EXHIBIT 10.2
 
 
 

 
 

   ASSET PURCHASE AGREEMENT                                   DONIHE GRAPHICS,
INC.      A TENNESSEE CORPORATION, SELLER      AND     THE MERTEN COMPANY,    
AN OHIO CORPORATION, SELLER
                             TO                              GRAPHICS
INTERNATIONAL, LLC,    
A NORTH CAROLINA LIMITED LIABILITY COMPANY, BUYER
                                   NOVEMBER 30, 2012  

 
 
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   TABLE OF CONTENTS  

 
 

Section Page     1. Sale of Assets 1     2. Purchase Price 1     3. Closing Date
and Place; Operations Post-Closing 3     4. Representations and Warranties of
Sellers 5     5. Covenants of the Sellers 9     6. Representations and
Warranties of Buyer 11     7. Conditions Precedent to Buyer's Obligations 11    
8. Conditions to Closing by Sellers 14    
9. Termination of Agreement
15     10. Additional Documents and Acts after Closing 17     11. Non-Assumption
of Liability 18     12. Indemnification 18     13. Risk of Loss 20     14.
Brokerage 21     15. Survival of Representations, Warranties and Agreements 21  
  16. Benefit 21    
17. Modification
21    
18. Nonwaiver
22     19. Entire Agreement 22 22    

 
 
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20. Descriptive Headings 22     21. Notices 22     22. Counterparts 23     23.
Binding Nature; Assignments
23
    24. Governing Law and Venue 23     25. Legal Fees and Expenses; Other
Expenses 23     26. Invalid Provisions 24    
Signatures
24    

 
 

 

 

 
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   EXHIBITS  

 
 

A                      Assets – Machinery and Equipment

B                      Liens, Encumbrances, Mortgages and Security Interests

C                      Allocation of Purchase Price

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   ASSET PURCHASE AGREEMENT  

 
 
               THIS AGREEMENT is made and entered into as of the 30th day of
November, 2012, by and between DONIHE GRAPHICS, INC., a Tennessee corpora­tion,
hereinafter called “Donihe” or a "Seller", THE MERTEN COMPANY, an Ohio
corporation, hereinafter called “Merten” or a “Seller” (collectively, the
“Sellers”) and GRAPHICS INTERNATIONAL, LLC, a North Carolina limited liability
company, herein­after called the "Buyer".
 
               WHEREAS, Donihe is engaged in the commercial printing business in
Tennessee and Merten owns printing machinery and equipment in Ohio; and
 
               WHEREAS, the parties have reached an understanding with respect
to the sale of machinery and equipment of the Sellers and the purchase by the
Buyer of such assets.
 
               NOW, THEREFORE, in consideration of the premises, which are not
mere recitals but are an integral part hereof, and in further consideration of
the mutual covenants and promises herein con­tained, and for other good and
valuable consideration, the receipt and sufficiency of all of which are hereby
acknowl­edged, the parties hereto agree as follows:
 
           1.           Sale of Assets.   The Sellers agree that, at the
Closing, the Sellers shall sell, transfer, and deliver to the Buyer for the
consideration hereinafter provided, those assets of the Sellers set forth in
Exhibit A attached hereto and incor­porated herein by reference, constituting
all the Sellers’ machinery and equipment (collectively, the “Purchased
Assets”).  The Sellers are not selling to Buyer any other assets (collectively,
the “Excluded Assets”) and such Excluded Assets shall remain the property of
Sellers after the Closing.  Such sale shall be made free and clear of all
liabil­ities, mortgages, liens, obliga­tions, security in­terests, and
encum­brances except such that are ex­pressly assumed in writing by Buyer.
 
          2.           Purchase Price.    Subject to the terms of this
agreement, the Buyer shall purchase the Purchased Assets and, in full
consideration therefor, shall pay the Sellers, subject to the adjustments
provided for herein, the sum of One Million One Hundred Thousand Dollars
($1,100,000.00) (the "Purchase Price"), as described and calculated below.
 
A.           Adjustments to Purchase Price.   The Purchase Price shall be
adjusted at Closing as follows:
(1)           Ad valorem taxes on the Purchased Assets assessed as of the
Closing shall be prorated on a calendar year basis, with the Buyer receiving a
credit against the Purchase Price for the amount of such taxes apportioned to
Sellers, which will be calculated on the basis of the latest tax bill available.
(2)           Amounts to be adjusted pursuant to Section A(1) above that are
known prior to the Closing Date shall be handled by a credit against or increase
in the Purchase Price to be paid at Closing.  Amounts to be so adjusted pursuant
to Section A(1) above that are not handled at the Closing, shall be handled as
follows:  the party hereto claiming that the other party owes payment to it for
such adjusted item shall so notify the other party of the amount due with
reasonable details about the nature of the charge and the manner in which the
amount due was calculated and with documentation that the claiming party has
paid the amount for which it seeks reimbursement.  The party receiving notice
shall pay the amount due within fifteen (15) days after receipt of such notice.
 
B.
Payment of Purchase Price.  Purchase Price shall be paid as follows:

 
1.
The Purchase Price shall be paid at Closing in cash by wire transfer of funds as
follows:

 
(a)
Fifty Thousand and no/100 Dollars to Raymond  James & Associates, Inc. to an
account with Citibank, N.A. as designated by Sellers; and

 
(b)
the balance of the purchase price directly to an account at Fifth Third Bank as
Administrative Agent (the “Agent”) for those secured lenders under that certain
First Amended and Restated Credit Agreement dated as of October 19, 2012, in the
name of the Agent, as designated by Sellers.

C.
Allocation.

                                (a)
The Purchase Price shall be allocated among the Purchased Assets hereby sold and
purchased for all purposes, including all tax, tax reporting and accounting
purposes, as set forth on Exhibit C.  The allocations shall be determined by
mutual agreement of Buyer and Sellers. The allocation of the Purchase Price to
the Purchased Assets shall be binding on Buyer and Sellers for all tax
purposes.  Buyer and Sellers will exe­cute Internal Revenue Service Form 8594 at
the Closing and shall attach same to their tax return covering the year in which
the Closing occurs.

                                (b)
In the event of a reduction in the Purchase Price, the allocation agreed to by
the parties shall be reduced in proportion to the original values agreed upon.

 
 
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3.           Closing Date and Place; Operations Post-Closing.  The Closing under
this agreement (the "Closing") shall take place within five (5) days from the
date of this Agreement at such time (the "Closing Date") and place as to which
the parties may agree.
 
                Buyer acknowledges that at the Closing Date of this Agreement
and at the closing date of the real estate purchase agreement for 766 Brookside,
Kingsport, Tennessee (the “Donihe Facility”), Donihe will have uncompleted
orders and work in process.  Buyer agrees that after the Closing Date of this
Agreement Donihe will be permitted to utilize the Purchased Assets located at
the Donihe Facility, without charge, to complete its uncompleted jobs and work
in process at the Closing Date of this Agreement for as long as necessary but in
no event beyond December 30, 2012.  Buyer agrees that on and after the closing
of the real estate purchase agreement, Buyer hereby leases to Donihe, without
charge, and Donihe shall have full but non-exclusive access to, the Donihe
Facility for as long as necessary to complete Donihe’s uncompleted jobs and work
in process, but in no event beyond December 30, 2012, at which time Donihe shall
vacate such location and remove all its property therefrom.  Donihe shall
indemnify and hold Buyer from any damages caused by Donihe’s use of the
Purchased Assets after the Closing Date.  Donihe agrees to have Buyer named as
an additional insured on its insurance policies for such time as Donihe is using
the Purchased Assets or occupying the Donihe Facility under the above and
foregoing lease.
 
               Until such time as the sale to Buyer of the Donihe Facility is
closed, Buyer shall have continuing access to the Donihe Facility and Donihe
agrees to move any of its remaining inventory located in the Donihe Facility,
except for any inventory that is in process and located on any of the Purchased
Assets, to a location within the Donihe Facility that will not unreasonably
interfere with Buyer’s efforts (a) to market the Purchased Assets before the end
of the Donihe’s rights to use the Purchased Assets and (b) thereafter, but
subject to the time limits set forth herein, to liquidate the Purchased
Assets.  Buyer shall have the right to have access to the Donihe facility and
Merten’s leased real property facility located at 1515 Central Parkway,
Cincinnati, Ohio (the “Merten Facility”) without charge for the purpose of
removing the Purchased Assets therefrom, but subject to the rights of Donihe
noted above, for a period of 120 days from the Closing Date and shall have the
Purchased Assets removed from the Donihe Facility and the Merten Facility within
such 120 day period, provided however that such time limits will have no further
force or effect as to the Donihe Facility after the closing of the sale thereof
to Buyer.  Buyer shall not cause any physical injury to the Merten Facility
during Buyer’s use thereof and Buyer shall not cause any physical injury to the
Donihe Facility prior to the closing of the sale thereof by Donihe to
Buyer.  Buyer shall be entitled to temporarily move any non-weight bearing wall
at the Merten Facility in order to remove the pre-press equipment therefrom but
shall promptly restore said wall or walls to their former condition following
the removal.  Buyer shall indemnify and hold Sellers harmless from any damages
caused by Buyer’s access to the facilities of Sellers.  Buyer shall also carry
insurance with respect to any such damage and shall provide Sellers with
evidence of such insurance coverage prior to Closing.
 
              4.           Representations and Warranties of Sellers.   The
Sellers jointly represent and warrant to Buyer as a material inducement to Buyer
to enter into and perform its obligations under this Agreement, as follows:
 

  (a)   Organization and Standing of Sellers.   Donihe is a cor­poration duly
organized, validly existing, and in good standing under the laws of the State of
Tennessee. Merten is a corporation duly organized, validly existing and in good
standing under the laws of Ohio. The Sellers have all requisite corporate power
and authority to own and operate their properties and to conduct their business
in the manner and in the places where it is now conducted.           (b)  
 Sellers’ Authority. The execution and delivery of this Agreement and other
documents herein contemplated to the Buyer and the sale contemplated hereby will
have been duly authorized by the Sellers’ Boards of Directors and sole
shareholder, and the Sellers will at the Closing deliver to the Buyer copies of
the resolutions of their Boards of Directors and sole shareholder granting such
authority, such copies to be certified by the Sellers’ and sole shareholder’s
secre­tary. No other corporate action on the part of the Sellers will be
neces­sary to authorize execution and delivery of same and of the sale. The
execution and delivery of this Agreement to the Buyer and the sale con­templated
hereby do not violate any federal, state or local laws or regulations. The
execu­tion and delivery of this Agreement and the consum­mation of the
transac­tions con­templated hereby will not violate any provision of, or result
in the breach of or accelerate or permit the acceler­ation of the performance
required by the terms of, any applicable law, rule or regu­lation of any
governmental body having jurisdiction, the Articles of Incorporation or Bylaws
of the Sellers, or any agreement to which the Sellers are a party or by which
they may be bound (except for loan agreements and other obligations for which
consent is required, as listed on Exhibit B), or of any order, judgment or
decree applicable to it, or result in the crea­tion of any claim, lien, charge
or encumbrance upon any of the property or assets of the Sellers or termi­nate
or result in the termination of any such agreement.           (c)  
Title of Property. The Sellers have good, market­able and indefeasible title to
all the Purchased Assets, including without limitation, those reflected on
Exhibit A hereto, free and clear of any mortgages, security interests, liens,
charges or encumbrances what­soever, except as otherwise specifically disclosed
in Exhibit B to this Agreement. Prior to Closing, Buyer shall have received a
commitment from any and all secured lenders of Seller that the liens of said
secured lender will be released upon Closing.
       

 
 
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  (d)  
Tax Returns. All required federal, state and local tax returns of the Sellers
have been accurately pre­pared and duly and timely filed, and all federal, state
and local taxes re­quired to be paid with respect to the periods covered by such
returns have been paid or accrued on the balance sheets. The Sellers are not
delinquent in the pay­ment of any tax, assessment or governmental charge, and
there is no tax deficiency outstan­ding, proposed in writing or assessed against
it. The Sellers have not executed any outstanding waiver of any statute of
limitations on the as­sessment or collection of any tax.
          (e)   Insurance. All Purchased Assets are and will be insured against
fire and other casualty to the Closing Date in accordance with past practices
and valid policies there­for are and will be outstanding and duly in force at
Closing.           (f)   Compliance with Laws. To the best knowledge of Sellers,
the Sellers have complied in all material respects with all applicable laws,
rules, regulations, ordinances, and franchises with respect to their operations,
and neither the ownership nor use of the Sellers’ properties nor the conduct of
its business con­flicts with the rights of any other person, firm or
corpora­tion.           (g)   No Litigation. There is no claim, legal action,
suit, arbitra­tion, governmental investigation or other legal, administra­tive
or tax proceeding for which Sellers have received written notice, nor any order,
decree or judgment, in progress, pending, or, to the best knowledge of Seller,
threatened against or relating to the Sellers which in­volves or affects their
properties, assets or business or the tran­sac­tions contem­plated by this
Agreement.           (h)   Employees. Donihe will retain all li­ability, if any,
for any benefits of its employees at­tributable to their employment by Donihe
and the termina­tion of such employment by Donihe, including specifically
severance, hospitalization, or retirement benefits, if any, and liability for
any other claim by an employee or former employee of Donihe attributable to his
employment or termi­nation of employment by Seller.               (i)  Donihe
has paid in full (to the extent required by the Donihe's current practices but
con­sistent with the Donihe's legal obliga­tions) to all its employees, all
wages, salaries, commissions, bonuses, vacation pay, and other direct
compensation for all services perform­ed by them to the date here­of and will
pay after the Closing Date as and when due such obliga­tions through the day
preceding Closing Date;               (ii) Upon termination of the employment of
any such employees, Donihe will not, by reason of anything done prior to the
Closing Date, be liable to any of such employees for any specific "severance
pay" or any other payments, except for liabilities accrued on the Finan­cial
State­ments or other of Donihe's books and records (all of which have been made
available for Buyer's in­spection) or as may be required under state
unemploy­ment insur­ance or other laws;               (iii)  Donihe has complied
in all material respects and is in compliance with all Federal, state and local
laws and regulations respecting employment and employment practices (including,
without limitation, to the best of Donihe’s knowledge, OSHA), terms and
conditions of employment, wages and hours, collective bargaining and the payment
of social security and similar taxes.           (i)   Employee Benefit Plans.
Sellers are not party to any pension plan or profit sharing plan or other
employee benefit plan which would constitute a "Multi­employer Plan" as defined
in Section 3(37) of ERISA (a "Multiemployer Plan"). Sellers have not incurred
nor will Sellers incur, directly or in­directly, any material withdrawal
li­ability with respect to a Multi­employer Plan nor do Sellers expect to incur
such li­ability.           (j)   No Bankruptcy. There has not been filed any
petition application, or any proceedings commenced, by or against, or with
respect to any assets of, Sellers under Title 11 of the United States Code or
any other law, domestic or foreign, relating to bankruptcy, reorganization,
compromise, arrangement, insolvency, readjustment of debt or creditors' rights
which is currently being adjudicated, and Sellers have not made any assignment
for the benefit of creditors that is currently effective.           (k)   List
of Secured Creditors, Taxes, and Obligations. The Sellers have delivered to
Buyer a true and complete list of the Sellers’ obligations, including but not
limited to obligations owed to secured creditors, taxing authorities, and other
creditors, whether secured or unsecured, together with copies of all documents
evidencing or relating to such obligations. The Sellers warrant that said list,
attached hereto as Exhibit B, is accurate and complete.

 
 
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               5.           Covenants of the Sellers.    The Sellers covenant
and agree with the Buyer that they will perform the following between the date
of this Agreement and the Closing Date:
 

  (a)   Access. The Sellers shall give Buyer and its lenders, counsel,
accountants, and other representa­tives full access during normal business hours
to all of the properties, books, contracts and records of the Sellers related to
the Purchased Assets, and the Sellers will furnish Buyer with all such
documents, copies of documents (certified if re­quired) and information
concerning the affairs of the Sellers as Buyer may from time to time reasonably
request. Buyer and its representatives will conduct their investigation so as
not to disrupt the operations of Sellers.           (b)   Conduct of Business
Pending Closing. The Sellers covenant that pending the Closing:              
(i)  The Sellers shall maintain, keep and preserve the Purchased Assets in good
condition and repair, normal wear and tear excepted, and main­tain insurance
thereon in accordance with present practices.               (ii)  The Sellers
will not sell or dispose of any of the Purchased Assets except in the ordinary
course of business, or permit the creation of any mort­gage, pledge, lien or
other encum­brances, security interest, or imperfection of title thereon or with
respect thereto, without prior written consent of Buyer. Without limiting the
foregoing, the Sellers shall not transfer the Purchased Assets to or incur any
liability to any corporation, partnership, Sellers, joint venture or any
individual related to (whether by virtue of common ownership or agreement) or
controlled by the Sellers or any of their stockholders, and any such transfer or
incurrence of liability shall be deemed not to be in the ordinary course of
Sellers’ business.               (iii)  Except as otherwise specifically
provided in this Agreement, possession and control of the assets covered by this
Agreement shall remain with Sellers.           (c)   Obligations of Donihe After
the Closing Date. Donihe covenants and agrees that:               (i)  Donihe’s
Corporate Records. Donihe will make available for inspection and copying all
books and records related to the Purchased Assets to Buyer upon reasonable
request for access thereto, and if at any time Donihe proposes to discard or
destroy the books and records, they will first offer to transfer them without
charge to Buyer.        

 
            6.           Representations and Warranties of Buyer.  Buyer
repre­sents and warrants to Sellers as follows:
 

  (a)   Buyer is a limited liability company duly organized and validly existing
under the laws of North Carolina, and has the full power and authority to enter
into this Agreement and to carry out the trans­actions con­tem­plated thereby.  
        (b)   Neither the execution, delivery nor performance of this Agreement
by Buyer will, with or without the giving of notice of the passage of time, or
both, conflict with, re­sult in a default or loss or rights under, or result in
the creation of any lien, charge or encumbrance pursuant to any provision of its
Articles of Organization or Operating Agreement, or any mortgage, deed of trust,
lease, license, agreement, un­derstanding, law, order, or judgment, fran­chise,
or­dinance or decree to which Buyer is a party or by which it is bound. Buyer
has the full power and authority to enter into this Agreement and to carry out
the trans­actions con­templated hereby and this Agreement and Buyer's
perfor­mance hereunder have been duly and validly authorized by all necessary
cor­porate actions on the part of the Buyer and constitutes the valid and
binding obligation of the Buyer enforceable in accor­dance with its terms.      
 

 
 
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7.           Conditions Precedent to Buyer's Obligations.  All obli­gations of
Buyer under this Agreement are subject, at the option of Buyer, to the
satisfaction and fulfillment of each of the following con­ditions at or prior to
Closing.  Buyer may waive any or all of these conditions in whole or in part
without prior notice; provided, however, that no such waiver of a condition
shall constitute a waiver by Buyer of any of their other rights or remedies at
law or in equity, if the Sellers shall be in default of any of their
representations, warranties or covenants under this Agreement.  The Sellers
agree to use its best efforts to fulfill each such condition:
 

  (a)   The representations and warranties of the Sellers contained herein and
in any document or certificate delivered pursuant to this Agreement shall be
true and cor­rect as of the date of this Agreement, and shall be true and
correct on and as of the Closing Date with the same force and effect as though
made on and as of the Closing Date.           (b)  
The Sellers shall have per­formed all of their obli­gations and agreements and
complied with all covenants and conditions contained in this Agreement to be
performed or complied with on or before the Closing Date.
          (c)   The Sellers shall have obtained all necessary con­sents or
approvals, of other persons or parties, to the as­signment of all contracts to
be assigned to Buyer pursuant hereto.           (d)  
The Sellers shall have obtained all necessary consents and releases of taxing
authorities and secured creditors necessary to ensure that the Purchased Assets
are free and clear of all liabilities, mortgages, liens, obligations, security
interests and encumbrances.
          (e)   Sellers shall deliver to Buyer bills of sale, en­dorsements,
certificates of title, as­signments and other good and sufficient in­struments
of conveyance, transfer and assignment as shall be effective to vest in Buyer
good and marketable title in and to the Purchased Assets, free and clear of all
security interests, liens, charges and en­cumbrances of any nature what­soever.
          (f)   Between the date of this agreement and the Closing Date, there
shall have been no material adverse change in the Purchased Assets.          
(g)    Sellers and Buyer shall deliver to each other copies of resolutions of
their respective Board of Directors (and the Sellers’ shareholder) authorizing
and approving the execution and consummation of the transactions contemplated
hereby, certified by their secretaries.           (h)   There shall not be any
pending or threatened arbi­tration, litigation or administrative proceeding
against or affecting the Sellers, Buyer or any shareholder, director, officer,
agent, employee or affiliate of any of the fore­going or to which any properties
or rights of the Sellers or Buyer is subject, which (a) is likely to have a
material adverse effect on the Purchased Assets or the Buyer or (b) would
prohibit or set aside the transactions contemplated by this Agreement.          
(i)   The approval of and consent to the tran­sactions contemplated hereby shall
have been given prior to the Closing Date by the regulatory agencies, federal
and state, whose approval or consent is re­quired, and all notice periods,
waiting periods, delay periods and all periods for review, objection or appeal
of or to any of the consents, approvals, or permissions required by law with
respect to the consummation of this Agreement shall have expired. Such approvals
shall not be conditioned or restricted in a manner which, in the judgment of
Buyer, materially adversely affects the economic assumptions of the
transac­tions contemplated hereby so as to render inadvisable con­summation of
the Agreement.           (j)   Buyer shall have received from the Agent an
agreement, in writing, that it will release its lien against the Purchased
Assets upon Buyer’s payment of the full purchase price set forth in this
Agreement and as adjusted pursuant to the terms hereof.        

 
 
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            8.           Conditions to Closing by Sellers.  The obligations of
Sellers under this Agreement are, at the option of Sellers, subject to the
satis­faction, at or prior to the Closing Date, of each of the conditions set
forth below in this Section 8.  Sellers may waive any or all of these conditions
in whole or in part without prior notice; provided, however, that no such waiver
of a con­dition shall constitute a waiver by Sellers of any of their other
rights or remedies at law or in equity if Buyer shall be in default of any of
its represen­ta­tions, warranties or covenants under this Agreement.
 

  (a)   All proceedings taken in connec­tion with the tran­sactions contemplated
hereby, and all instru­ments and documents incident thereto shall be reasonably
satis­factory in form and substance to counsel for Sellers.           (b)   The
representations and warran­ties of Buyer made in this Agreement and in any
document or certificate delivered pursuant to this Agreement shall be true and
correct as of the date of this Agreement and shall be true and correct on and as
of the Closing Date with the same effect as though such representations and
warranties had been made on and as of the Closing Date.           (c)   Buyer
shall have fully performed and complied with all covenants and agreements to be
performed and complied with by Buyer on or before the Closing Date.          
(d)   
Sellers and Buyer shall deliver to each other copies of resolutions of their
respective Board of Directors (and the Sellers’ shareholder) authorizing and
approving the execution and consummation of the transactions contemplated
hereby, certified by their secretaries.
          (e)   There shall not be any pending or threatened arbi­tration,
litigation or administrative proceeding against or affecting the Sellers, Buyer
or any shareholder, director, officer, agent, employee or affiliate of any of
the fore­going or to which any properties or rights of the Sellers or Buyer is
subject, which (i) is likely to have a material adverse effect on the Purchased
Assets or the Buyer or (ii) would prohibit or set aside the transactions
contemplated by this Agreement.           (f)  
Buyer and Donihe shall have entered into a real estate purchase agreement for
the sale by Donihe to Buyer of the Donihe Facility for a purchase price of
$175,000.
          (g)   Buyer shall have provided Sellers with sales tax exemption
certificates with respect to the sale of the Purchased Assets hereunder.        
  (h)  
Buyer shall have provided Sellers with certificates of insurance as to the
coverage required under Section 3 of this Agreement.
       

 
 
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9.           Termination of Agreement.
 

  (a)   Grounds for Termination. This Agreement and the tran­sac­tions
contemplated hereby may be terminated at any time prior to the Closing Date:    
          (i)  By mutual consent in writing of all parties hereto; or          
    (ii)  By Buyer if there has been a material misrepresen­tation or breach of
warranty in the representations and warran­ties of Sellers set forth herein not
materially cured by Sellers within ten (10) days after written notice of same
from Buyer, or by Sellers if there has been a material misrepresentation or
breach of warranty in the represen­tations and warranties of Buyer set forth
herein not materially cured by Buyer within ten (10) days after written notice
of same from Sellers; or               (iii)  By either Sellers or Buyer upon
written notice to the other if any regulatory agency whose approval of the
transactions con­templated by this Agreement is required denies such application
for approval by final order or ruling (which order or ruling shall not be
considered final until expiration or waiver of all periods for review or
appeal); or               (iv)  By either Sellers or Buyer upon written notice
to the other if any condition precedent to such party’s performance hereunder is
not satisfied or waived; or               (v)  By either Sellers or Buyer if the
transac­tions con­templated by the Agreement shall violate any non-ap­pealable
final order, decree or judgment of any court or governmental body having
competent jurisdiction; or               (vi) By either Sellers or Buyer upon
the bank­ruptcy or assignment for the benefit of creditors of either the Sellers
or the Buyer.           (b)   Effect of Termination. In the event of the
termination and abandonment of this Agreement pursuant to Section 9 of this
Agreement, this Agreement shall become void and have no effect, and none of the
Sellers, the Buyer, the stockholders or any of the officers or directors of any
of them shall have any liability of any nature whatsoever under this Agreement,
except that the provisions of this Section 9(b), Section 9(c) and Section 12 of
this Agreement shall survive any such termination and abandonment.           (c)
  Return of Information. In the event of the termination of this Agreement for
any reason, each party shall deliver to the other party, and shall require each
of its officers, agents, employees and independent advisers (including legal,
financial and accounting advisers) to deliver to the other party all documents,
work papers, and other material obtained from such other party relating to the
transactions contemplated hereby, whether obtained before or after the execution
hereof. Each party agrees that notwithstanding any other provision contained in
this Agreement, the undertakings and covenants regarding confidentiality shall
survive termination of this Agreement.        

 
10.           Additional Documents and Acts after Closing. 
 
                (a)           From time to time, at the Buyer's or Sellers’
request, whether at or after closing, and without further consideration, the
Sellers or Buyer, as the case may be, will at their own expense execute and
deliver such further instruments of convey­ance and transfer and take such other
action as may be reason­ably re­quested to more effectively convey and transfer
to the Buyer the Purchased Assets, and will assist the Buyer in the collection
or reduction to possession of such property.
 
                (b)           After the Closing Date, Buyer agrees that it shall
forward to Donihe, c/o Champion Industries, Inc., P.O. Box 2968, 2450 1st
Avenue, Huntington, West Virginia 25704 any customer checks received by it
attributable to Donihe accounts receivable.
 
                (c)           Post-Closing Access.  After the Closing, Buyer
shall provide Donihe with reasonable access during normal business hours to any
books and records of Donihe related to the Purchased Assets reasonably required
by Donihe in connection with, among other things, any insurance claims by, legal
proceedings against or governmental investigations of Donihe or preparation of
Donihe financial statements and tax returns.  Buyer shall maintain such books
and records following the Closing for a period of at least seven years.  In the
event the Buyer wishes to destroy (or permit to be destroyed) such records after
that time, Buyer shall first give ninety (90) days prior written notice to
Donihe and Donihe shall have the right at its option and expense, upon prior
written notice given to Buyer within that ninety (90) day period, to take
possession of the records within one hundred eighty (180) days after the date of
such notice. 
 
 
7

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              11.           Non-Assumption of Liability.  It is understood and
agreed that the Buyer is not assuming in any way whatsoever any liability of
Seller of any kind whatsoever.
 
              12.           Indemnification.
 

  (a)   Sellers. Without limiting any other right of in­demnification or any
other cause of action, Sellers shall defend, indemnify and hold Buyer harmless
from and against any and all losses, liabilities, damages, costs, claims,
judgments and expenses (including attorney's fees) what­soever arising out of or
resulting from:               (i)  Any breach of warranty or misrepresentation
by Sellers con­tained herein, or the non­performance of any covenant or
obligation to be per­formed by Sellers or from any mis­repre­sentation, omission
or inaccuracy in any schedule, exhibit, certificate, instrument or paper
delivered or to be delivered by Sellers hereunder in connection with the
transactions herein con­templated;               (ii)  Any liability or matter
not disclosed in writing to Buyer prior to Closing arising out of the con­duct
of Sellers’ business prior to the Closing Date;               (iii)  Any claim
which may be asserted against Buyer or any of the assets being sold hereunder,
by any of Sellers’ employees, independent contractors or agents with respect to
liabilities incurred by or on Sellers’ behalf prior to their termination by
Sellers whether covered by a collective bargaining agreement or not, including
labor costs, severance pay, pension benefits, employee benefits, vacation and
holiday benefits, sick pay, mul­tiemployer withdrawal liability, any and all
employee benefits, and any other costs associated therewith;               (iv) 
Any attempt (whether or not successful) by any person to cause or require Buyer
to pay or discharge any debt, obligation or liability relating to the Sellers
other than any liability specifically assumed by Buyer hereunder;              
(v)  Any liability arising out of or in connec­tion with Donihe’s termination of
its employees, including but not limited to alleged violations of any
collec­tive bargaining agreement, any charges or com­plaints against Buyer or
Donihe, by or with the National Labor Rela­tions Board or any body judicial,
ad­ministrative or otherwise, with jurisdiction over the parties to any
collective bargaining agreement or otherwise or any such charges, complaints,
lawsuits or administrative proceedings with regard to the termina­tion of
employees, the payment of wages or benefits or related costs associated with the
termination of Donihe's employees; and               (vi)  Any and all claims
and expenses related to or arising under any of the Donihe’s employee benefit
plans, including, but not limited to, claims related to health care continuation
coverage under Internal Revenue Code Section 4980B and ERISA Sections 601-608.  
        (b)   Buyer's Indemnity. Without limiting any other right of
indemnification or any other cause of action, Buyer shall indemnify and hold
Sellers forever harmless from and against any and all losses, liability,
damages, costs, claims, judgments and expenses (including attorney's fees)
whatsoever arising out of or resulting from:               (i)  Any breach of
warranty or misrepresenta­tion by Buyer contained herein, or the
non-perfor­mance of any covenant or obligation to be performed by Buyer or from
any misrepresentation, omis­sion or inaccuracy in any Schedule, exhibit,
cer­tificate, instrument or paper delivered or to be delivered by Buyer
hereunder in con­nection with the transactions herein contem­plated.          
(c)   Indemnification Limitations. Notwithstanding any other provision in this
Agreement:               (i)  The Indemnifying Party hereunder shall have the
right to control the defense of any claim or proceeding by any third party as to
which it shall have acknow­ledged its obligation to indemnify the other party,
and the Indem­nified Party hereunder shall not settle or compromise any such
claim or proceeding without the written consent of the Indemnifying Party, which
con­sent shall not unreasonably be withheld or delayed. The Indemnified Party
may in any event participate in any such defense, with its own counsel and at
its own expense; and               (ii)  Nothing herein shall be construed as
granting a right of indem­nification in any party hereto in respect of any (A)
losses any party may have arising out of the allocation of the purchase price or
(B) in respect of any consequential damages.        

 
           13.            Risk of Loss.    Sellers shall assume all risk of loss
to the assets covered by this Agreement until the Closing Date and the transfer
of assets contemplated hereunder except either the Buyer or the Sellers shall
have the option to determine whether to cancel this con­tract or adjust the
sales price in the event of losses in excess of $10,000.00.  Buyer has the risk
of loss after the Closing Date.
 
8

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                14.           Brokerage.  The Sellers represent and warrant to
the Buyer and Buyer represents and warrants to Sellers that except for the
assistance of Raymond James and Associates, Inc., for whose fee Sellers’ sole
shareholder has sole responsibility, all negotiations on its part relative to
this Agreement have been carried on by the parties hereto directly without the
intervention of any other person on its behalf; that except as aforesaid,
neither party has incurred any liability for finder's, agents or brokerage fees,
commissions or compensation in connection with this Agreement or the
transactions contemplated hereby, and each party shall indemnify the other and
hold the other harmless against and in respect of any claim for such relative to
this Agreement, or to the transactions contemplated hereby, and also in respect
of all expenses of any character incurred by them in connection with this
Agreement or such transactions.
 
                15.           Survival of Representations, Warranties and
Agreements.  All representations, warran­ties, agree­ments and indemnities made
by the Sellers and Buyer in this Agreement, or pursuant hereto, shall sur­vive
the Closing Date and any investigation at any time made by or on behalf of the
Buyer or Sellers for a period of two (2) years after the Closing Date.
 
16.           Benefit.  This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns.
 
17.           Modification.                                This agreement cannot
be modified, changed, discharged, or terminated, except by a writing signed by
the parties hereto.
 
18.           Nonwaiver.  No waiver of any breach or default here­under shall be
considered valid unless in writing and signed by the party giving such waiver,
and no such waiver shall be deemed a waiver of any subsequent breach of default
of the same or simi­lar nature.
 
19.           Entire Agreement.  This Agreement and the agreements specifically
referred to herein constitute the entire agreement among the parties hereto and
supersede all prior agreements and understandings, oral and written, among the
parties hereto or their assignors with respect to the subject matter hereof.
 
20.           Descriptive Headings.  Descriptive headings used in this Agreement
are for convenience only and shall not control or affect the meaning or
construction of any provision of this Agree­ment.
 
 
9

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               21.           Notices.  All notices or other communications which
are required or permitted hereunder shall be in writing and shall be sufficient
if delivered or mailed by registered or certified mail, postage prepaid, sent by
telex or telegram, or delivered by hand, and shall be effective upon delivery to
the following addresses or such other address as the appropriate party may
advise each other party hereto.                            
 

  If to the Sellers:  
c/o Champion Industries, Inc.
P.O. Box 2968
2450 1st Avenue
Huntington, WV 25704
  Attention:   Todd R. Fry, Senior Vice President and Chief Financial Officer  
                Copy to:  
Huddleston Bolen LLP
Post Office Box 2185
Huntington, West Virginia 25722
  Attention:   Thomas J. Murray, Esquire                                   If to
the Buyer:  
Graphics International, LLC
2318 Crown Centre Drive
Charlotte, NC 28227
  Attention:   William B. Troutman, CEO   Telephone:   1-704-847-8282          
        Copy to:  
Weaver, Bennett & Bland, P.A.
P.O. Box 2570
Matthews, NC 28106
  Attention:   F. Lee Weaver, Esquire        

                             

 
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                22.           Counterparts.  This Agreement may be executed in
one or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same Agree­ment.
 
23.           Binding Nature; Assignments.  This Agreement is binding upon, and
inures to the benefit of, the parties hereto and their respective heirs,
successors and assigns.  This Agreement may not be assigned by any party hereto
without the prior written consent of the other parties to be bound thereby,
except that Buyer may assign this Agreement to any affiliate of Buyer.  Except
as otherwise expressly stated in this Agreement, nothing contained herein shall
be construed to confer any right or cause of action on any person other than the
parties hereto, and their respective successors and permitted assigns.
 
24.           Governing Law and Venue.  This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Tennessee.
 
25.           Legal Fees and Expenses; Other Expenses.  Each of the parties
hereto will pay its own fees and expenses incurred in connection with review of
this Agreement and related documents and the consummation of the transactions
therein contemplated, including, without limitation, all legal fees.
 
26.           Invalid Provisions.  The invalidity or unenforceability of any
particular provision of this Agreement shall not affect the other provisions
hereof, and this Agreement shall be con­strued in all respects as if such
invalid or unenforceable pro­vision were omitted.
 
IN WITNESS WHEREOF, the parties have executed this Agreement effective on the
30th day of November, 2012.
 

DONIHE GRAPHICS, INC.,
a Tennessee corpora­tion

By /s/ Todd R. Fry
Its:  Vice President

THE MERTEN COMPANY,
an Ohio corporation

By: /s/  Todd R. Fry
Its: Vice President
 

GRAPHICS INTERNATIONAL, LLC,
a North Carolina limited liability company

By: /s/ WB Troutman
Its:  Member/Mgr.

{H0807897.2 }
 
11

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EXHIBIT “A”

Assets – Machinery and Equipment

1.  
All the assets set forth and described on Exhibit A-1 attached hereto and
incorporated herein by reference, which assets are presently located in Seller’s
Cincinnati, Ohio printing business which operates under the name of The Merten
Company at the following business address:  1515 Central Parkway, Cincinnati,
Ohio.  These assets include computers and computer software and further include
all the operating software necessary to run the printing equipment being
purchased and any and all related support software (exclusive of Apogee Workflow
Software), whether proprietary to The Merten Company, or subject to the
proprietary claims of third parties and/or license agreements, which license
agreements, if any, are hereby transferred to Buyer.

2.  
All the assets presently located in Seller’s Kingsport, Tennessee printing
business, which operates under the name of Donihe Graphics, Inc., at the
following business address:  766 Brookside Drive, Kingsport, Tennessee.  These
assets consist of (but are not limited to) printing equipment, machinery, tools,
spare parts, computers, and computer software including of all the operating
software necessary to run the printing equipment being purchased and any and all
related support software (exclusive of Apogee Workflow Software), whether
proprietary to Donihe Graphics, Inc., or subject to the proprietary claims of
third parties and/or license agreements, which license agreement, if any, are
hereby assigned and transferred to Buyer.

{H0807897.2 }
 
 

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EXHIBIT A-1
         
MERTEN
                 
Machine
Model
Machine Number
Year
Description
Heidelberg
CD 102-6-L
548 127
2007
SE Version AXIS Control
Komori
L640+C
249
1988
200 Million Impressions
Heidelberg
SORSZ
507 993
1975
2 Color 40"
Heidelberg
102 ZP
515 552
1980
 
Komori
L426
300
1985
4 Color
Muller Martini
Presto
 
2006
8 Pocket with Conver Feeder
Heidelberg
Plate Bender
   
Plate Bender
Heidelberg
Plate Punch
   
Plate Punch
Carlson
KPS-40
16968
             
Seybold
Citation 42
   
42" Paper Cutter with Micro Cut
Schnieder
Senator 115MC2
45382
 
45" Paper Cutter
MBO
B26-C
k.10/69
1983
26 X 40 Folder
Baumfolder
Liberty
AD5171
 
26 X 40 Folder
MBO
B30F-1-30/4
Y06/09
2007
30 X 44" Folder with 3 rt angles and stacker
Hangata
HP-10Z Lbar
110109
1997
Shrink wrap with heat tunnel
Beseler
3020-EM-A
3870205
 
Shrink wrap with Bestronic Heat Tunnel
AM Graphics
SP455
SL1316
1993
6 Pocket Saddle Stitcher
Champion
     
Wire Stitcher
Acme Champion
     
Wire Stitcher
Lassco
50P
518
 
Round Corner Machine
         
Challenge
MS-10A
50185
 
5 Hole Drill
Nestaflex
     
12" Wide X 15' Long Flexible Conveyor
Ingersoll-Rand
SSR-EP20SE
970DXR3853
1997
20 HP Screw Compressor 57K Hours with Tank
Quincy
QSBHANA12K
38162
 
Estimated 15 HP Screw Compressor with Belair Dryer
         
Factory Support
     
Factory Support Equipment Pallet Jacks Workbenchs etc.
Pallet Racking
     
78 Sections Medium Duty 108" X 40" X 8' to 2 Tier
Prepress Misc.
     
AGFA 50" Viewing Booth, Light Tabels, etc
Agfa
Gallleo VE
3067
 
Computer to Plate
Caterpillar
T40D
1990
1990
4,000 lb. lift truck LP Gas
Big Joe
1524-A/
1317710
 
Walk behind electric walkie
Crown
BT-130
20202
 
1500 lb. Electric Walkie
Clark
SP30
SP30-0069
1985
3000 lb. Electric Walkie
Toyota
6HBW20
6HBW20-18704
 
4000 lb. Electric Walkie
         
EXCLUDED ITEMS:
     
Items on list that were not present in final walk through and in certain cases
have been removed for months:
GSF
550
   
5000 Pound Scale 48" X 48"
PMC
 
B193
 
Bottom Up Diecutter
Office
     
Furniture Business Machine Conference Table, etc.
Prepress Misc
     
Epson 9800
Ford
350
 
2008
Cargo Van 80K miles
Freightliner
BUS M2 BUS
 
2004
297K miles
Ford
Escape
 
2010
SUV
         

 
 
 

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DONIHE
                 
Machine
Model
Machine Number
Year
Description
Gardner Denver
EBH99D13
S036790
1999
15 HP Rotary Screw Compressor
Ingersoll Rand
U40H-SP
 
1989
40 HP Rotary Screw Compressor
Ingersoll Rand
SSR 150H
S036790
1982
40 HP Rotary Screw Compressor
Mitsubishi
DAIYA-3F
K7725U89F
1989
6 Color 16B Million Impressions with Rapidec Coater
Wohlenberg
92
 
1982
36 inch Paper Cutter
Harris
M110
3F155D
1981
5 Color Press
Halm Jet
JP-TWOD-6D
3003-003
1996
2 Color 12 X 18"
AB Dick
9870
0195005
1981
Single Color with T-51 Print Head
Beseler
1720-GMTE
SJ5598
 
Heat Shrink Tunnel
Hanagata
HP-110Z
110067
 
L Bar Sealer
Wohlenberg
92
9209-001
 
36 inch Paper Cutter
Challenge
EH-3A
75753
 
3 Hole Drill
Polar
115 EMC
5232119
1982
45" Paper Cutter
Wohlenberg
 
S7223
 
Trimmer 36" Not in operation
Kansa
   
1982
28 inch Padder
MBO
B26 S-C
R11/72
2000
26 X 40" with right angle ith BA-700 Banding Machine
MBO
B123-C
f.05/104
1992
Folder with 2 right angles
Challenge
MS-10A
68372
 
5 Hole Drill
Bostitch
Bronco
   
Single head stitcher
Muller Martini
Minuteman
99.0084
 
4 Pocket
Muller Martini
Bravo T
NN6259
2000
10 Pocket Cover Feeder Apollo Stacker
Toledo
8136
   
Platform Scale
3M
4800
6111
2000
Case Sealer
Wexler
ATS-CE 240/30
8587-G
 
Banding Machine
Agfa
Avalon LF
CNXZA000
2007
CTP System
Misc PrePress
     
Apple G5 Computers Printers etc.
Hyster
E4OB
B108V073398
1980
4000 lb Electric Lift Truck
Hyster
E65Xm2
F108V21950Y
2001
6500 lb Electric Fork Lift side shift
Clark
CSM-15
CSM-0248-6833
1998
3000 lb Electric Walkie
MAN Roland
202
     

{H0807897.2 }
 
 

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EXHIBIT B
 
LIENS, ENCUMBRANCES, MORTGAGES AND SECURITY INTERESTS
 

 
Sellers’ Guaranty of the obligations of Champion Industries, Inc. under the
First Amended and Restated Credit Agreement among Champion Industries, Inc. as
Borrower, Various Lenders from time to time party thereto and Fifth Third Bank,
as Administrative Agent and L/C Issuer dated as of October 19, 2012, secured in
part by UCC-1 financing statements covering the Purchased Assets.
 

 
{H0807897.2 }

 

 
 

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EXHIBIT C
 
ALLOCATION OF PURCHASE PRICE
 
One hundred percent (100%) of the Purchase Price is allocated to the machinery
and equipment listed or described in Exhibit A.
 

{H0807897.2 }
 
 

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