UNITED STATES 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
Date of Report April 18, 1997
TOWN & COUNTRY CORPORATION
(Exact name of Registrant as specified in its charter)
Commission File Number: 0-14394
Massachusetts 04-2384321
(State or other jurisdiction of incorporation (I.R.S. Employer Identification
or organization) Number)
25 Union Street, Chelsea, Massachusetts 02150
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (617) 884-8500
<PAGE>
Form 8-K
Page 1
ITEM 2. Acquisition or Disposition of Assets
On April 18, 1997, the Company sold certain assets of its Gold Lance subsidiary
to Jostens, Inc.
Prior to or at closing, on April 18, 1997, the Company received cash equal to
the purchase price of approximately $10.8 million, less $2.5 million the payment
of which is contingent on the operating performance of Gold Lance during a
transition period between April 18, 1997 and July 31, 1997.
ITEM 7. Financial Statements, Pro Forma Financial Information and Exhibits
Page(s)
(b) Pro Forma Financial Information 2 - 7
(c) Exhibits
2.1 Asset Purchase Agreement by and among Jostens, Inc.,
Gold Lance, Inc., and Town & Country Corporation dated
as of April 18, 1997.
2.2 Transition Agreement by and among Jostens, Inc.,
Gold Lance, Inc., and Town & Country Corporation dated
as of April 18, 1997.
<PAGE>
Form 8-K
Page 2
Pro Forma Condensed Consolidated Financial Statements
The following pro forma condensed consolidated balance sheet and condensed
consolidated statements of operations of the Company present the effects of the
sale, as if, for balance sheet purposes, the transaction had taken place on
November 24, 1996, and for statement of operations purposes, the transaction had
taken place February 27, 1995 for the year ended February 25, 1996 and February
26, 1996 for the nine month period ended November 24, 1996. The pro forma
financial statements do not purport to represent what the Company's financial
position or results of operations would actually have been if such transaction
in fact had occurred on such date or at the beginning of the periods indicated
or to project the Company's financial position or results of operations for any
future date or periods.
The pro forma condensed consolidated balance sheet and statements of operations
and accompanying notes should be read in conjunction with the Company's
Consolidated Financial Statements and related notes thereto for the year ended
February 25, 1996 included in the Company's annual report on Form 10-K and in
conjunction with the Company's Consolidated Financial Statements and related
notes thereto for the nine month period ended November 24, 1996, included in the
Company's quarterly report on Form 10-Q.
Pro forma consolidated results include the results of the Balfour subsidiary the
assets of which were sold on 12/16/96. These pro forma statements make no
adjustment related to the Balfour sale. The Company's Form 10-Q for the period
ended November 24, 1996 includes pro forma condensed consolidated balance sheet
and condensed consolidated statements of operations for the Company and the sale
of the Balfour assets.
In the Pro Forma Condensed Consolidated Statements of Operations, the Gold Lance
subsidiary's results of operations are being deducted from the Company's
consolidated results. In addition, adjustments are included for the benefit
derived from the use of proceeds.
In the Pro Forma Condensed Consolidated Balance Sheet, the Gold Lance column
represents the sale of certain Gold Lance assets while the adjustments represent
the pro forma use of proceeds and the change in the carrying value of the real
estate.
<PAGE>
TOWN & COUNTRY CORPORATION Form 8-K
Page 3
Pro Forma Condensed Consolidated Statement of Operations
For the Nine Months Ended November 24, 1996 (1)(3)
<TABLE>
<CAPTION>
Total Consolidated
Total Consolidated Gold Lance Adjustments Excluding Gold Lance
-------------- ----------- ----------- -------------
<S> <C> <C> <C> <C>
NET SALES 181,984,187 (10,342,943) -- 171,641,244
COST OF SALES 123,536,397 (6,856,837) 116,679,560
INVENTORY CHARGE 35,521,000 -- -- 35,521,000
-------------- ----------- ----------- -------------
Gross Profit 22,926,790 (3,486,106) -- 19,440,684
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 61,330,299 (4,200,242) -- 57,130,057
-------------- ----------- ----------- -------------
Income (loss) from operations (38,403,509) 714,136 -- (37,689,373)
INTEREST EXPENSE, net (9,168,769) (15,205) 558,000 (2) (8,625,974)
GAIN (LOSS) ON SALE OF REAL ESTATE (742,330) -- -- (742,330)
MINORITY INTEREST 49,311 -- -- 49,311
-------------- ----------- ----------- -------------
Income (loss) before provision for (48,265,297) 698,931 558,000 (47,008,366)
income taxes
PROVISION FOR INCOME TAXES 200,025 -- -- 200,025
-------------- ----------- ----------- -------------
Net income (loss) (48,465,322) 698,931 558,000 (47,208,391)
ACCRETION OF DISCOUNT AND DIVIDENDS
ON PREFERRED STOCKS 575,050 -- -- 575,050
-------------- ----------- ----------- -------------
Income (loss) attributable to (49,040,372) 698,931 558,000 (47,783,441)
common stockholders ============== =========== =========== =============
INCOME (LOSS) PER COMMON SHARE (1.94) (1.89)
============== =============
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING 25,330,088 25,330,088
============== =============
</TABLE>
<PAGE>
TOWN & COUNTRY CORPORATION Form 8-K
Page 4
Pro Forma Condensed Consolidated Statement of Operations
For the Year Ended February 25, 1996 (1)(3)
<TABLE>
<CAPTION>
Total Consolidated
Total Consolidated Gold Lance Adjustments Excluding Gold Lance
------------- ----------- ------------ -----------
<S> <C> <C> <C> <C>
NET SALES 250,577,816 (14,352,950) -- 236,224,866
COST OF SALES 173,141,311 (9,778,055) -- 163,363,256
------------- ----------- ---------- -----------
Gross Profit 77,436,505 (4,574,895) -- 72,861,610
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 66,407,484 (5,506,073) -- 60,901,411
------------- ----------- ---------- -----------
Income (loss) from operations 11,029,021 931,178 -- 11,960,199
INTEREST EXPENSE, net (12,475,409) (29,225) 752,000 (2) (11,752,634)
GAIN (LOSS) ON SALE OF REAL ESTATE 417,220 -- 417,220
MINORITY INTEREST (673,079) -- -- (673,079)
------------- ----------- ---------- -----------
Income (loss) before provision for (1,702,247) 901,953 752,000 (48,294)
income taxes
PROVISION FOR INCOME TAXES 163,867 -- -- 163,867
------------- ----------- ---------- -----------
Net income (loss) (1,866,114) 901,953 752,000 (212,161)
ACCRETION OF DISCOUNT AND DIVIDENDS
ON PREFERRED STOCKS 1,039,802 -- -- 1,039,802
------------- ----------- ---------- -----------
Income (loss) attributable (2,905,916) 901,953 752,000 (1,251,963)
to common stockholders ============= =========== ========== ===========
INCOME (LOSS) PER COMMON SHARE (0.12) (0.05)
============= ===========
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING 23,769,323 23,769,323
============= ===========
</TABLE>
<PAGE>
TOWN & COUNTRY CORPORATION Form 8-K
Page 5
Notes to Pro Forma Condensed Consolidated Statements of Operations
(1) The Statements of Operations assume that $8.3 million was received on
the closing date and excludes any benefit of the contingent additional
payment of $2.5 million subject to certain operating performance
measures of Gold Lance during a transition period between April 18,
1997 and July 31, 1997.
(2) For the purpose of determining pro forma interest savings, the
effective rate of the debt being reduced, is applied for the period
being presented. ($ in 000's)
Twelve Months
Effective Debt Ended
Interest Rate Reduction February 25,
1996
Notes payable to banks
(working capital facility) 11.67% $6,444 $752
Nine Months
Effective Debt Ended
Interest Rate Reduction November 24,
1996
Notes payable to banks
(working capital facility) 11.67% $6,374 $558
Debt reduction assumptions are based on a closing as of February 27, 1995 and
February 26, 1996 for the twelve month and nine month pro forma statements of
operations, respectively, which approximate the seasonal low point in the
balance of the working capital facility, and on the application of all available
proceeds to first reduce the working capital facility. The actual close took
place at a time when, due to the previous sale of another subsidiary, there was
no outstanding balance on the working capital facility and the proceeds were
used to reduce the gold consignment facility.
(3) The sale did not include any real property. The prime component of
real property is a facility in Houston, Texas with a net book value of
approximately $1.5 million and a fair value of approximately $0.7
million as of February 23, 1997. A $0.8 million impairment of the
carrying value of the facility has been recognized in association with
this transaction. Such amount is reflected as an adjustment to the Pro
Forma Condensed Consolidated Balance Sheet and excluded from the Pro
Forma Condensed Consolidated Statements of Operations due to its
nonrecurring nature. The Company will continue to operate the property
on a temporary basis for approximately four months. It is possible
that the Company will be required to hold the facility for an
unspecified amount of time before being able to complete a sale.
<PAGE>
TOWN & COUNTRY CORPORATION Form 8-K
Page 6
Pro Forma Condensed Consolidated Balance Sheet
As of November 24, 1996
<TABLE>
<CAPTION>
Total Consolidated
Total Consolidated Gold Lance Adjustments Excluding Gold Lance
----------- ---------- ---------- -----------
<S> <C> <C> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents 739,773 8,315,000 (8,315,000)(2) 739,773
Restricted cash 105,305 -- -- 105,305
Accounts receivable, less allowances for
doubtful accounts 69,533,940 (3,466,143) -- 66,067,797
Inventories 45,929,148 -- -- 45,929,148
Prepaid expenses and other current assets 6,857,776 (128,895) -- 6,728,881
----------- ---------- ---------- -----------
Total current assets 123,165,942 4,719,962 (8,315,000) 119,570,904
----------- ---------- ---------- -----------
PROPERTY, PLANT AND EQUIPMENT, net 31,470,653 (6,234,982) (800,000)(1) 24,435,671
----------- ---------- ---------- -----------
INVESTMENT IN AFFILIATES 17,246,585 -- -- 17,246,585
----------- ---------- ---------- -----------
OTHER ASSETS 5,873,035 (2,252,549) -- 3,620,486
----------- ---------- ---------- -----------
177,756,215 (3,767,569) (9,115,000) 164,873,646
=========== ========== ========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Notes payable to banks 31,547,641 -- (5,855,444)(2) 25,692,197
Current portion of long-term debt 13,441,325 -- -- 13,441,325
Accounts payable 22,710,933 -- (846,473)(2) 21,864,460
Accrued expenses 13,004,900 -- (358,083)(2) 12,646,817
Accrued taxes 646,098 -- -- 646,098
----------- ---------- ---------- -----------
Total current liabilities 81,350,897 -- (7,060,000) 74,290,897
----------- ---------- ---------- -----------
LONG-TERM DEBT, less current portion 78,528,150 -- -- 78,528,150
----------- ---------- ---------- -----------
OTHER LONG-TERM LIABILITIES 1,063,094 -- -- 1,063,094
----------- ---------- ---------- -----------
COMMITMENTS AND CONTINGENCIES
MINORITY INTEREST 5,114,636 -- -- 5,114,636
----------- ---------- ---------- -----------
EXCHANGEABLE PREFERRED STOCK 2,343,534 -- -- 2,343,534
----------- ---------- ---------- -----------
STOCKHOLDERS' EQUITY
Preferred Stock, $1.00 par value - -- -- -- --
Convertible Preferred Stock,
$1.00 par value 1,407,361 -- -- 1,407,361
Class A Common Stock, $.01 par value - 259,661 -- -- 259,661
Class B Common Stock, $.01 par value - -- -- -- --
Additional paid-in capital 75,561,343 -- -- 75,561,343
Retained deficit (67,872,461) (3,767,569) (800,000)(1)
(1,255,000)(2) (73,695,030)
----------- ---------- ---------- -----------
Total stockholders' equity 9,355,904 (3,767,569) (2,055,000) 3,533,335
----------- ---------- ---------- -----------
177,756,215 (3,767,569) (9,115,000) 164,873,646
=========== ========== ========== ===========
</TABLE>
<PAGE>
TOWN & COUNTRY CORPORATION Form 8-K
Page 7
Notes to Pro Forma Condensed Consolidated Balance Sheet
(1) The sale did not include any real property. The prime component of
real property is a facility in Houston, Texas, with a net book value
of approximately $1.5 million and a fair value of approximately $0.7
million. A $0.8 million impairment of the carrying value of the
facility has been recognized in association with this transaction.
(2) Use of proceeds as of November 24, 1996:
Gross proceeds (a) $8,315,000
Less: Transaction costs(b) 1,255,000
Less: Liabilities not assumed in the sale (c) 1,204,556
----------
Proceeds available for debt repayment $5,855,444
Notes payable to banks (working capital
facility) 5,855,444
----------
$ --
==========
(a) Assumes that $8.3 million was received on the closing date and
excludes any benefit of the contingent additional payment of $2.5
million, subject to certain operating performance measures of
Gold Lance during a transition period between April 18, 1997 and
July 31, 1997.
(b) Expenses:
Financial advisor fees $250,000
Legal and other fees 840,000
Executive bonuses 165,000
----------
$1,255,000
==========
(c) Trade payables and short-term accruals primarily related to
payroll.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
TOWN & COUNTRY CORPORATION
Dates: May 2, 1997 By: /s/ Veronica Zsolcsak
-----------------------
Veronica Zsolcsak
Chief Financial Officer
Exibit 2.1
ASSET PURCHASE AGREEMENT
Dated as of April 18, 1997
By and Among
JOSTENS, INC.,
GOLD LANCE, INC.
and
TOWN & COUNTRY CORPORATION
<PAGE>
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "Agreement"), dated as of April 18,
1997, is by and among Jostens, Inc., a Minnesota corporation (the "Purchaser"),
Gold Lance, Inc., a Massachusetts corporation (the "Company"), and Town &
Country Corporation, a Massachusetts corporation ("Parent").
A. The parties hereto wish to provide for the terms and conditions upon
which the Purchaser will acquire certain assets of the Company used in the
manufacture and sale of school, mothers, recognition and other specialty rings
to retail jewelers by the Company in accordance with historic practices (the
"Business") and to assume only certain, limited liabilities associated with the
Business.
B. Because the Company is a wholly-owned subsidiary of Parent, Parent
has an interest to induce Purchaser to enter into this Agreement by making to
Purchaser the representations, warranties, covenants and agreements of Parent
contained herein.
Accordingly, and in consideration of the representations, warranties,
covenants, agreements and conditions herein contained, the parties hereto agree
as follows:
SECTION
1. PURCHASE OF ASSETS
1.1. Assets to be Purchased. Upon the terms and subject to satisfaction of
all conditions to the obligations of the parties contained herein
(other than such conditions as are waived in accordance with the terms
hereof), as of the First Closing Date the Company hereby agrees to
sell, transfer, convey, assign and deliver to the Purchaser, and the
Purchaser hereby agrees to purchase from the Company, certain of the
assets used by the Company in the Business and as listed on Exhibit
1.1(a)(1) hereto (hereinafter sometimes collectively called the
"Transferred Assets"), free and clear of any mortgage, pledge, lien or
security interest of any kind or nature (whether or not of record).
Prior to the execution of this Agreement, the Company has delivered to
Purchaser written confirmation from any and all holders of security
interests and claims in the Transferred Assets that such security
interests and claims will be released on or prior to the First
Closing. It is expressly understood that certain of the Transferred
Assets sold and transferred to Purchaser as of the First Closing Date
may be left in the temporary possession of the Company for its use
during the term of the Transition Agreement, a copy of which is
attached as Exhibit 1.1. The Transferred Assets include, without
limitation, the assets, rights, contracts and claims as of the First
Closing Date and described in the following paragraphs:
(a) to the extent transferable and including, without limitation, as
listed on Exhibit 1.1(a), all rights and interests of the Company
in and to (i) the "Gold Lance" name and all other trademarks,
trade names and service marks and registrations and applications
for such trademarks, trade names and service marks; (ii)
copyrights, and registrations and applications for such
copyrights; (iii) trade secrets, know-how, inventions,
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research, development and manufacturing and other technical
information, whether owned by the Company or licensed from third
parties to the Company used, necessary or required for the
Business, and (iv) the patents, patent applications, patent
rights, inventions, know-how, trade secrets, technology,
proprietary processes and formulae used, necessary or required
for the Business (collectively, "Intellectual Property Rights");
(b) to the extent transferable, all customer and vendor lists and
contracts relating to the Business and all files and documents
(including credit information) relating to such customers and
vendors;
(c) all tools, dies and samples (wherever located) used in the
Business;
(d) to the extent transferable, all rights of the Company under or
pursuant to all warranties, representations and guarantees made
by suppliers, manufacturers and contractors affecting the
Transferred Assets;
(e) the machinery and equipment listed on Exhibit 1.1(e); and
(f) all the assets, rights, contracts and claims in existence as of
July 31, 1997 in all accounts receivable and all notes receivable
from third parties (other than inter-company accounts between the
Company and Parent) arising out of the operation of the Business
by the Company through July 31, 1997, together with any unpaid
interest accrued thereon and any security or collateral therefor,
including recoverable deposits (the "Accounts Receivable"), such
Accounts Receivable to be delivered to the Purchaser at the
Second Closing.
1.2. Excluded Assets. Notwithstanding the foregoing, the Company is not
selling, transferring, conveying, assigning or delivering to the
Purchaser, and the Purchaser is not purchasing from the Company any of
the other assets of the Company (the "Excluded Assets"), including
without limitation:
(a) title to, or the Company's leasehold interests in, or any other
interests in any real property;
(b) title to, or the Company's leasehold interests in, any
furnishings, furniture, office supplies, vehicles, spare parts,
machinery and equipment (except as listed on Exhibit 1.1(e));
(c) title to, or the Company's leasehold interests in, any fixed
assets;
(d) any inventory, including without limitation, raw materials,
work-in-process, finished goods and supplies;
(e) computers and any software embodied in such computers and
communication or data network systems and all other equipment
used to provide support or administrative functions;
2
<PAGE>
(f) any of the Company's cash, marketable or other securities,
commercial paper and cash equivalents or other investments, on
hand or in bank accounts and all of the Company's bank accounts;
and
(g) all corporate, financial, tax and other records and the Company's
corporate franchise, stock record books, corporate record books
containing minutes of meetings of directors and stockholders and
such other records that relate to the Company's corporate
organization and stock capitalization.
1.3. Assumed Liabilities. The Purchaser agrees to assume only such
liabilities of the Company (the "Assumed Liabilities") as of July 31,
1997 as set forth on an Exhibit 1.3(a) hereto (the "Liabilities
Undertaking"). The Assumed Liabilities are specifically identified and
relate only to such matters as customer orders, warranty obligations,
return obligations and rebate obligations. Each of the Company and
Parent expressly understands and agrees that except for the Assumed
Liabilities as set forth on Exhibit 1.3(a), the Purchaser has not
agreed to pay or assume, will not be required to assume and will have
no liability or obligation, direct or indirect, absolute or contingent
with respect to any liabilities of the Company, contingent or
non-contingent, known or unknown, historical or current or future,
which liabilities will remain the sole responsibility of, and will be
satisfied by, the Company (the "Retained Liabilities"). Retained
Liabilities specifically includes, without limitation, all liabilities
with respect to employees of the Company, ERISA matters, and
environmental matters, and all liabilities of the Company created or
incurred during the term of the Transition Agreement (other than
Assumed Liabilities created or incurred during such period); provided,
however that any liabilities created for the Company during the term
of the Transition Agreement arising or relating from the conduct or
activities of the Purchaser will be Assumed Liabilities. The Company
hereby conveys, transfers and assigns, and the Purchaser hereby
accepts and assumes, as part of the Assumed Liabilities, those
contracts, agreements and commitments listed on the Liabilities
Undertaking to be assumed by the Purchaser (the "Assumed Contracts").
1.4. Purchase Price. The Purchaser hereby agrees to pay, as full payment
for the Transferred Assets, in addition to the Liabilities
Undertaking, the "Purchase Price", which shall consist of the
following:
(a) The One Million Dollars ($1,000,000) previously paid to the
Company on April 3, 1997 as a nonrefundable deposit;
(b) Seven Million Three Hundred Fifteen Thousand Dollars ($7,315,000)
(the "First Closing Date Payment") as of the First Closing Date
to the Company by federal wire transfer in immediately available
funds to a bank account of the Company pursuant to written
instructions of the Company previously given to the Purchaser;
(c) Two Million Dollars ($2,000,000) as of the Second Closing Date
(subject to the adjustments set forth in Section 1.5(a) and (b)
hereto) (the "Second Closing Date Payment") to the Company;
3
<PAGE>
(d) Five Hundred Thousand Dollars ($500,000) on the Third Closing
Date (subject to the adjustments set forth in Section 1.5(c) and
(d) hereto) (the "Third Closing Date Payment"); and
(e) a contingent payment (the "Contingent Payment") equal to One
Hundred Ten and No/100 Dollars ($110) multiplied by the number
equal to (i) the number of class rings shipped by the Purchaser
to the customers of Gold Lance as of April 18, 1997 and as listed
on Exhibit 1.4(e) during the period from June 1, 1997 through May
31, 1998 minus (ii) 97,500; provided, however, that such number
is a positive number. The Contingent Payment, if any, shall be
payable by federal wire transfer on or before June 30, 1998 in
immediately available funds to a bank account of the Company
pursuant to written instructions of the Company given to the
Purchaser on or before June 25, 1998. The Contingent Payment
shall not exceed One Million Five Hundred Thousand Dollars
($1,500,000). No later than June 10, 1998, the Purchaser shall
calculate the amount of the Contingent Payment pursuant to the
formula in this Section 1.4(e) above and deliver to the Company a
certificate signed by an officer of the Purchaser setting forth
the computation of the Contingent Payment and the information
used in making such computation. The Purchaser agrees to
cooperate with the Company and make available to the Company such
documents, books, records or information relating to the
computation of the Contingent Payment as the Company may
reasonably request. The Purchaser's computation of the Contingent
Payment shall be conclusive and binding upon the parties hereto,
unless, on or prior to June 25, 1998, the Company notifies the
Purchaser in writing (the "Objection Notice") that the Company
disagrees with the Purchaser's computation of the Contingent
Payment. If the parties are unable between themselves to resolve
their differences within ten (10) days of the Purchaser's receipt
of the Objection Notice, the parties shall resolve their
differences pursuant to Section 9.12 hereof.
1.5. The Second Closing Date Payment shall be adjusted based on the
following:
(a) In the event that the aggregate number of class rings shipped to
customers by the Company during March, April May and June 1997 is
less than 29,000, the Second Closing Date Payment shall be
reduced by the amount of One Hundred Ten and No/100 Dollars
($110) multiplied by the difference between 31,000 and the number
of class rings actually shipped to customers by the Company
during that period. The Purchaser agrees that in the event that
the number of class rings shipped to customers by the Company
during March, April, May and June 1997 is greater than 33,000 the
Second Closing Date Payment shall be increased by the amount of
One Hundred Ten and No/100 Dollars ($110) multiplied by the
difference between 31,000 and the number of class rings actually
shipped to customers by the Company during that period.
(b) In the event that prior to June 30, 1997, any customer of the
Business which is listed on Exhibit 1.5(b), advises the Company
that it intends to terminate or reduce its relationship with the
Business due to poor service or quality by the Company, then the
Second Closing Date Payment shall be reduced by the amount of One
Hundred Ten and No/100 Dollars ($110) multiplied (i) by the
number of class rings shipped to such customer during the period
from June 1, 1996 through May 31, 1997 (in the event of the
termination of the relationship) or (ii) by the number of class
rings
4
<PAGE>
shipped to such customer during the period from June 1, 1996 to
May 31, 1997 multiplied by the percentage by which such customer
has reduced its relationship with the Business (in the event of
a reduction of the relationship).
(c) The Company has budgeted for its fiscal year period ending July
31, 1997 to spend $230,000 during the period of March 1, 1997
through July 31, 1997 on samples and collateral and other
marketing materials related to its post-July 31, 1997 business
needs. The Company agrees not to make any such expenditure
without specific approval by Purchaser. To the extent the Company
generates an operating profit for the period March 1, 1997
through July 31, 1997, the Third Closing Date Payment shall be
reduced by the amount of such operating profits up to but not to
exceed $230,000. Operating profit for purposes of this Section
shall be defined as the Company's earnings before interest and
taxes, but shall not reflect severance costs, bonus payments,
conversion costs with respect to information services, or
consulting cost reimbursements or payments to William Carey.
(d) The Company agrees that the Third Closing Date Payment shall be
reduced by up to $300,000 for Purchaser's costs of converting the
Company's order entry and data entry systems, and conversion of
other information services, to the Purchaser's systems. Such
costs shall include the allocable costs of Purchaser's personnel
who work on such conversion, and the costs of any outside
assistance engaged by the Purchaser. The Company agrees to
cooperate with the Purchaser in its conversion efforts, provided,
however, that "Purchaser's costs" as calculated above shall
include any allocable incremental Company costs associated with
Company personnel, which personnel the Company agrees to provide
if available, as reasonably requested by Purchaser, to assist and
facilitate such conversion.
1.6. Allocation of Purchase Price. The Purchase Price shall be allocated
among the Transferred Assets as set forth in Exhibit 1.6 hereto (the
"Allocation Schedule"). In preparing Exhibit 1.6, the parties hereto
have negotiated in good faith the values of the Transferred Assets and
the resulting allocation of the Purchase Price among the various
Transferred Assets; it being understood and agreed that such
determination shall be binding on the Purchaser and the Company only
for the purposes of U.S. Federal, state and local taxation. The
Company and the Purchaser shall file all Tax Returns and tax reports
(including IRS Form 8594) in accordance with and based upon such
allocation and shall take no position in any Tax Return, tax
proceeding or tax audit which is inconsistent with such allocation.
SECTION
2. THE CLOSINGS
2.1. The Closing. The initial closing (the "First Closing") of this
Agreement will take place on April 18, 1997, or such other date as
agreed by the parties hereto (the "First Closing Date"). The First
Closing will be held at the offices of Goodwin, Procter & Hoar LLP,
Exchange Place, Boston, Massachusetts 02109 or such other place as the
parties have agreed, at 2:00 p.m., Massachusetts time or such other
time as the parties have agreed, at which time and place the documents
and instruments necessary or appropriate to effect the transactions
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<PAGE>
contemplated herein will be exchanged by the parties. The second
closing (the "Second Closing") shall occur on July 31, 1997 (the
"Second Closing Date"), at which time the Second Closing Date Payment
shall be made, subject to adjustment pursuant to Sections 1.5(a) and
(b). The Third Closing Date Payment shall be made within five (5)
business days after such date that the Company provides financial
statements and information to the Purchaser (the "Third Closing Date")
so they can mutually agree as to any adjustments that must be made
pursuant to Sections 1.5(c) and (d). The Second Closing and the Third
Closing shall be at the same place and time of day as the First
Closing, or at such other place and time as the parties may agree.
2.2. Deliveries of the Company and Parent. The Company and Parent will
deliver the following documents to the Purchaser:
(a) at each Closing, such bills of sale, endorsements, assignments
(together with necessary consents), and other good and sufficient
instruments of conveyance and transfer, in form and substance
reasonably satisfactory to the Purchaser and its counsel, to vest
in the Purchaser valid legal title to the Transferred Assets
being transferred at such Closing, including such releases and
termination statements as may be necessary to transfer (or to
confirm the transfer of) the Transferred Assets free and clear of
all liens;
(b) at the First Closing, duly executed and acknowledged certificates
of amendment to the Company's articles of organization which are
required to change the Company's corporate name so as to make the
Company's present name available for use by the Purchaser;
(c) at the First and Second Closings, the certificates required of
the Company and Parent in accordance with Section 6.8 hereof;
(d) at the First and Second Closings, an opinion of counsel for
Company and Parent in form and substance reasonably satisfactory
to the Purchaser and its counsel in accordance with Section 6.5
hereof;
(e) at each Closing, any other documents reasonably requested by the
Purchaser to confirm the accuracy of the representations and
warranties and the performance of the agreements of the Company
and Parent hereunder;
(f) at the Second Closing, a certificate signed by an officer of the
Company setting forth the adjustments to the Second Closing Date
Payment and the information used in making such computation; and
(g) at the Third Closing, a certificate signed by an officer of the
Company certifying the financial information delivered to the
Purchaser and setting forth the proposed adjustments to the Third
Closing Date Payment and the information used in making such
computation.
2.3. Deliveries of the Purchaser. The Purchaser will deliver the following
documents to the Company and Parent:
(a) at the First Closing, the First Closing Date Payment;
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(b) at the Second Closing, the Second Closing Date Payment;
(c) at the Third Closing, the Third Closing Date Payment;
(d) at the First and Second Closings, the certificate required of the
Purchaser in accordance with Section 7.4 hereof;
(e) at the First and Second Closings, an opinion of counsel of the
Purchaser in form and substance reasonably satisfactory to the
Company and Parent and their counsel in accordance with Section
7.5 hereof;
(f) at each Closing, any other documents reasonably requested by the
Company and Parent to confirm the accuracy of the representations
and warranties and the performance of the agreements of the
Purchaser hereunder; and
(g) at the Second Closing, an Assumption Agreement with respect to
the Assumed Liabilities.
2.4. Effect of First Closing. The transfer of the Transferred Assets
(except for the Accounts Receivable which will be transferred on the
Second Closing Date) shall be deemed complete on the First Closing,
and regardless of any thing that may happen subsequent thereto through
the Third Closing Date, the Purchaser shall have no right to rescind
or terminate this Agreement and shall have no claim to and shall not
be entitled to any reimbursement with respect to any portion of the
Purchase Price that Purchaser has previously paid to the Company;
provided, however, that this Section 2.4 shall in no way prejudice (i)
the Company's, the Parent's or the Purchaser's respective
indemnification rights under Section 8 of this Agreement, (ii) the
Company's and the Parent's rights to receive the balance of the
Purchaser Price due under Section 1.4 of this Agreement or (iii) the
parties' rights to adjust the Second Closing Date Payment or the Third
Closing Date Payment pursuant to Section 1.5 of this Agreement.
SECTION
3. REPRESENTATIONS OF THE COMPANY AND PARENT
The Company and Parent, jointly and severally, hereby represent and
warrant to the Purchaser as follows (as of the date hereof and as of both the
First Closing and the Second Closing):
3.1. Disclosure Schedule. The disclosure schedule marked as Exhibit 3
hereto (the "Disclosure Schedule") is divided into sections which
correspond to the subsections of this Section 3. The Disclosure
Schedule is accurate and complete and the disclosures in any
subsection thereof shall constitute disclosure for purposes of any
other subsection and any other section or subsection of this Agreement
or any exhibit to or other writing which is designated herein as being
part of this Agreement. Prior to the Second Closing Date, the Company
and Parent shall update the Disclosure Schedule to make it accurate as
of that date.
3.2. Corporate Organization. Each of the Company and Parent is a
corporation duly organized, validly existing and in good standing
under the law of the state of its incorporation, has full
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corporate power and authority to carry on its business as it is now
being conducted and to own, lease and operate its properties and
assets, is duly qualified or licensed to do business as a foreign
corporation in good standing in every other jurisdiction in which the
character or location of the properties and assets owned, leased or
operated by it or the conduct of its business requires such
qualification or licensing, except in such jurisdictions in which the
failure to be so qualified or licensed and in good standing would not,
individually or in the aggregate, have a material adverse effect on
its condition (financial or otherwise), working capital, assets,
properties, liabilities, obligations, reserves, businesses, prospects,
goodwill or going concern value, or its ability to enter into this
Agreement and the Transition Agreement and to carry out the
transactions contemplated herein and therein. The Disclosure Schedule
contains a list of all jurisdictions in which the Company is qualified
or licensed to do business, and all jurisdictions in which the Company
is conducting business.
3.3. Capitalization. All issued and outstanding shares of capital stock of
the Company are duly authorized, validly issued, fully paid and
nonassessable and owned by Parent, free and clear of any proxy,
limitation on voting, lien, security interest, pledge, charge, claim,
option, right to acquire, restriction on transfer or encumbrance of
any nature whatsoever.
3.4. Authorization. Each of the Company and Parent has full corporate power
and authority to enter into this Agreement and the Transition
Agreement and to carry out the transactions contemplated herein and
therein. The Parent, as sole shareholder of the Company, and the Board
of Directors of each of the Company and Parent, have taken all action
required by law, their articles or certificate of organization and
bylaws and otherwise to authorize the execution, delivery and
performance of this Agreement and the Transition Agreement and the
consummation of the transactions contemplated herein and therein. This
Agreement and the Transition Agreement have been duly and validly
executed and delivered by each of the Company and Parent and no other
corporate action is necessary. This Agreement and the Transition
Agreement are valid and binding legal obligations of the Company and
Parent, enforceable against each of the Company and Parent in
accordance with their terms, subject to bankruptcy, insolvency,
reorganization, moratorium and other similar laws of applicability
relating to or affecting creditors' rights and general principles of
equity.
3.5. Non-Contravention. Except as set forth in the Disclosure Schedule, the
execution, delivery and performance of this Agreement and the
Transition Agreement and the consummation of the transactions
contemplated herein and therein will not: (i) violate or be in
conflict with any provision of the articles or certificate of
organization or bylaws of the Company or Parent; or (ii) except for
such violations, conflicts, defaults, accelerations, terminations,
cancellations, impositions of fees or penalties, mortgages, pledges,
liens, security interests, encumbrances, restrictions and charges
which would not, individually or in the aggregate, have a material
adverse effect on the business of Company or Parent and its
subsidiaries taken as a whole, (A) violate, be in conflict with, or
constitute a default, however defined (or an event which, with the
giving of due notice or lapse of time, or both, would constitute such
a default), under, or cause or permit the acceleration of the maturity
of, or give rise to any right of termination, cancellation, imposition
of fees or penalties under, any debt, note, bond, lease, mortgage,
indenture, license, obligation, contract, commitment, franchise,
permit, instrument or other agreement or obligation to which the
Company or Parent is a party or by which the Company or Parent or any
of their respective properties or assets is or may be bound (unless
with respect to which defaults or other rights, requisite waivers or
consents shall have been obtained at or prior to the Closing) or (B)
result in the creation or imposition
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of any mortgage, pledge, lien, security interest, encumbrance,
restriction, adverse claim or charge of any kind, upon any property or
assets of the Company under any debt, obligation, contract, agreement
or commitment to which the Company or Parent is a party or by which
the Company or Parent or any of the Company's or Parent's assets or
properties is or may be bound; or (iii) to the knowledge of the
Company or Parent violate any statute, treaty, law, judgment, writ,
injunction, decision, decree, order, regulation, ordinance or other
similar authoritative matters of any foreign, federal, state or local
governmental or quasi-governmental, administrative, regulatory or
judicial court, department, commission, agency, board, bureau,
instrumentality or other authority (hereinafter sometimes separately
referred to as an "Authority" and sometimes collectively as
"Authorities") (sometimes hereinafter separately referred to as a
"Law" and sometimes collectively as "Laws").
3.6. Consents and Approvals. Except as set forth in the Disclosure
Schedule, with respect to the Company and Parent, no consent,
approval, order or authorization of or from, or registration,
notification, declaration or filing with (hereinafter sometimes
separately referred to as a "Consent" and sometimes collectively as
"Consents") any individual or entity, including without limitation any
Authority, is required in connection with the execution, delivery or
performance of this Agreement and the Transition Agreement by the
Company or Parent, the transfer of the Transferred Assets or the
consummation by the Company or Parent of the transactions contemplated
herein and therein.
3.7. Financial Statements. The Company has furnished to the Purchaser the
balance sheets and statements of operations (or income or loss),
changes in shareholders' equity and changes in cash flow (or financial
position) of the Company described on the Disclosure Schedule. The
most recent balance sheet so described is referred to herein as the
"Latest Balance Sheet." Except as disclosed in the Disclosure
Schedule, the aforesaid financial statements (i) are in accordance
with the books and records of the Company and have been prepared in
conformity with generally accepted accounting principles consistently
applied for all periods within the context of the Parent's
consolidated financial statements, which includes the Company as a
division, and (ii) fairly present the financial position of the
Company as of the respective dates thereof, and the results of
operations (or income or loss), changes in shareholders' equity and
changes in cash flow (or financial position) for the periods then
ended, all in accordance with generally accepted accounting principles
consistently applied for all periods within the context of the
Parent's consolidated financial statements, which includes the Company
as a division.
3.8. Absence of Certain Changes. Except as set forth in the Disclosure
Schedule, and except for changes to the Company relating to the First
Closing and as contemplated in the Transition Agreement, since the
date of the Latest Balance Sheet, the Company has owned and operated
its assets, properties and business in the ordinary course of business
and consistent with past practice; without limiting the generality of
the foregoing, the Company has not, to its knowledge, subject to the
aforesaid exceptions:
(a) suffered any adverse change in its condition (financial or
otherwise), working capital, assets, properties,
liabilities, obligations, reserves, businesses, prospects,
goodwill or going concern value or experienced any event
or failed to take any action which reasonably could be
expected to result in such an adverse change;
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(b) suffered any loss, damage, destruction or other casualty
(whether or not covered by insurance) or suffered any loss
of officers, employees, dealers, distributors, independent
contractors, customers, or suppliers or other favorable
business relationships;
(c) acquired or disposed of any assets or properties other than in
the ordinary course of business; and
(d) agreed, whether in writing or otherwise, to take any action
described in this Section 3.8.
3.9. The Transferred Assets. Except as set forth in the Disclosure
Schedule, the Company has good title to all of the Transferred Assets,
free and clear of any mortgage, pledge, lien, security interest,
conditional or installment sales agreement, encumbrance, claim,
easement, right-of-way, tenancy, covenant, encroachment, restriction
or charge of any kind or nature (whether or not of record) (herein
called a "Lien"). The Company has full right and power to, and Parent
is causing the Company to deliver to the Purchaser good title to, or
in the case of any licensed Intellectual Property Rights, the right to
use, all of the Transferred Assets, free and clear of any Lien. The
Company and the Parent will take such action as may be necessary to
assure that no lien attaches to any of the Transferred Assets
temporarily left in the possession of the Company during the
Transition Agreement.
3.10. Accounts Receivables. Except as set forth on the Disclosure Schedule,
(A) the Company has and will have good right, title and interest in
and to all its Accounts Receivable reflected in the Latest Balance
Sheet and those acquired and generated since the date of the Latest
Balance Sheet (except for those paid or otherwise eliminated in the
ordinary course of business since the date of the Latest Balance Sheet
through the Second Closing Date); (B) none of such Accounts Receivable
is or will be subject to any mortgage, pledge, lien or security
interest of any kind or nature (whether or not of record); (C) except
to the extent of applicable reserves shown in the Latest Balance
Sheet, all of the Accounts Receivable owing to the Company constitute
and will constitute valid and enforceable claims arising from bona
fide transactions in the ordinary course of business, and to the
Company's knowledge there are no claims, refusals to pay or other
rights of set-off against any thereof; and (D) the aging schedule of
the Accounts Receivable of the Company delivered to the Purchaser at
the First Closing is complete and accurate and an updated aging
schedule will be delivered at the Second Closing.
3.11. Intellectual Property Rights. The Company owns the Intellectual
Property Rights as described on the Disclosure Schedule, and all such
Intellectual Property Rights are included in the Transferred Assets.
The Intellectual Property Rights used, necessary or required for the
conduct of the Business of the Company as presently conducted do not
and will not infringe or violate or allegedly infringe or violate the
intellectual property rights of any person or entity. Except as
described on the Disclosure Schedule, (i) the Company does not own or
use any Intellectual Property Rights pursuant to any written license
agreement; (ii) the Company has not granted any person or entity any
rights, pursuant to written license agreement or otherwise, to use the
Intellectual Property Rights; and (iii) none of the Intellectual
Property Rights are owned by Parent or any person other than the
Company.
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3.12. Litigation. Except as set forth in the Disclosure Schedule, there is
no legal, administrative, arbitration, or other proceeding, suit,
claim or action of any nature or investigation, review or audit of any
kind (including without limitation a proceeding, suit, claim or
action, or an investigation, review or audit, involving any
environmental Law or matter), judgment, decree, decision, injunction,
writ or order pending, noticed, scheduled or, to the knowledge of the
Company, threatened or contemplated by or against or involving the
Company, its assets, properties or businesses or its directors,
officers, agents or employees (but only in their capacity as such),
whether at law or in equity, before or by any person or entity or
Authority, which would affect the Transferred Assets or the ability of
the Company to fulfill its obligations under the Transition Agreement,
or which questions or challenges the validity of this Agreement and
the Transition Agreement, or any action taken or to be taken by the
parties hereto pursuant to this Agreement, or the Transition Agreement
or in connection with the transactions contemplated herein or therein.
3.13. Assumed Contracts; No Default. True and complete copies (or summaries,
in the case of oral orders) of all Assumed Contracts have been made
available to the Purchaser for review, and as to any Assumed Contracts
which arise between the date hereof and the Second Closing Date will
be made available to Purchaser for review as soon as practicable.
Except as set forth in the Disclosure Schedule, all such items are and
will be valid and enforceable by and against the Company in accordance
with their respective terms; the Company is not and will not be in
material breach, violation or default, however defined, in the
performance of any of its obligations thereunder, and no facts and
circumstances exist which, whether with the giving of due notice,
lapse of time, or both, would constitute such a material breach,
violation or default thereunder or thereof; and, to the Company's
knowledge, no other parties thereto are in a breach, violation or
default, however defined, thereunder or thereof, and no facts or
circumstances exist which, whether with the giving of due notice,
lapse of time, or both, would constitute such a breach, violation or
default thereunder or thereof.
3.14. Orders, Commitments and Returns. Except as set forth in the Disclosure
Schedule, all accepted and unfulfilled orders for the sale of products
and the performance of services entered into by the Company which will
be assumed by the Purchaser as of the Second Closing Date as an
Assumed Liability were or will have been made in bona fide
transactions in the ordinary course of business.
3.15. Dealers , Suppliers and Customers. As of the First Closing, (i) all of
the Company's relationships with those customers set forth on Exhibit
3.15(a) hereto are good commercial working relationships and none of
such customers have given notice to the Company that they are
dissatisfied with the quality of products or service provided by the
Company, and (ii) no customer set forth on Exhibit 3.15(a) hereto has,
to the knowledge of the Company or Parent, a plan or intention to
cancel or otherwise terminate, materially and adversely to the
Business, its relationship with the Company, or materially decrease
its purchase of finished products from the Company. Except as set
forth in the Disclosure Schedule (which, with respect to this Section
3.15, will have no exceptions on the First Closing Date and will be
updated as of June 30, 1997 for the Second Closing), between the First
Closing Date and June 30, 1997, the Company's customers set forth on
Exhibit 3.15(a) hereto have not, and have not notified or advised the
Company that they intend to, due to poor service or quality, (i)
cancel or otherwise terminate their relationship with the Company,
(ii) decrease their purchase of finished products from the Company in
such a manner or to such an extent as to have a material adverse
effect on the Business or (iii) to the knowledge of the Company,
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indicated that the quality of products or service provided by the
Company has diminished. Except as set forth on the Disclosure
Schedule, if any customer set forth on Exhibit 3.15(a) has terminated
its relationship with the Company or materially decreased its purchase
of finished products from the Company or notified the Company it
intends to do so between the First Closing Date and June 30, 1997 in
such a manner or to such an extent as to have a material adverse
effect on that particular customer account, such termination or
material decrease or notification was not caused by poor quality of
products or service provided by the Company.
The Purchaser acknowledges that (A) in the ordinary course of
business in the Company's industry customers from time to time
entertain or solicit and (B) as a result of the transactions
contemplated by this Agreement or of changes that may be introduced
by the Purchaser in the relationships acquired from the Company or
of the manner in which the Purchaser intends to conduct the
Business acquired from the Company, customers may entertain or
solicit proposals from competing suppliers with respect to the
products presently supplied by the Company. The Company and Parent
shall confirm that the representations in this Section 3.15 are
true and correct as of June 30, 1997 with respect to the
immediately preceding twelve (12) months.
3.16. Permits and Other Operating Rights. Except as set forth in the
Disclosure Schedule, no Consent of any Authority is required to permit
the operation of the Business in the manner in which it presently is
being operated, and all permits and other authorizations from all
Authorities presently required necessary to permit the operation of
the Business in the manner in which it is presently being conducted as
identified on the Disclosure Schedule.
3.17. Assets of Business. The Transferred Assets, together with the Excluded
Assets, constitute all of the assets held for use or used primarily in
connection with the Business and are adequate to carry on the Business
as presently conducted and as contemplated to be conducted by the
Company under the Transition Agreement.
3.18. Accuracy of Information. The representations and warranties of the
Company and Parent in this Agreement and the Disclosure Schedule, when
taken together, do not contain any untrue statement of known material
facts or, to the knowledge of the Company or Parent, any omission of a
material fact necessary to make the statements herein or therein, in
light of the circumstances under which they were made, not misleading.
It is understood and acknowledged that the Purchaser (i) is a large
established commercial enterprise operating in the same general
industry (though not the same industry segment) as the Company and is
advised by experienced counsel, and (ii) either alone or with its
external advisors has such knowledge and experience in business and
financial matters that it is capable to evaluate the merits and risks
of an acquisition of the Business from the Company.
3.19. Brokers. Except as set forth in the Disclosure Schedule, neither the
Company, Parent nor any of their directors, officers or key employees
have employed any broker, finder or financial advisor, or incurred any
liability for any brokerage fee or commission, finder's fee or
financial advisory fee, in connection with the transactions
contemplated hereby, nor is there any basis known to the Company or
Parent for any such fee or commission to be claimed by any person or
entity.
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SECTION
4. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser represents and warrants to the Company and Parent as of
the date hereof, and as of the First Closing Date and the Second Closing Date,
as follows:
4.1. Corporate Organization. The Purchaser is a corporation duly organized,
validly existing and in good standing under the law of the State of
Minnesota.
4.2. Authorization. The Purchaser has full corporate power and authority to
enter into this Agreement and the Transition Agreement and to carry
out the transactions contemplated herein and therein. The Board of
Directors of the Purchaser has taken all action required by law, its
articles of incorporation and bylaws or otherwise to authorize the
execution, delivery and performance of this Agreement and the
Transition Agreement and the consummation of the transactions
contemplated herein and therein. This Agreement and the Transition
Agreement have been duly and validly executed and delivered by the
Purchaser and no other corporate action is necessary. This Agreement
is, and upon execution and delivery, the Transition Agreement will be,
valid and binding legal obligations of the Purchaser enforceable
against it in accordance with their terms, subject to bankruptcy,
insolvency, reorganization, moratorium and other similar laws of
applicability relating to or affecting creditors' rights and general
principles of equity.
4.3. Non-Contravention. The execution, delivery and performance of this
Agreement and the Transition Agreement and the consummation of the
transactions contemplated herein and therein will not: (i) violate or
be in conflict with any provision of the articles of incorporation or
bylaws of the Purchaser; or (ii) except for such violations,
conflicts, defaults, accelerations, terminations, cancellations,
impositions of fees or penalties, mortgages, pledges, liens, security
interests, encumbrances, restrictions and charges which would not,
individually or in the aggregate, have a material adverse effect on
the business of the Purchaser and its subsidiaries taken as a whole,
(A) violate, be in conflict with, or constitute a default, however
defined (or an event which, with the giving of due notice or lapse of
time, or both, would constitute such a default), under, or cause or
permit the acceleration of the maturity of, or give rise to, any right
of termination, cancellation, imposition of fees or penalties under,
any debt, note, bond, lease, mortgage, indenture, license, obligation,
contract, commitment, franchise, permit, instrument or other agreement
or obligation to which the Purchaser or any subsidiary of the
Purchaser is a party or by which they or any of their properties or
assets is or may be bound (unless with respect to which defaults or
other rights, requisite waivers or consents shall have been obtained
at or prior to the Closing) or (B) result in the creation or
imposition of any mortgage, pledge, lien, security interest,
encumbrance, restriction or charge of any kind, upon any property or
assets of the Purchaser or any subsidiary of the Purchaser under any
debt, obligation, contract, agreement or commitment to which the
Purchaser or any subsidiary of the Purchaser is a party or by which
the Purchaser or any subsidiary of the Purchaser or any of their
assets or properties is or may be bound; or (iii) to the knowledge of
the Purchaser violate any Law.
4.4. Consents and Approvals. Except for the Consents identified on Exhibit
4.4 hereto, no Consent is required by any person or entity, including
without limitation any Authority, in connection with the execution,
delivery and performance by the Purchaser of this Agreement
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or the Transition Agreement or the consummation of the transactions
contemplated herein or therein, other than any Consent which, if not
made or obtained, will not, individually or in the aggregate, have a
material adverse effect on the business of the Purchaser and its
subsidiaries taken as a whole.
4.5. Accuracy of Information. No representation or warranty by the
Purchaser in this Agreement contains or will contain any untrue
statement of material fact or omits or will omit to state any material
fact necessary in order to make the statements herein or therein, in
light of the circumstances under which made, not misleading as of the
date of the representation or warranty.
4.6. Brokers. Neither the Purchaser nor any of its directors, officers or
key employees have employed any broker, finder or financial advisor,
or incurred any liability for any brokerage fee or commission,
finder's fee or financial advisory fee, in connection with the
transactions contemplated hereby, nor is there any basis known to the
Purchaser for any such fee or commission to be claimed by any person
or entity.
4.7. Available Financing. Purchaser has available sufficient funds and/or
credit availability to deliver the Purchase Price.
SECTION
5. COVENANTS
5.1. Confidentiality; Non-Compete. Each of the parties hereto agrees that
the existing Confidentiality and Non-Compete Agreements, as attached
hereto as Exhibit 5.1, shall continue in full force and effect. In
addition, the Company and Parent agree that from the Second Closing
Date until July 31, 2002, neither the Company nor Parent will,
directly or indirectly, within the United States, either for their own
benefit or for the benefit of any other person, firm or corporation
whatsoever, (i) directly engage in any commercial activity related to
the sale of class rings, (ii) in any way interfere or attempt to
interfere with the Purchaser's relationships with any of its current
or potential customers with respect to the sale of class rings, or
(iii) employ or attempt to employ any of the Purchaser's then
employees on behalf of any other entity competing with the Purchaser.
The Company and Parent acknowledge that if either one of them breaches
this covenant, the Purchaser will be irreparably and immeasurably
injured. Therefore, the Company and Parent agree that in addition to
any other remedies available to the Purchaser, the Purchaser may apply
to a court of competent jurisdiction for a temporary and/or permanent
injunction and that such court may grant such injunction to restrain
and prohibit such breach by the Company and Parent.
5.2. Filings; Consents; Removal of Objections. Subject to the terms and
conditions herein provided, the parties hereto shall use their best
efforts to take or cause to be taken all actions and do or cause to be
done all things necessary, proper or advisable under applicable Laws
to consummate and make effective, as soon as reasonably practicable,
the transactions contemplated hereby, including without limitation
obtaining all Consents of any person or entity, whether private or
governmental, required in connection with the consummation of the
transactions contemplated herein. In furtherance, and not in
limitation of the foregoing, it is the intent of the parties to
consummate the transactions contemplated herein, and they
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respectively agree to exert their best efforts to that end, including
without limitation: (i) the removal or satisfaction, if possible, of
any objections to the validity or legality of the transactions
contemplated herein; and (ii) the satisfaction of the conditions to
consummation of the transactions contemplated hereby.
5.3. HSR Act. The Company, the Parent and the Purchaser have each made a
good faith determination that (i) the total purchase price that is
being paid to the Company and Parent in connection with this Agreement
and the transactions contemplated hereby and thereby is less than
$15,000,000 and (ii) the aggregate fair market value of the
transactions contemplated by this Agreement is less than $15,000,000
to the Company and the Parent.. Accordingly, Purchaser has made a good
faith determination that it is not necessary to file any documents
and/or notifications in connection with the transactions contemplated
hereby pursuant to the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended, and the rules and regulations promulgated thereunder
(the "HSR Act") with the Federal Trade Commission ("FTC") and the
Antitrust Division of the Department of Justice (the "Antitrust
Division"). It is expressly agreed by the parties hereto that in the
event that the FTC or the Antitrust Division questions, investigates
or challenges the transaction, the Purchaser shall respond as promptly
as practicable to all inquiries from the FTC or the Antitrust Division
in connection therewith, and the Company and Parent shall cooperate
fully with the Purchaser in connection therewith. It is further
expressly agreed by the parties hereto that the obligation to
indemnify the Company and Parent under Section 8.2 of this Agreement
includes any costs, expenses or claims by the FTC and the Antitrust
Division against the Company and Parent arising, directly or
indirectly, in connection with any such questioning, investigation or
challenge to the transaction or the failure to file any documents
and/or notifications under the HSR Act; provided, however, that such
indemnity by the Purchaser shall not apply as to any questioning,
investigation, challenge or claim against the Company or Parent or
Purchaser with respect to any existing order of or agreement with the
FTC or the Antitrust Division, and the Company and Parent shall
indemnify the Purchaser under Section 8.3 of this Agreement for any
costs, expenses or claims against Purchaser for any such questioning,
investigation, challenge or claim.
5.4. Further Assurances; Cooperation; Notification.
(a) Each party hereto shall, before, at and after each Closing,
execute and deliver such instruments and take such other actions
as the other party or parties, as the case may be, may reasonably
require in order to carry out the intent of this Agreement.
(b) At all times from the date hereof until the Second Closing, each
party shall promptly notify the other in writing of the
occurrence of any event which it reasonably believes will or may
result in a failure by such party to satisfy the conditions
specified in Sections 6 and 7 hereof.
5.5. Public Announcements. Prior to the First Closing, none of the parties
hereto shall make any public announcement with respect to the
transactions contemplated herein and no party shall disclose the
existence of this Agreement or the transactions contemplated hereby to
any person except on a "need to know" basis or as required by law.
After the First Closing, each of the parties may make a public
announcement with respect to this Agreement and the transactions
contemplated hereby, and each agrees to discuss with the other parties
in good faith the proposed wording of any such announcement.
15
<PAGE>
5.6. Transactional Tax Undertakings.
(a) The parties hereto shall cooperate to make any necessary filings
with state and local taxing authorities and to furnish any
required supplemental information to any state and local tax
liabilities resulting from the consummation of the transactions
contemplated herein.
(b) In the event that any sales or use tax, or any tax in the nature
of a sales or use tax, or any transactional tax is payable or
assessed relative to the acquisition of Acquired Assets, the
Purchaser shall pay all such taxes.
(c) Any and all income, property and other taxes incurred or arising
out of the operation of the Business by the Company under the
Transition Agreement shall be the responsibility of the Company.
5.7. Bulk Transfers. The Company and Parent have requested that the
Purchaser waive, and the Purchaser hereby agrees to waive, the
requirements of the Uniform Commercial Code concerning bulk transfers,
as in effect in the various states in which the Company has assets,
including without limitation the requirement of notice to creditors of
the Company. It is expressly agreed by the parties hereto that the
obligation to indemnify the Purchaser under Section 8.3 includes any
claims by creditors of the Company or Parent or by others against the
Purchaser arising, directly or indirectly, in connection with such
request and waiver.
5.8. Change of Name. Prior to the First Closing, or promptly thereafter as
feasible, the Company shall take such action and make such filings as
are necessary to change its name to a name not similar, in any way, to
"Gold Lance." From and after the First Closing, the Company shall not
use in any way the mark or name "Gold Lance," or any other marks or
names which constitute Intellectual Property Rights, except as
permitted by Section 7 under the Transition Agreement.
SECTION
6. CONDITIONS TO OBLIGATIONS OF THE PURCHASER
Notwithstanding any other provision of this Agreement to the contrary,
the obligation of the Purchaser to effect the transactions contemplated at a
particular Closing shall be subject to the satisfaction at or prior to such
Closing (or waiver by the Purchaser) of each of the following conditions:
6.1. Representations and Warranties True. The representations and
warranties of the Company and Parent contained in this Agreement,
including without limitation in the Disclosure Schedule (and as of the
Second Closing Date, as updated at the Second Closing), shall be in
all material respects true, complete and accurate as of the date when
made and at and as of such Closing as though such representations and
warranties were made at and as of such time, except for changes
specifically permitted or contemplated by this Agreement, and except
insofar as the representations and warranties relate expressly and
solely to a particular date or period, in which case they shall be
true and correct in all material respects at such Closing with respect
to such date or period.
16
<PAGE>
6.2. Performance. The Company and Parent shall have performed and complied
in all material respects with all agreements, covenants, obligations
and conditions required by this Agreement and the Transition Agreement
to be performed or complied with by the Company and Parent on or prior
to such Closing.
6.3. Required Approvals and Consents.
(a) All action required by law and otherwise to be taken by
Parent, as the sole shareholder of the Company, and the
Board of Directors of the Company and Parent to authorize
the execution, delivery and performance of this Agreement
and the Transition Agreement and the consummation of the
transactions contemplated hereby and thereby shall have
been duly and validly taken.
(b) All Consents of or from all Authorities required hereunder
to consummate the transactions contemplated herein, and
all Consents of from all persons and entities other than
Authorities that are identified in the Disclosure Schedule
shall have been delivered, made or obtained, and the
Purchaser shall have received copies thereof.
6.4. No Proceeding or Litigation. No suit, action, investigation, inquiry
or other proceeding by any Authority or other person or entity shall
have been instituted or threatened which questions the validity or
legality of the transactions contemplated hereby or which, if
successfully asserted, would individually or in the aggregate,
otherwise have a material adverse effect on the Transferred Assets,
the Business, or the conduct of the Business by the Purchaser.
6.5. Opinion of Counsel. The Purchaser shall have received an opinion of
counsel for the Company and Parent of Goodwin, Procter & Hoar LLP,
dated the First or Second Closing Date, as appropriate, in form and
substance reasonably satisfactory to the Purchaser and its counsel.
6.6. Legislation. No Law shall have been enacted which prohibits, restricts
or delays the consummation of the transactions contemplated hereby or
any of the conditions to the consummation of such transaction.
6.7. Acceptance by Counsel to the Purchaser. The form and substance of all
legal matters contemplated hereby and of all papers delivered
hereunder shall be reasonably acceptable to counsel to the Purchaser.
6.8. Certificates. The Purchaser shall have received such certificates of
the Company's and Parent's officers, in a form and substance
reasonably satisfactory to the Purchaser, dated the First or Second
Closing Date, as appropriate, to evidence compliance with the
conditions set forth in this Section 6 and such other matters as may
be reasonably requested by the Purchaser.
6.9. Transition Agreement. The Purchaser shall have received at the First
Closing, from the Company and Parent, an executed Transition Agreement
in the form of Exhibit 1.1 hereto (with only such changes as agreed to
in writing by Purchaser).
6.10. Deliveries of the Company and Parent. The Company and Parent will have
made or caused to be made to the Purchaser delivery of the items set
forth in Section 2.2 hereof.
17
<PAGE>
SECTION
7. CONDITIONS TO OBLIGATIONS OF THE COMPANY AND PARENT
Notwithstanding anything in this Agreement to the contrary, the
obligations of the Company and Parent to effect the transactions contemplated
herein shall be subject to the satisfaction at or prior to each Closing (or
waiver by the Company or Parent) of each of the following conditions:
7.1. Representations and Warranties True. The representations and
warranties of the Purchaser contained in this Agreement shall be in
all material respects true, complete and accurate as of the date when
made and at and as of such Closing, as though such representations and
warranties were made at and as of such time, except for changes
permitted or contemplated in this Agreement, and except insofar as the
representations and warranties relate expressly and solely to a
particular date or period, in which case they shall be true and
correct in all material respects at such Closing with respect to such
date or period.
7.2. Performance. The Purchaser shall have performed and complied in all
material respects with all agreements, covenants, obligations and
conditions required by this Agreement and the Transition Agreement to
be performed or complied with by the Purchaser at or prior to such
Closing.
7.3. No Proceeding or Litigation. No suit, action, investigation, inquiry
or other proceeding by any Authority or other person or entity shall
have been instituted or threatened which questions the validity or
legality of the transactions contemplated hereby.
7.4. Certificates. The Purchaser shall have furnished the Company and
Parent with such certificates of the Purchaser's officers, in a form
and substance reasonably acceptable to the Company and Parent, dated
as of the First or Second Closing Date, as appropriate, to evidence
compliance with the conditions set forth in this Section 7 and such
other matters as may be reasonably requested by the Company or Parent.
7.5. Opinion of Counsel. The Purchaser shall have delivered to the Company
an opinion of counsel to the Purchaser, dated the First or Second
Closing Date, as appropriate, in form and substance reasonably
satisfactory to the Company and Parent and their counsel.
7.6. Deliveries of the Purchaser. The Purchaser will have made or caused to
be made to the Company and Parent delivery of the items set forth in
Section 2.3 hereof.
7.7. Acceptance by Counsel. The form and substance of all legal matters
contemplated hereby and of all papers delivered hereunder shall be
reasonably acceptable to Goodwin, Procter & Hoar, LLP, counsel to the
Company and Parent.
18
<PAGE>
SECTION
8. SURVIVAL AND INDEMNIFICATION
8.1. Survival. All representations and warranties of the parties contained
in this Agreement will survive the Second Closing Date for a period of
one year, except that the representations and warranties set forth in
Sections 3.4 and 4.2 shall survive without limitation as to time. The
covenants and agreements contained herein and in the exhibits hereto
will survive the Second Closing without limitation as to time unless
the covenant or agreement specifies the term, in which case such
covenant or agreement will survive until the expiration of such
specified term and will thereupon expire. The respective expiration
dates for the survival of the representations and warranties and the
covenants shall be referred to herein as the relevant "Expiration
Date."
8.2. Indemnification by the Purchaser. The Purchaser agrees to promptly
indemnify, defend and hold the Company and Parent and their respective
agents, representatives, employees, officers, directors, shareholders,
controlling persons and affiliates harmless from and against:
(a) any and all loss, liability or damage suffered or incurred by it
arising out of or resulting from (i) any untrue representation
of, or breach of warranty by the Purchaser in any part of this
Agreement or the Transition Agreement or any exhibit hereto,
notice of which is given to the Purchaser prior to the relevant
Expiration Date; (ii) any nonfulfillment of any covenant,
agreement or undertaking of the Purchaser in any part of this
Agreement or the Transition Agreement, notice of which is given
to the Purchaser prior to the relevant Expiration Date; (iii) any
failure to pay and perform Assumed Liabilities; or (iv) any
proceedings, claims, investigations or actions arising under any
or all federal and/or state antitrust laws arising out of or
relating to or based upon the entering into or performance of
this Agreement or any of the transactions contemplated hereby;
provided, however, that Purchaser shall not indemnify the Company
or Parent with respect to any proceedings, claims, investigations
or actions arising from or relating to any existing order of or
agreement with the FTC or the Antitrust Division; and
(b) any and all actions, suits, proceedings, claims, demands,
assessments, judgments, costs and expenses, including, without
limitation, legal and economic fees and expenses, incident to any
of the foregoing or incurred in investigating or attempting to
avoid the same or to oppose the imposition thereof, or in
enforcing the indemnification rights of the Company or Parent
pursuant this Section 8.2.
8.3. Indemnification by the Company and Parent. The Company and Parent,
jointly and severally, agree to promptly indemnify, defend and hold
the Purchaser and its respective agents, representatives,
employees, officers, directors, shareholders, controlling persons
and affiliates harmless from and against:
(a) any and all loss, liability or damage suffered or incurred by the
Purchaser, whether or not involving a third-party claim, arising
out of or resulting from (i) any untrue representation of, or
breach of warranty by the Company or Parent in any part of this
Agreement or any exhibit hereto, notice of which is given to the
Company or Parent prior to the relevant Expiration Date; (ii) any
nonfulfillment of any covenant,
19
<PAGE>
agreement or undertaking of the Company or Parent in any part of
this Agreement or the Transition Agreement, notice of which is
given to the Company or Parent prior to the relevant Expiration
Date; (iii) the failure to (A) comply with the requirements of
the Uniform Commercial Code concerning bulk transfers, as in
effect in the various states in which the Company has assets,
including, without limitation, the requirement of notice to
creditors, except that any liability arising out of the
Purchaser's failure to pay and perform the Assumed Liabilities
will not give rise to any liability of the Company and Parent
pursuant hereto; or (B) obtain any clearance certificate or
similar document required by any taxing Authority in order to
relieve the Purchaser of any obligation to withhold any portion
of the Purchase Price or in order to avoid any successor
liability for any taxes; or (iv) any proceedings, claims,
investigations or actions arising from or relating to any
existing order of or agreement with the FTC or the Antitrust
Division or (v) any Retained Liabilities; provided, that the
damages for any claim for a breach of Section 3.15 shall be
calculated pursuant to the formula set forth in Section 1.5(b);
and
(b) any and all actions, suits, proceedings, claims, demands,
assessments, judgments, costs and expenses, including, without
limitation, legal and economic fees and expenses, incident to any
of the foregoing or incurred in investigating or attempting to
avoid the same or to oppose the imposition thereof, or in
enforcing the indemnification rights of the Purchaser pursuant to
this Section 8.3.
It is the intention of the parties that, to the extent the
Purchaser has received the benefit of an adjustment to the
Purchase Price, that there not be indemnification for the matter
causing such Purchase Price adjustment.
8.4. Claims for Indemnification. Whenever any claim shall arise for
indemnification hereunder, 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.
In the case of any such claim for indemnification hereunder
resulting from or in connection with any claim or legal
proceedings of a third party, the notice to the Indemnifying
Party 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 of the Indemnifying Party, which shall not
be unreasonably withheld. If the Indemnifying Party is of the
opinion that the Indemnified Party is not entitled to
indemnification, or is not entitled to indemnification in the
amount claimed in such notice, it shall deliver, within twenty
(20) days after the receipt of such notice, a written objection
to such claim and written specifications in reasonable detail of
the aspects or details objected to, and the grounds for such
objection. If the Indemnifying Party shall file timely written
notice of objection to any claim for indemnification, the
validity and amount of such claim shall be determined by
arbitration pursuant to Section 9.12 hereof. If timely notice of
a claim is given by the Indemnified Party or if objection is not
delivered or if a claim by an Indemnified Party is admitted in
writing by an Indemnifying Party or if an arbitration award is
made in favor of an Indemnified Party, the Indemnified Party, as
a non-exclusive remedy, shall have the right to set-off the
amount of such claim or award against any amount yet owed,
whether due or to become due, by the Indemnified Party or any
subsidiary thereof under this Agreement or any agreement or
arrangement or contract
20
<PAGE>
to be entered into in connection herewith, including without
limitation, any payments under the Escrow Agreement.
SECTION
9. MISCELLANEOUS PROVISIONS
9.1. Expenses. Each of the parties hereto shall bear its own costs, fees
and expenses in connection with the negotiation, preparation,
execution, delivery and performance of this Agreement and the
Transition Agreement and the consummation of the transactions
contemplated hereby, and thereby, including without limitation fees,
commissions and expenses payable to brokers, finders, investment
bankers, consultants, exchange or transfer agents, attorneys,
accountants and other professionals, whether or not the transactions
contemplated herein are consummated.
9.2. Amendment and Modification. Subject to applicable Law, this Agreement
may be amended or modified by the parties hereto with respect to any
of the terms contained herein; provided, however, that all such
amendments and modifications must be in writing duly executed by all
of the parties hereto.
9.3. Waiver of Compliance; Consents. Any failure of a party to comply with
any obligation, covenant, agreement or condition herein may be
expressly waived in writing by the party entitled hereby to such
compliance, but such waiver or failure to insist upon strict
compliance with such obligation, covenant, agreement or condition
shall not operate as a waiver of, or estoppel with respect to, any
subsequent or other failure. No single or partial exercise of a right
or remedy shall preclude any other or further exercise thereof or of
any other right or remedy hereunder. Whenever this Agreement requires
or permits the consent by or on behalf of a party, such consent shall
be given in writing in the same manner as for waivers of compliance.
9.4. No Third Party Beneficiaries. Nothing in this Agreement shall entitle
any person or entity (other than a party hereto and his, her or its
respective successors and assigns permitted hereby) to any claim,
cause of action, remedy or right of any kind.
9.5. Notices. All notices, requests, demands and other communications
required or permitted hereunder shall be made in writing and shall be
deemed to have been duly given and effective: (i) on the date of
delivery, if delivered personally; (ii) on the earlier of the third
(3rd) day after mailing or the date of the return receipt
acknowledgment, if mailed, postage prepaid, by certified or registered
mail, return receipt requested; (iii) on the date of transmission, if
sent by facsimile, telecopy, telegraph, telex or other similar
telegraphic communications equipment; or (iv) on the date of delivery
if sent by overnight delivery service:
21
<PAGE>
If to the Company or Parent:
To: Gold Lance, Inc.
c/o Town & Country Corporation
25 Union Street
Chelsea, MA 02150
Attention: William Schawbel, Co-Chairman and
Acting Chief Executive Officer
Fax: (617) 889-6707
With a copy to:
Goodwin, Procter & Hoar LLP
Exchange Place
Boston, MA 02109
Attention: Kevin M. Dennis, Esq.
Fax: (617) 523-1231
or to such other person or address as the Company or Parent shall
furnish to the other parties hereto in writing in accordance with this
subsection.
If to the Purchaser:
To: Jostens, Inc.
5501 Norman Center Drive
Minneapolis, MN 55437
Attention: Orville E. Fisher, Jr.
Fax: (612) 830-3293
With a copy to:
Jostens, Inc.
5501 Norman Center Drive
Minneapolis, MN 55437
Attention: Legal Department
Fax: (612) 830-3380
or to such other person or address as the Purchaser shall furnish to
the other parties hereto in writing in accordance with this subsection.
9.6. Assignment. This Agreement and all of the provisions hereof shall be
binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns, but neither this
Agreement nor any of the rights, interests or obligations hereunder
shall be assigned (whether voluntarily, involuntarily, by operation of
law or otherwise) by any of the parties hereto without the prior
written consent of the other parties, provided, however, that the
Purchaser may assign this Agreement, in whole or in any part, and from
time to time, to a wholly-owned, direct or indirect, subsidiary of the
Purchaser, if the Purchaser remains bound hereby.
22
<PAGE>
9.7. Governing Law. This Agreement and the legal relations among the
parties hereto shall be governed by and construed in accordance with
the internal substantive laws of the State of Minnesota (without
regard to the laws of conflict that might otherwise apply) as to all
matters, including without limitation matters of validity,
construction, effect, performance and remedies.
9.8. Counterparts. This Agreement may be executed simultaneously in one or
more counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.
9.9. Headings. The table of contents and the headings of the sections and
subsections of this Agreement are inserted for convenience only and
shall not constitute a part hereof.
9.10. Entire Agreement. The Disclosure Schedule and the exhibits and other
writings referred to in this Agreement or in the Disclosure Schedule
or any such exhibit or other writing are part of this Agreement,
together they embody the entire agreement and understanding of the
parties hereto in respect of the transactions contemplated by this
Agreement and together they are referred to as "this Agreement" or
"the Agreement." There are no restrictions, promises, warranties,
agreements, covenants or undertakings, other than those expressly set
forth or referred to in this Agreement. This Agreement supersedes all
prior agreements and understandings between the parties with respect
to the transaction or transactions contemplated by this Agreement.
Provisions of this Agreement shall be interpreted to be valid and
enforceable under applicable Law to the extent that such
interpretation does not materially alter this Agreement; provided,
however, that if any such provision shall become invalid or
unenforceable under applicable Law such provision shall be stricken to
the extent necessary and the remainder of such provisions and the
remainder of this Agreement shall continue in full force and effect.
9.11. Injunctive Relief. It is expressly agreed among the parties hereto
that monetary damages would be inadequate to compensate a party hereto
for any breach by any other party of its covenants and agreements in
Sections 5.1 and 5.2 hereof. Accordingly, the parties agree and
acknowledge that any such violation or threatened violation will cause
irreparable injury to the other and that, in addition to any other
remedies which may be available, such party shall be entitled to
injunctive relief against the threatened breach of Sections 5.1 and
5.2 hereof or the continuation of any such breach without the
necessity or proving actual damages and may seek to specifically
enforce the terms thereof.
9.12. Arbitration. With the sole exception of the injunctive relief
contemplated by Section 9.11 above, any controversy or claim arising
out of or relating to this Agreement, or the making, performance or
interpretation thereof, including without limitation alleged
fraudulent inducement thereof, shall be settled by binding arbitration
in Minneapolis, Minnesota by a panel of three arbitrators in
accordance with the Commercial Arbitration Rules of the American
Arbitration Association. Judgment upon any arbitration award may be
entered in any court having jurisdiction thereof and the parties
consent to the jurisdiction of the courts of the State of Minnesota
for this purpose.
9.13. List of Defined Terms. Reference is made to Exhibit 9.13 for a listing
and location of terms defined in this Agreement.
23
<PAGE>
ACCORDINGLY, the parties hereto have caused this Agreement to be duly
executed as of the day and year first above written.
JOSTENS, INC.
/s/ Orville E. Fisher, Jr.
By: __________________________________
Senior Vice President
Its: __________________________________
GOLD LANCE, INC.
/s/ Billy D. Starnes, Jr.
By: __________________________________
President
Its: __________________________________
TOWN & COUNTRY CORPORATION
/s/ Francis X. Correra
By: __________________________________
Senior Vice President
Its: __________________________________
24
<PAGE>
Exhibit 9.13
LIST OF DEFINED TERMS
Term Page
---------
Accounts Receivable.......................................................2
Agreement.................................................................1
Allocation Schedule.......................................................5
Antitrust Division.......................................................15
Assumed Contracts.........................................................3
Assumed Liabilities.......................................................3
Authorities...............................................................9
Authority.................................................................9
Business..................................................................1
Company...................................................................1
Consent...................................................................9
Consents..................................................................9
Contingent Payment........................................................4
Disclosure Schedule.......................................................7
Excluded Assets...........................................................2
Expiration Date..........................................................19
First Closing.............................................................5
First Closing Date........................................................5
First Closing Date Payment................................................3
FTC......................................................................15
HSR Act..................................................................15
Indemnified Party........................................................20
Indemnifying Party.......................................................20
Intellectual Property Rights..............................................2
Latest Balance Sheet......................................................9
Law.......................................................................9
Laws......................................................................9
Liabilities Undertaking...................................................3
Lien.....................................................................10
Objection Notice..........................................................4
Parent....................................................................1
Purchase Price............................................................3
Purchaser.................................................................1
Retained Liabilities......................................................3
Second Closing............................................................6
1
<PAGE>
Second Closing Date.......................................................6
Second Closing Date Payment...............................................3
Third Closing Date........................................................6
Third Closing Date Payment................................................4
Transferred Assets........................................................1
2
Exhibit 2.2
Transition Agreement
dated as of April 18, 1997
By and Among
Jostens, Inc.,
Gold Lance, Inc.
and
Town & Country Corporation
<PAGE>
TRANSITION AGREEMENT
THIS TRANSITION AGREEMENT (this "Transition Agreement"), dated as of
April 18, 1997, is by and among Jostens, Inc., a Minnesota corporation (the
"Purchaser"), Gold Lance, Inc., a Massachusetts corporation (the "Company"), and
Town & Country Corporation, a Massachusetts corporation ("Parent"). Capitalized
terms used herein and not defined have the meanings ascribed to them in the
Purchase Agreement (as defined herein).
A. The parties have entered into a certain Asset Purchase Agreement
dated as of April 18, 1997 (the "Purchase Agreement"), pursuant to which the
Purchaser agreed to purchase from the Company certain assets (the "Transferred
Assets") used in the manufacture and sale of school, mothers, recognition and
other specialty rings to retail jewelers by the Company in accordance with
historic practice (the "Business"), and the Company has retained the other
assets it has used for the Business (the "Excluded Assets").
B. The parties understand and acknowledge that it is not practical or
economically feasible for the Purchaser to remove the Transferred Assets
immediately and attempt to continue and maintain the Business, and as an
inducement for the Purchaser to enter into the Purchase Agreement, for a
transition period the Company has agreed to continue and maintain the Business
until July 31, 1997, and to assist the Purchaser in transitioning the
Transferred Assets and the Business to the Purchaser's operations and locations.
C. Because the Company is a wholly-owned subsidiary of Parent, Parent
has a significant economic interest to induce Purchaser to enter into this
Transition Agreement by making to Purchaser the representations, warranties,
covenants and agreements of Parent contained herein.
Accordingly, and in consideration of the representations, warranties,
covenants, agreements and conditions herein contained, the parties hereto agree
as follows:
SECTION 1.
CONTINUATION AND
MAINTENANCE OF THE BUSINESS
1.1. Company's Covenants Regarding Business. During the term of this
Transition Agreement, subject to winding down the Business by the
Company consistent with the Transition Plan (as defined below), and
except to the extent Purchaser in its sole judgment shall otherwise
consent in writing (which consent will not be unreasonably withheld,
the Purchaser agreeing not to require the Company to incur any unneeded
or unnecessary costs), the Company agrees that it shall, and Parent
agrees that it shall cause Company to, do or not do the following:
(a) The Company shall operate and conduct the Business on a
"reasonable efforts" basis and in the ordinary course and
consistent with past practices, including, without limitation,
(i) not accelerating or delaying any product deliveries, and
(ii) maintaining and preserving the quality of product and
service to customers of the Business. For purposes of this
Transition Agreement, a "reasonable efforts" basis means
performing, or causing
<PAGE>
to be performed, identified tasks to the same level or degree
of involvement in continuing and maintaining the Business prior
to the date of this Transition Agreement. Subject to winding
down the Business consistent with the Transition Plan, the
Company and Parent, jointly and severally, agree to continue
and maintain the Business hereunder so that the Business will
be of equal nature and quality to that which the Company
required prior to the date of this Transition Agreement;
(b) The Company shall promptly notify Purchaser in writing of, and
furnish to Purchaser any information the Company or Parent may
have with respect to, the occurrence of any event or the
existence of any state of facts that would result in any of the
Company's or Parent's representations and warranties in the
Purchase Agreement not being true in any material respect if
they were made at any time prior to or as of the date of the
Second Closing;
(c) The Company shall maintain and keep the Excluded Assets and the
Transferred Assets, (to the extent left in the temporary
possession of the Company under this Transition Agreement)
including properties and equipment, in good repair, working
order and condition, except for ordinary wear and tear;
(d) The Company shall on a reasonable efforts basis endeavor to
maintain its existing relationships with customers, suppliers
and others as if it were continuing in the business. In the
event that the Company loses the services of a sales, marketing
or customer service employee, or an employee deemed critical to
customer relationships (each, a "Lost Employee") during the term
of this Transition Agreement, the Purchaser shall have the right
to hire an employee (the "Hired Employee") to replace the Lost
Employee for the remaining term of this Transition Agreement;
provided, however, that the Hired Employee will be an employee
of the Purchaser but subject to the supervision of the Company
during the term of this Transition Agreement. If Purchaser
wishes to hire employees of the Company, such employment offer
shall require that such employees remain in their current
positions and maintain their current responsibilities with the
Company until the end of this Transition Agreement, during which
such employees will be supervised by the Company. The Company
shall reimburse the Purchaser for the cost of the Hired
Employee's salary and related payroll expenses during the
remaining term of the Transition Agreement up to the amount that
would have been expended on the Lost Employee during the same
period. The Company shall maintain on a reasonable efforts basis
an adequate number and quality of personnel in operating and
non-operating positions as are necessary to meet the Company's
obligations.
(e) The Company shall pay accounts or notes payable only in the
ordinary course of business and consistent with past practice;
(f) The Company shall restock inventory as needed to fill customers
orders;
(g) Except in the ordinary course of business and consistent with
past practices, the Company shall not offer any early payment
terms or deferred payment terms;
2
<PAGE>
(h) Unless otherwise authorized by Purchaser, the Company shall
continue to effect payments in a manner consistent with prior
practice and to perform, in all material respects, its
obligations under all leases, contracts, commitments and
agreements; and
(i) During the term of the Transition Agreement, the Company shall
make all reasonable selling and marketing efforts, including
travel and entertainment expenditures, as if the Company were
continuing in business; provided, however, that the Company will
have no obligation to spend the $230,000 that has been budgeted
for its fiscal period ending July 31, 1997 on samples and
collateral and other marketing materials related to its
post-July 31, 1997 business needs.
1.2. Purchaser's Covenants. Except as otherwise contemplated in this
Transition Agreement, during the term of this Transition Agreement,
the Purchaser agrees that:
(a) it shall not take any action that will cause the Company to
incur costs or expenses in addition to costs or expenses
incurred by the Company in the ordinary course of its business
consistent with past practices;
(b) it shall not limit or increase the expenses of the Company, or
instruct the Company with respect to expenses, during the term
of the Transition Agreement;
(c) it shall have no control whatsoever over the Company's
operations, including, without limitation, the manufacture,
production, sale and delivery of school, mothers, recognition
and other specialty rings to retail jewelers, and nothing in
this Transition Agreement or the Transition Plan shall impair
the ability of the Company to perform its obligations under this
Transition Agreement or the Purchase Agreement; and
(d) subject to Section 2.1(b) hereof, if the Purchaser requests that
additional compensation be paid to employees of the Company,
such compensation and all expenses related to such compensation
shall be solely at the Purchaser's expense.
1.3. Post Transition Agreement Assistance. After the term of this Agreement
as described in Section 4.1, the Company shall, to the extent it is
able, if requested by Purchaser and at Purchaser's expense, fully
cooperate with, and provide all reasonable assistance to the Purchaser
on a best efforts basis in connection with the transition of the
Business and the customer accounts to Purchaser.
SECTION 2.
PERSONNEL MATTERS
2.1. Company Personnel.
(a) Supervision and Compensation. The Company will employ, pay,
supervise, direct and discharge all Company personnel. The
Company will be solely responsible for the payment of wages,
salaries, benefits and any other direct and indirect
compensation for Company personnel. Accordingly, the Company
understands and agrees that it will be responsible for the
Company's employees' worker's compensation insurance, employment
taxes and other employer liabilities relating to such personnel.
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The Company expressly understands and agrees that it will be
required to give all notifications to its employees as required
by the WARN Act from time to time under this Transition
Agreement. It is further expressly agreed that if the Company
determines to terminate any of Company employees during the term
of this Transition Agreement or thereafter, the Company shall be
responsible for any WARN obligations and notifications and
employee payments and costs required during any notice period;
provided, however that if this Transition Agreement is
terminated or altered in such a way as to change the timing of
the WARN Act requirements (as determined by the Company) prior
to July 31, 1997 as a result of Purchaser's request or conduct,
Purchaser shall be responsible for any and all costs and
expenses arising from the delivery of late WARN Act violations.
(b) Retention Bonuses. The Company currently has employment
agreements with the six employees identified in Exhibit 2.1(b)
attached hereto, and such employment agreements contemplate
retention bonuses as listed on such Exhibit 2.1(b). The Company
agrees to pay such retention bonuses.
Notwithstanding the above, in the event the Purchaser modifies or
changes the Transition Plan that causes an increase in costs to the
Company that would have otherwise been incurred by the Company in the
absence of such change, the Purchaser shall pay such increased cost.
SECTION
3. RECORDS AND INSPECTIONS
The Company will keep and maintain complete and accurate records and books of
account, consistent with its past practices, showing the operations and results
of the Business. Such records and books of account shall be maintained for a
period of one (1) year following termination of this Transition Agreement. The
Company agrees to permit the Purchaser and the Purchaser's duly authorized
representatives and agents, at the Purchaser's expense, complete access to the
Company's facilities to audit, inspect and copy the Company's records and books
of account with respect to the Business at all reasonable times.
SECTION
4. TERM AND TERMINATION
4.1. Transitional Nature of This Agreement. The parties understand and
acknowledge that the continuation and maintenance of the Business by
the Company is intended only to be transitional in nature. The
Purchaser understands that the Company has no long-term interest in
continuing this Transition Agreement, and will be discontinuing all of
its operations immediately after termination of this Transition
Agreement.
4.2. Term. This Transition Agreement shall take effect as of the date first
above written and, except for the provisions of this Transition
Agreement which by their terms continue for a longer period, will
continue until July 31, 1997 or such other date as mutually agreed.
4.3. Termination. This Transition Agreement may be terminated:
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(a) by mutual written consent of the parties hereto;
(b) at the end of its term, as set forth in Section 4.2, unless the
parties agree to an earlier termination pursuant to Section
4.3(a); or
(c) by a party giving notice to another party that such other party
is in material breach of this Transition Agreement and the
breaching party's failure to cure such breach within thirty (30)
calendar days of such notice.
4.4. Rights and Obligations on Termination. In the event of termination of
this Transition Agreement for any reason, the obligations hereunder
which by their terms or clear intent extend beyond termination of this
Transition Agreement, including, without limitation, the obligations
hereunder pursuant to Section 3 (relating to records and reports), and
Section 5.3 (relating to confidentiality), will survive termination of
this Transition Agreement.
SECTION
5. ADDITIONAL COVENANTS
5.1. Employees.
(a) Employees of the Company. It is expressly agreed by the parties
hereto that the Purchaser has not agreed to hire any employees
of the Company or assume any obligations or liabilities relating
to or arising out of the Company's relationships with its
employees either prior to, during or after the term of this
Transition Agreement. Except as otherwise provided in this
Transition Agreement, all obligations and liabilities shall be
the Company's.
(b) Employment Offers; Non-Solicitation. Notwithstanding Section
5.1(a) above, the Purchaser may in its sole discretion offer to
any employees of the Company at any time the opportunity to work
for the Purchaser or any subsidiary of the Purchaser. Purchaser
anticipates any such offers will be made within two (2) weeks
after delivery of the final Transition Plan.
5.2. Full Access by the Purchaser; Cooperation. The Company shall and Parent
shall cause the Company to afford to the Purchaser and its directors,
officers, employees, counsel, accountants, investment advisors and
other authorized representatives and agents free and full access to the
facilities, properties, books and records of the Company in order that
the Purchaser may have full opportunity to make such evaluation,
analysis and investigations as it shall desire to make of the
operations of the Company and the Business during this Transition
Agreement; provided, however, that any such evaluation, analysis or
investigation shall be conducted in such a manner as not to interfere
unreasonably with the Company's business operations; and, provided,
further, that the Company shall furnish such additional financial and
operating data and other information as the Purchaser shall, from time
to time, reasonably request, including without limitation access to the
working papers of its independent certified public accountants to the
extent they exist; and, provided, further, that any such evaluation,
analysis or investigation shall not affect or otherwise diminish or
obviate in any respect any of the representations and warranties of the
Company or Parent herein.
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Both the Company and the Purchaser acknowledge that from the First
Closing Date through June 30, 1997, each will be required to be in
contact with and otherwise involved with current customers of the
Business. For example, the Company, as part of its continuation and
maintenance of the Business during the term of the Transition
Agreement, will be involved in the selling, distribution and shipping
of product to customers, as well as customer service and collection
matters. The Purchaser will be involved in introducing itself to
customers of the Business, assuring customers of the future customer
relationship with Purchaser, and, commencing in July 1997, presenting
to customers new samples and designs and marketing material. To this
end, each of the Company and the Purchaser agree to cooperate with each
other in their communications with customers of the Business, as
outlined in the attached Exhibit 5.2, and (i) Purchaser agrees that it
shall attempt to conduct its pre-June 30 contact with customers of the
Business so as to not unduly interfere with the Company's obligations
under this Transition Agreement or the Purchase Agreement, and (ii) the
Company agrees that it shall attempt to conduct its contact with
customers of the Business so as to not unduly interfere with the
Purchaser's efforts to develop post-June 30 sales and deliveries.
5.3. Confidentiality.
(a) Proprietary Information. "Proprietary Information" means all
information which is directly or indirectly disclosed to any
party hereunder, regardless of the form in which it is disclosed,
relating in any way to any other party's markets, customers,
products, patents, inventions, proprietary information,
procedures, processes, methods, designs, strategies, know-how,
plans, assets, liabilities, costs, expenses, revenues, profits,
organization, officers, directors, employees, representatives,
agents, distributors, dealers or business in general. All rights
to "Proprietary Information" which are part of the Transferred
Assets belong to Purchaser.
(b) Non-Disclosure. The parties acknowledge and agree that each
other's Proprietary Information is confidential and proprietary.
Without a party's express prior written consent, the parties
agree not to use any of such party's Proprietary Information for
any purpose other than as permitted or required for performance
hereunder. Without a party's express prior written consent, the
parties further agree not to disclose or provide any of such
party's Proprietary Information to any third party and to take
all necessary measures to prevent any such disclosure by their
respective officers, directors, managers, employees, agents or
representatives. The foregoing obligations of non-disclosure and
confidentiality will survive termination of this Transition
Agreement. Following termination of this Transition Agreement,
the parties will use their reasonable efforts to return all
Proprietary Information (and reproductions thereof) of the other.
(c) Public Information; Court Order. Nothing herein will prevent a
party from using, disclosing or authorizing the disclosure of any
Proprietary Information of another party hereunder: (a) which is
or hereafter becomes part of the public domain or otherwise
becomes generally available to the public through no fault of the
disclosing party; (b) to the extent and upon the terms and
conditions that the parties may have previously made their
respective Proprietary Information available to certain persons;
or (c) to the extent that the disclosing party is required to
disclose such Proprietary Information by law or court order.
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(d) Legal Action. At the request of a party, the parties will
cooperate fully with each other in any and all legal actions
taken by the other to protect the requesting party's rights in
its Proprietary Information. The party seeking to protect such
rights will bear all costs and expenses reasonably incurred by
any other party in the course of cooperating in such legal
action.
5.4. Further Assurances; Cooperation.
(a) Each party hereto shall execute and deliver such instruments and
take such other actions as the other party or parties, as the
case may be, may reasonably require from time to time in order to
carry out the intent of this Transition Agreement.
(b) Purchaser agrees to develop a plan no later than May 15, 1997 for
the complete and orderly transition of the Business to it at or
prior to the termination of this Transition Agreement (the
"Transition Plan"); provided, however, that the Transition Plan
shall be subject to Section 1.2 hereof. The Company and Parent
agree to cooperate with the Purchaser, and Purchaser agrees to
cooperate with the Company and Parent, to provide for the
implementation of such Transition Plan as soon as practicable.
Representatives of the Company, Parent and the Purchaser shall
confer on a regular and reasonable basis (at least weekly) to
report on material operational matters, the general status of
ongoing operations, and the status of the Transition Plan.
5.5. Parent Guarantee. The Parent hereby guarantees, in all respects, all
obligations of the Company under this Transition Agreement.
SECTION
6. LIMITED LICENSE
Solely for the purposes of the Company's operation under and during this
Transition Agreement, Purchaser hereby grants to the Company a nonexclusive,
royalty-free license to use the Proprietary Information and the trademarks which
are part of the Intellectual Property Rights on all advertising material,
letterheads, announcements, public communications and packaging materials
utilized by the Company in the ordinary course of business and upon all products
manufactured by the Company under and during this Transition Agreement. It is
understood that the Company shall not be entitled to make any change,
alteration, or modification of said marks other than as expressly provided
herein except with the prior written approval of Purchaser.
It is expressly agreed between the parties that Purchaser retains full ownership
of the marks and any applications or registrations thereof. The Company agrees
to maintain quality on goods sold under the marks in accordance with the
specifications previously established by the Company. Purchaser reserves the
right to inspect the quality of the goods sold under the marks to ensure the
quality as above required. This license shall not be assignable by the Company
without the prior written consent of Purchaser. This license shall terminate and
be extinguished for all purposes on July 31, 1997.
7
<PAGE>
SECTION
7. MISCELLANEOUS PROVISIONS
7.1. Compliance with Laws. The Company and Parent, jointly and severally,
warrant to the Purchaser that the Company will abide by and comply with
all applicable laws and regulations in connection with continuing and
maintaining the Business during this Transition Agreement.
7.2. Taxes. Any and all income, property and taxes incurred or arising out
of the operation of the Business by the Company under this Transition
Agreement shall be paid by, and be the sole responsibility of, the
Company.
7.3. Relationship. Other than with respect to the performance of any
agreement or obligation of a party which is expressly required pursuant
to this Transition Agreement or the Purchase Agreement, (i) this
Transition Agreement and the Purchase Agreement do not make any party
the employee, agent, partner, co-venturer or legal representative of
the other for any purpose whatsoever; and (ii) no party is granted any
right or authority under this Transition Agreement or the Purchase
Agreement to assume or to create any obligation or responsibility,
express or implied, on behalf of or in the name of any other party;
provided, however, the performance of the Purchaser and the Company
hereunder must meet the respective representations, warranties and
covenants of the Purchaser and the Company and Parent set forth in this
Transition Agreement and the Purchase Agreement; further provided, this
Transition Agreement and the Purchase Agreement do not cause any of the
employees or agents of the Company to be made, or deemed to be made for
any purpose, employees or agents of the Purchaser.
7.4. Expenses. Each of the parties hereto shall bear its own costs, fees and
expenses in connection with the negotiation, preparation, execution,
delivery and performance of this Transition Agreement and the
consummation of the transactions contemplated hereby, including without
limitation fees, commissions and expenses payable to brokers, finders,
investment bankers, consultants, attorneys, accountants and other
professionals.
7.5. Amendment and Modification. Subject to applicable law, this Transition
Agreement may be amended or modified by the parties hereto at any time
with respect to any of the terms contained herein; provided, however,
that all such amendments and modifications must be in writing duly
executed by all of the parties hereto.
7.6. No Third Party Beneficiaries. Nothing in this Transition Agreement
shall entitle any person or entity (other than a party hereto and his,
her or its respective successors and assigns permitted hereby) to any
claim, cause of action, remedy or right of any kind.
7.7. Notices. All notices, requests, demands and other communications
required or permitted hereunder shall be made in writing and shall be
deemed to have been duly given and effective: (i) on the date of
delivery, if delivered personally; (ii) on the earlier of the second
(2nd) day after mailing or the date of the return receipt
acknowledgment, if mailed, postage prepaid, by certified or registered
mail, return receipt requested; (iii) on the date of transmission, if
sent by facsimile, telecopy, telegraph, telex or other similar
telegraphic communications equipment; or (iv) on the date of delivery,
if delivered by overnight delivery service:
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If to the Company or Parent:
To: Gold Lance, Inc.
c/o Town & Country Corporation
25 Union Street
Chelsea, MA 02150
Attention: William Schawbel, Co-Chairman
and Acting Chief Executive Officer
Fax: (617) 889-6707
With a copy to:
Goodwin, Procter & Hoar LLP
Exchange Place
Boston, MA 02109
Attention: Kevin M. Dennis, Esq.
Fax: (617) 523-1231
or to such other person or address as the Company or Parent shall
furnish to the other parties hereto in writing in accordance with this
subsection.
If to the Purchaser:
To: Jostens, Inc.
5501 Norman Center Drive
Minneapolis, MN 55437
Attention: Orville E. Fisher, Jr.
Fax: (612) 830-3293
With a copy to:
Jostens, Inc.
5501 Norman Center Drive
Minneapolis, MN 55437
Attention: Legal Department
Fax: (612) 830-3380
or to such other person or address as the Purchaser shall furnish to
the other parties hereto in writing in accordance with this subsection.
7.8. Assignment. This Transition Agreement and all of the provisions hereof
shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and permitted assigns, but neither this
Transition Agreement nor any of the rights, interests or obligations
hereunder shall be assigned (whether voluntarily, involuntarily, by
operation of law or otherwise) by any of the parties hereto without the
prior written consent of the other parties, provided, however, that the
Purchaser may assign this Transition Agreement, in whole or in any
part, and from time to time, to a wholly-owned, direct or indirect,
subsidiary of the Purchaser, if the Purchaser remains bound hereby.
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7.9. Governing Law. This Transition Agreement and the legal relations among
the parties hereto shall be governed by and construed in accordance
with the internal substantive laws of the State of Minnesota (without
regard to the laws of conflict that might otherwise apply) as to all
matters, including without limitation matters of validity,
construction, effect, performance and remedies.
7.10. Survival of Provisions. The rights, remedies, agreements, obligations
and covenants of the parties contained in or made pursuant to this
Transition Agreement which by their terms or clear intent extend beyond
the termination of this Transition Agreement will survive the
termination of this Transition Agreement and will remain in full force
and effect.
7.11. Severability. In the event that any of the terms or provisions of this
Transition Agreement are in conflict with any rule of law or statutory
provision or otherwise unenforceable under the laws or regulations of
any government or subdivision thereof having jurisdiction over this
Transition Agreement, such terms or provisions will be deemed stricken
from this Transition Agreement to the extent necessary to avoid such
conflict, but such invalidity or unenforceability will not invalidate
any of the other terms or provisions of this Transition Agreement and
the remainder of such terms or provisions and the remainder of this
Transition Agreement will continue in full force and effect, unless the
invalidity or unenforceability of any such provisions hereof does
substantial violence to, or where the invalid or unenforceable
provisions comprise an integral part of, or are otherwise inseparable
from, the remainder of this Transition Agreement.
7.12. Waiver. No failure or delay by any party to take any action or assert
any right or remedy hereunder or to enforce strict compliance with any
provision hereof will be deemed to be a waiver of, or estoppel with
respect to, such right, remedy or noncompliance in the event of the
continuation or repetition of the circumstances giving rise to such
right, remedy or noncompliance. No waiver will be effective unless
given in a duly executed written instrument.
7.13. Counterparts. This Transition Agreement may be executed simultaneously
in one or more counterparts, each of which shall be deemed an original,
but all of which together shall constitute one and the same instrument.
7.14. Headings. The table of contents and the headings of the sections and
subsections of this Transition Agreement are inserted for convenience
only and shall not constitute a part hereof.
7.15. Entire Agreement. This Transition Agreement, including the exhibits and
schedules referred to herein (which are incorporated as an integral
part of this Transition Agreement), together with the Purchase
Agreement, constitutes the entire agreement and understanding of the
parties hereto in respect of the subject matter hereof, and supersedes
all prior agreements and understandings between the parties with
respect to the subject matter hereof.
7.16. Capitalized Terms. Capitalized terms which are not otherwise defined
herein shall have the respective meanings given to such terms in the
Purchase Agreement or the Escrow Agreement.
7.17. Injunctive Relief. It is expressly agreed among the parties hereto that
monetary damages would be inadequate to compensate a party hereto for
any breach by any other party of its covenants and agreements in
Sections 5.2(b) and 5.4 hereof. Accordingly, the parties agree and
acknowledge that any such violation or threatened violation will cause
irreparable injury to the other and that, in addition to any other
remedies which may be available, such party shall be entitled to
injunctive relief against the threatened breach of Sections 5.2(b) and
5.4 hereof or the
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continuation of any such breach without the necessity or proving
actual damages and may seek to specifically enforce the terms thereof.
7.18. Arbitration. With the sole exception of the injunctive relief
contemplated by Section 7.17 above, any controversy or claim arising
out of or relating to this Transition Agreement, or the making,
performance or interpretation thereof, shall be settled by binding
arbitration in Minneapolis, Minnesota by a panel of three arbitrators
in accordance with the Commercial Arbitration Rules of the American
Arbitration Association. Judgment upon any arbitration award may be
entered in any court having jurisdiction thereof and the parties
consent to the jurisdiction of the courts of the State of Minnesota for
this purpose.
ACCORDINGLY, the parties hereto have caused this Transition Agreement
to be duly executed as of the day and year first above written.
JOSTENS, INC.
/s/ Orville E. Fisher, Jr.
By: __________________________________
Senior Vice President
Its: __________________________________
GOLD LANCE, INC.
/s/ Billy D. Starnes, Jr.
By: __________________________________
President
Its: __________________________________
TOWN & COUNTRY CORPORATION
/s/ Francis X. Correra
By: __________________________________
Senior Vice President
Its: __________________________________
11
