Execution Copy
Exhibit 10.1
ASSET PURCHASE AGREEMENT
DATED
DECEMBER 19, 2005
AMONG
VECTOR INVESTMENT HOLDINGS, INC.,
VESTCOM INTERNATIONAL, INC.,
VESTCOM MID-ATLANTIC, INC.,
VESTCOM NEW CENTURY, LLC,
VESTCOM WISCONSIN, INC.,
ELECTRONIC IMAGING SERVICES, INC.,
VESTCOM MASSACHUSETTS, INC.,
VESTCOM NORTHWEST, INC.,
LIRPACO INC.,
COS INFORMATION INC.,
504087 N.B. INC.,
3013439 NOVA SCOTIA COMPANY, AND
VESTCOM ONTARIO INC.,
AS SELLERS
AND
BOWNE ENTERPRISE SOLUTIONS, LLC,
BOWNE OF CANADA, LTD., AND
BOWNE MBC, LLC,
AS PURCHASER

 

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TABLE OF CONTENTS

                              Page   ARTICLE I Certain Definitions     1        
 
 
                  Section 1.1  
Certain Definitions
    1             Section 1.2  
Interpretation
    6          
 
        ARTICLE II Purchase and Sale of Assets     6          
 
                  Section 2.1  
Purchase and Sale of Purchased Assets; Assumption of Liabilities
    6             Section 2.2  
Purchase Price
    6             Section 2.3  
Working Capital Adjustment
    7          
 
        ARTICLE III Closing     10          
 
        ARTICLE IV Representations and Warranties Regarding the Sellers     11  
       
 
                  Section 4.1  
Organization and Qualification of the Sellers
    11             Section 4.2  
Authorization
    11             Section 4.3  
Non-Contravention
    11             Section 4.4  
No Consents
    11             Section 4.5  
Personal Property
    12             Section 4.6  
Real Property
    12             Section 4.7  
Financial Statements
    12             Section 4.8  
Absence of Certain Developments and Undisclosed Liabilities
    13             Section 4.9  
Governmental Authorizations; Licenses
    13             Section 4.10  
Litigation
    14             Section 4.11  
Taxes
    14             Section 4.12  
Insurance
    15             Section 4.13  
Environmental Matters
    15             Section 4.14  
Employee Matters
    15             Section 4.15  
Employee Benefit Plans
    16             Section 4.16  
Proprietary Rights
    17             Section 4.17  
Contracts
    18             Section 4.18  
Accounts Receivable
    18             Section 4.19  
Accounts Payable
    18             Section 4.20  
Books and Records
    19             Section 4.21  
Brokers
    19             Section 4.22  
Inventory
    19             Section 4.23  
Assets
    19             Section 4.24  
Customers
    20             Section 4.25  
Full Disclosure
    20  

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                              Page   ARTICLE V Representations and Warranties
Regarding the Purchaser     20          
 
                  Section 5.1  
Organization
    20             Section 5.2  
Authorization
    20             Section 5.3  
Non-Contravention
    20             Section 5.4  
No Consents
    20             Section 5.5  
Brokers
    21          
 
        ARTICLE VI Additional Agreements     21          
 
                  Section 6.1  
Tax Matters
    21             Section 6.2  
Non-Competition
    23             Section 6.3  
Employees
    25             Section 6.4  
Best Efforts; Further Assurances
    27             Section 6.5  
Additional Assistance
    27             Section 6.6  
Removal of Assets
    27             Section 6.7  
Post-Closing Access to Records
    28             Section 6.8  
Certain Transition Services
    28             Section 6.9  
Conduct of Business Prior to the Closing
    28             Section 6.10  
Access to Information
    29             Section 6.11  
Bulk Transfer Laws
    29             Section 6.12  
Consents
    29             Section 6.13  
Sellers Financial Statements
    30          
 
        ARTICLE VII Conditions to Closing     31          
 
                  Section 7.1  
Conditions to Obligations of the Sellers
    31             Section 7.2  
Conditions to Obligations of the Purchaser
    31          
 
        ARTICLE VIII Survival of Representations and Warranties; Indemnification
    32          
 
                  Section 8.1  
Survival of Representations and Warranties
    33             Section 8.2  
Indemnification
    33             Section 8.3  
Procedures for Third Party Claims
    34             Section 8.4  
Procedures for Inter-Party Claims
    35             Section 8.5  
Offset to Indemnification
    35             Section 8.6  
Remedies Limited
    36          
 
        ARTICLE IX Termination     36          
 
                  Section 9.1  
Termination
    36             Section 9.2  
Effect of Termination
    37  

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                              Page   ARTICLE X Miscellaneous     37          
 
                  Section 10.1  
Notices
    37             Section 10.2  
Expenses
    38             Section 10.3  
Governing Law; Consent to Jurisdiction; Waiver of Trial by Jury
    38             Section 10.4  
No Assignment; Successors and Assigns; No Third Party Rights
    39             Section 10.5  
Counterparts; Facsimile
    39             Section 10.6  
Titles and Headings
    39             Section 10.7  
Entire Agreement
    39             Section 10.8  
Amendment and Modification
    39             Section 10.9  
Public Announcement
    39             Section 10.10  
Waiver
    39             Section 10.11  
Severability
    39             Section 10.12  
No Strict Construction
    40  

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LIST OF SCHEDULES AND EXHIBITS
Schedules
Schedule 2.1
Schedule 4.1
Schedule 4.4
Schedule 4.5
Schedule 4.6
Schedule 4.7(a)
Schedule 4.7(b)
Schedule 4.7(c)
Schedule 4.7(d)
Schedule 4.7(f)
Schedule 4.8
Schedule 4.9
Schedule 4.10
Schedule 4.11
Schedule 4.12
Schedule 4.13
Schedule 4.14
Schedule 4.14(v)
Schedule 4.14(vi)
Schedule 4.16
Schedule 4.17(a)
Schedule 4.17(b)(i)
Schedule 4.17(b)(ii)
Schedule 4.17(c)
Schedule 4.17(d)
Schedule 4.18
Schedule 4.19
Schedule 4.22
Schedule 4.24
Schedule 6.2
Schedule 7.2(ix)

      Exhibits      
Exhibit A
  Targeted Working Capital Calculation
Exhibit B
  Transition Services Agreement
Exhibit C
  Definition of MBC Business

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ASSET PURCHASE AGREEMENT
     ASSET PURCHASE AGREEMENT (the “Agreement”), dated as of December 19, 2005,
among VECTOR INVESTMENT HOLDINGS, INC., a Delaware corporation (“Vector”),
VESTCOM INTERNATIONAL, INC., a New Jersey corporation (“Vestcom”), VESTCOM
MID-ATLANTIC, INC., a Delaware corporation (“Mid-Atlantic”), VESTCOM NEW
CENTURY, LLC, a Delaware limited liability company (“New Century”), VESTCOM
WISCONSIN, INC., a Wisconsin corporation (“Wisconsin”), ELECTRONIC IMAGING
SERVICES, INC., a Delaware corporation (“EIS”), VESTCOM MASSACHUSETTS, INC., a
Massachusetts corporation (“Massachusetts”), VESTCOM NORTHWEST, INC., a Delaware
corporation (“Northwest”), LIRPACO INC., a Canada corporation (“Lirpaco”), COS
INFORMATION INC., a Quebec, Canada corporation (“COS”), 504087 N.B. INC., a New
Brunswick, Canada corporation (“NB”), 3013439 Nova Scotia Company, a Nova Scotia
corporation (“Nova Scotia”) and VESTCOM ONTARIO INC., an Ontario, Canada
corporation (“Ontario”) (each of Vestcom, Mid-Atlantic, New Century, Wisconsin,
EIS, Massachusetts, Northwest, Lirpaco, COS, NB, Nova Scotia and Ontario, a
“Seller” and collectively, the “Sellers”) and BOWNE ENTERPRISE SOLUTIONS, LLC, a
New York limited liability company, BOWNE OF CANADA, LTD., a Canadian limited
liability company and BOWNE MBC, LLC, a Delaware limited liability company
(collectively, the “Purchaser”).
W I T N E S S E T H:
     WHEREAS, each Seller desires to sell and transfer to the Purchaser, and the
Purchaser desires to purchase from each Seller, substantially all of the assets
used by each Seller in conducting its “MBC Business” (as hereinafter defined);
     NOW, THEREFORE, in consideration of the premises and of the mutual
agreements, representations, warranties and covenants contained herein, and
intending to be legally bound, the parties hereto hereby agree as follows:
ARTICLE I
Certain Definitions
     Section 1.1. Certain Definitions. As used in this Agreement, the following
terms have the respective meanings set forth below.
     “Action” means Rodriguez v. Vestcom Mid-Atlantic, Inc., et al, dated
February 25, 2005 and Chavez v. Vestcom Mid-Atlantic, Inc., et al, dated
September 9, 2004.
     “Affiliate” means, with respect to any Person, any other Person who,
directly or indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with, such Person. The term “control”
means the possession, directly or indirectly, of the power to direct or cause
the direction of

 

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the management and policies of a Person, whether through the ownership of voting
securities, by contract or otherwise, and the terms “controlled” and
“controlling” have meanings correlative thereto.
     “Agreement” means this Asset Purchase Agreement.
     “Assumed Liabilities” means (a) those liabilities and obligations of each
Seller that arise after the Closing Date under the (i) real estate leases of
each Seller listed on Schedule 4.6, (ii) equipment and operating leases assigned
to the Purchaser and (iii) other Contracts listed on Schedule 4.17 that are
assigned to the Purchaser, and (b) the Total Current Working Capital Liabilities
as of the Closing Date. For the avoidance of doubt, except for those categories
of Liabilities set forth in Exhibit A, the Assumed Liabilities do not include,
without limitation, any Liabilities that arose or accrued prior to the Closing
Date or to the extent relating to any Environmental Law, arose from any
condition or event existing on, occurring as of or prior to the Closing Date,
including without limitation all matters identified in Schedule 4.13, or any
Liabilities relating to any terms and conditions of employment existing on,
occurring as of or prior to the Closing Date, including but not limited to any
Liabilities relating to or arising from the Action and/or any matters referenced
in, alleged or which could have been alleged in the Action.
     “Business Day” means a day, other than a Saturday or Sunday, on which
commercial banks in New York are open for the general transaction of business.
     “Closing” has the meaning ascribed to such term in Article III.
     “Closing Date” has the meaning ascribed to such term in Article III.
     “Closing Working Capital Amount” means the amount equal to Total Current
Working Capital Assets as of the Closing Date minus Total Current Working
Capital Liabilities as of the Closing Date.
     “Code” means the Internal Revenue Code of 1986, or any subsequent
legislative enactment thereof, as amended and in effect from time to time.
     “Contracts” has the meaning ascribed to such term in Section 4.17.
     “Controlled Group” has the meaning ascribed to such term in Section 4.15.
     “Damages” has the meaning ascribed to such term in Section 8.2.
     “Employee Benefit Plan” has the meaning ascribed to such term in
Section 4.15.
     “Encumbrances” has the meaning ascribed to such term in Section 4.3.

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     “Environmental Laws” means any federal, state or local law, statute,
ordinance, rule, regulation, license, permit, authorization, approval, consent,
court order, judgment, decree, injunction, code, requirement or agreement,
(x) relating to pollution (or the cleanup thereof or the filing of information
with respect thereto), human health or the protection of air, surface water,
ground water, drinking water supply, land (including land surface or
subsurface), plant and animal life or any other natural resource, or
(y) concerning exposure to, or the use, storage, recycling, treatment,
generation, transportation, processing, handling, labeling, production or
disposal of Regulated Substances, in each case as amended and as now or
hereafter in effect. The term Environmental Law includes, without limitation,
(i) the Comprehensive Environmental Response Compensation and Liability Act of
1980, the Water Pollution Control Act, the Clean Air Act, the Clean Water Act,
the Solid Waste Disposal Act (including the Resource Conservation and Recovery
Act of 1976 and the Hazardous and Solid Waste Amendments of 1984), the Toxic
Substances Control Act, the Insecticide, Fungicide and Rodenticide Act, the
Occupational Safety and Health Act of 1970, each as amended and as now or
hereafter in effect, and (ii) any common law or equitable doctrine (including,
without limitation, injunctive relief and tort doctrines such as negligence,
nuisance, trespass and strict liability) that may impose liability or
obligations for injuries or damages due to or threatened as a result of the
presence of, exposure to, or ingestion of, any Regulated Substance.
     “Excluded Assets” means (i) any Tax refund and (ii) all other businesses
and assets of the Sellers and of Vestcom’s other subsidiaries that are not
Purchased Assets, including, without limitation, the Retail Business of any of
Vestcom’s subsidiaries and the assets related thereto.
     “Environmental Permits” has the meaning ascribed to such term in
Section 4.13.
     “Excluded Liabilities” means those Liabilities that are not specifically
assumed by the Purchaser under this Agreement. Excluded Liabilities include,
without limitation, (i) any and all liabilities for violation of Environmental
Laws by Sellers that arose from any condition or event existing on, occurring as
of or prior to the Closing Date; (ii) any litigation arising from or relating to
facts or circumstances or any conduct of Sellers prior to or as of the Closing
Date, including but not limited to any Liabilities relating to or arising from
the Action and/or any matters referenced in, alleged or which could have been
alleged in the Action; (iii) any liabilities in respect of or arising out of any
and all Taxes of Sellers pursuant to Section 6.1; (iv) any liabilities arising
in connection with Excluded Assets; (v) any obligations or liabilities of
Sellers to any of their employees or to any other Person under any employment
contract or Employee Benefit Plan, or for wages, salaries, other compensation or
employee benefits, or with respect to compliance with applicable legal
requirements relating to minimum wages, overtime rates, labor or employment,
pertaining to periods ending or obligations incurred prior to the Closing Date
or which arise by reason of the termination of such Persons as employees of
Sellers or their non-hire by

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Purchaser; (vi) any Liabilities relating to, or in respect of, any individual
who is not a Hired Employee, (vii) any debt, trade payable or accounts payable
of Sellers (except to the extent provided for in the Closing Date Working
Capital Amount); and (viii) any other liabilities of Sellers of any nature, but
excluding the Assumed Liabilities.
     “GAAP” means United States generally accepted accounting principles and
practices in effect from time to time and applied consistently throughout the
periods involved.
     “Governmental Authority” means any national, federal, state, provincial,
county, municipal or local government, foreign or domestic, or the government of
any political subdivision of any of the foregoing, or any entity, authority,
agency, ministry or other similar body exercising executive, legislative,
judicial, regulatory or administrative authority or functions of or pertaining
to government, including any authority or other quasi-governmental entity
established to perform any of such functions.
     “Indemnified Party” has the meaning ascribed to such term in Section 8.2.
     “Indemnifying Party” has the meaning ascribed to such term in Section 8.2.
     “Knowledge”, in the context of the Sellers, means the actual current
knowledge after reasonable inquiry of John Mortenson, Ami Beers, Joel Cartun,
Coleen McCaffery, Tom Smith, Mike Nevolo, Joe Mislinski, Russell Radil, Richard
Lusch, Pierre Dallaire, Joseph Barrett, III and Craig Volwiler.
     “Leased Real Property” has the meaning ascribed to such term in
Section 4.6.
     “Leases” has the meaning ascribed to such term in Section 4.6.
     “Liabilities” means any and all debts, liabilities and obligations, award
of damages and/or attorney’s fees, whether accrued or fixed, absolute or
contingent, matured or unmatured or determined or determinable, including,
without limitation, those arising under any law, Environmental Law, any
Governmental Authority and those arising under any contract, agreement,
arrangement, commitment or undertaking.
     “Material Adverse Effect” means any change, circumstance, event or effect
that, individually or in the aggregate, materially and adversely affects the
business, financial condition or results of operations of the Sellers with
respect to the MBC Business.

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     “MBC Business” means the entire business of the Sellers described in
Exhibit C attached hereto. For purposes of this Agreement, the MBC Business does
not include the Retail Business.
     “MBC Business Employee” has the meaning ascribed to such term in
Section 4.14.
     “October Financials” has the meaning ascribed to such term in
Section 4.7(f).
     “Person” means an individual, partnership, corporation, joint stock
company, unincorporated organization or association, trust or joint venture, or
a governmental agency or political subdivision thereof.
     “Proprietary Rights” means all patents, patent registrations, patent
applications, trademarks, trade names, service marks, domain names, trade dress,
logos, trademark and service mark registrations and applications therefor,
copyrights, copyright registrations, copyright applications, technology,
inventions, computer software (including code in any form), data, databases and
documentation (including electronic media), website content, trade secrets,
know-how, customer lists, processes, other intellectual property and proprietary
information or rights related to or which have been or are currently used in the
conduct of the Sellers’ MBC Business and permits, licenses or other agreements
to or from third parties regarding the foregoing, but excluding the name
“Vestcom” and any rights related thereto (except that Purchaser shall be
permitted to use the name “Vestcom” for the time period specified in the
Transition Services Agreement described in this Agreement).
     “Purchased Assets” means all of each Seller’s rights, title and interests
in and to the respective assets of such Seller on the Closing Date pertaining to
each Seller’s MBC Business, including, without limitation:

  (i)   all furniture, fixtures, leasehold improvements, plants, structures and
buildings, computer equipment, software, software licenses, communication
equipment, inventory, equipment, supplies (including, without limitation,
postage supplies) and any other miscellaneous assets listed on Schedule 4.5;    
(ii)   all vehicles listed on Schedule 4.5;     (iii)   Total Current Working
Capital Assets;     (iv)   all books and records (or copies thereof), personnel
and independent contractor records, financial records, insurance and workers
compensation histories and advertising or

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      promotional materials relating to each Seller’s MBC Business;

  (v)   all rights under all real property leases listed on Schedule 4.6 and any
and all security deposits related thereto;     (vi)   all rights under the
Contracts;     (vii)   all telephone numbers listed on Schedule 4.16;     (viii)
  all customer lists and data (in any media, including electronic) of each
Seller pertaining to such Seller’s MBC Business;     (ix)   all Proprietary
Rights of each Seller pertaining to such Seller’s MBC Business, including,
without limitation, those listed on Schedule 4.16; and     (x)   all goodwill
and going concern value associated with each Seller’s MBC Business.

     “Regulated Substances” means pollutants, contaminants, hazardous or toxic
substances, compounds or related materials or chemicals, hazardous materials
(including, but not limited to radon, radioactive materials, asbestos, urea
formaldehyde foam insulation, toxic mold and polychlorinated biphenyls),
hazardous waste, flammable explosives, medical waste or by-products, petroleum
and petroleum products (including, but not limited to, waste petroleum and
petroleum products) and any other material regulated under applicable
Environmental Laws.
     “Related Party Transaction” has the meaning ascribed to such term in
Section 4.7(e).
     “Retail Business” means the business of certain subsidiaries of Vestcom
involving the provision of marketing services, including, but not limited to,
shelf labels, signage, direct mail and in-store advertising to the retail and
packaged goods industries.
     “Sellers Financial Statements” has the meaning ascribed to such term in
Section 6.13.
     “Storage Tank” has the meaning ascribed to such term in Section 8.2(a).
     “Survival Period” has the meaning ascribed to such term in Section 8.1.
     “Taxes” means any and all federal, state, provincial, local, foreign and
other taxes, levies, fees, imposts, duties and similar governmental charges
(including any interest, fines, assessments, penalties or additions to tax
imposed

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in connection therewith or with respect thereto) including taxes imposed on, or
measured by, income, franchise, profits or gross receipts, ad valorem, value
added, capital gains, sales, goods and services, use, real or personal property,
capital stock, license, branch, payroll, estimated withholding, employment,
social security (or similar), unemployment, compensation, utility, severance,
production, excise, stamp, occupation, premium, windfall profits, transfer and
gains taxes, and customs duties.
     “Tax Return” means any return, report, statement, exhibit, attachment or
other similar information required to be supplied to or filed with a
Governmental Authority with respect to Taxes.
     “Third Party Claim” has the meaning ascribed to such term in Section 8.3.
     “Total Current Working Capital Assets” means the aggregate of all net
accounts receivable, postage receivable, inventory, prepaid postage and prepaid
expenses/other current assets of each Seller pertaining to such Seller’s MBC
Business.
     “Total Current Working Capital Liabilities” means the aggregate of all
accounts payable, accrued expenses, advanced postage and other current
liabilities of each Seller pertaining to such Seller’s MBC Business.
     Section 1.2. Interpretation. Unless otherwise indicated to the contrary
herein by the context or use thereof: (i) the words, “herein,” “hereto,”
“hereof” and words of similar import refer to this Agreement as a whole and not
to any particular Section or paragraph hereof; (ii) words importing the
masculine gender shall also include the feminine and neutral genders, and vice
versa; and (iii) words importing the singular shall also include the plural, and
vice versa.
ARTICLE II
Purchase and Sale of Assets
     Section 2.1. Purchase and Sale of Purchased Assets; Assumption of
Liabilities. Upon the terms and subject to the conditions of this Agreement and
on the basis of the representations, warranties and agreements contained herein,
at the Closing (as defined in Article III hereto), (i) each Seller shall sell,
assign, transfer, convey and deliver to the Purchaser all of such Seller’s
right, title and interest in and to the Purchased Assets and the Purchaser shall
purchase such Purchased Assets from each Seller and (ii) the Purchaser shall
assume all of the Assumed Liabilities, all in accordance with Schedule 2.1
attached hereto. For the avoidance of doubt, the Purchased Assets relate only to
each Seller’s MBC Business and not to any other business of any Seller,
including, without limitation, the Retail Business.

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     Section 2.2. Purchase Price.
     (a) The aggregate purchase price for the Purchased Assets is $30.0 million
(the “Purchase Price”), subject to the working capital adjustments set forth in
Section 2.3 hereof. If the Closing Working Capital Amount, as determined
pursuant to Section 2.3, is less than $3,900,000, then the Purchase Price shall
be adjusted downward, dollar for dollar, in an amount equal to the amount by
which the Closing Working Capital Amount is less than $3,900,000. If the Closing
Working Capital Amount, as determined pursuant to Section 2.3, is greater than
$4,500,000, then the Purchase Price shall be adjusted upward, dollar for dollar,
in an amount equal to the amount by which the Closing Working Capital Amount is
greater than $4,500,000. If the Closing Working Capital Amount, as determined
pursuant to Section 2.3, is between $3,900,000 and $4,500,000, there shall be no
adjustment to the Purchase Price.
     (b) The Purchaser shall pay the Purchase Price in full to Vestcom, on
behalf of the Sellers, at the Closing by wire transfer in immediately available
funds. Such payment will be made to an account designated at least three
(3) days prior to the Closing Date by Vestcom, on behalf of the Sellers.
     Section 2.3. Working Capital Adjustment.
     (a) Within ninety (90) days after the Closing, Purchaser shall provide
Vestcom, on behalf of the Sellers, with its calculation of the Closing Working
Capital Amount, along with data to support such calculation. The Closing Working
Capital Amount shall be prepared and determined in accordance with GAAP,
utilizing the methodology used in preparing Exhibit A attached hereto and the
categories of assets and liabilities set forth in Exhibit A attached hereto. The
Closing Working Capital Amount shall be binding and conclusive upon, and deemed
accepted by, the Sellers unless Vestcom, on behalf of the Sellers, shall have
notified Purchaser in writing within thirty (30) days after receipt of
Purchaser’s calculation of the Closing Working Capital Amount (the “Objection
Notice”) that it disputes the Closing Working Capital Amount as calculated by
Purchaser. If Purchaser receives such an Objection Notice from Vestcom, on
behalf of the Sellers, Purchaser will provide Vestcom, on behalf of the Sellers,
and its authorized representatives with commercially reasonable access during
normal business hours to all books, records and personnel of Purchaser as
Vestcom, on behalf of the Sellers, may reasonably request in order to verify the
accuracy of the Closing Working Capital Amount. The Objection Notice shall
specify in reasonable detail (i) those items that Vestcom, on behalf of the
Sellers, disputes, (ii) the amounts of any adjustments to the Closing Working
Capital Amount that are necessary in Vestcom’s judgment to conform to the
provisions of this Agreement and (iii) Vestcom’s, on behalf of the Sellers,
reasons for such disputes and adjustments.
     (b) If Purchaser and Vestcom, on behalf of the Sellers, cannot agree on the
Closing Working Capital Amount within twenty (20) days after receipt by

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Purchaser of the Objection Notice, the parties shall submit their final
calculations of the items in dispute to an independent nationally recognized
accounting firm selected upon mutual agreement of Vestcom, on behalf of the
Sellers, and Purchaser, for resolution within thirty (30) days. Such independent
accounting firm shall review such final calculations and the applicable books
and records and determine the Closing Working Capital Amount, such determination
to be made in accordance with the provisions of this Agreement (including
Exhibit A attached hereto). The determination made by such accounting firm shall
be final and binding on the parties.
     (c) The party (either the Purchaser or Vestcom, on behalf of the Sellers)
that the accounting firm determines to be more incorrect in its calculation of
the Closing Working Capital Amount shall be responsible for all of the
accounting firm’s costs and expenses related to the resolution of this issue.
     (d) If the Closing Working Capital Amount, as finally determined by the
passage of the deadline for an Objection Notice without one being given or by
any other final determination or acceptance in accordance with this Section 2.3,
results in an adjustment in favor of the Purchaser, then the amount of such
adjustment, as determined pursuant to Section 2.2(a), shall be paid by Vestcom,
on behalf of the Sellers, to Purchaser within five (5) business days after the
date of such final determination or acceptance. If the Closing Working Capital
Amount, as finally determined by the passage of the deadline for an Objection
Notice without one being given or by any other final determination or acceptance
in accordance with this Section 2.3, results in an adjustment in favor of the
Sellers, then the amount of such adjustment, as determined pursuant to
Section 2.2(a), shall be paid by Purchaser to Vestcom, on behalf of the Sellers,
within five (5) business days after the date of such final determination or
acceptance. Any payment due under this Section 2.3 shall be made by wire
transfer in immediately available funds in accordance with wiring instructions
furnished by the recipient of such payment at least three (3) business days
prior to the date of payment.
ARTICLE III
Closing
     The closing of the transactions contemplated by this Agreement (herein
referred to as the “Closing”) shall take place at the offices of Lowenstein
Sandler PC, 65 Livingston Avenue, Roseland, New Jersey 07068, or at such other
location as may be mutually agreed upon by the Sellers and the Purchaser, on
January 3, 2006, which date shall be referred to as the “Closing Date”. The
Closing shall be effective as of 12:01 a.m. New York Time on January 1, 2006.

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ARTICLE IV
Representations and Warranties Regarding the Sellers
     Vestcom, on behalf of itself and the other Sellers, represents and warrants
to the Purchaser as follows:
     Section 4.1. Organization and Qualification of the Sellers. Each Seller is
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, with full power and authority to own or lease
its properties and assets and to carry on its business as presently conducted.
Each Seller is duly qualified to do business as a foreign corporation in all
other jurisdictions where the nature of its business requires such
qualification, except where the failure to so qualify could not result in a
Material Adverse Effect with respect to such Seller’s MBC Business. A true and
complete list of the jurisdictions in which each Seller is qualified to do
business is set forth on Schedule 4.1 annexed hereto.
     Section 4.2. Authorization. Each Seller has full power and authority to
execute and deliver this Agreement and to perform its obligations hereunder.
This Agreement has been duly authorized, executed and delivered by each Seller
and constitutes a valid and binding agreement of each Seller, enforceable
against each Seller in accordance with its terms.
     Section 4.3. Non-Contravention. Neither the execution and delivery of this
Agreement nor the performance by each Seller of its respective obligations
hereunder will (i) contravene any provision contained in its Certificate of
Incorporation or by-laws or other applicable documents of formation,
(ii) violate or result in a breach (with or without the lapse of time, the
giving of notice or both) of or constitute a default under (A) any contract,
agreement, commitment, indenture, mortgage, lease, pledge, note, license, permit
or other instrument or obligation or (B) any judgment, order, decree, law, rule
or regulation or other restriction of any Governmental Authority, in each case
to which any of the Purchased Assets and the MBC Business are subject,
(iii) result in the creation or imposition of any lien, claim, charge, mortgage,
pledge, security interest, equity, restriction or other encumbrance
(collectively, “Encumbrances”) on any of the Purchased Assets or the MBC
Business or (iv) result in the increase or acceleration of, or permit any Person
to increase, accelerate or declare due and payable prior to its stated maturity,
any liability relating to the Purchased Assets, the Assumed Liabilities or the
MBC Business, except, with respect to clauses (ii), (iii) and (iv) above, for
any such violation, breach, Encumbrance or acceleration which could not result
in a Material Adverse Effect with respect to such Seller’s MBC Business.
     Section 4.4. No Consents. Except as set forth in Schedule 4.4, no notice
to, filing with, or authorization, registration, consent or approval of any
Governmental Authority or other Person is necessary for the execution, delivery

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or performance of this Agreement or the consummation of the transactions
contemplated hereby by Sellers.
     Section 4.5. Personal Property. Schedule 4.5 sets forth a true and complete
list of all items of personal property with a book value on September 30, 2005
of at least $3,000 (including, without limitation, furniture, fixtures,
equipment, inventory and vehicles), owned and leased, used by each Seller in,
and necessary to each Seller’s conduct of, its MBC Business. Except for liens on
the Purchased Assets which will be released in connection with the Closing and
liens on leased equipment, which will be transferred to Purchaser, each Seller
has good and marketable title to (or valid leasehold or contractual interests
in) all personal property constituting Purchased Assets, free and clear of any
Encumbrances. Except as set forth in Schedule 4.5, all such personal property
constituting Purchased Assets is in good operating condition, ordinary wear and
tear excepted. Each Seller is in compliance with all material terms and
conditions of each such lease to which it is a party.
     Section 4.6. Real Property. None of the Sellers nor any of their Affiliates
owns any real property or interests in real property used, held for use,
occupied or operated in connection with the MBC Business. Each Seller has a
valid leasehold interest in all plants, structures, buildings, or portions of
such buildings, fixtures and improvements used, held for use, occupied or
operated in connection with such Seller’s MBC Business (collectively, the
“Leased Real Property”), which interest is free and clear of all Encumbrances.
Schedule 4.6 sets forth a true and complete list of all Leased Real Property and
lists all lease agreements (including all amendments and modifications thereto)
pursuant to which the Sellers lease, sublease, license or otherwise occupy the
Leased Real Property (each a “Lease”, collectively, the “Leases”), which are
part of the Purchased Assets and the MBC Business, and the amount remaining, if
any, in the “improvement fund” established under the lease for the West
Caldwell, New Jersey property. Except as set forth in Schedule 4.6, all plants,
structures, buildings, improvements and fixtures located on the Leased Real
Property are in good operating condition and repair, ordinary wear and tear
excepted. Each Seller is in compliance with all the material terms and
conditions of each Lease to which it is a party. Each Lease is in full force and
effect and is valid and enforceable in accordance with its terms, and there is
no material default under any Lease either by the Seller party thereto or, to
the Seller’s Knowledge, by any other party thereto, and no event has occurred
that, with the lapse of time or the giving of notice or both, would constitute a
default by such Seller thereunder. Except as set forth on Schedule 4.4, the
consent of the landlord or any other Person to the transactions contemplated by
this Agreement is not required by the terms of any Lease. Except as set forth on
Schedule 4.6, none of the Leased Real Property is subject to any option, right,
concession or other agreement, written or oral, granting to any other Person any
right to purchase, use or occupy such Leased Real Property or any part thereof.
     Section 4.7. Financial Statements.

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     (a) Attached hereto as Schedule 4.7(a) is a true and complete copy of the
consolidated audited balance sheet of Vector Investment Holdings, Inc.
(“Vector”) as at December 31, 2004, 2003 and since ownership in 2002 and the
related consolidated audited statements of operations, shareholder’s equity and
cash flows, together with the notes thereto, for the three years ended
December 31, 2004 (collectively, the “Audited Financial Statements”). The
Financial Statements have been prepared in conformity with GAAP, applied on a
consistent basis throughout the respective periods and present fairly the
financial condition and results of operations of Vector and the Sellers, on a
consolidated basis, as of and for the periods included therein.
     (b) Attached hereto as Schedule 4.7(b) is a true and complete copy of
Vector’s unaudited balance sheet and the related unaudited statements of
operations and cash flows for the nine months ended September 30, 2004 and
September 30, 2005 (collectively, the “Interim Financial Statements”, and
together with the Audited Financial Statements, the “Financial Statements”). The
Interim Financial Statements have been prepared in conformity with GAAP, applied
on a consistent basis throughout the respective periods and on a consistent
basis with the Financial Statements, and present fairly the financial condition
and results of operations of Vector and the Sellers, on a consolidated basis, as
of and for the periods included therein.
     (c) Attached hereto as Schedule 4.7(c) is a true and complete copy of the
unaudited carve-out statements of operations for the MBC Business for the years
ended December 31, 2004 and 2003 and for the nine months ended September 30,
2004 and September 30, 2005 and the unaudited carve-out balance sheets for the
MBC Business as of June 30, 2005 and September 30, 2005 (collectively, the
“Carve-Out Financials”). Except as set forth on Schedule 4.7(c), the Carve-Out
Financials (i) have been prepared by the Sellers in good faith, in a consistent
manner and in accordance with the Sellers’ accounting policies and procedures,
(ii) have been prepared in accordance with GAAP consistently applied, (iii) have
been derived in good faith from the books and records of the Sellers, which
books and records have been properly and accurately maintained, (iv) set forth
the Sellers’ good faith allocations between Vector and each of the Sellers in
connection with the MBC Business and (v) present fairly in all material respects
the consolidated financial position and results of operations of the MBC
Business for the periods or as of the dates set forth therein.
     (d) Attached hereto as Schedule 4.7(d) is a true and complete copy of the
unaudited reconciliations of the statements of operations included as part of
the Carve-Out Financials to the Financial Statements (the “Reconciliations”).
Except as set forth in such Reconciliations, the Reconciliations (i) have been
prepared by the Sellers in good faith, in a consistent manner and in accordance
with the Sellers’ accounting policies and procedures, (ii) have been derived in
good faith from the books and records of the Sellers, which books and records

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have been properly and accurately maintained and (iii) set forth the Sellers’
good faith allocations between Vector and each of the Sellers in connection with
the MBC Business.
     (e) Except as described in the Financial Statements, there is no
transaction, agreement or arrangement between any Seller and any Person that
would constitute a “Related Transaction” within the meaning of Item 404 of
Regulation S-K under the Securities Exchange Act of 1934, as amended (a “Related
Party Transaction”).
     (f) Attached hereto as Schedule 4.7(f) is a true and complete copy of the
unaudited carve-out statements of operations for the MBC Business for the one
month ended October 31, 2004 and the one month ended October 31, 2005 (the
“October Financials”). Except as set forth on Schedule 4.7(f), the October
Financials (i) have been prepared by the Sellers in good faith, in a consistent
manner and in accordance with the Sellers’ accounting policies and procedures,
(ii) have been prepared in accordance with GAAP consistently applied, (iii) have
been derived in good faith from the books and records of the Sellers, which
books and records have been properly and accurately maintained, (iv) set forth
the Sellers’ good faith allocations between Vector and each of the Sellers in
connection with the MBC Business and (v) present fairly in all material respects
the consolidated results of operations of the MBC Business for the periods set
forth therein.
     Section 4.8. Absence of Certain Developments and Undisclosed Liabilities.
Since January 1, 2005, there has been no Material Adverse Effect, or any
development which could result in a Material Adverse Effect, with respect to the
MBC Business, except as set forth on Schedule 4.8. Since January 1, 2005, except
as set forth on Schedule 4.8, each Seller has conducted its MBC Business in the
ordinary and usual course consistent with past practices and there has not been,
any (i) change in any employment terms for any MBC Business Employee (except for
increases in salary or wages in the ordinary course of business consistent with
past practice), or (ii) establishment, adoption, entrance into, amendment or
termination of any Employee Benefit Plan (other than as may be required by the
terms of an existing Employee Benefit Plan, or as may be required by applicable
law or in order to qualify under Sections 401 and 501 of the Code). Sellers do
not have any material Liabilities (nor is there any past or present fact,
situation, circumstance, status, condition, activity, practice, plan,
occurrence, event, incident, action, failure to act or transaction that could,
individually or in the aggregate, reasonably be expected to give rise to any
material Liabilities), except for (i) Liabilities set forth on Schedules 4.8,
4.10 and 4.13 or in the Financial Statements and (ii) unknown Liabilities which
Sellers could not reasonably be expected to have knowledge of.
     Section 4.9. Governmental Authorizations; Licenses. Each Seller’s MBC
Business has been operated in material compliance with all applicable laws,
rules, regulations, codes, ordinances, orders, policies and guidelines of all

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Governmental Authorities. Except as set forth on Schedule 4.9, each Seller has
all permits, licenses, approvals, certificates, titles, and other
authorizations, and has made all notifications, registrations, certifications
and filings with all Governmental Authorities, necessary or advisable for the
operation of such Seller’s MBC Business as currently conducted, except where the
failure to obtain such permits, licenses, approvals, certificates, titles and
authorizations, and to make such notifications, registrations, certifications or
filings, could not result in a Material Adverse Effect with respect to such
Seller’s MBC Business. There is no action, case or proceeding pending or, to any
Seller’s Knowledge, threatened, by any Governmental Authority with respect to
(i) any alleged violation by the Seller of any law, rule, regulation, code,
ordinance, order, policy or guideline of any Governmental Authority relating to
any Seller’s MBC Business, or (ii) any alleged failure by any Seller to have any
permit, license, approval, certification or other authorization required in
connection with the operation of any Seller’s MBC Business.
     Section 4.10. Litigation. Except as set forth in Schedule 4.10, there are
no lawsuits, actions, proceedings, claims, orders or investigations pending or,
to any Seller’s Knowledge, threatened against any Seller relating to the MBC
Business, nor any outstanding judgments, orders, writs, injunctions or decrees
of any Governmental Authority against the Sellers which would result in
liability to the MBC Business in excess of $5,000 (whether or not insured) or
that would materially affect or delay the Sellers performance of this Agreement.
     Section 4.11. Taxes. (a) All Tax Returns required to be filed by Sellers on
or before the date hereof have been filed within the time and in the manner
provided by law, and all such Tax Returns are true, correct and complete in all
material respects. All Tax Returns required to be filed by the Sellers after the
date hereof and on or before the Closing Date shall be prepared and timely filed
(or an extension to file shall have been validly obtained) in a manner
consistent with prior years and applicable laws and regulations. The Sellers
have timely paid all deficiencies or other assessments of Taxes owed by them
(whether or not shown on any Tax Return) on or before the date hereof. Any Taxes
required to be paid by or on behalf of the Sellers after the date hereof and on
or before the Closing Date will be timely paid. To the Knowledge of the Sellers,
no claim has ever been made by an authority in any jurisdiction where Sellers do
not file Tax Returns that Sellers may be subject to taxation by such
jurisdictions. There are no liens for Taxes on the Purchased Assets (other than
for Taxes not yet due and payable or which are being contested in good faith).
Schedule 4.11 hereto lists all of the jurisdictions in which the Sellers have
filed Returns during 2005, 2004 and 2003. The Sellers have provided (or made
available) to the Purchaser true and complete copies of all such Tax Returns.
          (b) Sellers have not executed any presently effective waiver or
extension of any statute of limitations against assessments and collections of
Taxes. Except as set forth in Schedule 4.11 hereto, no Tax Return of Sellers has
been audited and there are no current pending or, to the Knowledge of the

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Sellers, threatened claims, assessments, notices, proposals to assess,
deficiencies, or audits (collectively, “Tax Actions”) with respect to any Taxes
owed by Sellers.
          (c) Proper and accurate amounts have been withheld and timely remitted
by Sellers from and in respect of their current and former employees,
independent contractors, creditors and other third parties for all periods in
full and complete compliance with the tax withholding provisions of all
applicable laws and regulations.
          (d) Sellers have not been, nor are they, a party to any tax sharing
agreement. Sellers have not made, nor are they obligated to make, any payments,
nor are they a party to any agreement that could obligate them to make any
payments that will not be deductible under Code Section 280G.
          (e) Set forth in Schedule 4.11 hereto is a list of all jurisdictions
in which Sellers charge customers of the MBC Business any sales, goods and
services, or other similar Taxes. Except as set forth in Schedule 4.11 hereto,
Sellers have charged the customers of the MBC Business all sales, goods and
services and other similar Taxes required to be charged under the laws and
regulations of all applicable taxing jurisdictions and all such Taxes have been
collected and remitted to the appropriate taxing authorities in a timely manner.
     Section 4.12. Insurance. Schedule 4.12 hereto sets forth a list of all
insurance policies held and maintained by the Sellers covering the Purchased
Assets and in connection with the MBC Business in effect on the date hereof,
including the types and amounts of coverage and the expiration dates thereof.
Such policies provide for coverage that is standard in the industry of which the
MBC Business is a part. Sellers have not received any notices of cancellation or
of any dispute as to validity of coverage under any such policies.
     Section 4.13. Environmental Matters. Except as set forth in Schedule 4.13,
(i) each Seller’s MBC Business is being and has at all prior times been
conducted in material compliance with all Environmental Laws, (ii) each Seller
has not received any notice from any Governmental Authority or any other Person
that any Seller may be a potentially responsible party or otherwise potentially
subject to liability under any Environmental Law in connection with any waste
disposal site or facility used, directly or indirectly, by or otherwise related
to any Seller’s MBC Business, (iii) no Regulated Substance has been disposed of,
transferred, released, discharged or transported by or for or in relation to any
Seller’s MBC Business, other than as permitted under applicable Environmental
Law pursuant to appropriate regulations, permits or authorizations and as
otherwise could not reasonably be expected to result in liability under any
Environmental Law and Regulated Substances are not otherwise present at or about
any of the Purchased Assets or the Leased Real Property in condition or amount
that could reasonably be expected to result in Liability under any Environmental
Law of or relating to the MBC Business, (iv) there are no civil, criminal or
administrative actions, suits, demands, claims,

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hearings, investigations or other proceedings pending or, to any Seller’s
Knowledge, threatened against any Seller with respect to the MBC Business
relating to any Environmental Law, (v) except as set forth on Schedule 4.13, the
Sellers hold all permits, licenses, approvals and other authorizations required
under any Environmental Law for the conduct of the MBC Business (the
“Environmental Permits”) and each of the Environmental Permits may be validly
transferred to the Purchaser without any alteration or amendment or any notice
to or consent of any third Person, and (vi) in connection with their MBC
Business, none of the Sellers has contractually assumed or accepted any
Liabilities of any other Person under any Environmental Law.
     Section 4.14. Employee Matters. Schedule 4.14 sets forth a list of all
employees of the MBC Business (each, an “MBC Business Employee”) as of
September 30, 2005 and provides for each such MBC Business Employee their job
title, salary and cash and noncash bonus payments for each of the years 2003 and
2004. (i) No Seller has entered into any collective bargaining agreement
regarding the MBC Business Employees, (ii) there are no written personnel
policies applicable to such MBC Business Employees generally, other than
employee manuals, true and complete copies of which have previously been
provided to the Purchaser, (iii) there is no labor strike, dispute, slowdown or
work stoppage or lockout pending or, to the Knowledge of the Sellers, threatened
against or affecting any Seller’s MBC Business and during the past three
(3) years there has been no such action, (iv) to the Knowledge of the Sellers,
no union organization campaign is in progress with respect to any of the MBC
Business Employees, and no question concerning representation exists respecting
such MBC Business Employees, (v) except as set forth on Schedule 4.14(v), there
is no unfair labor practice (including, without limitation, discrimination in
employment), charge or complaint pending or, to the Knowledge of the Sellers,
threatened against any Seller with respect to any MBC Business Employee,
(vi) except as set forth on Schedule 4.14(vi), no Seller has entered into any
agreement, arrangement or understanding restricting the ability of any Seller to
terminate the employment of any or all of the MBC Business Employees at any
time, for any lawful or no reason, without penalty or liability, (vii) the
Sellers have paid in full to all of their MBC Business Employees or adequately
accrued for in accordance with GAAP all wages, salaries, commissions, bonuses,
benefits and other compensation due to or on behalf of such MBC Business
Employees, (viii) there is no charge or proceeding with respect to a violation
of any occupational safety or health standard that has been asserted or is now
pending, or to the Knowledge of Sellers, threatened with respect to the MBC
Business, (ix) the Sellers are in compliance with the requirements of the
Workers Adjustment and Retraining Notification Act and any similar state or
local law and have no liability in connection therewith with respect to MBC
Business Employees and (x) each Seller is in compliance with the continuation
coverage requirements under COBRA.
     Section 4.15. Employee Benefit Plans. Each Seller has provided the
Purchaser with a current, accurate and complete copy (or, to the extent no such

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copy exists, an accurate description) of each bonus, deferred compensation,
pension, retirement, profit-sharing, thrift, savings, employee stock ownership,
stock bonus, stock purchase, restricted stock and stock option plans, all
employment, change in control or severance contracts, health and medical
insurance plans, life insurance and disability insurance plans, other material
employee benefit plans, contracts or arrangements which cover employees or
former employees of the MBC Business including, but not limited to, “employee
benefit plans” within the meaning of Section 3(3) of ERISA (the “Employee
Benefit Plans”), and each such Employee Benefit Plan is set forth on
Schedule 4.12. The Employee Benefit Plans are in compliance in all respects with
the applicable provisions of ERISA, the Code and other applicable laws and have
been administered in all material respects in accordance with their terms and
such laws. Each Employee Benefit Plan that is intended to be qualified within
the meaning of Section 401 of the Code has received a favorable determination
letter as to its qualification, and nothing has occurred that could reasonably
be expected to adversely affect such qualification. Except as set forth on
Schedule 4.14(vi), no event has occurred and no condition exists that would
subject any Seller, either directly or by reason of their affiliation with any
member of their “Controlled Group” (defined as any organization which is a
member of a controlled group of organizations within the meaning of Code
sections 414(b), (c), (m), or (o)), to any tax, fine, lien, penalty or other
liability imposed by ERISA, the Code or other applicable laws, rules and
regulations. Sellers nor any member of their Controlled Group has at any time
maintained, sponsored or contributed to any plans that are a multiemployer plan
(within the meaning of Section 3(37) or 4001(a)(3) of ERISA). No Employee
Benefit Plan exists that could result in the payment to any Hired Employee of
any money or other property (including any severance payments, bonus or other
compensation) or in the acceleration of any other rights or benefits to any
Hired Employee as a result of the transactions contemplated herein.
     Section 4.16. Proprietary Rights.
     (a) Schedule 4.16 sets forth a true and complete list of all Proprietary
Rights now or previously used or owned by each Seller in the conduct of such
Seller’s MBC Business (including computer software other than software purchased
“off the shelf” with annual fees of less than $3,000 or imbedded in hardware
when acquired), and all telephone numbers used in the conduct of such Seller’s
MBC Business, and which constitute Purchased Assets.
     (b) Except for liens on such Proprietary Rights that will be released in
connection with the Closing, Sellers own all right, title and interest in and to
the Proprietary Rights that are material to the MBC Business free and clear of
any Encumbrances. With respect to all licensed Proprietary Rights included in
the Purchased Assets, the Sellers have the valid right to use such licensed
Proprietary Rights in the MBC Business.

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     (c) No claim by any third party contesting the validity, enforceability,
use or ownership of any Proprietary Rights has been made, is currently pending
or, to the Sellers’ Knowledge, threatened. Except as set forth on
Schedule 4.16(c), no Seller has received any notice of, nor is any Seller aware
of any fact that indicates a likelihood of, any infringement or misappropriation
by, or conflict with, any third party with respect to any of the Proprietary
Rights. To the Sellers’ Knowledge, each Seller and the MBC Business has not
infringed, misappropriated or otherwise conflicted with any rights of any third
parties. The Sellers take all reasonable actions to protect the Proprietary
Rights that are material to the MBC Business, including any that are
confidential in nature, and have caused all current and former employees and
contractors to sign assignments and similar agreements to ensure the Sellers’
exclusive ownership of all non-licensed Proprietary Rights.
     (d) All software and related items that will be transferred to the
Purchaser as part of the Proprietary Rights (the “Software”) is operational in
all material respects, functions properly in accordance with its specifications,
does not contain, nor have Sellers intentionally placed, (i) any viruses, time
bombs or disabling code in the Software which would alter, destroy or
incapacitate, harm, interfere with, or otherwise adversely affect the Software
or Purchaser’s use of the Software or the data contained therein and (ii) other
code typically described as a virus by similar terms, including trojan horse,
worm, or backdoor which would alter, destroy, or incapacitate harm, interfere or
otherwise adversely affect the Software or Purchaser’s use of the Software or
data contained therein. Sellers have also maintained security controls, such as,
but not limited to, logical access controls including user sign-on
identification and authentication, data access controls (e.g. password
protection of applications, data files, and libraries), accountability tracking,
anti-virus software, and restricted download to disk capability and Sellers have
regularly conducted intrusion detection and other forms of preventative and
early warning measures to alert the appropriate people to possible security
violations. To the Sellers’ Knowledge, no material software or related item used
in the MBC Business is subject to any “open source,” copyleft or similar
license, including the GNU General Public License, nor is any Seller in
violation of any such agreement with respect to the MBC Business.
     Section 4.17. Contracts.
     (a) Schedule 4.17(a) sets forth a true and complete list of each written
contract, agreement, lease, commitment, instrument, plan, permit or license to
which any Seller is a party or is otherwise bound, which requires payments in
excess of $10,000 relating to the MBC Business (each, a “Contract”, and
collectively, the “Contracts”).
     (b) Schedule 4.17(b)(i) lists the Sellers’ material equipment and operating
leases and Schedule 4.17(b)(ii) lists the Sellers’ material supplier contracts.

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     (c) Schedule 4.17(c) sets forth a true and complete list of each
“unwritten” agreement or understanding to which any Seller is a party or is
otherwise bound, which requires payments in excess of $10,000, relating to the
MBC Business (each, an “Understanding” and collectively, the “Understandings”).
     (d) Each Contract and Understanding: (i) is valid and binding on the
parties thereto and is in full force and effect and (ii) except as set forth on
Schedule 4.17(d), is freely assignable to the Purchaser without penalty, fees or
other adverse consequences and upon consummation of the transaction contemplated
by this Agreement shall continue in full force and effect without penalty or
other adverse consequence. No Seller is or, to such Seller’s knowledge, is
alleged to be in breach of, or default under, any material provision of any
Contract or Understanding.
     (e) To Sellers’ Knowledge, no other party to any Contract or Understanding
is in breach thereof or default thereunder and the Sellers have not received any
notice of termination, cancellation, breach or default under any Contract or
Understanding.
     (f) The Sellers have delivered to the Purchaser true and complete copies of
each Contract and a written description of each Understanding.
     (g) There is no contract, agreement or other arrangement granting any
Person any preferential right to purchase any of the Purchased Assets or the MBC
Business.
     Section 4.18. Accounts Receivable. All notes and accounts receivable of
each Seller’s MBC Business are reflected properly on their respective books and
records, valid obligations of the respective makers thereof, have arisen in the
ordinary course of such Seller’s MBC Business for goods or services delivered or
rendered, are not subject to any valid defenses, counterclaims, or set-offs, and
are collectible in full at their recorded amounts in the ordinary course,
subject to reduction for bad debt and return reserves included in such Seller’s
Financial Statements or Schedule 4.18. Schedule 4.18 sets forth a true and
complete list of all accounts receivable of such Seller’s MBC Business as of
September 30, 2005 by the number of days such receivable has been outstanding.
     Section 4.19. Accounts Payable. Schedule 4.19 sets forth a true and
complete list of all accounts payable of each Seller’s MBC Business as of
September 30, 2005. All accounts payable have arisen in the ordinary course of
each Seller’s MBC Business.
     Section 4.20. Books and Records. The books and records of each of the
Sellers pertaining to the Purchased Assets and the MBC Business, including, but
not limited to, financial books and records, are complete and accurate in all
material respects and do not contain or reflect any material inaccuracies or

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discrepancies and have been maintained in accordance with GAAP and good business
and accounting practices.
     Section 4.21. Brokers. Other than Fidus Partners, LLC, no Person is or will
be entitled to a broker’s, finder’s, investment banker’s, financial adviser’s or
similar fee from any Seller or its Affiliates in connection with this Agreement
or any of the transactions contemplated hereby. The Sellers are solely
responsible for the payment of any fee due or owing to Fidus Partners, LLC.
     Section 4.22. Inventory. Schedule 4.22 sets forth a true and complete list
of the inventory items of each Seller’s MBC Business included in the Purchased
Assets as of September 30, 2005. Such Schedule 4.22 also sets forth a true and
complete list of all customer owned inventory in each Seller’s possession as of
such date.
     Section 4.23. Assets.
     (a) The Sellers own, lease, license or have the legal right to use all the
properties and assets used in the conduct of the MBC Business, and with respect
to contract rights, are a party to and enjoy the right to the benefits of all
the contracts, agreements and other arrangements used by the Sellers in the
conduct of the MBC Business, all of which properties, assets and rights
constitute Purchased Assets. Except for liens on the Purchased Assets which will
be released in connection with the Closing and liens on leased equipment, which
will be transferred to Purchaser, the Sellers have good and valid title to, or,
in the case of leased or subleased Purchased Assets, valid and subsisting
leaseholds in, all the Purchased Assets, free and clear of any and all
Encumbrances.
     (b) The Purchased Assets constitute all the properties, assets and rights
forming a part of, used or held in, and all such properties, assets and rights
as are necessary in the conduct of, the MBC Business. At all times since
January 1, 2005, the Sellers have caused the Purchased Assets to be maintained
in accordance with good business practice, and, except as set forth on
Schedule 4.6, all the Purchased Assets are in good operating condition and
repair and are suitable for the purposes for which they are used.
     (c) Following the consummation of the transactions contemplated by this
Agreement, the execution of the instruments of transfer contemplated by this
Agreement, the receipt of all consents and the release of all liens on the
Purchased Assets in connection with the Closing (other than liens on leased
equipment, which will be transferred to Purchaser), the Purchaser will own, with
good and valid title, or lease, under valid and subsisting leases, or otherwise
acquire the interests of the Sellers in the Purchased Assets and the MBC
Business, free and clear of any Encumbrances.
     Section 4.24. Customers. Schedule 4.24 lists the names, addresses and
telephone numbers of each customer of the MBC Business as of September 30,

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2005 and the amount for which each such customer was invoiced through such date.
Except as set forth on Schedule 4.24, the Sellers have not received any notice
and have no reason to believe that any customer of the MBC Business has ceased,
or will cease, to use the products, goods or services of the MBC Business, or
has substantially reduced, or will substantially reduce, the use of such
products, equipment, goods or services at any time.
     Section 4.25. Full Disclosure. No representation or warranty made by such
Seller in this Agreement or any certificate delivered by or on behalf of such
Seller pursuant hereto contains or will contain any untrue statement of a
material fact or omits or will omit to state a material fact necessary to make
the statements contained herein or therein not misleading.
ARTICLE V
Representations and Warranties Regarding the Purchaser
     The Purchaser represents and warrants to the Sellers as follows:
     Section 5.1. Organization. The Purchaser is duly incorporated, validly
existing and in good standing under the laws of the State of Delaware, and has
full power and authority, corporate and other, to own its property and assets
and to carry on its business as presently conducted.
     Section 5.2. Authorization. The Purchaser has full power and authority,
corporate and other, to execute and deliver this Agreement and to perform its
respective obligations hereunder. This Agreement has been duly authorized,
executed and delivered by the Purchaser and (assuming the due authorization,
execution and delivery by each Seller) constitutes a valid and binding agreement
of the Purchaser, enforceable against the Purchaser in accordance with its
terms.
     Section 5.3. Non-Contravention. The Purchaser is not subject to any
provision of its Certificate of Incorporation or by-laws or any agreement,
instrument, law, rule, regulation, order, decree or judgment of any Governmental
Authority or other restriction that would prevent the consummation by Purchaser
of the transactions contemplated by this Agreement.
     Section 5.4. No Consents. No notice to, filing with, or authorization,
registration, consent or approval of any Governmental Authority or other Person
is necessary for the execution, delivery or performance of this Agreement or the
consummation of the transactions contemplated hereby by the Purchaser.
     Section 5.5. Brokers. No Person is or will be entitled to a broker’s,
finder’s, investment banker’s, financial adviser’s or similar fee from the
Purchaser in connection with this Agreement or any of the transactions
contemplated hereby.

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ARTICLE VI
Additional Agreements
     Section 6.1. Tax Matters.
     (a) Taxes Related to Transaction. The Sellers and Purchaser shall each pay
any transfer, sales, purchase, use or similar Taxes that they are each primarily
obligated to pay under the laws of any Governmental Authority arising out of or
resulting from the sale and purchase of the Purchased Assets or as otherwise set
forth in this Agreement.
     (b) Tax Returns. The Sellers shall (i) prepare and file all Tax Returns
(including without limitation all income, sales and use Tax Returns) reporting
the income attributable to the Purchased Assets or the operation of the Sellers’
MBC Business for all periods ending prior to or on the Closing Date,
(ii) prepare and file all income Tax Returns reporting the income of the
Sellers’ MBC Business arising on the Closing Date from the sale to the Purchaser
of the Purchased Assets, (iii) be responsible for the conduct of all tax
examinations relating to the Tax Returns referred to in (i) and (ii) above, and
(iv) pay all Taxes attributable to the Purchased Assets or the operation of the
Sellers’ MBC Business due with respect to the Tax Returns referred to in (i) and
(ii) above. The Purchaser shall prepare and file all Tax Returns reporting the
income attributable to the ownership of the Purchased Assets and the operation
thereof for all periods beginning after the Closing and shall be liable for and
pay all Taxes due in respect of such Tax Returns.
     (c) Responsibility. All personal property, motor vehicle (including road
use) and ad valorem Taxes, if any, and all other Taxes, charges or assessments
levied or imposed upon the Purchased Assets by any Governmental Authority, for
the taxable year beginning before and ending on or after the Closing Date shall
be apportioned and pro rated on a per diem basis between the Purchaser and the
Sellers as of 11:59 p.m. on the day before the Closing Date (the “Adjustment
Time”). The Sellers shall pay or cause to be paid, on or prior to the Closing
Date (or promptly when due, if due after the Closing Date), all Taxes and
assessments against the Purchased Assets for all taxable periods ending prior to
the Closing Date. The Purchaser shall pay all Taxes and assessments against the
Purchased Assets for all periods beginning on or after the Closing Date.
     (d) Allocation. The parties will agree to an allocation of the Purchase
Price which will be utilized in preparing Form 8594 or any other form or report
required by any provision of local, state or foreign law to be included in their
respective Tax Returns for the purposes of reflecting the allocation of value in
this transaction and for determination of future depreciation and amortization
of the Purchased Assets. This allocation will be prepared in accordance with
Section

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1060 of the Internal Revenue Code of 1986, as amended, and will be binding on
all of the parties to this Agreement.
     (e) Tax Indemnification. Notwithstanding anything to the contrary contained
herein, (i) Vestcom shall be liable for, and shall pay, indemnify and hold
harmless Purchaser and its Affiliates from and against any liability for Taxes
that either (A) are imposed on Sellers or any of their respective Affiliates
which are attributable to any taxable period or portion thereof, (B) otherwise
result from the ownership, possession, use or operation of the Purchased Assets
or the MBC Business prior to the Closing, or (C) any Taxes that the Sellers are
responsible for under Section 6.1(c) of this Agreement, and (ii) Purchaser shall
be liable for, and shall pay, indemnify and hold harmless Sellers and their
Affiliates from and against any liability for Taxes either (A) imposed on
Purchaser or any Affiliate of Purchaser which are attributable to any taxable
period or portion thereof (other than any Taxes of Sellers or, with respect to
periods ending prior to the Closing Date, Taxes that are attributable to the MBC
Business or the Purchased Assets, in either event that are imposed on Purchaser
as a result of the consummation of the transactions contemplated by this
Agreement), (B) otherwise resulting from Purchaser’s ownership, possession, use
or operation of the Purchased Assets or the MBC Business on or after the Closing
Date, or (C) any Taxes that the Purchaser is responsible for under
Section 6.1(c) of this Agreement.
     (f) Settlements and Elections. Sellers shall not enter into any settlement
or agreement in compromise of any claim relating to Taxes with any government or
taxing authority which purports to bind Purchaser with respect to any tax period
ending after the Closing Date without Purchaser’s prior written consent, which
consent shall not be unreasonably withheld or delayed. Except to the extent
required by applicable law, no material new elections with respect to Taxes, and
no material changes in current elections with respect to Taxes, affecting the
Purchased Assets or the MBC Business shall be made by Sellers or any of their
respective Affiliates after the date of this Agreement without the prior written
consent of Purchaser, which consent shall not be unreasonably withheld or
delayed.
     (g) Contest and Settlement. The contest and/or settlement of any issue
raised in any official inquiry, examination or proceeding that could result in
an official determination with respect to Taxes due or payable for any taxable
year or period shall be conducted as follows:
          (i) with respect to any such issue for which Purchaser or any of its
Affiliates may be entitled to indemnification from Vestcom hereunder, the
provisions of Article VIII hereof shall apply, provided, however, that Vestcom
shall not settle any tax issue without the prior written consent of Purchaser,
which consent shall not be unreasonably withheld or delayed; and

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          (ii) with respect to any such issue for which Vestcom or any of its
Affiliates may be entitled to indemnification from Purchaser hereunder, the
provisions of Article VIII hereof shall apply, provided, however, that Purchaser
shall not settle any tax issue without the prior written consent of Vestcom,
which consent shall not be unreasonably withheld or delayed.
     (h) Customers. In the event any taxing authority assesses any sales, goods
and services, use or other similar Taxes and Purchaser submits a claim for
indemnification with respect to such Taxes hereunder against Vestcom, Vestcom
will coordinate with Purchaser (including, without limitation, a review by
Purchaser of the proposed approach) in connection with the collection of such
Taxes from the customers with respect to which such Taxes have been assessed in
a reasonable manner so as not to disrupt Purchaser’s ongoing business
relationships with such customers.
     (i) Goods and Services Tax Election. The Sellers and the Purchaser shall
jointly execute an election under Sections 167 and 167.1 of the Excise Tax Act
(Canada) and Sections 75 and 75.1 of An Act Respecting the Quebec Sales Tax on
the forms prescribed for such purposes along with any documentation necessary or
desirable in order to effect the transfer of the Purchased Assets by the Sellers
without payment of any Goods and Services Tax or Quebec Sales Tax. The Purchaser
shall file the election forms referred to above, along with any documentation
necessary or desirable to give effect to such, with Revenue Canada and the
Ministère du Revenu du Québec, respectively, together with the Purchaser’s Goods
and Services Tax and Quebec Sales Tax returns for the reporting period in which
the transactions contemplated herein are consummated.
     Notwithstanding such election, in the event that it is determined by
Revenue Canada or by the Ministère du Revenu du Québec that there is a Goods and
Services Tax or Quebec Sales Tax liability of the Purchased Assets, the parties
agree that such Goods and Services Tax or Quebec Sales Tax, as the case may be,
shall, unless already collected from the Purchaser by the Sellers, be forthwith
remitted by the Purchaser to Revenue Canada or the Ministère du Revenu du
Québec, as the case may be, and the Purchaser shall indemnify and hold the
Sellers harmless with respect to any such Goods and Services Tax or Quebec Sales
Tax liability arising herein, as well as any interest and penalties related
thereto.
          Section 6.2. Non-Competition.
     (a) For a period of three (3) years after the Closing Date (the
“Non-Compete Period”), neither the Sellers nor any of their respective
Affiliates will, directly or indirectly, without the prior written approval of
the Purchaser:
(i) (A) compete anywhere in Canada or the United States (the “Territory”) with
the Purchaser or any of its Affiliates in the MBC Business or (B) call upon or
solicit any customer which was a

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customer of any Seller’s MBC Business within the two (2) year period prior to
the Closing Date (a “Prohibited Customer”) for the purpose of offering or
selling to such Prohibited Customer any products or services of the MBC
Business; it being understood that (1) Vestcom and its Affiliates shall be
permitted to sell products and services of any of its businesses other than the
MBC Business (including, without limitation, the Retail Business) to any
customer or potential customer, including a Prohibited Customer and (2) this
Section 6.2 shall not apply to any purchaser or other successor in interest to
any non-MBC Business (including, without limitation, the Retail Business) of any
Seller or any other subsidiary or Affiliate of Vestcom, except that if the
Retail Business is sold during the Non-Compete Period, those individuals listed
on Schedule 6.2 (if such individuals are still employed by any of the Sellers at
the time of such sale) shall not, for the remainder of the Non-Compete Period,
call upon or solicit any Prohibited Customer for the purpose of offering or
selling to such Prohibited Customer any products or services of the MBC
Business;
(ii) except as provided in the Transition Services Agreement, employ, retain as
a consultant or attempt to entice away any Person who was an employee of any
Seller within the six (6) month period prior to the Closing Date and is, at that
time, an employee of the Purchaser for the purpose or with the intent of
enticing such employee away from or out of the employ of the Purchaser or its
subsidiaries or Affiliates (except for those employees who are hired by
Purchaser primarily to perform certain transition services pursuant to the
Transition Services Agreement); or
(iii) use for its own benefit or divulge or convey to any third party, any
Confidential Information (as defined below) relating to any Seller’s MBC
Business.
     To the Sellers’ knowledge, the individuals listed on Schedule 6.2 are the
only employees of the Retail Business (as well as Joel Cartun) who have, or
could reasonably be expected to have, as of the date hereof, substantial MBC
Business relationships.
     For purposes of this Agreement, Confidential Information consists of all
information, knowledge or data relating to the MBC Business of any Seller,
including, without limitation, customer and supplier lists, formulae, trade
know-how, processes, secrets, consultant contracts, pricing information,
marketing plans, product development plans, business acquisition plans and all
other information relating to the operation of such Seller’s MBC Business not in
the public domain or otherwise publicly available. Information which enters the
public domain or is publicly available loses its confidential status hereunder
so

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long as the Sellers do not directly or indirectly cause such information to
enter the public domain.
     (b) The Sellers acknowledge that the restrictions contained in this
Section 6.2 are reasonable and necessary to protect the legitimate interests of
the Purchaser and that any breach by any Seller of any provision hereof will
result in irreparable injury to the Purchaser. The Sellers acknowledge that, in
addition to all remedies available at law, the Purchaser shall be entitled to
equitable relief, including injunctive relief, and an equitable accounting of
all earnings, profits or other benefits arising from such breach and shall be
entitled to receive such other damages, direct or consequential, as may be
appropriate.
     Section 6.3. Employees.
     (a) Purchaser shall have the right, but not the obligation, to offer
employment effective upon the Closing Date to any MBC Business Employee on terms
to be determined by the Purchaser. No later than five business days prior to the
Closing Date, Purchaser shall inform the Sellers of those MBC Business Employees
it wishes to hire. Purchaser’s offer of employment to each such MBC Business
Employee shall be conditioned upon (i) such MBC Business Employee’s resignation
from such Seller immediately prior to the Closing and such MBC Business
Employee’s acceptance of the offer of employment on or after the Closing Date
and (ii) successful passing of criminal and background checks and a drug screen
as part of the Purchaser’s corporate policy (each MBC Business Employee who
accepts such offer of employment and passes the criminal and background check
and the drug screen is referred to herein as a “Hired Employee”). Those MBC
Business Employees rejected as a result of the above checks will not be hired by
Purchaser.
     (b) Except as is expressly assumed by the Purchaser in this Agreement,
(i) Vestcom, on behalf of the Sellers, shall indemnify, defend and hold the
Purchaser harmless from and against any and all Liabilities (including, without
limitation, those arising under Sellers’ Employee Benefit Plans) due or which
may become due to, or in respect of, any of Sellers’ employees, whether or not
they are hired or engaged by Purchaser, which relate to periods, conduct or
obligations incurred prior to the Closing Date or which arise by reason of their
termination of employment with Sellers or non-hire by Purchaser, and (ii) the
Purchaser shall indemnify, defend and hold the Sellers harmless from and against
any and all Liabilities due or which may become due to, or in respect of, any
Hired Employees, which relate to periods on or after the Closing Date or arise
by reason of their termination of employment with Purchaser.
     (c) Effective upon the Closing, the Sellers shall be solely responsible and
liable for providing “COBRA” coverage to all MBC Business Employees and their
qualifying beneficiaries who experience a “qualifying event” on or prior to the
Closing and for providing (or continuing to provide) COBRA coverage with respect
to any former employees of the MBC Business and their qualifying

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beneficiaries who experience or experienced a “qualifying event” before or on
the Closing. For purposes of this paragraph, COBRA coverage refers to continued
health coverage in accordance with the provisions of Section 4980B of the Code
and Section 601 et. seq. of ERISA and the term “qualifying event” shall have the
meaning given such term under such Sections.
     (d) Effective as of the Closing Date, the Hired Employees shall cease to be
covered by the Sellers’ employee benefit and welfare plans, programs and
arrangements. All of Purchaser’s employee benefit and welfare plans, programs
and arrangements in which Hired Employees become eligible to participate shall
credit such Hired Employees with a period of service beginning on their most
recent hire date with any Seller for purposes of eligibility and vesting. In
addition, the Hired Employees shall be permitted by Purchaser to “carryover” to
Purchaser any unused accrued vacation time that was earned at any time on or
after January 1, 2005 they have with the Sellers as of the Closing Date and
Purchaser will assume all Liabilities and obligations for such unused accrued
vacation time for the remainder of calendar year 2005.
     (e) Purchaser shall maintain a health care and dependent care flexible
spending accounts plan pursuant to Section 125 of the Code (“Purchaser’s FSA”)
through the period beginning on the Closing Date and ending on the later of
(i) the last day of the calendar year in which the Closing Date occurs or
(ii) the last day on which claims may be incurred for reimbursement under
Purchaser’s FSA with respect to salary reduction contributions made during 2005.
Effective as of the Closing Date, Hired Employees who were participants of the
Sellers’ health care and/or dependent care flexible spending accounts
established under Section 125 of the Code (“Sellers’ FSA”) immediately prior to
the Closing Date shall become participants of the Purchaser’s FSA and the health
flexible spending account and dependent care account elections of Hired
Employees under Sellers’ FSA shall be continued by Purchaser under the
Purchaser’s FSA after the Closing Date and through December 31, 2005 (plus any
extended period allowed by Purchaser’s FSA for the reimbursement of claims). As
soon as practicable, but no later than 60 days following the Closing Date,
Sellers shall transfer to Purchaser an amount in cash equal to the excess of
(i) the amount withheld from the compensation of Hired Employees under the
Sellers’ FSA since January 1, 2005 on account of health care and dependent care
flexible spending account elections of Hired Employees, over (ii) the amount
paid in respect of claims submitted under Sellers’ FSA since January 1, 2005
with respect to Hired Employees and/or their covered dependents. Health care and
dependent care expenses incurred by Hired Employees and/or their dependents
between January 1, 2005 and the Closing Date but not previously reimbursed under
Sellers’ FSA, as well as health care and dependent care expenses incurred on or
after the Closing Date by Hired Employees and/or their dependents, shall be paid
or reimbursed by Purchaser under Purchaser’s FSA. Hired Employees and their
dependents shall cease to be eligible for health care and dependent care expense
reimbursements from Sellers as of the Closing Date, except to the extent of any
COBRA continuation coverage that may be applicable. Sellers shall promptly
furnish Purchaser with health

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and/or dependent care flexible spending account elections of Hired Employees
under Sellers’ FSA in effect as of the Closing Date and any outstanding
reimbursement claims of Hired Employees and their dependents. The parties agree
to cooperate and make reasonable, good faith efforts to implement the provisions
of this section to take into account the complexity of transferring flexible
spending accounts.
     (f) Purchaser shall cause its tax-qualified savings plan (the “Purchaser
Savings Plan”) to, following the Closing Date and pursuant to
Section 401(a)(31)(D) of the Code, accept rollover contributions of “eligible
rollover distributions” (within the meaning of Section 401(a)(31) of the Code)
in cash in an amount equal to the full account balance distributed to a Hired
Employee from any benefit plan of any Seller (or any Seller’s Affiliate)
qualified under Section 401(a) of the Code. Sellers shall provide evidence
reasonably satisfactory to Purchaser that the employee benefit plan of any
Seller (or any Seller’s Affiliate) from which the eligible rollover distribution
was made is qualified under Section 401(a) of the Code. For purpose of this
Section 6.3(f), the term “eligible rollover distribution” shall include (i) the
amount of any unpaid balance of any loan made to a Hired Employee under the
Sellers’ savings plan and (ii) the promissory note evidencing such loan.
     Section 6.4. Best Efforts; Further Assurances. Subject to the terms and
conditions herein provided, each of the parties hereto shall use its best
efforts to take, or cause to be taken, all action, and to do, or cause to be
done, all things reasonably necessary, proper or advisable under applicable laws
and regulations to consummate and make effective the transactions contemplated
by this Agreement. In the event that at any time after Closing any further
action is necessary to carry out the purposes of this Agreement, the Sellers and
the Purchaser shall take all such reasonable action without any further
consideration therefor. The parties agree to use their best efforts to obtain
all of the consents listed on Schedule 4.4 which are not yet received as of the
Closing Date.
     Section 6.5. Additional Assistance.
     (a) If, after the Closing, any payments from customers or other third
parties due to Purchaser are inadvertently paid to or received by any Seller,
such Seller shall deliver such payments in cash or in kind to Purchaser within
five (5) business days of receipt by such Seller.
     (b) If, after the Closing, any payments from customers or other third
parties due to any Seller are inadvertently paid to or received by Purchaser,
Purchaser shall deliver such payments in cash or in kind to such Seller within
five (5) business days of receipt by Purchaser.
     Section 6.6. Removal of Assets. From the Closing Date until the one year
anniversary (except for the West Caldwell, New Jersey property, which shall be
the six (6) month anniversary) of the Closing Date, Purchaser shall provide
Sellers with commercially reasonable access to all premises occupied by

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Purchaser pursuant to any Real Property Leases assumed by Purchaser as Assumed
Liabilities during regular business hours to permit Sellers to remove from such
premises any assets which Purchaser has not purchased. From the Closing Date
until the one year anniversary (except for the West Caldwell, New Jersey
property, which shall be the six (6) month anniversary) of the Closing Date,
Sellers shall provide Purchaser with access to all other premises of Sellers
during regular business hours to permit Purchaser to remove Purchased Assets
from such premises. Sellers and Purchaser shall obtain and maintain proper and
sufficient insurance coverage for any damages that either party may cause to the
other party for the duration of the removal of assets.
     Section 6.7. Post-Closing Access to Records. The Purchaser and the Sellers
shall maintain any records in connection with the MBC Business for three
(3) years after Closing and will provide each other with commercially reasonable
access thereto during regular business hours following reasonable prior notice.
     Section 6.8. Certain Transition Services. From time to time during the
period commencing on the Closing Date and ending on the one year anniversary of
the Closing Date (or for such shorter period described in the transition
services agreement), the parties will provide certain services to each other as
set forth in the transition services agreement (the “Transition Services
Agreement”) attached hereto as Exhibit B.
     Section 6.9. Conduct of Business Prior to the Closing. The Sellers covenant
and agree that between the date hereof and the Closing Date, the Sellers shall
not conduct the MBC Business other than in the ordinary course and consistent
with Sellers’ past practice. Without limiting the generality of the foregoing,
the Sellers shall (as it relates to the MBC Business): (i) continue pricing and
purchasing policies in accordance with past practice, (ii) preserve the business
organization of the MBC Business, (iii) use their best efforts to keep available
to the Purchaser the services of the employees of the Sellers to whom the
Purchaser will be offering employment, (iv) use their best efforts to preserve
their current relationships with customers and suppliers of the MBC Business,
(v) not engage in any practice, take any action, fail to take any action or
enter into any transaction not in the ordinary course which could cause any
representation or warranty of the Sellers to be untrue or result in a breach of
any covenant made by the Sellers in this Agreement, and (vi) not, without
limitation (except as otherwise contemplated by this Agreement), do any of the
following without the prior written consent of the Purchaser:
     (a) amend the incorporation documents, formation documents or other
organizational and operational documents of any Seller;
     (b) make any material change in any method of accounting or accounting
practice or policy other than those required by GAAP;
     (c) acquire or agree to acquire by merging or consolidating with, or by
purchasing a substantial portion of the assets of, or by any other manner, any

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business or any corporation, partnership, association or other business
organization or division thereof;
     (d) initiate or settle any litigation to which any Seller is party that is
not fully covered by insurance;
     (e) incur or assume any liabilities for borrowed money or obligations for
borrowed money (i) in the aggregate in excess of $25,000 in the ordinary course
of business or (ii) outside the ordinary course of business;
     (f) make any commitments for capital expenditures for additions to, or
relocate any, property, plant or equipment in excess of $25,000 in the
aggregate, excluding any additions under SOP 98-1 capitalized in accordance with
GAAP;
     (g) enter into or renew any real property lease;
     (h) adopt any Employee Benefit Plan, except as may be, and to the extent,
required by law;
     (i) enter into any employment, labor, consulting or service contract,
arrangement or commitment which is not terminable at will, without penalty or
continuing obligation of the Sellers;
     (j) enter into a Related Party Transaction; or
     (k) agree to any of the foregoing.
     Section 6.10. Access to Information. From the date hereof until the Closing
Date, upon reasonable notice and during normal business hours, the Sellers shall
cause their respective officers, directors, employees, agents, representatives,
accountants and counsel to: (i) afford Purchaser and any of its representatives
reasonable access to the offices, properties, other facilities, books and
records (including Tax Returns) of the Sellers relating to the MBC Business,
including, without limitation, access to enter such properties and facilities to
investigate and collect air, surface water, groundwater and soil samples or to
conduct any other type of environmental assessment, and to those officers,
employees, agents, accountants, counsel and representatives of the Sellers who
have any Knowledge relating to the MBC Business and (ii) furnish to the
Purchaser and any of its representatives such additional financial and operating
data and other information regarding the assets, properties, liabilities and
goodwill of the MBC Business as the Purchaser may from time to time reasonably
request.
     Section 6.11. Bulk Transfer Laws. The Sellers will indemnify the Purchaser
for any charges or other Liabilities arising under any bulk sales or bulk
transfer laws.

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     Section 6.12. Consents. Sellers shall use their best efforts to obtain, and
Purchaser will use reasonable commercial efforts (which shall include, without
limitation, providing such financial statements and other literature concerning
Purchaser as Sellers may reasonably request and which shall not require the
payment of any consideration by the Purchaser) to assist Sellers in obtaining,
all required consents to assignment under Sellers’ Contracts and permits
pertaining to the MBC Business. Notwithstanding anything contained in this
Agreement to the contrary, Sellers will not be obligated to assign to Purchaser
any of their rights and obligations in and to any Contracts and to any permits
without first having obtained all consents, approvals and waivers necessary for
such assignment and nothing in this Agreement will constitute an assignment of
such Contract or permit without such consent, approval or waiver. To the extent
that such consents, approvals and waivers are not obtained by Sellers, Sellers
shall use their reasonable commercial efforts (which shall not require the
payment of any consideration by Sellers to obtain any such consents, approvals
or waivers) to (i) provide to Purchaser the financial and business benefits of
any such Contract or permit and (ii) enforce, at the request and expense of
Purchaser, for the account of Purchaser, any rights of Sellers arising from any
such Contract or permit (including, without limitation, the right to elect to
terminate such Contract or permit in accordance with the terms thereof upon the
advice, and at the expense, of Purchaser), provided, however, that Sellers shall
not be required to take any action which would constitute a breach of any such
Contract or permit other than an action to terminate any such Contract or permit
as described herein. With respect to Contracts and permits for which consents or
waivers cannot be obtained but as to which Sellers are able to pass on the
financial and business benefits to Purchaser, Purchaser shall assume Sellers’
obligations thereunder (except as provided by Section 7.2(ix)). With respect to
Contracts and permits for which such consents or waivers cannot be obtained and
as to which Sellers are unable to pass on the financial and business benefits to
Purchaser, Sellers shall retain their obligations thereunder, which Purchaser
hereby agrees will not constitute a breach by Sellers of any of their
obligations under this Agreement.
     Section 6.13. Sellers Financial Statements. Sellers agree to cooperate and
assist in good faith the Purchaser in the preparation of the balance sheet,
statements of operations, shareholder’s equity and cash flows, and any other
financial information of the Sellers (“Sellers Financial Statements”) in
conformity with GAAP, applied on a consistent basis throughout the applicable
periods and which present fairly the financial condition and results of
operations of the MBC Business and the Sellers, on a consolidated basis, as of
and for the periods included therein necessary, for the Purchaser to comply with
its reporting obligations under the Securities Exchange Act of 1934, as amended,
including (without limitation) Sellers (i) executing and delivering customary
management representation letters to the Purchasers auditor and otherwise
cooperating with the Purchaser’s auditor in connection with the audit of the
Sellers Financial Statements and (ii) affording the Purchaser’s auditors,
Purchaser and the Purchaser’s representatives access to any employee of any
Seller or any Affiliate of any Seller and to properties, books, contracts,
commitments, records and

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information of any Seller or any Affiliate of any Seller, including existing
internal financial statements, to the extent reasonably requested to prepare the
Sellers Financial Statements.
ARTICLE VII
Conditions to Closing
     Section 7.1. Conditions to Obligations of the Sellers. The obligations of
the Sellers to consummate the transactions contemplated by this Agreement shall
be subject to the fulfillment or written waiver, at or prior to Closing, of each
of the following conditions:
     (i) (a) except for those representations and warranties which are made as
of a particular date, all representations and warranties made by the Purchaser
in this Agreement and the Schedules hereto are true, correct and complete in all
material respects (except with respect to those representations and warranties
which are qualified as to materiality, which shall be true, correct and complete
in all respects) on the date hereof and as of Closing, (b) the representations
and warranties made by the Purchaser in this Agreement and the Schedules hereto
which are made as of a particular date shall be true, correct and complete in
all material respects (except with respect to those representations and
warranties which are qualified as to materiality, which shall be true, correct
and complete in all respects) as of such date and as of Closing; and (c) the
Purchaser has performed or complied in all material respects with all of the
covenants, obligations and conditions to be performed or complied with by it
under the terms of this Agreement at or prior to the Closing;
     (ii) Purchaser shall have delivered a certificate of the President or a
Vice President of the Purchaser, dated the Closing Date, to the effect that each
of the conditions set forth in Section 7.1(i) is satisfied in all respects;
     (iii) a certificate of the Secretary or Assistant Secretary of the
Purchaser, dated the Closing Date, as to the incumbency of any officer of the
Purchaser executing this Agreement or any document related thereto;
     (iv) a certified copy of resolutions of the Board of Directors or members
of the Purchaser, authorizing the execution, delivery and consummation of this
Agreement and the transactions contemplated hereby;
     (v) receipt of the Purchase Price;
     (vi) the executed Transition Services Agreement; and

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     (vii) such other documents or instruments as the Sellers reasonably request
to effect the transactions contemplated hereby.
     Section 7.2. Conditions to the Obligations of the Purchaser. The
obligations of the Purchaser to consummate the transactions contemplated by this
Agreement shall be subject to the fulfillment or written waiver, at or prior to
Closing, of each of the following conditions:
     (i) (a) except for those representations and warranties which are made as
of a particular date, all representations and warranties made by the each of the
Sellers in this Agreement are true, correct and complete in all material
respects (except with respect to those representations and warranties which are
qualified as to materiality, which shall be true, correct and complete in all
respects) on the date hereof and as of Closing, (b) the representations and
warranties made by each of the Sellers in this Agreement and the Schedules
hereto which are made as of a particular date shall be true, correct and
complete in all material respects (except with respect to those representations
and warranties which are qualified as to materiality, which shall be true,
correct and complete in all respects) as of such date and as of Closing; and
(c) each of the Sellers has performed or complied in all material respects with
all of the covenants, obligations and conditions to be performed or complied
with by them under the terms of this Agreement at or prior to the Closing;
     (ii) Sellers shall have delivered a certificate of the President or a Vice
President of each of the Sellers, dated the Closing Date, to the effect that
each of the conditions set forth in Section 7.2(i) is satisfied in all respects;
     (iii) a certificate of the Secretary or Assistant Secretary of each of the
Sellers, dated the Closing Date, as to the incumbency of any officer of each of
the Sellers executing this Agreement or any document related thereto;
     (iv) a certified copy of the resolutions of the Board of Directors of each
of the Sellers, and of Vector, authorizing the execution, delivery and
consummation of this Agreement and the transactions contemplated hereby;
     (v) the executed Transition Services Agreement;
     (vi) a duly executed receipt for the Purchase Price;
     (vii) certificates of good standing for each of the Sellers;

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     (viii) Sellers shall obtain and deliver to Purchaser from NJDEP one of the
following: (1) a “No Further Action Letter”, (2) an approved “Negative
Declaration,” (3) an approved “Remedial Action Workplan,” (4) an authorization
letter or other consent or approval pursuant to N.J.S.A. 13:1K-11.2 through
11.7, or in lieu thereof, (5) at Sellers’ sole discretion, a “Remediation
Agreement”. In connection with any Remediation Agreement or as otherwise
required by NJDEP, Sellers (or a Seller-related party) shall be designated as
the party responsible for obtaining approval of and implementing the Remedial
Action Workplan, and Sellers (or a Seller-related party) shall obtain and
maintain any required “Remediation Funding Source” in form and amount acceptable
to NJDEP. Upon entry into a Remediation Agreement with NJDEP, Sellers shall be
deemed to have fulfilled this ISRA condition precedent to Closing;
     (ix) Sellers shall have received (and furnished evidence thereof reasonably
satisfactory to Purchaser) the consents listed on Schedule 7.2(ix);
     (x) no event shall have occurred between the execution of this Agreement
and the Closing that has had, or that could reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect; and
     (xi) such other documents as the Purchaser reasonably requests to effect
the transactions contemplated hereby.
ARTICLE VIII
Survival of Representations and Warranties; Indemnification
     Section 8.1. Survival of Representations and Warranties. Except as set
forth below, the representations and warranties provided for in this Agreement
shall survive the Closing for sixteen (16) months from the Closing Date for the
benefit of the parties hereto and their successors and assigns. The
representations and warranties provided for in Sections 4.11, 4.13 and 4.15
shall survive the Closing and remain in full force and effect until sixty
(60) days following the expiration of the relevant statute of limitations for
the Liabilities in question (giving effect to any waiver, mitigation or
extension thereof). The representations and warranties provided for in
Sections 4.1, 4.2, 4.21, 5.1, 5.2 and 5.5 shall survive the Closing in
perpetuity. The survival period of each representation or warranty as provided
in this Section 8.1 is hereinafter referred to as the “Survival Period.”

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     Section 8.2. Indemnification.
     (a) Vestcom, on behalf of itself and each of the other Sellers, shall
indemnify and hold harmless the Purchaser and its Affiliates, agents and
representatives, and any Person claiming by or through any of them, against and
in respect of any and all claims, costs, expenses, damages, liabilities, losses
or deficiencies (including, without limitation, counsel’s fees and other costs
and expenses incident to any suit, action or proceeding) (the “Damages”) arising
out of, resulting from or incurred in connection with (i) any inaccuracy in any
representation or the breach of any warranty made by the Sellers for the
applicable Survival Period, (ii) the breach by Sellers of any covenant or
agreement to be performed by them hereunder, (iii) the Excluded Assets and
Excluded Liabilities, (iv) any violation of Environmental Laws or presence of
any Regulated Substance with respect to the Leased Real Property that occurred
or existed as of or prior to the Closing Date including, without limitation, any
contamination resulting after the Closing Date from any condition existing as of
or prior to the Closing Date that constituted a violation of Environmental Law,
provided that Vestcom and the other Sellers shall also indemnify Purchaser for
Damages arising out of, resulting from or incurred in connection with any
violation of Environmental Laws or presence of any Regulated Substance with
respect to the underground storage tank located on the West Caldwell, New Jersey
property (“Storage Tank”) after the Closing Date except to the extent that the
Purchaser causes, or takes actions that exacerbate, such Damages, (v) any claims
related to Taxes pertaining to periods ending on or prior to the Closing Date
(as provided in Section 6.1 hereof), and (vi) any liability of the Sellers
relating to the MBC Business or the Purchased Assets incurred prior to the
Closing Date, other than the Assumed Liabilities.
     (b) The Purchaser shall indemnify and hold harmless the Sellers and their
Affiliates, agents and representatives, and any Person claiming by or through
any of them, against and in respect of any and all Damages arising out of,
resulting from or incurred in connection with (i) any inaccuracy in any
representation or the breach of any warranty made by the Purchaser in this
Agreement for the applicable Survival Period, (ii) the breach by the Purchaser
of any covenant or agreement to be performed by it hereunder, (iii) after the
Closing, the Assumed Liabilities, (iv) any violation of Environmental Laws by
Purchaser with respect to the Leased Real Property that first occurs after the
Closing Date, and (v) any claims related to Taxes pertaining to periods after
the Closing Date (as provided in Section 6.1 hereof).
     (c) Any Person providing indemnification pursuant to the provisions of this
Section 8.2 is hereinafter referred to as an “Indemnifying Party” and any Person
entitled to be indemnified pursuant to the provisions of this Section 8.2 is
hereinafter referred to as an “Indemnified Party.”
     Section 8.3. Procedures for Third Party Claims. In the case of any claim
for indemnification arising from a claim of a third party, including without

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limitation a claim for Taxes (a “Third Party Claim”), an Indemnified Party shall
give prompt written notice to the Indemnifying Party of any claim or demand of
which such Indemnified Party has knowledge and as to which it may request
indemnification hereunder. The Indemnifying Party shall have the right to defend
and to direct the defense against any such Third Party Claim, in its name or in
the name of the Indemnified Party, as the case may be, at the expense of the
Indemnifying Party, and with counsel selected by the Indemnifying Party unless
(i) such Third Party Claim seeks an order, injunction or other equitable relief
against the Indemnified Party and it is reasonably necessary for the Indemnified
Party to utilize its own counsel either due to time demands or the nature of the
relief sought, or (ii) the Indemnified Party shall have reasonably concluded
that there is an actual conflict of interest arising from the counsel chosen by
the Indemnifying Party to represent the Indemnified Party in the conduct of the
defense of such Third Party Claim. Notwithstanding anything in this Agreement to
the contrary, the Indemnified Party shall, at the expense of the Indemnifying
Party, cooperate with the Indemnifying Party, and keep the Indemnifying Party
fully informed, in the defense of such Third Party Claim. The Indemnified Party
shall have the right to participate in the defense of any Third Party Claim with
counsel employed at its own expense; provided, however, that, in the case of any
Third Party Claim described in clause (i) or (ii) of the second preceding
sentence or as to which the Indemnifying Party shall not in fact have employed
counsel to assume the defense of such Third Party Claim, the reasonable fees and
disbursements of such counsel shall be at the expense of the Indemnifying Party.
The Indemnifying Party shall have no indemnification obligations with respect to
any Third Party Claim which shall be settled by the Indemnified Party without
the prior written consent of the Indemnifying Party, which consent shall not be
unreasonably withheld or delayed. No Third Party Claim may be settled by the
Indemnifying Party without the prior written consent of the Indemnified Party,
unless such settlement shall include an unconditional release of the Indemnified
Party from any and all Liabilities arising out of such claim.
     Section 8.4. Procedures for Inter-Party Claims. In the event that an
Indemnified Party determines that it has a claim for Damages against an
Indemnifying Party hereunder (other than as a result of a Third Party Claim),
the Indemnified Party shall give prompt written notice thereof to the
Indemnifying Party, specifying the amount of such claim and any relevant facts
and circumstances relating thereto. The Indemnified Party shall provide the
Indemnifying Party with reasonable access to its books and records for the
purpose of allowing the Indemnifying Party a reasonable opportunity to verify
any such claim for Damages. The Indemnified Party and the Indemnifying Party
shall negotiate in good faith regarding the resolution of any disputed claims
for Damages. Promptly following the final determination of the amount of any
Damages claimed by the Indemnified Party, the Indemnifying Party shall pay such
Damages to the Indemnified Party by wire transfer or check made payable to the
order of the Indemnified Party, without interest.

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     Section 8.5. Offset to Indemnification. All amounts of Damages for which a
party claims indemnity shall be offset by any insurance or other monetary
benefit received by the Indemnified Party as a result of the event giving rise
to an indemnity claim, so that there is no double recovery by the Indemnified
Party.
     Section 8.6. Remedies Limited.
     (a) No claim may be made for indemnification concerning breaches of
representations and warranties after the expiration of the applicable Survival
Period. Claims for indemnification asserted in a written notice to the
Indemnifying Party prior to the end of the Survival Period shall survive until
final resolution thereof.
     (b) Except for indemnification claims relating to Taxes, environmental
matters and Employee Benefits Plans, for which there shall be no indemnification
threshold, no claim for indemnification shall be made unless the aggregate
amount of all Damages arising out of or resulting from the causes set forth in
Section 8.2(a)(i) and Section 8.2(b)(i) exceeds $285,000, whereupon the
Indemnified Party shall be entitled to indemnification for the aggregate amount
of such Damages which exceed such amount.
     (c) Except for indemnification claims relating to Taxes, environmental
matters and Employee Benefits Plans, for which there shall be no maximum
aggregate indemnification amount, the maximum aggregate amount that may be
recovered by an Indemnified Party arising out of or resulting from the causes
set forth in Section 8.2(a)(i) and Section 8.2(b)(i) shall be $3,500,000.
ARTICLE IX
Termination
     Section 9.1. Termination. This Agreement may be terminated at any time
prior to the Closing:
     (a) by the Purchaser if, between the date hereof and the Closing: (i) any
representations and warranties of the Sellers contained in this Agreement shall
not have been true and correct when made, (ii) the Sellers shall not have
complied in all material respects with the covenants or agreements contained in
this Agreement to be complied with by them or (iii) the Sellers make a general
assignment for the benefit of creditors, or any proceeding shall be instituted
by or against the Sellers seeking to adjudicate any of them as bankrupt or
insolvent, or seeking liquidation, winding up or reorganization, arrangement,
adjustment, protection, relief or composition of their debts under any law
relating to bankruptcy or reorganization;
     (b) by Vestcom, on behalf of the Sellers, if, between the date hereof and
the Closing: (i) any representations and warranties of the Purchaser contained
in

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this Agreement shall not have been true and correct when made, (ii) the
Purchaser shall not have complied in all material respects with the covenants or
agreements contained in this Agreement to be complied with by it or (iii) the
Purchaser makes a general assignment for the benefit of creditors, or any
proceeding shall be instituted by or against the Purchaser seeking to adjudicate
it as bankrupt or insolvent, or seeking liquidation, winding up or
reorganization, arrangement, adjustment, protection, relief or composition of
its debts under any law relating to bankruptcy or reorganization;
     (c) by either Purchaser or Vestcom, on behalf of the Sellers, if the
Closing shall not have occurred by January 3, 2006; provided, however, that the
right to terminate this Agreement under this Section 9.1(c) shall not be
available to any party whose failure to fulfill any obligation under this
Agreement shall have been the cause of, or shall have resulted in, the failure
of the Closing to occur on or prior to such date;
     (d) by either Purchaser or Vestcom, on behalf of the Sellers, in the event
any Governmental Authority shall have issued an order, decree or ruling or taken
any other action restraining, enjoining or otherwise prohibiting the
transactions contemplated by this Agreement and such order, decree, ruling or
other action shall have become final and nonappealable; or
     (e) by the mutual written consent of the Purchaser and Vestcom, on behalf
of the Sellers.
     Section 9.2. Effect of Termination. In the event of termination of this
Agreement as provided in Section 9.1 above, this Agreement shall forthwith
become void and there shall be no liability on the part of either party hereto
except (a) with respect to any confidentiality obligation in Section 6.2 hereof
and Section 10.2 hereof and (b) that nothing herein shall relieve any party from
liability for any breach of this Agreement.
ARTICLE X
Miscellaneous
     Section10.1. Notices. All notices or other communications required or
permitted hereunder shall be in writing and shall be delivered personally, by
facsimile or sent by certified, registered or express air mail, postage prepaid,
and shall be deemed given when so delivered personally, or by facsimile, or if
mailed, five days after the date of mailing, as follows:

     
If to Sellers:
  Vestcom International, Inc.
 
  7304 Kanis Road
 
  Little Rock, Arkansas 72204
 
  Telephone: 501-663-0100
 
  Facsimile: 501-663-7999
 
  Attention: Steven Bardwell, President and CEO

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  And
 
   
 
  Cornerstone Equity Investors, LLC
 
  717 Fifth Avenue, Suite 1100
 
  New York, New York 10022
 
  Attention: Stephen L. Larson, Managing Director
 
   
 
  And
 
   
 
  Joel Cartun
 
  29 Hemlock Road
 
  Livingston, New Jersey 07039
 
   
With a copy to:
  Lowenstein Sandler PC
 
  65 Livingston Avenue
 
  Roseland, New Jersey 07068
 
  Telephone: 973-597-2398
 
  Facsimile: 973 597-2399
 
  Attention: Laura R. Kuntz, Esq.
 
   
If to Purchaser:
  Bowne & Co., Inc.
 
  345 Hudson Street
 
  New York, NY 10014
 
  Telephone: 212-924-5500
 
  Facsimile: 212-229-3149
 
  Attention: General Counsel
 
   
With a copy to:
  Simpson Thacher & Bartlett LLP
 
  425 Lexington Avenue
 
  New York, NY
 
  Telephone: 212-455-2000
 
  Facsimile: 212-455-2502
 
  Attention: Vincent Pagano, Jr., Esq.

or to such other address as any party hereto shall notify the other parties
hereto (as provided above) from time to time.
     Section 10.2. Expenses. Regardless of whether the transactions provided for
in this Agreement are consummated, except as otherwise provided herein, the
Purchaser, on the one hand, and the Sellers, on the other hand, shall each pay
their own expenses incident to this Agreement and the transactions contemplated
herein.
     Section 10.3. Governing Law; Consent to Jurisdiction; Waiver of Trial by
Jury. This Agreement shall be governed by, and construed in accordance with,

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the internal laws of the State of New York. Each of the parties hereto
irrevocably submits to the non-exclusive jurisdiction of the state and federal
courts of the State of New York, for the purpose of any suit, action, proceeding
or judgment relating to or arising out of this Agreement and the transactions
contemplated hereby. Service of process in connection with any such suit, action
or proceeding may be served on each party hereto anywhere in the world by the
same methods as are specified for the giving of notices under this Agreement.
Each of the parties hereto irrevocably consents to the jurisdiction of any such
court in any such suit, action or proceeding and to the laying of venue in such
court. Each party hereto irrevocably waives any objection to the laying of venue
of any such suit, action or proceeding brought in such courts and irrevocably
waives any claim that any such suit, action or proceeding brought in any such
court has been brought in an inconvenient forum. EACH PARTY HERETO WAIVES TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN CONNECTION WITH ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF,
UNDER OR IN CONNECTION WITH THIS AGREEMENT.
     Section 10.4. No Assignment; Successors and Assigns; No Third Party Rights.
This Agreement may not be assigned by operation of law or otherwise, and any
attempted assignment shall be null and void, except that any Seller may assign
any of its rights and obligations hereunder to any other Seller or to any
Affiliate of any Seller. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors, permitted assigns
and legal representatives. This Agreement shall be for the sole benefit of the
parties to this Agreement and their respective successors, permitted assigns and
legal representatives and is not intended, nor shall it be construed, to give
any Person, other than the parties hereto and their respective successors,
permitted assigns and legal representatives, any legal or equitable right,
remedy or claim hereunder.
     Section 10.5. Counterparts; Facsimile. This Agreement may be executed in
counterparts, each of which shall be deemed an original agreement, but all of
which together shall constitute one and the same instrument. This Agreement may
be executed by facsimile signature.
     Section 10.6. Titles and Headings. The headings in this Agreement are for
reference purposes only, and shall not in any way affect the meaning or
interpretation of this Agreement.
     Section 10.7. Entire Agreement. This Agreement, including the Schedules and
Exhibits attached hereto, constitutes the entire agreement among the parties
with respect to the matters covered hereby and supersedes all previous written,
oral or implied understandings among them with respect to such matters.

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     Section 10.8. Amendment and Modification. This Agreement may only be
amended or modified in writing signed by the party against whom enforcement of
such amendment or modification is sought.
     Section 10.9. Public Announcement. Except as may be required by law, none
of the parties shall issue any press release or otherwise publicly disclose this
Agreement or the transactions contemplated hereby or any dealings between or
among the parties in connection with the subject matter hereof without the prior
approval of the other, which will not be unreasonably withheld.
     Section 10.10. Waiver. Any of the terms or conditions of this Agreement may
be waived at any time by the party or parties entitled to the benefit thereof,
but only by a writing signed by the party or parties waiving such terms or
conditions.
     Section 10.11. Severability. The invalidity of any portion hereof shall not
affect the validity, force or effect of the remaining portions hereof. If it is
ever held that any restriction hereunder is too broad to permit enforcement of
such restriction to its fullest extent, such restriction shall be enforced to
the maximum extent permitted by law.
     Section 10.12. No Strict Construction. Each of the parties to this
Agreement acknowledges that this Agreement has been prepared jointly by the
parties hereto, and shall not be strictly construed against any party.

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     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.

              VECTOR INVESTMENT HOLDINGS, INC.
 
       
 
  By:    
 
       
 
  Name:    
 
       
 
  Title:    
 
       
 
            VESTCOM INTERNATIONAL, INC.
 
       
 
  By:    
 
       
 
  Name:    
 
       
 
  Title:    
 
       
 
            VESTCOM MID-ATLANTIC, INC.
 
       
 
  By:    
 
       
 
  Name:    
 
       
 
  Title:    
 
       
 
            VESTCOM NEW CENTURY, LLC     By: Vestcom Mid-Atlantic, Inc., its
sole member
 
       
 
  By:    
 
       
 
  Name:    
 
       
 
  Title:    
 
       
 
            VESTCOM WISCONSIN, INC.
 
       
 
  By:    
 
       
 
  Name:    
 
       
 
  Title:    
 
       
 
            ELECTRONIC IMAGING SERVICES, INC.
 
       
 
  By:    
 
       
 
  Name:    
 
       
 
  Title:    
 
       

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              VESTCOM MASSACHUSETTS, INC.
 
       
 
  By:    
 
       
 
  Name:    
 
       
 
  Title:    
 
       
 
            VESTCOM NORTHWEST, INC.
 
       
 
  By:    
 
       
 
  Name:    
 
       
 
  Title:    
 
       
 
            LIRPACO INC.
 
       
 
  By:    
 
       
 
  Name:    
 
       
 
  Title:    
 
       
 
            COS INFORMATION INC.
 
       
 
  By:    
 
       
 
  Name:    
 
       
 
  Title:    
 
       
 
            504087 N.B. INC.
 
       
 
  By:    
 
       
 
  Name:    
 
       
 
  Title:    
 
       
 
            3013439 NOVA SCOTIA COMPANY
 
       
 
  By:    
 
       
 
  Name:    
 
       
 
  Title:    
 
       

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              VESTCOM ONTARIO INC.
 
       
 
  By:    
 
       
 
  Name:    
 
       
 
  Title:    
 
       
 
            BOWNE ENTERPRISE SOLUTIONS, LLC
 
       
 
  By:    
 
       
 
  Name:    
 
       
 
  Title:    
 
       
 
            BOWNE OF CANADA, LTD.
 
       
 
  By:    
 
       
 
  Name:    
 
       
 
  Title:    
 
       
 
            BOWNE MBC, LLC
 
       
 
  By:    
 
       
 
  Name:    
 
       
 
  Title:    
 
       

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SCHEDULE 2.1
SELLERS/PURCHASERS
     Each Seller is selling its respective Purchased Assets to the Purchaser and
the Purchaser is purchasing such Purchased Assets and assuming the Assumed
Liabilities of each Seller as follows:

      Seller   Purchaser
Vestcom Mid-Atlantic, Inc.
  Bowne Enterprise Solutions, LLC
Lirpaco Inc.
  Bowne of Canada, Ltd.
COS Information Inc.
  Bowne of Canada, Ltd.
504087 N.B. Inc.
  Bowne of Canada, Ltd.
3013439 Nova Scotia Company
  Bowne of Canada, Ltd.
Vestcom Ontario Inc.
  Bowne of Canada, Ltd.
Vestcom International, Inc.
  Bowne MBC, LLC
Vestcom New Century, LLC
  Bowne MBC, LLC
Vestcom Wisconsin, Inc.
  Bowne MBC, LLC
Electronic Imaging Services, Inc.
  Bowne MBC, LLC
Vestcom Massachusetts, Inc.
  Bowne MBC, LLC
Vestcom Northwest, Inc.
  Bowne MBC, LLC

 

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EXHIBIT A
TARGETED WORKING CAPITAL CALCULATION

              9/30/05  
CURRENT WORKING CAPITAL ASSETS:
       
 
       
Net Accounts Receivable
  $ 11,187,538  
Postage Receivable
    422,219  
Supplies Inventory
    2,192,834  
Prepaid Postage
    771,405  
Prepaid Expenses/Other Current Assets
    901,040  
 
     
Total Current Working Capital Assets
  $ 15,475,036  
 
       
CURRENT WORKING CAPITAL LIABILITIES:
       
 
       
Accounts Payable
  $ 4,808,078  
Accrued Expenses
    3,454,435  
Advanced Postage
    3,536,624  
Other Current Liabilities
    181,053  
 
     
Total Current Working Capital Liabilities
  $ 11,980,190  
 
       
Total Working Capital Amount
  $ 3,494,846  
 
     

 

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EXHIBIT B
TRANSITION SERVICES AGREEMENT

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EXHIBIT C
DEFINITION OF MBC BUSINESS
Overview
     Vestcom Marketing and Business Communications (“MBC” or the “Division”), a
division of Vestcom International, Inc. (“Vestcom” or the “Company”), is a
leading provider of outsourced business communications and marketing services to
the financial services; insurance; and travel, leisure, and gaming industries in
the United States and Canada. Many of North America’s most respected companies
trust MBC to provide accurate, timely delivery of business-critical documents to
their customers and prospects. The Division’s service offering combines design,
production, and distribution capabilities to provide a full range of
transactional printing, mailing, and document management services. Additionally,
MBC provides its customers an integrated offering of one-to-one marketing
communications by combining advanced data management skills, gained from its
history of leadership in transactional printing, with extensive digital printing
and document fulfillment capabilities. Headquartered in West Caldwell, New
Jersey, the Division operates in two principal segments: Transactional Print and
Mail (“Print and Mail”) and Variable Data Print on Demand (“Print on Demand” or
“POD”).
     Transactional Print and Mail — The Division’s Print and Mail segment works
closely with its customers to design, develop, and produce high quality
financial communications. MBC’s transactional products include monthly and
quarterly statements, invoices, bills, trade confirmations, tax documents, and
other compliance communications. The time-sensitive nature of these services
requires the Division to partner with its customers to ensure accurate, timely
transfer of individual account data. In many cases, MBC is directly connected to
the customers’ databases through secure digital circuits or over wide area
networks. These close working relationships allow the Division to complete
statement production within 48 hours of data receipt in many cases. Further,
through a nationwide distributed network of printing facilities, MBC is able to
deliver consistent, informative documents to approximately 95% of the United
States in two business days or less. MBC’s two largest financial services
customers have been with the Division for over a decade and are representative
of MBC’s long-term partnerships with its customers.
     Variable Data Print on Demand — The Division’s POD segment designs,
produces, and delivers high-end personalized marketing communications for
customers in the financial services; insurance; and travel, leisure, and gaming
industries. Print on Demand utilizes many of the same software tools and
technologies as the Transactional Print and Mail segment and adds web-to-print
interfaces, customer relationship management (“CRM”) program detail, and
four-color digital print capabilities to create highly customized
communications. As part of its service to customers, MBC tracks and analyzes
response rates and

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results, providing customers with detailed, actionable information often
utilized in subsequent programs. Demand for the Division’s POD services has
increased as MBC has demonstrated to its customers an ability to generate
response rates and returns on investment superior to alternative means of
communications.
     As a complement to the Division’s print on demand services, MBC provides
document fulfillment services, which combine personalized variable information
with static documents to produce customized kits and packages. Many of these
applications involve financial or insurance-related documents, which must be
customized to comply with differing state regulations and specific end user
preferences. These services are integral to the Division’s ability to act as a
one-stop shop in the digital print marketplace.
     Employees and Facilities — The Division operates its largest facility at
its headquarters in West Caldwell, New Jersey. Additionally, MBC has five other
facilities located in Milwaukee, Wisconsin; Montreal, Canada; Sacramento,
California; Seattle, Washington; and Wilmington, Massachusetts. All locations
are leased from unaffiliated third parties.

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