<PAGE>
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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
MAY 28, 1998
MAIL-WELL, INC.
(Exact Name of Registrant as Specified in its Charter)
COLORADO
(State or Other Jurisdiction of Incorporation)
1-12551 84-1250533
(Commission File Number) (IRS Employer Identification Number)
23 INVERNESS WAY EAST, ENGLEWOOD, CO 80112
(Address of principal executive offices) (Zip Code)
303-790-8023
(Registrant's telephone number, including area code)
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<PAGE>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On May 28, 1998, the Registrant acquired Anderson Lithograph Company
("Anderson"), a commercial printing company based in Los Angeles, California.
The acquisition was accomplished through the merger of a newly formed
wholly-owned subsidiary of the Registrant with Anderson Lithograph Holding Corp.
("Anderson Holdings"), the parent company of Anderson. The Registrant will
continue to operate the division under the Anderson name. The purchase price
was approximately $90.8 million, subject to certain adjustments for delivered
working capital and indemnities, which consisted of cash and the assumption of
approximately $8.3 million in indebtedness of Anderson. Two of the principal
shareholders of Anderson Holdings, BankAmerica Ventures and BankAmerica Capital,
are affiliates of Bank of America, N.A., the Registrant's primary lender.
The funds used to acquire Anderson came from cash on hand and draws under
an unsecured line of credit with Bank of America.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits.
2. Agreement and Plan of Merger among Mail-Well I Corporation, Mail-Well,
Inc. and Anderson Lithograph Holding Corp. dated April 23, 1998.
The Registrant undertakes to furnish supplementally to the Commission upon
request a copy of any omitted schedule to the foregoing Exhibit.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized
Mail-Well, Inc.
---------------
(Registrant)
By: /s/ Paul V. Reilly
---------------------------------
Paul V. Reilly, President and
Chief Operating Officer
Date: June 8, 1998
<PAGE>
EXHIBIT INDEX
2. Agreement and Plan of Merger among Mail-Well I Corporation, Mail-Well,
Inc. and Anderson Lithograph Holding Corp. dated April 23, 1998.
<PAGE>
EXECUTION COPY
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AGREEMENT AND PLAN OF MERGER*
AMONG
MAIL-WELL I CORPORATION,
MAIL-WELL, INC.
AND
ANDERSON LITHOGRAPH HOLDING CORP.
APRIL 23, 1998
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* This copy of the Agreement incorporates those amendments effected by that
certain Letter of Amendment by and among Buyer, Buyer Sub, Acquisition and the
Company dated as of May 5, 1998.
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TABLE OF CONTENTS
<TABLE>
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<S> <C>
ARTICLE I DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . .2
ARTICLE II THE MERGER. . . . . . . . . . . . . . . . . . . . . . . . 10
2.01 Merger. . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.02 Effective Time. . . . . . . . . . . . . . . . . . . . . . . . 10
2.03 Certificate of Incorporation, Bylaws, Directors and
Officers, Name . . . . . . . . . . . . . . . . . . . . . . 10
2.04 Assets and Liabilities. . . . . . . . . . . . . . . . . . . . 11
2.05 Further Assurances. . . . . . . . . . . . . . . . . . . . . . 11
2.06 Conversion of Securities. . . . . . . . . . . . . . . . . . . 12
2.07 Determination of Adjusted Purchase Price; Adjustments . . . . 13
2.08 Payment of Cash for Common Stock. . . . . . . . . . . . . . . 16
2.09 Stockholders' Consent . . . . . . . . . . . . . . . . . . . . 18
2.10 Representatives . . . . . . . . . . . . . . . . . . . . . . . 18
2.11 Consummation of Merger. . . . . . . . . . . . . . . . . . . . 20
2.12 Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
2.13 Formation and Organization of Acquisition . . . . . . . . . . 21
2.14 Acquisition as a Party to this Agreement. . . . . . . . . . . 21
ARTICLE III REPRESENTATIONS AND WARRANTIES REGARDING THE COMPANY. . . 22
3.01 Organization, Power and Authority . . . . . . . . . . . . . . 22
3.02 No Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . 22
3.03 Capital Stock . . . . . . . . . . . . . . . . . . . . . . . . 22
3.04 No Conflict or Violation. . . . . . . . . . . . . . . . . . . 23
3.05 Financial Statements. . . . . . . . . . . . . . . . . . . . . 24
3.06 No Material Adverse Change. . . . . . . . . . . . . . . . . . 24
3.07 Consents and Approvals. . . . . . . . . . . . . . . . . . . . 25
3.08 Litigation. . . . . . . . . . . . . . . . . . . . . . . . . . 25
3.09 Contracts and Commitments . . . . . . . . . . . . . . . . . . 26
3.10 Employee Benefit Plans. . . . . . . . . . . . . . . . . . . . 28
3.11 Permits . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
3.12 Environmental Matters . . . . . . . . . . . . . . . . . . . . 31
3.13 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
3.14 Brokers' Fees . . . . . . . . . . . . . . . . . . . . . . . . 32
3.15 Labor Matters . . . . . . . . . . . . . . . . . . . . . . . . 32
3.16 Leases. . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
3.17 Title to Assets . . . . . . . . . . . . . . . . . . . . . . . 34
3.18 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . 34
3.19 Patents and Trademarks. . . . . . . . . . . . . . . . . . . . 34
3.20 Title to Real Property. . . . . . . . . . . . . . . . . . . . 35
3.21 Disclosure. . . . . . . . . . . . . . . . . . . . . . . . . . 35
3.22 Related Party Transactions. . . . . . . . . . . . . . . . . . 35
3.23 Customers and Vendors . . . . . . . . . . . . . . . . . . . . 35
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ARTICLE IV REPRESENTATIONS AND WARRANTIES OF BUYER . . . . . . . . . 36
4.01 Organization, Power and Authority of Buyer. . . . . . . . . . 36
4.02 Organization, Power and Authority of Acquisition. . . . . . . 36
4.03 Authorization . . . . . . . . . . . . . . . . . . . . . . . . 37
4.04 No Conflict or Violation. . . . . . . . . . . . . . . . . . . 37
4.05 Consents and Approvals. . . . . . . . . . . . . . . . . . . . 38
4.06 Brokers' Fees . . . . . . . . . . . . . . . . . . . . . . . . 38
4.07 Buyer's Investigation . . . . . . . . . . . . . . . . . . . . 38
4.08 Financing . . . . . . . . . . . . . . . . . . . . . . . . . . 38
ARTICLE V CONDITIONS TO THE OBLIGATIONS OF THE COMPANY. . . . . . . 39
5.01 Representations and Warranties True . . . . . . . . . . . . . 39
5.02 Covenants and Agreements Performed. . . . . . . . . . . . . . 39
5.03 No Actions, Suits or Proceedings. . . . . . . . . . . . . . . 39
5.04 Officers' Certificate . . . . . . . . . . . . . . . . . . . . 39
5.05 HSR Act Filings . . . . . . . . . . . . . . . . . . . . . . . 39
5.06 Existing Agreements . . . . . . . . . . . . . . . . . . . . . 40
5.07 Required Consents . . . . . . . . . . . . . . . . . . . . . . 40
5.08 Opinion . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
5.09 Certificate . . . . . . . . . . . . . . . . . . . . . . . . . 40
5.10 Proceedings and Documents . . . . . . . . . . . . . . . . . . 40
5.11 Escrow Agreement. . . . . . . . . . . . . . . . . . . . . . . 41
ARTICLE VI CONDITIONS TO THE OBLIGATIONS OF BUYER AND ACQUISITION. . 41
6.01 Representations and Warranties True . . . . . . . . . . . . . 41
6.02 Covenants and Agreements Performed. . . . . . . . . . . . . . 41
6.03 No Actions Suits or Proceedings . . . . . . . . . . . . . . . 41
6.04 Company Certificate . . . . . . . . . . . . . . . . . . . . . 41
6.05 HSR Act Filings . . . . . . . . . . . . . . . . . . . . . . . 42
6.06 Consents. . . . . . . . . . . . . . . . . . . . . . . . . . . 42
6.07 Opinion . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
6.08 No Material Change. . . . . . . . . . . . . . . . . . . . . . 42
6.09 Appraisal Rights. . . . . . . . . . . . . . . . . . . . . . . 42
6.10 Escrow Agreement. . . . . . . . . . . . . . . . . . . . . . . 42
6.11 Non-Competition Agreement . . . . . . . . . . . . . . . . . . 42
ARTICLE VII COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . 42
7.01 Inspection. . . . . . . . . . . . . . . . . . . . . . . . . . 43
7.02 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . 43
7.03 Conduct of Business . . . . . . . . . . . . . . . . . . . . . 43
7.04 Publicity . . . . . . . . . . . . . . . . . . . . . . . . . . 45
7.05 Expenses of Sale. . . . . . . . . . . . . . . . . . . . . . . 45
7.06 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . 45
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7.07 Consents. . . . . . . . . . . . . . . . . . . . . . . . . . . 45
7.08 Federal Income Tax Returns. . . . . . . . . . . . . . . . . . 45
7.09 Notice by the Company . . . . . . . . . . . . . . . . . . . . 46
ARTICLE VIII TERMINATION . . . . . . . . . . . . . . . . . . . . . . . 46
8.01 Termination . . . . . . . . . . . . . . . . . . . . . . . . . 46
8.02 Effects of Termination. . . . . . . . . . . . . . . . . . . . 47
ARTICLE IX SURVIVAL; BUYER DAMAGES; LIMITATIONS ON LIABILITY; AND
INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . 47
9.01 Survival of Representations and Warranties and Covenants. . . 47
9.02 Buyer Damages . . . . . . . . . . . . . . . . . . . . . . . . 48
9.03 Limitations on Liability. . . . . . . . . . . . . . . . . . . 50
9.04 Indemnification by Buyer. . . . . . . . . . . . . . . . . . . 52
9.05 Third Party Claims. . . . . . . . . . . . . . . . . . . . . . 54
9.06 Insurance Coverage. . . . . . . . . . . . . . . . . . . . . . 56
ARTICLE X MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . 56
10.01 Assignment; Successors and Assigns; Third Parties . . . . . . 56
10.02 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
10.03 Waiver; Remedies. . . . . . . . . . . . . . . . . . . . . . . 57
10.04 Entire Agreement. . . . . . . . . . . . . . . . . . . . . . . 58
10.05 Amendments; Waivers; Control By Majority. . . . . . . . . . . 58
10.06 Best Efforts. . . . . . . . . . . . . . . . . . . . . . . . . 58
10.07 Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . 58
10.08 Effectiveness of Execution. . . . . . . . . . . . . . . . . . 58
10.09 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . 58
10.10 Arbitration . . . . . . . . . . . . . . . . . . . . . . . . . 59
10.11 Exhibits and Schedules. . . . . . . . . . . . . . . . . . . . 59
10.12 Captions. . . . . . . . . . . . . . . . . . . . . . . . . . . 60
</TABLE>
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EXHIBITS
EXHIBIT A SHARES HELD BY THE STOCKHOLDERS
EXHIBIT B ALLOCATIONS
EXHIBIT C FORM OF OPINION OF ROTHGERBER JOHNSON & LYONS LLP
EXHIBIT D FORM OF ESCROW AGREEMENT
EXHIBIT E NON-COMPETITION AGREEMENT
EXHIBIT F FORM OF OPINION OF PAUL, HASTINGS,
JANOFSKY & WALKER LLP
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<PAGE>
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "AGREEMENT") is entered into
as of April 23, 1998 by and among Mail-Well I Corporation, a Delaware
corporation ("BUYER SUB"), Mail-Well, Inc., a Colorado corporation (the "BUYER")
and Anderson Lithograph Holding Corp., a Delaware corporation (the
"COMPANY").(1)
R E C I T A L S
A. The Company owns all of the outstanding shares of capital stock of
Anderson Lithograph Company, a California corporation ("ALC").
B. Buyer owns all of the outstanding shares of capital stock of Buyer
Sub.
C. Buyer and Buyer Sub shall, pursuant to Section 2.13 of this
Agreement, cause to be organized as a Delaware corporation a wholly-owned
subsidiary of Buyer Sub ("ACQUISITION"), with all outstanding shares of
Acquisition to be owned by Buyer Sub.
D. The Board of Directors of each of Buyer, Buyer Sub and the
Company has determined that it is fair to and in the best interest of their
respective corporations and stockholders for Acquisition to be merged with and
into the Company upon the terms and subject to the conditions set forth herein
(the "MERGER").
E. The Board of Directors of each of Buyer, Buyer Sub and the
Company has approved the Merger in accordance with the General Corporation Law
of the State of Delaware.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants, agreements,
representations and warranties herein contained, the parties hereto agree as
follows:
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(1) This copy of the Agreement incorporates those amendments effected by that
certain Letter of Amendment by and among Buyer, Buyer Sub, Acquisition and the
Company dated as of May 5, 1998.
<PAGE>
ARTICLE I
DEFINITIONS
Unless the context otherwise requires, the terms defined in this
Article I shall have the meanings herein specified for all purposes of this
Agreement, applicable to both the singular and plural forms of any of the terms
herein defined. All accounting terms defined in this Article I and those
accounting terms used in this Agreement and not defined in this Article I shall,
except as otherwise provided for herein, be construed in accordance with GAAP.
"ACQUISITION" shall have the meaning assigned to such term in Recital
C of this Agreement.
"ADJUSTED PURCHASE PRICE" shall have the meaning assigned to such term
in Section 2.07 hereof.
"AFFILIATE" shall have the meaning assigned to such term in Section
9.02(c) hereof.
"ALC" shall have the meaning assigned to such term in Recital A.
"ALLOCABLE PERCENTAGE" of a Stockholder, a Phantom Stockholder or a
Service Provider shall mean the percentage interest of such person in a specific
payment to be made or received by such persons after the Closing Date in
connection with the transactions contemplated by this Agreement. If any such
payment is to be made or received after the Closing Date, the Representatives
shall determine the respective Allocable Percentage of each Stockholder, Phantom
Stockholder and Service Provider in such payment and shall give written notice
of such determination to Buyer. The initial Allocable Percentage of each
Stockholder, Phantom Stockholder and Service Provider as of the Closing Date
shall be set forth opposite such person's name under "Allocable Percentage" on
Exhibit B hereto. After the Closing Date, each such percentage may be adjusted
to reflect (i) the effect of contractual provisions limiting the payment by the
Company or ALC of "excess parachute payments" under Section 280G of the Code and
(ii) minor adjustments to reflect the cumulative effect of payments previously
made or received.
"BANKAMERICA VENTURES FEE" means a fee for services rendered to the
Company in connection with the Merger by BankAmerica Ventures in the amount
provided for in
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that certain Transaction Fee Agreement between the Company and BankAmerica
Ventures dated as of February 27, 1998.
"BENEFIT PLANS" has the meaning assigned to such term in Section
3.10(a) hereof.
"BERENSON MINELLA FEE" means the investment banking fee for services
rendered to the Company by Berenson Minella & Company in the amount provided for
in its July 24, 1997 engagement letter agreement, as amended by that certain
letter agreement dated as of November 6, 1997.
"BOARD" shall mean the board of directors of the Company.
"BUSINESS DAY" shall mean any day excluding Saturday, Sunday or any
day which shall be in the State of California a legal holiday or a day on which
banking institutions are authorized by law to close.
"BUYER" shall have the meaning assigned to such term in the
introductory paragraph of this Agreement.
"BUYER DAMAGES" shall have the meaning assigned to it in Section 9.02
hereof.
"BUYER INDEMNIFIED PARTY" shall have the meaning assigned to it in
Section 9.02(b)
"BUYER SUB" shall have the meaning assigned to such term in the
introductory paragraph of this Agreement.
"CERTIFICATES" shall have the meaning assigned to such term in Section
2.08(a) hereof.
"CLAIM" shall mean any and all claims, actions, arbitrations, audits,
hearings, investigations, litigation or suits, whether in contract, tort or
otherwise, whether statutory or common law, whether civil, criminal,
administrative, investigative, formal or informal, fixed or contingent.
"CLAIM NOTICE" shall have the meaning assigned to it in Section
9.05(a) hereof.
"CLOSING" and "CLOSING DATE" shall have the meanings assigned to such
terms in Section 2.12 hereof.
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"CLOSING DATE INDEBTEDNESS" shall mean the Company's actual
Indebtedness as of the Closing Date plus the Transaction Expenses.
"CLOSING WORKING CAPITAL AMOUNT" shall mean Working Capital as of the
Closing Date.
"CODE" shall mean the Internal Revenue Code of 1986, as amended.
"COMMON STOCK" shall mean the Voting Common Stock and the Non-Voting
Common Stock, collectively.
"COMPANY" shall have the meaning assigned to such term in the
introductory paragraph of this Agreement.
"CONSTITUENT CORPORATIONS" shall have the meaning assigned to such
term in Section 2.01 hereof.
"DAMAGES" shall mean any and all losses, liabilities, obligations,
costs, expenses (including reasonable attorneys' fees), damages or judgments of
any kind or nature whatsoever (including reasonable attorneys' fees incurred in
pursuing claims under Article IX hereof and under the Escrow Agreement).
"DELAWARE LAW" shall mean the Delaware General Corporation Law, as
amended.
"DESIGNATED MANAGERS" shall mean John C. Fosmire, Alan Pemberton,
Frank C. Barnett, Edward A. Binder and Arthur C. Super.
"DISSENTERS' SHARES" shall have the meaning assigned to such term in
Section 2.06(d).
"EFFECTIVE TIME" shall have the meaning assigned to such term in
Section 2.02 hereof.
"ENVIRONMENTAL LAW(S)" means the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, 42 U.S.C. Sections 9601, ET SEQ., the
Resource Conservation and Recovery Act of 1976, 42 U.S.C. Sections 6901 ET SEQ.,
the Toxic Substances Control Act, 15 U.S.C. Sections 2601 ET. SEQ., the
Hazardous Materials Transportation Act, 49 U.S.C. 1801 ET SEQ., the Clean Water
Act, 33 U.S.C. Sections 1251 ET SEQ., The Safe Drinking Water and Toxic
Enforcement Act of 1986 (Cal. H&S Code Sections 25249.5-25249.13), the
Carpenter-Presley-Tanner
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<PAGE>
Hazardous Substance Account Act (Cal. H&S Code Sections 25300 ET SEQ.), and the
California Water Code (Cal. H&S Code Sections 1300, ET SEQ.), as said laws have
been supplemented or amended to date, the regulations promulgated pursuant to
said laws and any other federal, state or local law, statute, rule, regulation
or ordinance which regulates or proscribes the use, storage, disposal, presence,
cleanup, transportation or Release or threatened Release into the environment of
Hazardous Material.
"ERISA" shall mean the Employer Retirement Income Security Act of
1974, as amended.
"ESCROW ACCOUNT" shall have the meaning assigned to it in Section
9.02(a) hereof.
"ESCROW AGENT" shall have the meaning assigned to such term in Section
2.11(b)(ii) hereof.
"ESCROW AGREEMENT" shall have the meaning assigned to such term in
Section 5.13 hereof.
"ESCROW AMOUNT" shall mean the sum of (i) $3,000,000 plus (ii) the
Working Capital Escrow Amount.
"ESTIMATED PURCHASE PRICE" shall have the meaning assigned to such
term in Section 2.07(b) hereof.
"ESTIMATE NOTICE" shall have the meaning assigned to such term in
Section 2.07(b) hereof.
"EXISTING STOCKHOLDER AGREEMENTS" shall mean the Stock Agreements and
those certain Covenants Not To Compete, each of which is dated as of January 21,
1988, between the Company and each of Gene Parana, John Fosmire and Arlyn
Stanford.
"FINANCIAL STATEMENTS" shall have the meaning assigned to such term in
Section 3.05 hereof.
"FOSMIRE FEE" means the fee payable to John C. Fosmire for services
rendered to the Company in connection with the Merger in the amount provided for
in that certain Transaction Fee Agreement between John C. Fosmire and the
Company dated as of February 27, 1998.
"GAAP" means those generally accepted accounting principles and those
accounting practices that have been
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<PAGE>
employed by the Company in the preparation of the 1997 Financial Statements.
"HAZARDOUS MATERIAL" means any substance which is (i) designated,
defined, classified or regulated as a hazardous substance, hazardous material,
hazardous waste, pollutant or contaminant under any Environmental Law, as
currently in effect or as hereafter amended or enacted, (ii) a petroleum
hydrocarbon, including crude oil or any fraction thereof and all petroleum
products, (iii) PCBs, (iv) lead, (v) asbestos, (vi) flammable explosives,
(vii) infectious materials or (viii) radioactive materials.
"HSR ACT" shall mean the Hart-Scott-Rodino Antitrust Improvements Act
of 1976, as amended.
"INDEBTEDNESS" shall mean any liability or obligation created or
assumed by the Company or ALC (i) in respect of money borrowed (including
principal, accrued interest and any applicable prepayment premium (but excluding
the Prepayment Fee)), (ii) evidenced by a promissory note, bond, debenture or
similar instrument, or (iii) representing the capitalized amount of all
obligations of the Company as a lessee under leases are appropriately recorded
as capital leases for financial reporting purposes in accordance with GAAP.
"INDEMNIFIABLE CLAIM" shall have the meaning assigned to it in Section
9.05(a) hereof.
"INDEMNIFIED PARTY" shall have the meaning assigned to it in Section
9.05(a) hereof.
"INDEMNIFYING PARTY" shall have the meaning assigned to it in Section
9.05(a) hereof.
"INITIAL AMOUNT" shall have the meaning assigned to it in Section
9.03(c).
"IRS" shall mean the Internal Revenue Service.
"KNOWLEDGE" means (i) with respect to the Company, the actual
knowledge of the Designated Managers and the directors of the Company, (ii) with
respect to Buyer, the actual knowledge of any officer, manager or director of
Buyer or any affiliate of Buyer, and (iii) with respect to any other Person (A)
if an individual, the actual knowledge of such individual, and (B) if other than
an individual, the actual knowledge of the chief executive officer, general
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<PAGE>
partner, managing member or any other individual who performs a comparable
function for such person.
"MAJORITY STOCKHOLDERS" shall mean those stockholders beneficially
owning not less than 66-2/3% of the outstanding shares of the Common Stock.
"MATERIAL AGREEMENTS" shall have the meaning assigned to such term in
Section 3.09 hereof.
"MATERIAL PERMITS" shall have the meaning assigned to such term in
Section 3.11 hereof.
"MATERIAL EFFECT" shall mean a material and adverse effect on the
business, operations, financial condition or properties of the Company and ALC,
taken as a whole.
"MATERIAL LEASE" shall have the meaning assigned to such term in
Section 3.16 hereof.
"MERGER" shall have the meaning assigned to such term in Recital C.
"MERGER CONSIDERATION" shall have the meaning assigned to such term in
Section 2.06(a).
"MULTI-EMPLOYER PLAN" shall have the meaning assigned to such term in
Section 3.10(a) hereof.
"NON-VOTING COMMON STOCK" shall mean the Non-Voting Common Stock, par
value $.01 per share, of the Company.
"1996 FINANCIAL STATEMENTS" shall have the meaning assigned to such
term in Section 3.05 hereof.
"1997 BALANCE SHEET", "1997 BALANCE SHEET DATE" and "1997 FINANCIAL
STATEMENTS" shall have the meanings assigned to such terms in Section 3.05
hereof.
"OBJECTION NOTICE" shall have the meaning assigned to such term in
Section 2.07(d) hereof.
"OTHER PARTICIPANT" shall have the meaning assigned to it in Section
2.10(e).
"PHANTOM STOCKHOLDER" shall mean a participant in the Employee Phantom
Stock Award Plan of the Company.
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<PAGE>
"PHANTOM STOCK PAYMENT" shall mean the aggregate amount that shall
become payable to the Phantom Stockholders as a result of the transactions
contemplated in this Agreement.
"POST-CLOSING PURCHASE PRICE ESTIMATE" shall have the meaning assigned
to such term in Section 2.07(c) hereof.
"PREPAYMENT FEE" shall mean any and all early retirement or prepayment
fees and/or penalties of any kind that will be due and payable as a result of
the payment or prepayment of Indebtedness at Closing, including the prepayment
fee payable to Fleet Capital with respect to current credit facilities made
available to the Company or its affiliated companies if such facilities are
refinanced in connection with the transactions contemplated in this Agreement.
"REAL PROPERTY" shall have the meaning assigned to such term in
Section 3.12(b).
"RELATED PARTIES" shall have the meaning assigned to such term in
Section 3.22.
"RELEASE" means any spilling, leaking, pumping, pouring, emitting,
discharging, injecting, escaping, leaching, dumping or disposing into the
environment of any Hazardous Material (including the abandonment or discarding
of barrels, containers, and other receptacles containing any Hazardous
Material).
"REPRESENTATIVES" shall mean John C. Fosmire and James D. Murphy, who
have been appointed as representatives of the Stockholders pursuant to Section
2.10(a) hereof.
"REQUIRED WORKING CAPITAL AMOUNT" shall mean $10,657,000.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended.
"SECURITY INTEREST" shall mean any mortgage, pledge, lien,
encumbrance, charge, or other security interest, other than (a) mechanic's,
materialmen's, and similar liens, (b) liens for taxes not yet due and payable or
for taxes that the Company is contesting in good faith through appropriate
proceedings, (c) purchase money liens and liens securing rental payments under
capital lease arrangements, and (d) other liens arising in the ordinary
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course of business of the Company and not incurred in connection with the
borrowing of money.
"SELLER INDEMNIFIED PARTY" and "SELLER INDEMNIFIED PARTIES" shall have
the meanings assigned to them in Section 9.04 hereof.
"SERVICE PROVIDERS" shall mean Berenson Minella & Company, BankAmerica
Ventures and John C. Fosmire.
"SHARES" shall mean the issued and outstanding shares of Common Stock.
"STOCK AGREEMENTS" shall mean the Employee Stock Agreements each of
which is dated as of January 21, 1988, between the Company and certain
Stockholders.
"STOCKHOLDER" shall mean an owner of the Shares, as set forth in
Exhibit A hereto.
"STOCKHOLDER SHARES" shall mean those Shares set forth opposite the
Stockholders' respective names on Exhibit A hereto, collectively.
"SURVIVING CORPORATION" shall have the meaning assigned to such term
in Section 2.01 hereof.
"TAXES" shall have the meaning assigned to such term in Section
3.13(a) hereof.
"TRANSACTION EXPENSES" shall mean all costs and expenses of the
Company and ALC incurred in connection with the negotiation of this Agreement
and the consummation of this transactions contemplated hereby including, but not
limited to (i) the Berenson Minella Fee, (ii) the legal fees and expenses of
Paul, Hastings, Janofsky & Walker LLP,(iii) the Phantom Stock Payment,(iv) the
Prepayment Fee, (v) the BankAmerica Ventures Fee,(vi) the Fosmire Fee and (vii)
one-half of the cost of filing the notification and report form under the HSR
Act, in each case (a) net of any tax benefit realized, or reasonably expected to
be realized, by the Company or ALC by reason of the accrual or payment of such
cost or expense and (b) only to the extent incurred in connection with the
transactions contemplated by this Agreement and not previously paid and expensed
by the Company or ALC.
"VOTING COMMON STOCK" shall mean the Common Stock, par value $.01 per
share, of the Company.
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"WORKING CAPITAL" shall mean, as of any date, the excess of the
Company's current assets (excluding cash, cash equivalents, any deferred tax
assets and any LIFO reserve) over its current liabilities (excluding any portion
of Indebtedness included in current liabilities, accrued Transaction Expenses
and any deferred tax liability), as determined in accordance with GAAP.
"WORKING CAPITAL DECREASE" and "WORKING CAPITAL INCREASE" shall have
the meanings assigned to such terms in Section 2.07(a) hereof.
"WORKING CAPITAL ESCROW AMOUNT" shall mean the sum of $500,000.
ARTICLE II
THE MERGER
SECTION 2.01 MERGER. Upon the terms and subject to the conditions of
this Agreement, Acquisition shall be merged with and into the Company in
accordance with the applicable provisions of the Delaware Law. The Company
and Acquisition are herein sometimes referred to as the "CONSTITUENT
CORPORATIONS". At the Effective Time, the identity and separate corporate
existence of Acquisition shall cease and the Company shall be the surviving
corporation in the Merger (sometimes hereinafter referred to as the "SURVIVING
CORPORATION").
SECTION 2.02 EFFECTIVE TIME. The Merger shall become effective on
the date and at the time the Certificate of Merger referred to in Section 2.11
hereof is filed with the Secretary of State of Delaware in accordance with
Section 103 of the Delaware Law. The time at which the Merger shall become
effective as aforesaid is referred to hereinafter as the "EFFECTIVE TIME".
SECTION 2.03 CERTIFICATE OF INCORPORATION, BYLAWS, DIRECTORS AND
OFFICERS, NAME.
(a) The Certificate of Incorporation of Acquisition, as in
effect immediately prior to the Effective Time, shall be the Certificate of
Incorporation of the Surviving Corporation, from and after the Effective Time
until amended in accordance with applicable law.
(b) The Bylaws of Acquisition, as in effect immediately prior to
the Effective Time, shall be the Bylaws
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of the Surviving Corporation from and after the Effective Time until amended in
accordance with applicable law, the Certificate of Incorporation and such
Bylaws.
(c) The directors and officers of Acquisition in office
immediately prior to the Effective Time shall be the directors and officers of
the Surviving Corporation, and each shall hold his respective office or offices
from and after the Effective Time until his successor shall have been elected
and shall have qualified or as otherwise provided in the Bylaws of the Surviving
Corporation.
(d) The name of the Surviving Corporation from and after the
Effective Time shall continue to be "Anderson Lithograph Holding Corp." until
changed in accordance with applicable law.
SECTION 2.04 ASSETS AND LIABILITIES. At the Effective Time, the
Surviving Corporation shall possess all the rights, privileges, powers and
franchises of a public as well as of a private nature, and be subject to all the
restrictions, disabilities and duties of each of the Constituent Corporations;
and all and singular, the rights, privileges, powers and franchises of each of
the Constituent Corporations, and all property, real, personal and mixed, and
all debts due to any of the Constituent Corporations on whatever account, as
well as for stock subscriptions and all other things in action or belonging to
each of the Constituent Corporations, shall be vested in the Surviving
Corporation; and all property, rights, privileges, powers and franchises, and
all and every other interest shall be thereafter as effectually the property of
the Surviving Corporation as they were of the several and respective Constituent
Corporations, and the title to any real estate vested by deed or otherwise under
the laws of any jurisdiction, in any of the Constituent Corporations, shall not
revert or be in any way impaired by this Article II; but all rights of creditors
and all liens upon any property of any of the Constituent Corporations shall be
preserved unimpaired, and all debts, liabilities and duties of the respective
Constituent Corporations shall thenceforth attach to the Surviving Corporation,
and may be enforced against it to the same extent as if said debts, liabilities
and duties had been incurred or contracted by it.
SECTION 2.05 FURTHER ASSURANCES. If at any time after the Effective
Date, the Surviving Corporation shall consider or be advised that any deeds,
bills of sale,
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assignments or assurances or any other acts or things are necessary, desirable
or proper (i) to vest, perfect or confirm, of record or otherwise, in the
Surviving Corporation, its right, title or interest in, to or under any of the
rights, properties or assets of the Constituent Corporations acquired or to be
acquired as a result of the Merger, or (ii) otherwise to carry out the purposes
of this Agreement, the Surviving Corporation and its proper officers and
directors or their designees shall be authorized to execute and deliver, in the
name and on behalf of the Constituent Corporations, all such deeds, bills of
sale, assignments and assurances and do, in the name and on behalf of the
Constituent Corporations, all such other acts and things necessary, desirable or
proper to vest, perfect or confirm its right, title or interest in, to or under
any of the rights, properties or assets of the Constituent Corporations acquired
or to be acquired as a result of the Merger and otherwise to carry out the
purposes of this Agreement.
SECTION 2.06 CONVERSION OF SECURITIES. By virtue of the Merger and
without any action on the part of the holder thereof, at the Effective Time:
(a) each share of Common Stock outstanding immediately prior to
the Effective Time (other than Dissenters' Shares, as defined below, and
other than as provided in Section 2.06(b)) shall be converted into the
right to receive an amount equal to (i) the Adjusted Purchase Price (as
determined in accordance with Section 2.07 below) divided by (ii) the
number of shares of Common Stock outstanding immediately prior to the
Effective Time (for all such shares of Common Stock in the aggregate, the
"MERGER CONSIDERATION");
(b) each share of Common Stock held by the Company as a treasury
share immediately prior to the Effective Time shall be canceled and no
payment shall be made with respect thereto;
(c) each share of common stock of Acquisition that is issued and
outstanding immediately prior to the Effective Time shall be converted into
one newly issued share of common stock of the Surviving Corporation, par
value $.01 per share; and
(d) each outstanding share of Common Stock held by the
Stockholders who shall have properly perfected appraisal rights with
respect thereto under
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Section 262 of the Delaware Law ("DISSENTERS' SHARES") shall not be
converted into the right to receive the consideration specified in Section
2.06(a), but shall be entitled to receive payment of the appraised value of
such shares of Common Stock in accordance with the provisions of such
Section 262, except that any Dissenters' Shares held by a Stockholder who
shall thereafter withdraw its, his or her demand for appraisal of such
shares of Common Stock in accordance with the provisions of such Section
262, or lose its, his or her right to such payment, shall be converted, as
of the Effective Time, into the right to receive the consideration
specified in Section 2.06(a).
SECTION 2.07 DETERMINATION OF ADJUSTED PURCHASE PRICE; ADJUSTMENTS.
(a) The "ADJUSTED PURCHASE PRICE" shall be an amount equal to
EIGHTY-SEVEN MILLION SEVEN HUNDRED THOUSAND DOLLARS ($87,700,000) reduced by (i)
the Closing Date Indebtedness, (ii) all Buyer Damages, if any, and (iii) the
Working Capital Decrease, if any, and increased by the Working Capital Increase,
if any. As used in this Section 2.02(a), (A) "WORKING CAPITAL DECREASE" shall
mean the positive amount, if any, obtained by subtracting the Closing Working
Capital Amount from the Required Working Capital Amount and (B) "WORKING CAPITAL
INCREASE" shall mean the positive amount, if any, obtained by subtracting the
Required Working Capital Amount from the Closing Working Capital Amount.
(b) At least three (3) days prior to the Closing Date, the Company
shall provide to Buyer a written notice (the "ESTIMATE NOTICE") setting forth
the Company's estimate of the Adjusted Purchase Price (the "ESTIMATED PURCHASE
PRICE"), which Estimate Notice shall specifically set forth the Company's
estimate of the Closing Date Indebtedness and the Closing Working Capital
Amount. The amounts set forth in the Estimate Notice shall be estimated in good
faith by the Company in light of (i) the 1997 Balance Sheet and (ii) the
operations of the Company from such date through the Closing Date.
(c) Within three (3) days after the Closing Date, the Company shall
take a physical inventory (which may be observed by Buyer) and any third party
expense incurred by the Company in taking this inventory will be treated as
Transaction Expense; PROVIDED, that such expense does not exceed $5,000.
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Within sixty (60) days after the Closing Date, Buyer shall cause the Surviving
Corporation's chief financial officer to deliver to Buyer and the
Representatives (i) a consolidated balance sheet of the Company as of the
Closing Date, that has been prepared in good faith in accordance with GAAP
(applied on a basis that is consistent with those used in the preparation of the
1997 Balance Sheet but, in any case, treating all Transaction Expenses and the
Prepayment Fee as having been accrued on the books of account of the Company
immediately prior to the Effective Time), (ii) such chief financial officer's
calculation of the Adjusted Purchase Price (the "POST-CLOSING PURCHASE PRICE
ESTIMATE"), together with a statement, in reasonable detail, of the manner by
which such calculation was determined (including, without limitation, such chief
financial officer's determination of the Closing Date Indebtedness and the
Closing Working Capital Amount) and (iii) such other documentation that supports
such determination. Buyer shall cause such chief financial officer to make
available to the Representatives any work papers, financial data and other
information used by him in calculating the Post-Closing Purchase Price Estimate.
(d) Within thirty (30) business days after receipt of the
Post-Closing Purchase Price Estimate, Buyer shall notify the Representatives, or
the Representatives shall notify Buyer, or both, in writing (an "OBJECTION
NOTICE") of any objection to the Post-Closing Purchase Price Estimate. If no
Objection Notice is given within such thirty business-day period, then (i) the
Post-Closing Purchase Price Estimate shall be final and binding on all parties
and shall be deemed for all purposes to be the Adjusted Purchase Price and (ii)
any amounts payable to Buyer or the Stockholders, the Phantom Stockholders and
the Service Providers, as the case may be, as a result of such final
determination of the Adjusted Purchase Price, shall be paid within five (5) days
after the expiration of such thirty business-day period.
(e) In the event either Buyer or the Representatives timely provides
an Objection Notice, Buyer and the Representatives shall, for a period of
five (5) days, use their collective best efforts to resolve any differences
between the parties as to the determination of the Adjusted Purchase Price. In
the event Buyer and the Representatives are not, within the periods described
above, able to resolve such differences, the determination of the Adjusted
Purchase Price shall be referred for final resolution to the Los Angeles office
of such nationally
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recognized accounting firm, other than Ernst & Young LLP and Deloitte & Touche
LLP, as the parties may reasonably agree. Should the parties fail to so agree
upon a neutral accounting firm within five (5) days after expiration of the
resolution period, such firm shall be chosen by lot. Such selected or chosen
accounting firm shall, as promptly as practicable, but in no event later than
three (3) Business Days prior to the last Business Day prior to the 90th day
following the Closing Date, make a determination of the Adjusted Purchase Price.
Such determination shall be final and binding on Buyer, the Company and the
Stockholders, and any amounts payable to Buyer or the Stockholders, the Phantom
Stockholders and the Service Providers under this Article II, as the case may
be, as a result of such determination shall be paid on or before the 90th day
following the Closing Date.
(f) The Estimated Purchase Price shall be paid to the Stockholders by
Buyer in accordance with Section 2.08. Upon final determination of the Adjusted
Purchase Price as set forth above, the following payments shall be made:
(i) if the Estimated Purchase Price exceeds the Adjusted
Purchase Price, such excess shall be returned to Buyer from the Escrow Amount
pursuant to the terms of, and subject to the limitations set forth in, the
Escrow Agreement; and
(ii) if the Adjusted Purchase Price exceeds the Estimated
Purchase Price, Buyer shall pay such excess to the Stockholders, the Phantom
Stockholders and the Service Providers in accordance with their respective
Allocable Percentages; PROVIDED, that if and to the extent any Stockholder has
not surrendered its or his Certificates and any other required documents to
Buyer in accordance with Section 2.08, that Stockholder's Allocable Percentage
of the amount by which the Adjusted Purchase Price exceeds the Estimated
Purchase Price shall instead be held by Buyer and paid to any such Stockholder
only upon the surrender of its or his Certificates in accordance with Section
2.08.
(g) In computing the Estimated Purchase Price, the Transaction
Expenses referred to in clauses (i),(iii), (v) and (vi) of the definition of
"Transaction Expenses" (the "DESIGNATED TRANSACTION EXPENSES") shall be taken at
the respective amounts that would be payable to the named individuals and
entities (net of any tax benefit realized, or reasonably expected to be
realized, by the Company or ALC by reason of the accrual or payment of such
amounts) on the
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assumption that the Adjusted Purchase Price is equal to the Estimated Purchase
Price less the Escrow Amount.
(h) Not later than five (5) Business Days after the final
determination of the Adjusted Purchase Price, all amounts in the Escrow Account
in excess of $3,000,000 shall be paid to the Stockholders in accordance with
their respective Allocable Percentages. Subject to pending claims against the
Escrow Account, the Stockholders shall be entitled to receive, in accordance
with their Allocable Percentages, (i) on the first anniversary of the Closing
Date, all amounts in the Escrow Account in excess of $2,000,000 plus the amount
of any Buyer Damages(as defined in Section 9.02) for which Buyer has given
notice but which have not been resolved and are still pending, (ii) on the
second anniversary of the Closing Date, all amounts remaining in the Escrow
Account in excess of $1,000,000 plus the amount of any Buyer Damages (as defined
in Section 9.02) for which Buyer has given notice but which have not been
resolved and are still pending, and (iii) on the third anniversary of the
Closing Date, all amounts remaining in the Escrow Account less the amount of any
Buyer Damages (as defined in Section 9.02) for which Buyer has given notice but
which have not been resolved and are still pending.
SECTION 2.08 PAYMENT OF CASH FOR COMMON STOCK.
(a) Each holder of a certificate or certificates (the "CERTIFICATES")
which immediately prior to the Effective Time represented outstanding shares of
Common Stock will be entitled to receive, upon surrender to Buyer of such
Certificates for cancellation, the amount per share of Common Stock represented
thereby called for by Section 2.06 hereof, in all cases subject to any required
withholding of taxes. No interest shall accrue or be paid on the cash payable
upon the surrender of the Certificates. If payment is to be made to a person
other than the person in whose name the Certificates surrendered are registered,
it shall be a condition of payment that the Certificates so surrendered shall be
properly endorsed or otherwise in proper form for transfer and that the person
requesting such payment shall pay any transfer or other taxes required by reason
of the payment to a person other than the registered holder of the Certificates
surrendered or establish to the satisfaction of the Surviving Corporation that
such tax has been paid or is not applicable. Following the Effective Time,
until surrendered to Buyer in accordance with the provisions of this Section
2.08(a), each Certificate (other than Certificates representing Dissenting
Shares) shall
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represent for all purposes only the right to receive upon such surrender the
amount specified in the second sentence of this Section 2.08(a), without any
interest thereon, subject to any required withholding taxes.
(b) In the event any Certificate shall have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the person claiming
such Certificate to be lost, stolen or destroyed, Buyer shall issue in exchange
for such lost, stolen or destroyed Certificate the applicable amount per share
of Common Stock represented thereby called for by Section 2.06 hereof. Buyer
may, in its discretion and as a condition precedent to the payment thereof,
require the owner of such lost, stolen or destroyed Certificate to give Buyer
indemnity against, or post a bond for, any claim that may be made against Buyer
with respect to the Certificate alleged to have been lost, stolen or destroyed.
(c) No party hereto shall be liable to a holder of Common Stock for
any cash or interest thereon delivered to a public official pursuant to
applicable abandoned property, escheat or similar laws. If any Certificates
shall not have been surrendered prior to three years after the Effective Time
(or immediately prior to such earlier date on which any payment in respect
thereof would otherwise escheat to or become the property of any governmental
unit or agency), the payment in respect of such Certificates shall, to the
extent permitted by applicable law, become the property of the persons who have
previously surrendered Certificates to Buyer, and the Surviving Corporation
shall cause the amount of such payment or payments to be divided among the
holders of previously surrendered Certificates in proportion to the payments
previously made to such holders in respect of the stock represented by such
Certificates, and such holders shall be entitled to such payments free and clear
of all claims of interest of any person previously entitled thereto.
(d) From and after the Effective Time, the holders of shares of
Common Stock outstanding immediately prior to the Effective Time shall cease to
have any rights with respect to such shares of Common Stock, except as otherwise
provided herein or by law.
(e) After the Effective Time, there shall be no transfers on the
stock transfer books of the Surviving Corporation of any shares of Common Stock
which were outstanding immediately prior to the Effective Time. If, after the
Effective Time, Certificates are presented to the
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Surviving Corporation, they shall be canceled and promptly exchanged for cash as
provided in this Section 2.08 subject to applicable law in the case of
Dissenters' Shares.
(f) If the holder of any shares of Common Stock shall become entitled
to receive payment for such shares pursuant to Section 262 of the Delaware Law,
such payment shall be made by the Surviving Corporation.
SECTION 2.09 STOCKHOLDERS' CONSENT. The Company will take all action
necessary in accordance with applicable law and its Certificate of Incorporation
and Bylaws to convene a special meeting of its stockholders to consider and vote
upon the approval of the Merger and adoption of this Agreement or, in lieu of a
special meeting, to obtain the written consent of Stockholders beneficially
owning a majority of the outstanding shares of Common Stock in accordance with
Delaware Law.
SECTION 2.10 REPRESENTATIVES. By authorization of its Board of
Directors, the Company does, and by approval of this Agreement by the
Stockholders of the Company in accordance with Delaware Law, the Stockholders
do, hereby:
(a) Irrevocably appoint John C. Fosmire and James D. Murphy as the
sole and exclusive representatives of all Stockholders (the "REPRESENTATIVES")
to make all decisions and determinations on behalf of the Stockholders that the
Representatives may deem necessary or appropriate to consummate the transactions
contemplated under this Agreement and to exercise the rights and remedies and to
fulfill the duties and obligations delegated to them under this Agreement or the
Escrow Agreement, except to the extent otherwise provided therein or herein.
Without limiting the generality of the immediately preceding sentence, the
Representatives may, in their sole good faith discretion, (i) object to, settle
or compromise on the amount of the Adjusted Purchase Price, and authorize
payments to be made with respect thereto, and (ii) object to, settle or
compromise any claim made by Buyer under this Agreement or the Escrow Agreement
and authorize payments to be made with respect thereto and manage the defense
and settlement of any third party claims hereunder.
(b) Agree that the Representatives shall not be liable to the Company
or the Stockholders for any act or omission to act hereunder or under the Escrow
Agreement as Representatives, and the Company shall indemnify and hold each
Representative harmless from and against, and the
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Representatives shall be entitled to be paid out of the Escrow Account, any and
all costs, claims, demands, expenses, suits, proceedings or other liabilities
incurred in connection with such Representatives acting as such hereunder
except, in each case, to the extent that a final judgment of a court of
competent jurisdiction has determined that such Representative has acted in bad
faith or has demonstrated gross negligence in the performance of his duties
hereunder. The Representatives shall also be entitled to be paid out of the
Escrow Account all reasonable out-of-pocket expenses incurred by the
Representatives in performing their duties hereunder and under the Escrow
Agreement.
(c) Agree that any Representative, or any successor to him hereafter
appointed, may resign and shall be discharged of his duties hereunder upon the
appointment of a successor Representative as hereinafter provided. In case of
the resignation or the death or inability to act of John C. Fosmire or any of
his successors, a successor shall be named by the vote of a majority in interest
of the Stockholders (excluding BankAmerica Capital Corporation and BankAmerica
Ventures). In case of the resignation or the death or inability to act of James
D. Murphy or any of his successors, a successor shall be named by joint approval
of BankAmerica Capital Corporation and BankAmerica Ventures. Each such
successor Representative shall have all the power, authority, rights and
privileges hereby conferred upon the original Representative succeeded by him,
and the term "Representative" as used herein shall be deemed to include a
successor Representative.
(d) Acknowledge and agree that (i) Buyer Damages, if any, which are
approved and agreed to by the Representatives as provided for herein or in the
Escrow Agreement, shall be paid (subject to the limitations contained in this
Agreement and the Escrow Agreement) out of the Escrow Account and shall thereby
be charged to the interests of the Stockholders in accordance with their
respective Allocable Percentages, and (ii) amounts owed to Buyer, if any, in
connection with the final determination of the Adjusted Purchase Price, which
amounts are approved and agreed to by the Representatives as provided for herein
or in the Escrow Agreement, shall be paid (subject to the limitations contained
herein and in the Escrow Agreement) out of the Escrow Account and shall thereby
be charged to the interests of the Stockholders in accordance with their
respective Allocable Percentages.
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(e) Each of the Phantom Stockholders and Service Providers (each an
"OTHER PARTICIPANT" and collectively, "OTHER PARTICIPANTS"), by separate
agreement, has irrevocably appointed the Representatives as its duly authorized
and exclusive Representatives for the purpose of determining the Adjusted
Purchase Price ("PRICE DETERMINATION"). Each Other Participant has further
agreed that any amount in excess of the Estimated Purchase Price will be paid to
such Other Participant in accordance with its respective Allocable Percentage
(as the same is determined by the Representatives under this Agreement). As
between an Other Participant and the Buyer, the Buyer is authorized to deal
exclusively with the Representatives, rather than such Other Participant, in
agreeing upon such determinations, and each Other Participant agrees that such
agreement shall be final and binding on such Other Participant.
SECTION 2.11 CONSUMMATION OF MERGER. As soon as practicable after
satisfaction of the conditions set forth in Article V and Article VI hereof, the
Company shall execute and deliver to the Secretary of State of Delaware a duly
executed and verified Certificate of Merger, and the parties shall take all such
other and further actions as may be required by law to make the Merger
effective.
SECTION 2.12 CLOSING. The closing of the Merger (the "CLOSING")
shall take place at the offices of Rothgerber Johnson & Lyons LLP, Suite 3000,
One Tabor Center, 1200 Seventeenth Street, Denver, Colorado 80202-5839, at 10:00
A.M. local time on May 7, 1998, as promptly as practicable upon satisfaction of
the conditions appearing in Article V and Article VI hereof or at such other
place, time or date as Buyer and the Company may mutually establish (such time
and date being referred to herein as the "CLOSING DATE"). At the Closing:
(a) The Company shall deliver or cause to be delivered to Buyer (i)
all of the documents, certificates and instruments required to be delivered to
Buyer pursuant to Article VI hereof and (ii) payoff letters or communications
from the holders of all Indebtedness paid at the Closing including confirmation
of the receipt of any applicable Prepayment Fee;
(b) Buyer shall deliver or caused to be delivered the following:
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(i) by wire transfer to the Stockholders cash in the amount of
the Estimated Purchase Price (less the Escrow Amount) in immediately available
funds;
(ii) by wire transfer to the Escrow Agent (as defined in the
Escrow Agreement, the "ESCROW AGENT"), the Escrow Amount in immediately
available funds; and
(iii) to the Company and the Stockholders, all of the documents,
certificates and instruments required to be delivered to the Company and the
Stockholders pursuant to Article V hereof;
(c) The Company and Acquisition shall file the Certificate of Merger
with the Secretary of State of the State of Delaware; and
(d) Immediately after the Effective Time but prior to the close of
business on the Closing Date, Buyer shall, or shall cause the Surviving
Corporation to, extinguish each of the obligations of the Surviving Corporation
set forth on Schedule 2.12(d), which obligations are comprised of the Closing
Date Indebtedness (which includes the Transaction Expenses).
SECTION 2.13 FORMATION AND ORGANIZATION OF ACQUISITION. Buyer and
Buyer Sub shall cause (i) Acquisition to be formed and organized as a Delaware
corporation, with all outstanding shares of capital stock owned by Buyer Sub,
and (ii) the board of directors of Acquisition to approve this Agreement and to
authorize Acquisition to execute, deliver and perform its obligations under this
Agreement. Acquisition shall function as a wholly-owned subsidiary of Buyer
Sub.
SECTION 2.14 ACQUISITION AS A PARTY TO THIS AGREEMENT. Upon the
organization of Acquisition pursuant to Section 2.13, Buyer and Buyer Sub shall
cause Acquisition to enter into and become a party to this Agreement and to
undertake and perform the specified obligations, conditions and representations
and warranties hereof of Acquisition hereunder.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES
REGARDING THE COMPANY
Subject to the terms and limitations appearing in Article IX and the
Escrow Agreement, the Company hereby represents and warrants to Buyer that,
except as set forth in (or as may be deemed to have been set forth in) the
applicable section of Schedule 3:
SECTION 3.01 ORGANIZATION, POWER AND AUTHORITY. Each of the Company
and ALC is a corporation duly organized, validly existing and in good standing
under the laws of its state of incorporation, and has the corporate power and
authority to own or lease and to operate its properties and to carry on its
business as now being conducted. Each of the Company and ALC is qualified to
transact business and is in good standing in each jurisdiction in which the
nature of its business or location of its properties requires such qualification
and in which the failure to so qualify would have a Material Effect. Buyer has
previously received (i) complete and correct copies of the Certificate of
Incorporation and Bylaws of the Company and the Restated Articles of
Incorporation and Bylaws of ALC, each as currently in effect and (ii) a complete
and correct copy of the stock transfer books of the Company, which reflect all
issuances and transfers of the Stockholder Shares prior to the date hereof.
SECTION 3.02 NO SUBSIDIARIES. The Company does not own, directly or
indirectly, the capital stock of any other corporation other than ALC.
SECTION 3.03 CAPITAL STOCK.
(a) The authorized capital stock of the Company consists of
10,000,000 shares of Voting Common Stock, 1,408,164 shares of Non-Voting Common
Stock, 3,602,041 shares of Investor Preferred Stock, par value $.01 per share,
and 1,000,000 shares of Management Preferred Stock, par value $.01 per share, of
which the total number of shares of Voting Common Stock and Non-Voting Common
Stock set forth on Exhibit A are issued and outstanding. No shares of preferred
stock are outstanding. No other class of capital stock of the Company is
authorized or outstanding. Each of the Stockholder Shares has been duly
authorized, validly issued and is fully paid and non-assessable and was issued
in material compliance with
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(i) the terms of any agreement binding upon the Company and (ii) all applicable
federal and state securities or "blue sky" laws and regulations. Other than as
disclosed in Schedule 3.03, there are no authorized or outstanding options,
warrants, convertible securities, subscriptions or other agreements or rights of
any nature under which the Company is or may become obligated to issue,
transfer, repurchase or otherwise acquire or retire any shares of the capital
stock of the Company.
(b) The authorized capital stock of ALC consists of 1,000 shares of
common stock, all of which shares are outstanding, have been duly authorized,
validly issued and are fully paid and non-assessable and owned by the Company
free and clear of any liens, claims and encumbrances (other than restrictions
imposed by the Securities Act and applicable state securities laws). The
capital stock of ALC was issued in material compliance with (i) the terms of any
agreement binding upon the Company or ALC and (ii) all applicable federal and
state securities or "blue sky" laws and regulations. No other class of capital
stock of ALC is authorized or outstanding. There are no authorized or
outstanding options, warrants, convertible securities, subscriptions or other
agreements or rights of any nature under which ALC is or may become obligated to
issue, transfer, repurchase or otherwise acquire or retire any shares of the
capital stock of ALC.
SECTION 3.04 NO CONFLICT OR VIOLATION. Neither the execution and
delivery of this Agreement by the Company, nor the consummation of the
transactions contemplated hereby, will (a) violate any provision of the
Certificate of Incorporation or Bylaws of the Company or the Restated Articles
of Incorporation or Bylaws of ALC, (b) violate, conflict with or result in the
breach or termination of, or otherwise give any other contracting party the
right to terminate, accelerate obligations of the Company or ALC or constitute a
default under the terms of, any Material Agreement or, except as set forth in
Schedule 3.16 hereof, any Material Lease, (c) result in the creation of any
lien, charge or encumbrance upon the property or assets of the Company or ALC,
(d) violate any judgment, order, injunction, decree or award of any court,
administrative agency or governmental body against, or binding upon, either the
Company or ALC or their respective assets, or (e) to the Company's knowledge,
constitute a violation by the Company or ALC of any applicable law or regulation
of any jurisdiction as such law or regulation relates to the Company or ALC;
EXCEPT, as to clauses (b), (c), (d) and
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(e), where such violation, conflict, breach, default, termination, right of
termination, acceleration, lien, charge or other encumbrance would not have a
Material Effect or a material adverse effect on the Company's ability (or, to
the Company's knowledge, Buyer's ability) to consummate the Merger.
SECTION 3.05 FINANCIAL STATEMENTS. Schedule 3.05 contains (i) the
audited consolidated balance sheet of the Company at December 31, 1996 and
audited consolidated statements of income, cash flow and stockholders' equity of
the Company for the fiscal year then ended (the "1996 FINANCIAL STATEMENTS"),
(ii) the audited consolidated balance sheet (the "1997 BALANCE SHEET") of the
Company at December 31, 1997 (the "1997 BALANCE SHEET DATE") and (iii) the
audited consolidated statements of income, cash flow and stockholders' equity of
the Company for the fiscal year then ended (together with the 1997 Balance
Sheet, the "1997 FINANCIAL STATEMENTS") (the 1996 Financial Statements and the
1997 Financial Statements are collectively referred to herein as the "FINANCIAL
STATEMENTS"). The Financial Statements fairly present in all material respects
the consolidated financial condition and results of operations of the Company as
of the dates and for the respective periods therein specified, and have been
prepared from the books and records of the Company in accordance with GAAP
applied on a basis consistent with prior accounting periods.
SECTION 3.06 NO MATERIAL ADVERSE CHANGE. Except as set forth on
Schedule 3.06, since the 1997 Balance Sheet Date, the business of the Company
and ALC have been conducted in the ordinary course and neither the Company nor
ALC has (a) sold, transferred, licensed or leased any of its material assets,
except for sales of inventory in the ordinary course of business, (b) canceled
or compromised any debt or Claim, or waived or released any right, of material
value, (c) suffered any physical damage, destruction or loss (whether or not
covered by insurance), which has had a Material Effect, (d) issued or sold any
shares of capital stock or other securities or granted any options with respect
thereto, (e) suffered or experienced any material and adverse change in the
business or operations of the Company and ALC, taken as a whole, (f) created,
incurred, assumed or guaranteed any Indebtedness, liability or obligation
(whether absolute, accrued, contingent, or otherwise and whether due or to
become due) in an aggregate amount in excess of $25,000, except in the ordinary
course of business, (g) declared, set aside for payment or made any payment of
dividends or other distributions upon or in
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respect of any shares of its capital stock, or, directly or indirectly,
purchased, retired or redeemed any capital stock or securities convertible into
or exchangeable for such capital stock, (h) increased the salaries, benefits
(including those under any bonus, profit sharing, pension, retirement or similar
plan) or other compensation payable to, made loans to, or granted severance or
termination payments to, any officer, director, employee or shareholder of the
Company or ALC (except normal annual merit increases made in the ordinary course
of business consistent with past practice), (i) made any change in any method of
accounting or keeping its books or accounting practices, (j) experienced any
strike, walkout, or, to the Company's knowledge, any other labor trouble of a
character that has had or could reasonably be expected to have a Material
Effect, (k) made any capital expenditures or capital additions in excess of an
aggregate of $250,000, (1) entered into any material transaction, contract or
commitment other than in the ordinary course of business or (m) entered into any
agreement to do any of the foregoing.
SECTION 3.07 CONSENTS AND APPROVALS. To the Company's knowledge, no
consent, approval, authorization, license, permit or other action by, or filing
with, any governmental or regulatory authority or any third party is required by
or with respect to the Company or ALC in connection with the consummation of the
Merger, except (i) as required by the HSR Act, (ii) for such consents,
approvals, authorizations, licenses, permits, actions or filings as have
heretofore been obtained, taken or filed, or (iii) where the failure to obtain
such consents, approvals, authorizations, licenses or permits, to take such
actions or to make such filings would not have a Material Effect or, a material
adverse effect on the Company's ability (or, to the Company's knowledge, Buyer's
ability) to consummate the Merger.
SECTION 3.08 LITIGATION.
(a) Except as set forth on Schedule 3.08, there are no (i)
outstanding orders, writs, injunctions or decrees of any court, governmental
agency or arbitral tribunal against the Company or ALC or any of their
respective assets, with respect to which the Company has received a copy of such
order, writ, injunction or decree or other written notification, or (ii) Claims
pending against the Company or ALC or any of their respective assets, with
respect to which the Company has received service of process or other written
notification.
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(b) To the Company's knowledge, there are no Claims threatened
against the Company or ALC or any of their respective assets which would, if
decided adversely, be reasonably likely to have a Material Effect.
SECTION 3.09 CONTRACTS AND COMMITMENTS. Schedule 3.09 lists all of
the following contracts, agreements, licenses and commitments to which the
Company or ALC is a party or by which it is bound (other than leases and
subleases set forth in Schedule 3.16 and the employee benefit materials
disclosed in Schedule 3.10) (collectively, the "MATERIAL AGREEMENTS"):
(a) mortgages, indentures, security agreements, guaranties or other
agreements and instruments relating to the borrowing of money, the extension of
credit or the granting of liens or encumbrances;
(b) employment and consulting agreements;
(c) union or other collective bargaining agreements;
(d) powers of attorney;
(e) sales agency, manufacturers representative and distributorship
agreements or other distribution or commission arrangements;
(f) licenses of material patent, trademark and other intellectual
property rights;
(g) contracts or options relating to the sale by the Company or ALC
of any asset, other than sales of inventory in the ordinary course of business;
(h) agreements or commitments for capital expenditures in excess of
$100,000 for any single project;
(i) joint venture agreements;
(j) agreements expressly requiring the consent of any party thereto
to the consummation of the Merger;
(k) agreements, arrangements or understandings with any officer,
director, employee or shareholder of the Company or ALC (other than arrangements
with respect to the compensation of employees);
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(l) agreements, contracts or commitments for any charitable or
political contribution;
(m) agreements restricting the Company or ALC from relocating,
closing or terminating any of their respective operations or facilities;
(n) agreements purporting to limit the right of the Company or ALC to
compete in any line of business, with any person or other entity or in any
geographic area;
(o) any confidentiality, settlement or other similar agreements
entered into within the last three years other than those entered into with the
Company's customers, suppliers and subcontractors or in connection with a
possible disposition of the Company; or
(p) any other agreement, contract or obligation (other than those
arising in the ordinary course of business) entered into on or prior to the date
hereof calling for or involving the payment, potential payment or accrued
obligation by or to the Company or ALC, from the date hereof through the
earliest date such agreement, contract or obligation can be terminated
unilaterally without material penalty by the Company or ALC, of an amount in
excess of $100,000.
To the knowledge of the Company and ALC, all of the Material
Agreements are legal, valid, binding and in full force and effect, no default
exists thereunder on the part of the Company or ALC, and the consummation of the
transactions contemplated by this Agreement will not cause any default or
condition in respect of any such Material Agreement, the effect of which is to
cause, permit, create or perfect the right in any party (i) to repudiate or
disavow its obligations to the Company or ALC thereunder, (ii) to require or
have the right to require the Company or ALC to perform its obligations
thereunder (including obligations to pay Indebtedness) prior to such time on
which, or on terms and conditions otherwise different from those that, are
provided therein or (iii) to recover from the Company or ALC any damages or
fines. To the knowledge of the Company and ALC, no party (including the Company
or ALC) to any such Material Agreement is in material default thereunder. True,
correct and complete copies of all the Material Agreements have been delivered
or made available to Buyer.
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SECTION 3.10 EMPLOYEE BENEFIT PLANS.
(a) The only employee pension benefit plans (as defined in Section
3(2) of ERISA), welfare benefit plans (as defined in Section 3(1) of ERISA),
bonus, stock purchase, stock ownership, stock option, phantom stock, deferred
compensation, profit-sharing, incentive, severance, termination or other
compensation plan or arrangement, and other material employee fringe benefit
plans presently maintained by, or contributed to by the Company or ALC, for the
benefit of employees of the Company, other than a multi-employer plan as defined
in Section 3(37) of ERISA ("MULTI-EMPLOYER PLAN"), are those listed in Schedule
3.10 (the "BENEFIT PLANS"), a true and complete copy of each of which, and,
where applicable, a copy of the most recent IRS Form 5500 filed with respect to
each such Benefit Plan, has been made available to Buyer. The only
Multi-Employer Plan contributed to by the Company or ALC for the benefit of
employees of ALC are listed in Schedule 3.10.
(b) To the Company's knowledge, ALC and each of the Benefit Plans are
in compliance in all material respects with the applicable provisions of ERISA,
and those provisions of the Code applicable to the Benefit Plans.
(c) All contributions to the Benefit Plans and the Multi-Employer
Plans which were required to be made in accordance with such plans and, when
applicable, Section 302 of ERISA or Section 412 of the Code, have been timely
made. All such contributions to the Benefit Plans and the Multi-Employer Plans,
except those to be made from a trust qualified under Section 401(a) of the Code
and except those with respect to any retiree medical benefit plan, for any
period ending before the Closing Date that are not yet, but will be, required to
be made are properly accrued and reflected on the 1997 Balance Sheet.
(d) All material reports, returns and similar documents with respect
to the Benefit Plans required to be filed with any government agency or
distributed to any Benefit Plan participant have been filed or distributed.
(e) All of the Benefit Plans which are intended to be qualified plans
within the meaning of Section 401 of the Code have received determination
letters from the IRS to the effect that such plans are qualified and exempt from
federal income taxes under Sections 401(a) and 501(a), respectively, of the
Code.
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(f) Each of the Benefit Plans has been administered in all material
respects in accordance with its terms except that in any case in which any
Benefit Plan is currently required to comply with a provision of ERISA or of the
Code, but is not yet required to be amended to reflect such provision, it has
been administered in accordance with such provision.
(g) To the Company's knowledge, there are no (i) pending
investigations by any governmental agency involving the Benefit Plans or (ii)
threatened or pending Claims (except for Claims for benefits payable in the
normal operation of the Benefit Plans), suits or proceedings against any Benefit
Plan or asserting any rights or Claims to benefits under any Benefit Plan which
could give rise to any material liability.
(h) Neither the Benefit Plans, the Stockholders, the Company, ALC nor
any employee of the foregoing, nor, to the Company's knowledge, any trusts
created thereunder, nor any trustee, administrator or other fiduciary thereof,
has engaged in any non-exempt "prohibited transaction" (as such term is defined
in Section 4975 of the Code or Section 406 of ERISA) which could subject any of
the foregoing plans or persons to the tax or penalty on prohibited transactions
imposed by such Section 4975 of the Code or the sanctions imposed under Title I
of ERISA.
(i) Neither the Company nor ALC has incurred any withdrawal
liability, within the meaning of Section 4201 of ERISA to any Multi-Employer
Plan which liability has not been fully paid as of the date hereof, nor, to the
Company's knowledge, has any such employer announced an intention to withdraw,
but not yet completed such withdrawal, from any Multi-Employer Plan.
(j) No payment which is or may be made by the Company or ALC, or from
any Benefit Plan, to any employee, former employee, director or agent of the
Company or ALC under the terms of any Benefit Plan, either alone or in
conjunction with any other payment, will or could be characterized as an "excess
parachute payment" under Section 280G of the Code.
(k) There is no material pension, welfare, bonus, stock purchase,
stock ownership, stock option, deferred compensation, incentive, severance,
termination or other compensation plan or arrangement, or other material
employee fringe benefit plan presently maintained by, or contributed
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to by the Company or ALC for the benefit of any employee of the ALC, which would
be described in (a) above, but for the fact that such plans are maintained
outside the jurisdiction of the United States.
SECTION 3.11 PERMITS. To the Company's knowledge, all permits,
concessions, grants, franchises, licenses and other governmental authorizations
and approvals (excluding all permits, licenses, approvals or authorizations
required under applicable laws relating to the management of Hazardous Material)
necessary for, and material to, the conduct of the business of the Company and
ALC in the manner now conducted (the "MATERIAL PERMITS") have been duly obtained
and are in full force and effect, and the Company and ALC are in compliance with
the terms and conditions thereof. To the Company's knowledge, the consummation
of the Merger will not require the reissuance of or reapplication for, nor
result in any revocation, cancellation or suspension of, any Material Permits.
SECTION 3.12 ENVIRONMENTAL MATTERS. Except as otherwise disclosed to
Buyer in (i) that certain Phase I Environmental Site Assessment Update dated
February 17, 1998 prepared by Dames & Moore or (ii) Schedule 3.12, to the
Company's knowledge:
(a) The Company is in material compliance with all Environmental Laws
and has not received any written notice of violation issued pursuant to any
Environmental Law.
(b) Other than items used or generated in ALC's manufacturing
process, office supplies and pesticides stored for customary and normal use
there are no Hazardous Materials present on, in or under the real property owned
or leased by the Company in the City of Commerce and the structures thereon (the
"REAL PROPERTY").
(c) The Company has not manufactured any Hazardous Material in
violation of any Environmental Law.
(d) There is no Release of any Hazardous Material existing on,
beneath or from or in the surface or ground water associated with the Real
Property.
(e) All permits, licenses and other authorizations required by or
issued pursuant to any Environmental Law for the ownership or holding operation
of the Real Property by the Company have been obtained. The
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Real Property is not subject to any use or development restrictions arising out
of any Environmental Law.
(f) There exists no writ, injunction, decree, order or judgment
outstanding, nor any lawsuit, Claim, proceeding, citation, directive, summons or
investigation pending pursuant to any Environmental Law relating to any alleged
violation of any Environmental Law with respect to the Real Property.
(g) There are no above-ground or underground tanks located on the
Real Property used or formerly used for the purpose of storing any Hazardous
Material.
(h) There are no asbestos-containing building materials on or in the
Real Property except as determined by or for Buyer in the course of its due
diligence investigations.
(i) There is no PCB-containing equipment or PCB-containing material
located on or in the Real Property.
(j) There are no reports, data, surveys, maps, assessments or other
documents in the possession or control of the Company about the environmental
condition of the Real Property or the presence of Hazardous Materials on or
under the Real Property which have not been delivered to Buyer.
SECTION 3.13 TAXES.
(a) Each of the Company and ALC and each affiliated group, within the
meaning of Section 1504 of the Code, of which the Company or ALC is or has been
a member, (i) has filed or caused to be filed or will file in a timely manner
(within any applicable extension periods) all material, federal, foreign, state
and local income, payroll, withholding, excise, sales, use, personal property,
use and occupancy, business and occupation, mercantile, real estate, capital
stock and franchise or other tax returns, including information returns (all the
foregoing taxes, including interest and penalties thereon and including
estimated taxes, being hereinafter collectively called "TAXES"), (ii) has paid,
or provided adequate accruals for, all material Taxes which became due during
the periods covered by such returns and (iii) has paid all other Taxes for which
a notice of assessment or demand for payment has been received. There are no
proposed assessments of Tax against the Company or ALC or proposed adjustments
to any tax returns filed, pending against the Company or a Subsidiary.
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The accruals for Taxes reflected in the 1997 Balance Sheet are adequate to cover
all liabilities for Taxes of the Company and its subsidiaries for all periods
ending on or before the 1997 Balance Sheet Date.
(b) To the knowledge of the Company, neither the IRS nor any other
taxing authority is asserting or threatening to assert against the Company or
ALC (nor against any other member of the affiliated group of which they are or
were members) any material deficiency or Claim for additional Taxes. Neither
the Company nor ALC has ever (i) filed any consent agreement under Section
341(f) of the Code, (ii) executed a waiver or consent extending any statute of
limitation for federal income or other Tax liability which remains outstanding,
(iii) applied for a Tax ruling that has continuing effect, (iv) entered into a
closing agreement with any taxing authority that has continuing effect or
(v) filed or been the subject of an election under Section 338(g) or Section
338(h)(10) of the Code or caused or been the subject of a deemed election under
Section 338(e) thereof.
(c) True copies of (i) the United States federal consolidated income
tax returns of the Company for each of the fiscal years ended December 31, 1995
and 1996 and (ii) state income and franchise tax returns of the Company for each
of the fiscal years ended December 31, 1995 and 1996 have been made available
for inspection to Buyer.
SECTION 3.14 BROKERS' FEES. Except for a fee to Berenson Minella &
Co. that is described in that certain letter from Berenson Minella & Co. to the
Company dated July 24, 1997, as amended by that certain letter agreement dated
November 6, 1997, and the transaction fees payable to BankAmerica Ventures and
John C. Fosmire, no broker, finder or similar agent has been employed by or on
behalf of the Company in connection with this Agreement or the transactions
contemplated hereby, and the Company has not entered into any agreement or
understanding of any kind with any person or entity for the payment of any
brokerage commission, finder's fee or any similar compensation in connection
with this Agreement or the transactions contemplated hereby.
SECTION 3.15 LABOR MATTERS. Except as set forth in Schedule 3.15,
the employees of the Company and ALC are not subject to any collective
bargaining agreement, memorandum of understanding or other written document
binding on the Company or ALC respecting terms and
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conditions of employment with respect to an identified group of employees. As
to the collective bargaining agreements disclosed on Schedule 3.15, neither the
Company nor ALC is in material default thereunder. There are no Claims,
controversies, labor disturbances, investigations, proceedings or complaints
pending or, to the Company's knowledge, threatened, by any governmental agency
or any of the employees of the Company or ALC or any party or parties
representing any of such employees against the Company or ALC before any court,
arbitrator or other tribunal. To the Company's knowledge, (i) there are no
organizational efforts presently being made or threatened by or on behalf of any
labor union with respect to the employees of the Company or ALC nor (ii) have
there been any such efforts in the last five (5) years. Neither the Company nor
ALC has experienced a work stoppage, strike, lock-out or other labor disturbance
within the past five (5) years, and there is no work stoppage, strike, lock-out
or other labor disturbance presently occurring, or, to the knowledge of the
Company, threatened. The Company and ALC have complied in all material respects
with all legal requirements relating to their respective employees, the
employment of labor, and the safety and health of employees, including without
limitation, all legal requirements relating to occupational health and safety,
discrimination, unemployment, wages, hours, the Family and Medical Leave Act,
collective bargaining, and the collection and payment of withholding taxes and
similar taxes in respect of the business of the Company and ALC, except to the
extent that non-compliance with any such legal requirement would not have a
Material Effect. Except as set forth in Schedule 3.15, there are no unfair
labor practice charges, charges of discrimination, or other similar complaints
pending against the Company or ALC involving employees now or previously
employed by the Company and ALC.
SECTION 3.16 LEASES. Schedule 3.16 lists all leases and subleases
under which either the Company or ALC is lessor or lessee of any real property
or personal property which involve aggregate payments to or by the Company or
ALC during any twelve-month period in excess of $50,000 (herein, a "MATERIAL
LEASE"). Each Material Lease is a valid and binding obligation of the Company
or ALC, as the case may be, and is in full force and effect; the Company or ALC,
as the case may be, has performed in all material respects all material
obligations required to be performed by it to date under the Material Leases;
neither the Company nor ALC is in material default under any
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Material Lease; and no event has occurred that with the passage of time or the
giving of notice (or both) would constitute a material default under any
Material Lease.
SECTION 3.17 TITLE TO ASSETS. Each of the Company and ALC has good
and marketable title to, or valid leasehold interest in, all of its assets used
by it, located on its premises or shown on the 1997 Balance Sheet or acquired
since the 1997 Balance Sheet Date, free and clear of all Security Interests
except as referred to in the Financial Statements and except such ordinary and
customary imperfections of title, restrictions and encumbrances as do not
materially detract from the value of such assets or materially impair the use
made thereof by the Company or ALC, and except for assets disposed of since the
1997 Balance Sheet Date in the ordinary course of business.
SECTION 3.18 INSURANCE. Schedule 3.18 lists all insurance policies
currently in effect with respect to the Company or ALC, complete copies of which
have been made available for inspection to Buyer. Such policies insure the
Company and ALC and their respective properties and assets against such losses
and risks, and in such amounts, as the Board or the management of the Company
has determined in good faith to be necessary for the conduct of the business of
the Company and ALC. There has been no material default by the Company or ALC
with respect to any provision contained in any such policy. There have been no
disputes or reservations made by the insurance carrier issuing any policy under
which coverage is claimed by the Company or ALC.
SECTION 3.19 PATENTS AND TRADEMARKS. Schedule 3.19 lists all
patents, patent applications, trade names, trademarks and trademark applications
registered in the name of the Company or ALC, or used by the Company or ALC in
their respective businesses. To the Company's knowledge, each of the Company
and ALC owns or possesses (or will own or possess at the Closing Date) adequate
rights to use all patents, trade secrets, trade names, trademarks, inventions,
processes, designs, formulas, know-how and other industrial and intellectual
property rights and all machinery, apparatuses and methods necessary for the
conduct of its business as presently conducted. To the Company's knowledge, no
products manufactured or sold by the Company and ALC infringe the patent or
proprietary rights of any other person, and the Company has not received written
notification of any Claims or actions which have been asserted by any person
regarding such infringement.
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SECTION 3.20 TITLE TO REAL PROPERTY. Schedule 3.20 includes a
complete list of all real property and interests in real property owned in fee
by the Company or ALC. The Company has or at Closing will have good and
marketable fee title to all real property and interests in real property shown
on Schedule 3.20 free and clear of all Security Interests, easements covenants,
rights of way and other restrictions, except easements, covenants, rights of way
or other restrictions which do not individually or in the aggregate materially
detract from the value of such property or materially impair the uses of the
property to which they relate in the business of the Company and ALC as
presently conducted.
SECTION 3.21 DISCLOSURE. No representation or warranty by the
Company in this Agreement, and no exhibit, schedule, certificate or document or
other writing furnished or to be furnished by the Company to Buyer at the
Closing pursuant to the provisions hereof, contains or will contain any untrue
statement of a material fact or omits to state a material fact necessary to make
the statements herein or therein not misleading.
SECTION 3.22 RELATED PARTY TRANSACTIONS. Set forth on Schedule 3.22
is a list of all transactions (including, without limitation, debts, loans,
advances, or other obligations, guarantees, indemnities, accounts and notes
payable or receivable and service agreements) between the Company, ALC, any
Stockholder, any Other Participant, or any current officer, director, employee,
shareholder, or Affiliate of the Company, ALC or any Stockholder or any spouse,
child, grandchild, ancestor or sibling of any such person (collectively,
"RELATED PARTIES") which (i) were entered into and/or consummated after December
31, 1997, (ii) are or will be effective as of the date hereof or at Closing,
(iii) constitute a present or future liability or obligation of the Company or
ALC to any Related Party, or (iv) constitute a present or future liability of
any Related Party to the Company or ALC. No expenses of any Stockholder
incurred in connection with the transactions contemplated hereby have been borne
by the Company or ALC.
SECTION 3.23 CUSTOMERS AND VENDORS. Schedule 3.23 is a correct and
complete list of the twenty (20) largest customers and the ten (10) largest
vendors of the Company and ALC during the twelve-month period ended December 31,
1997, with the amount of sales made to each such customer or payments made to
each such vendor, as the case may be, during such period as reasonably
ascertained
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from readily available information, such amounts being estimated in good faith
as being within five percent (5%) of the actual sales made to such customer or
payments made to such vendor, as the case may be. Except as set forth on
Schedule 3.23, the Company and ALC have no information indicating that any of
such customers or vendors intends to cease doing business with the Company or
ALC or materially alter the volume of business that it is presently conducting
with the Company or ALC.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to the Company and each Stockholder
that:
SECTION 4.01 ORGANIZATION, POWER AND AUTHORITY OF BUYER. Each of
Buyer and Buyer Sub is a corporation duly organized, validly existing and in
good standing under the laws of the State of Colorado or Delaware, respectively,
and has the corporate power and authority to own or lease and to operate its
properties and to carry on its business as now being conducted. Each of Buyer
and Buyer Sub is qualified to transact business and is in good standing in each
jurisdiction in which the nature of its business or location of its properties
requires such qualification and in which the failure to so qualify would have a
material adverse effect on the business or operations of Buyer and Buyer Sub.
Each of Buyer and Buyer Sub has previously delivered to the Company complete and
correct copies of its respective Certificate of Incorporation and Bylaws.
SECTION 4.02 ORGANIZATION, POWER AND AUTHORITY OF ACQUISITION.
Acquisition shall be, upon formation pursuant to Section 2.13 of this Agreement,
a wholly-owned subsidiary of Buyer Sub and shall be a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware, with the corporate power and authority to own or lease and to operate
its properties and to carry on its business as then being conducted. Upon
formation, Acquisition shall be qualified to transact business and is in good
standing in each jurisdiction in which the nature of its business or location of
its properties requires such qualification and in which the failure to so
qualify would have a material adverse effect on the business or operations of
Acquisition. When available Buyer and Buyer Sub shall
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deliver to the Company complete and correct copies of the Certificate of
Incorporation and Bylaws of Acquisition.
SECTION 4.03 AUTHORIZATION. Each of Buyer, Buyer Sub and
Acquisition, respectively, has, or in the case of Acquisition shall have upon
formation, the corporate power and authority to execute and deliver this
Agreement, to consummate the transactions contemplated hereby and to perform its
obligations under this Agreement. The execution and delivery by Buyer, Buyer
Sub and Acquisition, respectively, of this Agreement, and the consummation of
the transactions contemplated hereby, have been or, in the case of Acquisition,
will be duly authorized by all necessary corporate action by Buyer, Buyer Sub
and Acquisition, respectively. This Agreement, upon its execution and delivery
by Buyer, Buyer Sub and Acquisition, respectively (assuming the due
authorization, execution and delivery hereof by the Company), will constitute
the legal, valid and binding obligation of Buyer, Buyer Sub and Acquisition,
respectively, enforceable against Buyer, Buyer Sub, and Acquisition,
respectively, in accordance with its terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency and similar laws relating to
creditors' rights generally and by general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).
SECTION 4.04 NO CONFLICT OR VIOLATION. Neither the execution and
delivery of this Agreement by Buyer, Buyer Sub or Acquisition, respectively, nor
the consummation of the transactions contemplated hereby, will (a) violate any
provision of the Certificate of Incorporation or Bylaws of Buyer, Buyer Sub or
Acquisition, (b) violate, conflict with or result in the breach or termination
of, or otherwise give any other contracting party the right to terminate, or
constitute a default under the terms of, any mortgage, bond, indenture or
material agreement to which Buyer, Buyer Sub or Acquisition is a party or by
which Buyer, Buyer Sub or Acquisition, respectively, or any of their respective
properties or businesses may be bound or materially affected, (c) violate any
judgment, order, injunction, decree or award of any court, administrative agency
or governmental body against, or binding upon, Buyer, Buyer Sub or Acquisition,
respectively, or upon their respective properties or businesses, or (d)
constitute a violation by Buyer, Buyer Sub or Acquisition of any applicable law
or regulation of any jurisdiction as such law or regulation relates to Buyer,
Buyer Sub or Acquisition, respectively, or to their respective properties or
businesses; EXCEPT, as to
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clauses (b), (c), and (d), where such violation, breach, default, termination or
right of termination would not have a material adverse effect on Buyer's, Buyer
Sub's or Acquisition's ability to consummate the transactions contemplated
hereby and fulfill its obligations hereunder.
SECTION 4.05 CONSENTS AND APPROVALS. No consent, approval,
authorization, license, permit or other action by, or filing with, any
governmental or regulatory authority is required in connection with the
execution and delivery of this Agreement by Buyer, Buyer Sub and Acquisition,
respectively, or the consummation by Buyer, Buyer Sub and Acquisition,
respectively, of the transactions contemplated hereby, except for such consents,
approvals, authorizations, licenses, permits, actions or filings as will have
been obtained, taken or filed at or prior to the Closing.
SECTION 4.06 BROKERS' FEES. No broker, finder or similar agent has
been employed by or on behalf of Buyer, Buyer Sub or Acquisition in connection
with this Agreement or the transactions contemplated hereby, and Buyer, Buyer
Sub and Acquisition have not entered into any agreement or understanding of any
kind with any person or entity for the payment of any brokerage commission,
finder's fee or any similar compensation in connection with this Agreement or
the transactions contemplated hereby.
SECTION 4.07 BUYER'S INVESTIGATION. Buyer has conducted inspections
of the properties and financial and other records of the Company and ALC, and
has engaged in other due diligence with respect to the Company and ALC and their
business, financial affairs and operations. The Buyer has had the opportunity
to ask questions of the Company, certain Stockholders, and certain employees and
officers of the Company and ALC relating to their business, management and
financial affairs, which questions were answered to Buyer's satisfaction, and to
examine all books and records of the Company and ALC. Based on such inspections
and inquiries, Buyer is not aware of any inaccuracies in or breaches of the
Company's representations and warranties set forth in this Agreement.
SECTION 4.08 FINANCING. Buyer has liquid funds on hand and/or has
obtained firm commitments from lenders which, in the aggregate, are sufficient
to enable Buyer to consummate the transactions contemplated by this Agreement.
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ARTICLE V
CONDITIONS TO THE OBLIGATIONS
OF THE COMPANY
The obligations of the Company to consummate the transactions
contemplated by this Agreement are subject to the fulfillment, on or before the
Closing Date, of the following conditions (subject to the right of the Company
to waive any such condition).
SECTION 5.01 REPRESENTATIONS AND WARRANTIES TRUE. All of the
material representations and warranties of Buyer, Buyer Sub and Acquisition
contained in this Agreement shall be true and correct in all material respects
on and as of the Closing Date as if made on and as of the Closing Date.
SECTION 5.02 COVENANTS AND AGREEMENTS PERFORMED. Buyer, Buyer Sub
and Acquisition shall have performed or complied with in all material respects
or delivered all covenants, agreements, conditions or documents required by this
Agreement to be performed, complied with or delivered by Buyer, Buyer Sub and
Acquisition, respectively, prior to or on the Closing Date.
SECTION 5.03 NO ACTIONS, SUITS OR PROCEEDINGS. No action, suit or
proceeding before any court or governmental body shall have been instituted (and
be pending) by any governmental authority to restrain or prohibit this Agreement
or the consummation of the transactions contemplated hereby. No preliminary or
permanent injunction or other order issued by any federal or state court of
competent jurisdiction preventing consummation of the Merger shall be in effect.
SECTION 5.04 OFFICERS' CERTIFICATE. The Company shall have been
furnished with a certificate executed on behalf of each of Buyer and Buyer Sub
by its Chairman or President, dated the Closing Date, representing and
certifying (a) that the conditions set forth in Sections 5.01, 5.02 and 5.03 of
this Article V have been fulfilled at or prior to the Closing Date, and (b) that
Buyer, Buyer Sub and Acquisition, respectively, are not in material default
under any provision of this Agreement.
SECTION 5.05 HSR ACT FILINGS. Any person required in connection with
the transactions contemplated hereby to file a notification and report form in
compliance
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with the HSR Act shall have filed such form and the applicable waiting period
with respect to each such form (including any extension thereof by reason of a
request for additional information) shall have expired or been terminated.
SECTION 5.06 EXISTING AGREEMENTS. The Company and the Stockholders
shall have terminated the Existing Stockholder Agreements in a manner
satisfactory to the Majority Stockholders.
SECTION 5.07 REQUIRED CONSENTS. All authorizations, consents,
waivers or approvals from or by third parties required for the transactions
contemplated hereby shall have been obtained.
SECTION 5.08 OPINION. The Company shall have received from
Rothgerber Johnson & Lyons LLP, counsel to Buyer, an opinion letter dated as of
the Closing Date in substantially the form attached as EXHIBIT C hereto.
SECTION 5.09 CERTIFICATE. Buyer shall deliver a certificate, signed
on behalf of Buyer by its Chairman or President, to the Stockholders certifying
that as of the Closing, after giving effect to Buyer's payment of the Merger
Consideration in accordance with this Agreement, and based in part on the
accuracy of the Company's representations set forth in Article III hereof,
neither the Company nor ALC:
(a) is insolvent or became insolvent as a result of the transactions
contemplated hereby;
(b) intends to incur, or believes that it would incur, debts that
would be beyond its ability to pay such debts as such debts matured; or
(c) was engaged in a business or a transaction, or was about to
engage in a business or a transaction, for which the property remaining with it
was unreasonably small in relation to such business or transaction.
SECTION 5.10 PROCEEDINGS AND DOCUMENTS. All certificates, opinions,
agreements, instruments and documents mentioned herein or incident to the
transactions contemplated hereby shall be reasonably satisfactory in form and
substance to the Company, the Stockholders and to Paul, Hastings, Janofsky &
Walker LLP.
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SECTION 5.11 ESCROW AGREEMENT. Buyer, the Company, the
Representatives and the Escrow Agent shall have executed and delivered to one
another the Escrow Agreement substantially in the form of EXHIBIT D attached
hereto.
ARTICLE VI
CONDITIONS TO THE OBLIGATIONS OF BUYER AND ACQUISITION
The obligations of Buyer, Buyer Sub and Acquisition to consummate the
transactions contemplated by this Agreement are subject to the fulfillment, on
or before the Closing Date, of the following conditions (subject to the right of
Buyer, Buyer Sub and Acquisition to waive any such condition):
SECTION 6.01 REPRESENTATIONS AND WARRANTIES TRUE. All of the
material representations and warranties of the Company contained in this
Agreement shall be true and correct in all material respects on and as of the
Closing Date as if made on and as of the Closing Date, except to the extent that
the breach thereof could not reasonably be expected to have a Material Effect.
SECTION 6.02 COVENANTS AND AGREEMENTS PERFORMED. The Company shall
have performed or complied with in all material respects or delivered all
covenants, agreements, conditions or documents required by this Agreement to be
performed, complied with or delivered by the Company prior to or on the Closing
Date.
SECTION 6.03 NO ACTIONS SUITS OR PROCEEDINGS. No action, suit or
proceeding before any court or governmental body shall have been instituted (and
be pending) by any governmental authority to restrain or prohibit this Agreement
or the consummation of the transactions contemplated hereby. No preliminary or
permanent injunction or other order issued by any federal or state court of
competent jurisdiction preventing consummation of the Merger shall be in effect.
SECTION 6.04 COMPANY CERTIFICATE. Buyer shall have been furnished
with a certificate executed on behalf of the Company by the President or any
Vice President of the Company, dated the Closing Date, representing and
certifying (a) that the conditions set forth in Sections 6.01, 6.02 and 6.03 of
this Article VI have been fulfilled at or prior to
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the Closing Date, and (b) that the Company is not in material default under any
provision of this Agreement.
SECTION 6.05 HSR ACT FILINGS. Any person required in connection with
the transaction contemplated hereby to file a notification and report form in
compliance with the HSR Act shall have filed such form and the applicable
waiting period with respect to each such form (including any extension thereof
by reason of a request for additional information) shall have expired or been
terminated.
SECTION 6.06 CONSENTS. All authorizations, consents, waivers and
approvals by or from third parties set forth on Schedule 6.06 shall have been
obtained.
SECTION 6.07 OPINION. Buyer shall have received from Paul, Hastings,
Janofsky & Walker LLP, counsel to the Company, an opinion letter dated as of the
Closing Date in substantially the form attached as EXHIBIT F hereto.
SECTION 6.08 NO MATERIAL CHANGE. No act, event or condition shall
have occurred after the date hereof which has or could reasonably be expected to
have a Material Effect.
SECTION 6.09 APPRAISAL RIGHTS. Appraisal rights shall not have been
demanded under Section 262 of the Delaware Law in respect of the Merger by
persons holding in the aggregate more than 5% of the Common Stock outstanding
and entitled to exercise appraisal rights.
SECTION 6.10 ESCROW AGREEMENT. Buyer, the Company, the
Representatives and the Escrow Agent shall have executed and delivered to one
another the Escrow Agreement.
SECTION 6.11 NON-COMPETITION AGREEMENT. John C. Fosmire shall have
entered into a Non-Competition Agreement among Acquisition, Buyer and ALC
substantially in the form of EXHIBIT E attached hereto.
ARTICLE VII
COVENANTS
Buyer, Buyer Sub, Acquisition and the Company (subject to the terms
and limitations described in Section 9.01 hereof) hereby covenant and agree as
follows:
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SECTION 7.01 INSPECTION. Until the Closing, the Company shall give
the officers, employees and representatives of Buyer reasonable access, during
normal business hours and upon reasonable notice, to the assets, personnel,
properties, books, records, agreements and commitments of the Company and ALC
and the Company shall furnish to Buyer during such period with all such
information relating to the Company and ALC as Buyer may reasonably request;
PROVIDED, however, that such access does not disrupt the normal operations of
the Company or ALC.
SECTION 7.02 CONFIDENTIALITY. That certain Confidentiality Agreement
dated December 29, 1997 and entered into by Buyer and the Company shall survive
the execution and delivery of this Agreement.
SECTION 7.03 CONDUCT OF BUSINESS. Until the Closing, the Company and
ALC shall conduct their respective businesses in the ordinary course and,
without limiting the generality of the foregoing, except (a) pursuant to
agreements entered into prior to the date hereof and disclosed to Buyer, (b) as
consented to by Buyer,(c) as expressly contemplated by this Agreement or (d) as
set forth in any schedule to this Agreement, neither the Company nor ALC shall,
prior to the Closing, take any one or more of the following actions:
(i) issue, sell, pledge or dispose of, or agree to issue, sell,
pledge or dispose of, any shares of its capital stock, or grant or issue, or
agree to grant or issue, any options, warrants or other rights calling for the
issue thereof;
(ii) except for sales of inventory in the ordinary course of
business, sell, pledge, dispose of or encumber any of its assets with a value
exceeding $100,000 in the aggregate;
(iii) make or permit to be made any material amendment or termination
of any contract or agreement material to the conduct of its business, or
willfully surrender or forfeit any license or other qualification or right
material to the conduct of its business;
(iv) enter into or amend any employment agreement, enter into or
amend any agreement with any labor union or association representing any
employee, enter into or amend any Benefit Plan, or, except in the ordinary
course of business and consistent with past practices, make any
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wage or salary increase or bonus, or increase in any other direct or indirect
compensation, for or to any of its officers, directors, employees, consultants
or agents, or any accrual for or commitment or agreement to make or pay the
same;
(v) except in the ordinary course of business, expressly incur or
guarantee or willfully become liable for any Indebtedness;
(vi) except for inventory or equipment acquired in the ordinary
course of business and except for capital expenditures or commitments not
exceeding $100,000 in the aggregate, acquire or agree to acquire any capital
assets or the capital stock or business of any other person or entity;
(vii) except in the ordinary course of business, enter into any other
material contract or other agreement or other material transaction;
(viii) split, combine or reclassify any of its outstanding capital
stock or declare, set aside or pay any dividend or make any other distribution
with respect to its capital stock, whether payable in cash, stock or property,
or make any payment to redeem, purchase or otherwise acquire, or call for
redemption, any of its capital stock or any securities convertible into
exchangeable to its capital stock;
(ix) amend its Restated Articles of Incorporation or Certificate of
Incorporation, as the case may be, or Bylaws;
(x) make any material change, from past practice, in billing,
shipping or collection practices or levels of accounts receivable, inventory,
accounts payable and accrued liabilities;
(xi) except as required by regulation or GAAP, maintain its books of
account other than in the usual, regular and ordinary manner in accordance with
GAAP, make any material change in any of their books, accounting methods or
practices, or reclassify any material assets or liabilities;
(xii) invest in certificates of deposit in any one bank if such
investment in the aggregate exceeds $100,000 at any time; or
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(xiii) take any action that would reasonably be expected to result in
any of the Company's representations or warranties in this Agreement being
untrue or incorrect in any material respect.
SECTION 7.04 PUBLICITY. No public release or announcement concerning
the transactions contemplated hereby shall be issued by any party hereto without
the advance consent of the other parties hereto (it being understood that the
Representatives may consent to the issue of a press release on behalf of all
Stockholders), except as such release or announcement may be required by law, in
which case the party making the release or announcement shall show such release
or announcement as soon in advance as is possible to the other parties hereto.
SECTION 7.05 EXPENSES OF SALE. Except as otherwise specifically
provided herein, the Company, ALC and the Stockholders on the one hand, and
Buyer, Buyer Sub and Acquisition, on the other hand, shall each bear their own
direct and indirect expenses incurred in connection with the negotiation and
preparation of this Agreement and the consummation and performance of the
transactions contemplated hereby, including, without limitation, all legal fees
and fees of any brokers, finders or similar agents. All material Transaction
Expenses shall be accrued prior to the Closing Date in accordance with GAAP.
SECTION 7.06 INSURANCE. The Company and ALC, as applicable, shall
maintain the insurance policies described in Section 3.18 hereof in full force
and effect through the Closing.
SECTION 7.07 CONSENTS. The Company shall use its reasonable best
efforts, and Buyer shall cooperate in all reasonable respects with the Company,
to obtain all authorizations, consents, waivers or approvals from or by third
parties (including, to the extent applicable, parties to certain of the Material
Agreements and Material Leases) required to perform their obligations hereunder
and consummate the transactions contemplated hereby.
SECTION 7.08 FEDERAL INCOME TAX RETURNS. Buyer and the Company
hereby agree that for federal income tax purposes, the Merger shall occur as of
the close of business on the Closing Date and that all transactions of the
Company and its subsidiaries occurring (a) prior to but not after the close of
business on the Closing Date shall be reflected
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in the consolidated federal income tax returns including the Company and its
subsidiaries and (b) after the close of business on the Closing Date shall be
reflected in the consolidated federal income tax returns including Buyer and its
subsidiaries.
SECTION 7.09 NOTICE BY THE COMPANY. The Company and ALC shall, as
promptly as practicable, give notice to Buyer upon obtaining knowledge of the
occurrence of any event which would cause any of the representations and
warranties of the Company to become untrue in any material respect, result in
the failure of the Company or ALC to comply with any of its covenants or
agreements hereunder, or result in the failure to satisfy any of the conditions
to Buyer's obligations hereunder and will cooperate with Buyer in attempting
promptly to remedy the same.
ARTICLE VIII
TERMINATION
SECTION 8.01 TERMINATION. Anything herein to the contrary
notwithstanding, this Agreement may be terminated and the transactions
contemplated hereby abandoned at any time prior to the Closing Date (a) by
mutual written consent of Buyer and the Company, (b) by either the Buyer or the
Company, if the Closing does not occur on or before June 30, 1998 (or such later
date as Buyer and the Company may agree upon), (c) by Buyer if there has been a
material misrepresentation by the Company in this Agreement, a material breach
by the Company of any of its warranties or covenants in this Agreement, or if
any of the conditions specified in Article VI hereof shall not have been
fulfilled by the time required and shall not have been waived by Buyer or (d) by
the Company if there has been a material misrepresentation by Buyer, Buyer Sub
or Acquisition in this Agreement, a material breach by Buyer, Buyer Sub or
Acquisition of any of its warranties or covenants in this Agreement, or if any
of the conditions specified in Article V hereof shall not have been fulfilled by
the time required and shall not have been waived by the Stockholders; PROVIDED
that in the case of a termination under the preceding clause (b), (c) or (d),
the party or parties terminating this Agreement and such transactions shall at
the time of such termination not be in material breach of any of their
respective obligations under this Agreement. A termination under clause (b),
(c) or (d) of the immediately preceding sentence shall be effective when a
notice of termination is
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deemed to have been given pursuant to Section 10.02 hereof by the party or
parties giving such notice to the other party or parties to whom such notice is
directed.
SECTION 8.02 EFFECTS OF TERMINATION. If this Agreement is terminated
and the transactions contemplated hereby are not consummated as described above,
this Agreement shall become void and of no further force and effect, except for
Section 7.04 hereof relating to publicity, Section 7.05 hereof relating to
expenses and Article IX relating to indemnification; PROVIDED that nothing in
this Article VII shall relieve any party of liability if the failure to
consummate the transactions contemplated hereby is due to an intentional action
or inaction by such party which such party knew or reasonably should have known
would cause the Closing hereunder not to occur on or prior to June 30, 1998.
ARTICLE IX
SURVIVAL; BUYER DAMAGES; LIMITATIONS ON LIABILITY;
AND INDEMNIFICATION
SECTION 9.01 SURVIVAL OF REPRESENTATIONS AND WARRANTIES AND
COVENANTS.
(a) All representations, warranties and covenants made by the parties
hereto in this Agreement, in any Schedule or in any document or certificate
delivered pursuant hereto, shall survive the Closing and shall terminate at
12:01 AM Pacific time on the third anniversary of the Effective Time; PROVIDED,
HOWEVER, that there shall be no termination of any such representation, warranty
or covenant as to which a claim has been asserted in writing prior to the
termination of the survival period for such representation, warranty or
covenant. All such representations, warranties and covenants shall be
unaffected by any investigation made by or on behalf of any party hereto, or by
knowledge obtained as a result thereof or otherwise.
(b) No claim may be asserted or action may be brought or proceeding
commenced with respect to any representation, warranty or covenant in this
Agreement or in any document or certificate delivered pursuant hereto, unless
written notice thereof, setting forth in reasonable detail the claimed
misrepresentation or breach of warranty or covenant, shall have been delivered
as provided in
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Section 10.02 hereof to the party or parties against whom liability for the
alleged misrepresentation or breach of warranty or covenant is charged (which,
in the case of any claim by Buyer for Buyer Damages, shall be delivered to the
Representatives and the Stockholders) on or before 12:01 AM Pacific time on the
third anniversary of the Effective Time.
(c) Only those covenants and agreements that contemplate, implicitly
or explicitly, or may involve action to be taken or obligations in effect after
the Closing shall survive the Closing in accordance with their terms, and no
other covenants or agreements contained in this Agreement or any document or
instrument to be delivered pursuant hereto shall survive the Closing.
SECTION 9.02 BUYER DAMAGES.
(a) The parties agree that only the following Damages (collectively,
sometimes referred to as "BUYER DAMAGES"), subject to Sections 9.01 and 9.03,
will be taken into account in arriving at the Adjusted Purchase Price as
contemplated by Section 2.07(a) and in determining whether Buyer is entitled
under Section 9.02(b) to be paid any amount out of the amounts available in the
escrow account established under the Escrow Agreement (the "ESCROW ACCOUNT"):
(i) any and all liabilities, obligations, losses, damages,
diminutions of value, Claims, liens and deficiencies of any kind or nature which
exist, or which are imposed on, incurred by or asserted against any Buyer
Indemnified Party, based upon, resulting from or arising out of, or as to which
there was, any breach or inaccuracy of any representation, warranty, statement,
certification, agreement or covenant made by the Company or ALC in this
Agreement, any related documents, any Schedule hereto or thereto, or in any
other written document or certificate delivered by or on behalf of the Company,
ALC or the Stockholders;
(ii) any and all liabilities, obligations, losses, damages,
diminutions of value, liens and deficiencies of any kind or nature which exist,
or which are imposed on, incurred by or asserted against any Buyer Indemnified
Party, based upon, resulting from or arising out of, any Claim brought by any
third party against any Buyer Indemnified Party based upon, resulting from,
arising out of or concerning any event occurring, or fact or circumstance
existing, prior to the Closing Date and related to (A) the
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transactions contemplated herein, (B) the Company or (C) ALC;
(iii) any and all liabilities or obligations for Taxes for periods
through the Closing Date, for which either the Company or ALC is liable, to the
extent that (A) such Taxes are not reflected on the 1997 Balance Sheet and did
not arise in the ordinary course of business after the date thereof, (B) such
Taxes should have been but were not reflected in any return filed by the Company
or ALC prior to the Closing Date, (C) such Taxes were required to be paid by the
Company or ALC prior to the Closing Date and were not so paid or (D) such Taxes
result from the failure by the Company or ALC prior to the Closing Date to
comply with any legal requirements relating to information reporting or
withholding and payment over of Taxes with respect to payments made to third
parties;
(iv) any and all liabilities, obligations, losses, damages,
diminutions of value, Claims, liens and deficiencies of any kind or nature which
exist, or which are imposed on, incurred by or asserted against any Buyer
Indemnified Party, based upon, resulting from or arising out of, the presence of
Hazardous Materials in, under or on the Real Property;
(v) all amounts due with respect to Dissenters' Shares; and
(vi) any cost or expenses (including, without limitation,
settlement costs and reasonable attorneys', accountants' and experts' fees and
court costs) incurred by the Buyer Indemnified Parties in connection with any of
the foregoing (including, without limitation, any reasonable cost or expense
incurred by the Buyer Indemnified Parties in enforcing their rights pursuant to
this Section 9.02); PROVIDED, HOWEVER, that the foregoing shall only constitute
Buyer Damages if and to the extent that in the aggregate they exceed (A) all
reserves recorded on the books and records of the Company or ALC as of the
Closing Date, which reserves shall be fungible and shall apply to any category
of the foregoing with respect to the Company or ALC and (B) any proceeds from
insurance or other co-payments by third parties which are related directly to
the indemnified matter.
(b) For purposes of this Agreement, "BUYER INDEMNIFIED PARTY"
includes (i) Buyer, (ii) each of the Surviving Corporation and ALC, (iii) each
Affiliate of
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Buyer, the Surviving Corporation or ALC and (iv) each officer, director,
employee, agent, consultant, stockholder or representative of any person or
entity referred to in the preceding clauses (i), (ii), and (iii) and their
respective heirs, successors and assigns.
(c) For purposes of this Agreement, an "AFFILIATE" of any party means
any other person or entity that controls, is controlled by or under common
control with, either directly or indirectly through one or more other persons or
entities, that party. For purposes of this provision, "control" shall mean
ownership of fifty percent (50%) or more of the ordinary voting stock of such
party, person or entity. Neither BankAmerica Ventures nor BankAmerica Capital
Corporation, nor any of the their respective Affiliates, shall be deemed to be
Affiliates of the Company or ALC.
(d) Claims for indemnification under Section 9.02(a) above may be
made regardless of whether or not the matter giving rise to such claim would
constitute a breach of representation or warranty made in this Agreement, any
related documents, any schedule hereto or thereto, or in any other written
document or certificate delivered by or on behalf of the Company, ALC or the
Stockholders. No Buyer Indemnified Party shall be required to make any Claim or
demand against any other person or entity prior to the making of any Claim or
demand for indemnification hereunder.
(e) Subject to Sections 9.01 and 9.03, Buyer shall be entitled to be
paid the amount of all Buyer Damages out of the amounts available in the Escrow
Account (as such amounts may be adjusted from time to time in accordance with
the terms of the Escrow Agreement).
SECTION 9.03 LIMITATIONS ON LIABILITY.
(a) Notwithstanding any provision in this Agreement to the
contrary, the provisions of this Article IX shall constitute the sole and
exclusive remedy of and means by which any Indemnified Party (including,
without limitation, any Buyer Indemnified Party) after the Closing may obtain
recompense for Damages (including, without limitation, Buyer Damages) arising
out of, resulting from or incurred in connection with this Agreement,
including, without limitation, any inaccuracy and/or breach of any
representation or warranty contained in this Agreement or any other agreement
or instrument, the failure to perform any covenant or agreement under this
Agreement or any other
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agreement or instrument, or any other act or omission by any party hereto.
Any other rights to be indemnified or held harmless or to be paid or be
compensated for Damages (including, without limitation, Buyer Damages) to
which any Indemnified Party (including, without limitation, any Buyer
Indemnified Party) might otherwise be entitled after the Closing, whether now
existing or hereafter arising and under any legal theory, are hereby waived
to the maximum extent permitted by applicable law.
(b) Notwithstanding any provision in this Agreement (or any other
agreement relating to the transactions contemplated hereby) to the contrary, no
Stockholder, officer, director, employee, agent or representative of the Company
or ALC shall have any liability or obligation whatsoever to indemnify or hold
harmless or compensate any Buyer Indemnified Party in respect of any Buyer
Damages or otherwise. Any and all entitlement of any Buyer Indemnified Party to
be compensated for Buyer Damages shall be satisfied exclusively out of the
Escrow Account as provided in Section 9.02 hereof. In no event shall any
Stockholder or any other Person be required to pay any additional amounts into
the Escrow Account or to any Buyer Indemnified Party hereunder or otherwise.
(c) Buyer shall not be entitled to have Buyer Damages taken into
account in arriving at the Adjusted Purchase Price, as contemplated in Section
2.07(a) hereof, or to recover any amount out of the Escrow Account, as
contemplated in Section 9.02(e) hereof, unless and until the total Buyer Damages
shall equal in the aggregate ONE HUNDRED THOUSAND DOLLARS ($100,000) (the
"INITIAL AMOUNT"), all of which Initial Amount will be solely Buyer's
responsibility and for Buyer's account and will remain so even if Buyer Damages
exceed ONE HUNDRED THOUSAND DOLLARS ($100,000); PROVIDED, HOWEVER, that amounts
due with respect to Dissenters' Shares in excess of the amount that would
otherwise be payable under this Agreement and Buyer Damages based upon,
resulting from or arising out of any knowing and intentional breach by the
Company or ALC of any representation, warranty, statement, certification,
agreement or covenant made by the Company or ALC in this Agreement or any
document delivered by or on behalf of the Company, ALC or the Stockholders
pursuant hereto shall not be subject to the Initial Amount.
(d) Buyer shall not be entitled to have Buyer Damages taken into
account in arriving at the Adjusted Purchase Price or to receive amounts from
the Escrow
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Account, unless a Buyer Claim Notice (as defined in the Escrow Agreement) shall
have been delivered to the Representatives, the Stockholders and the Escrow
Agent as provided in the Escrow Agreement on or before the dates specified in
the Escrow Agreement, and, to the extent necessary, a proceeding for arbitration
shall have been commenced with respect thereto pursuant to the Escrow Agreement
after the date of such notice.
(e) The Stockholders (or any of them) shall not be entitled to assert
a claim for indemnification against Buyer hereunder unless written notice
thereof, setting forth in reasonably sufficient detail the events or
circumstances which are the basis for and the amount of the claim shall have
been delivered to Buyer as provided herein on or before the dates specified
herein.
(f) Subject to the last sentence of this Section 9.03(f),
notwithstanding any provision in this Agreement to the contrary, in determining
the amount of Buyer Damages or the amount of Damages for which a Seller
Indemnified Party may seek indemnification hereunder, there shall be subtracted
an amount equal to: (i) the present value of any tax benefit (federal, state,
local or foreign) realized, or reasonably expected to be realized, by the
Indemnified Party (or Buyer, to the extent that it is entitled to have Buyer
Damages taken into account in arriving at the Adjusted Purchase Price and to
receive amounts from the Escrow Account) by reason of such claim, MINUS (ii) the
present value of any tax detriment (federal, state, local or foreign) incurred,
or reasonably expected to be incurred, by the Indemnified Party (or Buyer) as a
consequence of the receipt of a payment pursuant to the Escrow Agreement. For
purposes of this Section 9.03(f), "present value" shall be calculated using the
applicable annual federal mid-term rate, as that term is defined in the Code, in
effect for the month in which the calculation is made. The preceding sentences
of this Section 9.03(f) shall not apply to any claim by Seller Indemnified
Parties that Buyer has failed to pay the Merger Consideration as required by
this Agreement.
SECTION 9.04 INDEMNIFICATION BY BUYER.
(a) Subject to Sections 9.01 and 9.03 hereof, from and after the
Closing Date, Buyer (which shall include for this purpose the Surviving
Corporation, ALC and its direct and indirect subsidiaries) hereby covenants and
agrees to indemnify and hold harmless each Stockholder, its parents,
subsidiaries and Affiliates, and each of its or
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<PAGE>
their directors, officers, employees, agents, consultants and representatives,
and each of the heirs, executors, successors and assigns (individually a "SELLER
INDEMNIFIED PARTY" and collectively, "SELLER INDEMNIFIED PARTIES") of any of the
foregoing, from and against any Damages arising out of or resulting from any one
or more of (i) any inaccuracy in any representation or warranty made by Buyer,
Buyer Sub or Acquisition in this Agreement or in any writing delivered at the
Closing to the Company or the Stockholders by Buyer, Buyer Sub or Acquisition
pursuant to this Agreement, provided that such Stockholder did not have
knowledge of such inaccuracy as of the Closing Date, (ii) the failure of Buyer,
Buyer Sub or Acquisition to fully perform or observe any covenant, agreement or
provision to be performed or observed by it pursuant to this Agreement, (iii)
the failure of the Company or ALC to fully perform or discharge after the
Closing any of the contracts, arrangements, agreements, obligations or
commitments of the Company or ALC which (A) arose or were incurred prior to the
Closing and (B) if required to be specifically disclosed to Buyer pursuant to
this Agreement, were so disclosed by the Company, (iv) any actual or threatened
action, suit, arbitration, inquiry, proceeding, or investigation by or before
any court or governmental or other regulatory or administrative agency or
commission relating to a claim that any of the transactions contemplated by this
Agreement violated any fraudulent transfer or fraudulent conveyance or similar
statute, law, rule or regulation of any jurisdiction, and (v) the operations of
Buyer, Buyer Sub, the Surviving Corporation or ALC from and after the Effective
Time.
(b) No Seller Indemnified Party shall be entitled to assert a claim
for indemnification against Buyer hereunder, unless written notice thereof,
setting forth in reasonably sufficient detail the events or circumstances which
are the basis for and the amount of the claim shall have been delivered to Buyer
as provided in Section 10.02 hereof on or before 12:01 AM Pacific time on the
third anniversary of the Effective Time; PROVIDED, that there shall be no time
limit on the delivery of a notice of a claim that Buyer has failed to perform
its obligations under Article II, IX or X hereof or under the Escrow Agreement.
(c) Without limiting the effect of any other limitations set forth
herein, and notwithstanding any inaccuracy or inaccuracies in any representation
or warranty made herein, and except with respect to Damages resulting
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<PAGE>
from or arising out of any knowing and intentional breach by Buyer or Buyer Sub
of any representation, warranty, statement, certification, agreement or covenant
made by Buyer or Buyer Sub in this Agreement or any document delivered by or on
behalf of Buyer or Buyer Sub pursuant hereto or for any amounts payable pursuant
to this Section 9.04, each of Buyer and Buyer Sub shall not be liable to the
Seller Indemnified Parties unless and until the aggregate amount of Seller
Indemnified Obligations exceeds ONE HUNDRED THOUSAND DOLLARS ($100,000), and in
no event shall Buyer's and Buyer Sub's obligations under this Section 9.04
exceed THREE MILLION DOLLARS ($3,000,000).
SECTION 9.05 THIRD PARTY CLAIMS.
(a) If Buyer or any Seller Indemnified Party (in either case, an
"INDEMNIFIED PARTY") receives notice of the assertion by any third party of any
claim or of the commencement by any such third party of any action or proceeding
(any such claim, action or proceeding being referred to herein as an
"INDEMNIFIABLE CLAIM") with respect to which another party hereto (an
"INDEMNIFYING PARTY") is or may be obligated to provide indemnification (in the
case of Buyer) or as to which Buyer may assert that such Indemnifiable Claim
constitutes Buyer Damages, the Indemnified Party shall promptly notify the
Indemnifying Party (which, in the case of a Indemnifiable Claim that Buyer
asserts constitutes Buyer Damages, shall mean for this limited purpose the
Representatives) in writing (the "CLAIM NOTICE") of the Indemnifiable Claim in
reasonable detail; PROVIDED, that the failure to provide such notice shall not
relieve or otherwise affect the obligation of the Indemnifying Party to provide
indemnification hereunder, except to the extent that any Damages resulted or
were caused by such failure. The Indemnified Party shall, as promptly as
possible but not later than five (5) business days after the Indemnified Party's
receipt thereof, deliver to the Indemnifying Party copies of all notices and
documents (including court papers) received by the Indemnified Party with
respect to such Indemnifiable Claim.
(b) The Indemnifying Party shall have thirty (30) days after receipt
of the Claim Notice to undertake, conduct and control, through counsel of its
own choosing, and at its expense, the settlement or defense thereof, and the
Indemnified Party shall cooperate with the Indemnifying Party in connection
therewith; PROVIDED, that (i) the Indemnifying Party shall permit the
Indemnified Party to participate in such settlement or defense through counsel
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<PAGE>
chosen by the Indemnified Party (subject to the consent of the Indemnifying
Party, which consent shall not be unreasonably withheld), so long as the fees
and expenses of such counsel are not borne by the Indemnifying Party, and (ii)
the Indemnifying Party shall not settle any claim without the Indemnified
Party's consent (which consent shall not be unreasonably withheld), except that
if consent is withheld on the basis of the amount of the proposed settlement,
the Indemnifying Party shall not be responsible for, and the Indemnified Party
shall be deemed to have assumed and agreed to pay, any Damages related to the
Indemnifiable Claim that exceed the amount of such proposed settlement. So long
as the Indemnifying Party is reasonably contesting any such Indemnifiable Claim
in good faith, the Indemnified Party shall not pay or settle such claim without
the prior written consent of the Indemnifying Party. Notwithstanding the
immediately preceding sentence, the Indemnified Party may pay or settle such
Indemnifiable Claim without the prior written consent of the Indemnifying Party;
PROVIDED, that in such event the Indemnified Party shall waive any right to
indemnity therefor by the Indemnifying Party and no amount paid in connection
therewith by the Indemnified Party shall be counted in calculating the Initial
Amount allocation threshold. An Indemnifying Party may assume the defense of
any claim under a reservation of rights.
(c) If the Indemnifying Party does not notify the Indemnified Party
within thirty (30) days after receipt of the Claim Notice that it elects to
undertake the defense of the Indemnifiable Claim described therein, the
Indemnified Party shall have the right to contest, settle or compromise the
Indemnifiable Claim in the exercise of its reasonable discretion; PROVIDED, that
the Indemnified Party shall notify the Indemnifying Party of any compromise or
settlement of any such Indemnifiable Claim.
(d) The Indemnifying Party shall not, except with the prior consent
of the Indemnified Party, enter into any settlement of any Indemnifiable Claim
that does not include as an unconditional term thereof the giving by the person
or persons asserting the Indemnifiable Claim to all Indemnified Parties of an
unconditional release from all liability with respect to such Indemnifiable
Claim.
(e) The parties agree that the characterization of the
Representatives as "Indemnifying Parties" is for reference purposes only and
that anything herein to the
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<PAGE>
contrary notwithstanding, no Representative shall have any obligation to
indemnify Buyer (or any other Buyer Indemnified Party) in respect of any Buyer
Damages or any other sum.
SECTION 9.06 INSURANCE COVERAGE. The amount of any Damages,
liability or obligation for all purposes of this Agreement shall be net of any
amount recoverable by the indemnified party or parties under any policies of
insurance.
ARTICLE X
MISCELLANEOUS
SECTION 10.01 ASSIGNMENT; SUCCESSORS AND ASSIGNS; THIRD PARTIES. No
party to this Agreement shall convey, assign or otherwise transfer any of its
rights or obligations under this Agreement without the express written consent
of the other parties hereto and of the Majority Stockholders; PROVIDED, that,
without such consent, Buyer may collaterally assign its rights hereunder to the
lending institutions providing financing for the transactions contemplated
hereby, so long as Buyer provides notice to the Company of such assignment.
This Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and the Stockholders and the Representatives and their respective
successors and permitted assigns. Subject to the immediately preceding
sentence, this Agreement is not intended to benefit, and shall not run to the
benefit of or be enforceable by, any other person or entity other than the
parties hereto and their permitted successors and assigns.
SECTION 10.02 NOTICES. All notices or other communications required
or permitted to be given hereunder shall be in writing and shall be delivered by
hand or sent by prepaid telex, cable or telecopy, or sent, postage prepaid, by
registered, certified or express mail, or reputable overnight courier service,
and shall be deemed given when so delivered by hand, telexed, cabled or
telecopied, or if mailed, three days after mailing (one business day in the case
of express mail or overnight courier service) as follows:
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If to the Company, addressed to:
Anderson Lithograph Holding Corp.
3217 South Garfield Avenue
City of Commerce, California 90040
Attention: John C. Fosmire
Telecopier: (213) 722-0508
with a copy to:
Paul, Hastings, Janofsky & Walker LLP
555 South Flower Street
Twenty-Third Floor
Los Angeles, California 90071
Attention: Alan J. Barton, Esq.
Telecopier: (213) 627-0705
If to Buyer, Buyer Sub or Acquisition, addressed to:
Mail-Well, Inc.
23 Inverness Way East
Englewood, Colorado 80112
Attention: Roger Wertheimer, Vice President,
General Counsel
Telecopier: (303) 768-7380
with a copy to:
Rothgerber Johnson & Lyons LLP
Suite 3000
One Tabor Center
1200 Seventeenth Street
Denver, Colorado 80202-5839
Attention: Herbert H. Davis III, Esq.
Telecopier: (303) 623-9222
or in any case to such other address or addresses as hereafter shall be
furnished as provided in this Section 10.02 by any of the parties hereto to each
of the other parties hereto.
SECTION 10.03 WAIVER; REMEDIES. Except as expressly provided herein,
no delay on the part of any of Buyer, Buyer Sub or Acquisition, on the one hand,
or the
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Company, on the other, in exercising any right, power or privilege hereunder
shall operate as a waiver thereof, nor shall any waiver on the part of Buyer,
Buyer Sub or Acquisition or the Company of any right, power or privilege
hereunder operate as a waiver of any other right, power or privilege hereunder,
nor shall any single or partial exercise of any right, power or privilege
hereunder preclude any other or further exercise thereof or the exercise of any
other right, power or privilege hereunder.
SECTION 10.04 ENTIRE AGREEMENT. This Agreement, including the
Schedules and Exhibits attached hereto, constitutes the entire agreement among
the parties hereto with respect to the subject matter hereof and supersede all
other prior agreements or understandings of the parties relating thereto. There
are no representations, warranties, agreements or undertakings of any party
hereto with respect to the transactions contemplated by this Agreement other
than those set forth in this Agreement or in the documents delivered at the
Closing.
SECTION 10.05 AMENDMENTS; WAIVERS; CONTROL BY MAJORITY. This
Agreement may be modified or amended only by a written agreement signed by
Buyer, Buyer Sub, the Company and, to the extent executed thereby, Acquisition.
Provisions hereof may be waived, and other actions permitted hereunder or
contemplated hereby may be taken, in the case of Buyer, by an instrument signed
by Buyer, and in the case of the Company, by an instrument signed by the
Company.
SECTION 10.06 BEST EFFORTS. Buyer, Buyer Sub, Acquisition and the
Company shall use their reasonable best efforts to consummate the transactions
contemplated by this Agreement.
SECTION 10.07 COUNTERPARTS. This Agreement may be executed in
counterparts, each of which shall be deemed an original but all of which
together shall constitute a single instrument.
SECTION 10.08 EFFECTIVENESS OF EXECUTION. Upon execution by Buyer,
Buyer Sub and the Company, this Agreement shall be valid, effective and
enforceable as of the date first above written, notwithstanding the fact that
this Agreement has not yet been executed by Acquisition.
SECTION 10.09 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the
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laws of the State of California applicable to contracts made and to be performed
entirely within such State.
SECTION 10.10 ARBITRATION.
(a) Any controversy, claim or dispute involving the parties (or their
affiliated persons) directly or indirectly concerning this Agreement or the
subject matter hereof, including any issues and matters arising under the
federal and state securities laws and questions concerning the scope and
applicability of this Section 10.09, but excluding matters in this Agreement
expressly calling for determination of the Adjusted Purchase Price pursuant to
subsections (b) through (e) of Section 2.07 hereof, shall be finally settled by
arbitration held in Los Angeles, California, in accordance with the rules of
commercial arbitration then followed by the American Arbitration Association or
any successor to the functions thereof. The arbitrator shall be required to
apply the substantive law of California except to the extent that the matter
would be governed by the Delaware Law and shall have the right and authority to
determine how his decision or determination as to each issue or matter in
dispute may be implemented or enforced. Any decision or award of the arbitrator
shall be final and conclusive on the parties to this Agreement, their respective
affiliates and the Stockholders, and there shall be no appeal therefrom other
than from gross negligence or willful misconduct.
(b) The parties hereto agree that any action to compel arbitration
pursuant to this Agreement may be brought in the appropriate Los Angeles court
and in connection with such action to compel the laws of the State of California
to control. Application may also be made to such court for confirmation of any
decision or award of the arbitrator, for an order of the enforcement and for any
other remedies which may be necessary to effectuate such decision or award. The
parties hereto hereby consent to the jurisdiction of the arbitrator and of such
court and waive any objection to the jurisdiction of such arbitrator and court.
(c) Notwithstanding the foregoing in this Section 10.09, however,
nothing contained herein shall require arbitration of any issue arising under
this Agreement for which injunctive relief is successfully sought by any party
hereto.
SECTION 10.11 EXHIBITS AND SCHEDULES. All Exhibits annexed hereto,
and all Schedules referred to
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herein, are hereby incorporated in and made a part of this Agreement as if set
forth in full herein.
SECTION 10.12 CAPTIONS. All section titles or captions contained in
this Agreement, in any Exhibits annexed hereto or in any Schedule referred to
herein, and the table of contents to this Agreement are for convenience only,
shall not be deemed a part of this Agreement and shall not affect the meaning or
interpretation of this Agreement. All references herein to numbered sections
are to sections of this Agreement.
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SIGNATURE PAGE TO AGREEMENT AND PLAN OF MERGER
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the day and year first above written.
MAIL-WELL, INC.
By:_________________________
Its:_____________________
MAIL-WELL I CORPORATION
By:_________________________
Its:_____________________
ANDERSON LITHOGRAPH HOLDING CORP.
By:_________________________
Its:_____________________
AND, UPON FORMATION PURSUANT TO
SECTION 2.13 OF THIS AGREEMENT
_____________________________
"ACQUISITION"
By:_________________________
Its:_____________________
Date:____________________
<PAGE>
EXHIBIT A
SHARES HELD BY THE STOCKHOLDERS
<TABLE>
<CAPTION>
Number and Class
Stockholder and Address of Stockholder Shares Owned
- ----------------------- ---------------------------
Voting Non-Voting
Common Common
Stock Stock
--------- ---------
<S> <C> <C>
Gene Parana* 244,778.4 -0-
30234 Ave. De Calma
Palos Verdes, CA 90274
Arlyn Stanford* 244,778.4 -0-
531 Elinor Drive
Fullerton, CA 92635
John Fosmire* 244,778.4 -0-
6232 Oakbrook Cir.
Huntington Beach, CA 92648
Kenneth Campbell* 214,286.0 -0-
1 Tirremia Drive
Laguna Nigel, CA 92677
Garry Pearson* 81,515.4 -0-
9671 Hidden Valley Place
Beverly Hills, CA 90210
Fred Salazar* 81,515.4 -0-
2645 Wakefield Dr.
Belmont, CA 94002
BankAmerica Ventures 827,124.0 -0-
950 Tower Lane, #700
Foster City, CA 94404
BankAmerica Capital -0- 102,041.0
Corporation
950 Tower Lane, #700
Foster City, CA 94404
TOTAL 1,938,776.0 102,041.0
</TABLE>
* The record owners of Stockholder Shares attributable to the individual
Stockholders are certain trusts, as more fully described in Schedule 3 hereto.
<PAGE>
EXHIBIT B
ALLOCATIONS
Anderson Lithograph Holding Corp. will provide the allocations at the
Closing.
<PAGE>
EXHIBIT C
FORM OF OPINION OF
ROTHGERBER JOHNSON & LYONS LLP.
<PAGE>
EXHIBIT D
FORM OF ESCROW AGREEMENT
<PAGE>
EXHIBIT E
NON-COMPETITION AGREEMENT
<PAGE>
EXHIBIT F
FORM OF OPINION OF
PAUL, HASTINGS, JANOFSKY & WALKER LLP
