Exhibit 2.1
AGREEMENT AND PLAN OF MERGER Dated as of July 21, 2004 Among FUSION ACQUISITION LLC AHC MERGER, INC. And AHC I ACQUISITION CORP.
TABLE OF CONTENTS Page ARTICLE I THE MERGER....................................................2 The Certificate of Designations Amendment and the Merger............................................2 Closing...............................................2 Effective Time........................................2 Effects of the Merger.................................2 Certificate of Incorporation and By-laws..............3 Directors.............................................3 Officers..............................................3
SECTION 1.01. SECTION 1.02. SECTION 1.03. SECTION 1.04. SECTION 1.05. SECTION 1.06. SECTION 1.07. ARTICLE II
EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES AND THE COMPANY STOCK OPTIONS.................................3 Effect on Capital Stock...............................3
SECTION 2.01.
SECTION 2.02. SECTION 2.03. SECTION 2.04. ARTICLE III
Exchange of Certificates..............................5 Company Stock Options.................................7 Closing Date and Post-Closing Merger Consideration Adjustment..............................7
REPRESENTATIONS AND WARRANTIES OF THE COMPANY................10 Organization, Standing and Corporate Power...........10 Capital Structure....................................10 Authority; Noncontravention..........................11 Governmental Approvals...............................12 Litigation...........................................12 Compliance with Laws; Permits........................13 Affiliate Transactions...............................13 Subsidiaries.........................................14 No Brokers...........................................14 SEC Reports; Financial Statements....................14 Undisclosed Liabilities..............................15
SECTION 3.01. SECTION 3.02. SECTION 3.03. SECTION 3.04. SECTION 3.05. SECTION 3.06. SECTION 3.07. SECTION 3.08. SECTION 3.09. SECTION 3.10. SECTION 3.11.
TABLE OF CONTENTS (continued) Page SECTION 3.12. SECTION 3.13. SECTION 3.14. SECTION 3.15. SECTION 3.16. SECTION 3.17. SECTION 3.18. SECTION 3.19. SECTION 3.20. Intellectual Property................................15 Contracts and Commitments............................16 Employee Benefits....................................16 Absence of Certain Changes...........................18 Taxes................................................21 Insurance............................................23 Environmental Matters................................24 Real Property........................................25 Labor Relations......................................27
SECTION 3.21. SECTION 3.22. SECTION 3.23. ARTICLE IV
Inventories; Receivables; Payables...................27 Customers, Suppliers and Sales Representatives.......28 No Other Representations or Warranties...............28
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB......28 Organization, Standing and Corporate Power...........28 Authority; Noncontravention..........................28 Governmental Approvals...............................29 Litigation...........................................29 Brokers and Other Advisors...........................30 Interim Operations of Merger Sub.....................30
SECTION 4.01. SECTION 4.02. SECTION 4.03. SECTION 4.04. SECTION 4.05. SECTION 4.06. ARTICLE V
COVENANTS RELATING TO CONDUCT OF BUSINESS....................30 Conduct of Business..................................30
SECTION 5.01. ARTICLE VI
ADDITIONAL AGREEMENTS........................................33 Section 262 Notice and Information Statement; Section 228(e) Notice................................33 Access to Information; Confidentiality...............33 Efforts..............................................34 Indemnification, Exculpation and Insurance...........34 Cooperation..........................................35 Fees and Expenses....................................36 ii
SECTION 6.01. SECTION 6.02. SECTION 6.03. SECTION 6.04. SECTION 6.05. SECTION 6.06.
TABLE OF CONTENTS (continued) Page SECTION 6.07. SECTION 6.08. SECTION 6.09. Public Announcements.................................37 Stock Option Plan....................................37 Further Assurances...................................37
SECTION 6.10. SECTION 6.11. ARTICLE VII
Termination of Affiliate Arrangements................37 Equity Commitment....................................37
CONDITIONS PRECEDENT.........................................37 Conditions to Each Party's Obligation to Effect the Merger....................................37 Conditions to Obligations of Parent and Merger Sub...........................................38 Conditions to Obligations of the Company.............39 Frustration of Closing Conditions....................39 Documents to be Delivered by the Company.............39 Documents to be Delivered by Parent and Merger Sub...........................................39
SECTION 7.01. SECTION 7.02. SECTION 7.03. SECTION 7.04. SECTION 7.05. SECTION 7.06.
ARTICLE VIII TERMINATION, AMENDMENT AND WAIVER............................40 SECTION 8.01. SECTION 8.02. SECTION 8.03. SECTION 8.04. ARTICLE IX Termination..........................................40 Effect of Termination................................40 Amendment............................................40 Extension; Waiver....................................40
GENERAL PROVISIONS...........................................41 Nonsurvival..........................................41 Remedies; Specific Enforcement.......................41 Notices..............................................41 Definitions..........................................43 Interpretation.......................................44 Counterparts.........................................44 Entire Agreement; Third-Party Beneficiaries..........45 Governing Law........................................45 Assignment...........................................45 Consent to Jurisdiction..............................45 iii
SECTION 9.01. SECTION 9.02. SECTION 9.03. SECTION 9.04. SECTION 9.05. SECTION 9.06. SECTION 9.07. SECTION 9.08. SECTION 9.09. SECTION 9.10.
TABLE OF CONTENTS (continued) Page SECTION 9.11. SECTION 9.12. SECTION 9.13. Waiver of Jury Trial.................................45 No Recourse..........................................45 Severability.........................................45
EXHIBIT A - Contribution Agreement EXHIBIT B - Certificate of Designations Amendment iv Table of Defined Terms ---------------------Term ---Affiliate...................................................... Affiliate Agreement............................................ Agreement...................................................... AKI............................................................ Appraisal Shares............................................... Business Day................................................... Certificate.................................................... Certificate of Designations.................................... Certificate of Designations Amendment.......................... Certificate of Merger.......................................... Closing........................................................ Closing Date................................................... Closing Working Capital........................................ Code........................................................... Company........................................................ Company By-laws................................................ Company Cash................................................... Company Certificate............................................ Company Common Stock........................................... Company Disclosure Schedule.................................... Company Indebtedness........................................... Company Preferred Stock........................................ Company Real Property.......................................... Company Stock Options.......................................... Company Stock Plan............................................. Confidential Information....................................... Section ------9.04(a) 3.07 Preamble 2.01(c) 2.01(d) 9.04(b) 2.01(c) 1.01 1.01 1.03 1.02 1.02 2.04(f) 2.02(f) Preamble 3.03(b) 2.01(c) 3.03(b) 2.01 Article III 2.01(c) 1.01(a) 3.19(a) 3.02 2.03 6.02(b)
Contract....................................................... Contribution Agreement......................................... Credit Facility................................................ Debt Tender Offer.............................................. DGCL........................................................... Effective Time................................................. Environmental Claims........................................... Environmental Laws............................................. Environmental Liabilities...................................... ERISA.......................................................... Estimated Working Capital...................................... Estimated Working Capital Statement............................ Exchange Act................................................... Financial Statements........................................... Former Company Real Property................................... GAAP........................................................... Table of Defined Terms ---------------------Term ---Governmental Authority......................................... Hazardous Substances........................................... HSR Act........................................................ Independent Accounting Firm.................................... Intellectual Property.......................................... IRS............................................................ JHC............................................................ Knowledge...................................................... Laws........................................................... Leased Real Property........................................... Liens.......................................................... Material Adverse Effect........................................ Merger......................................................... Merger Consideration........................................... Merger Sub..................................................... Multi-Employer Plan............................................ Objection Notice............................................... Objection Period............................................... Owned Real Property............................................ Parent......................................................... Payment Fund................................................... Per Share Merger Consideration................................. Permits........................................................ Permitted Exceptions........................................... person......................................................... PIK Notes...................................................... Plans.......................................................... Real Property Leases........................................... Restraints..................................................... SEC............................................................
9.04(c) Recitals 2.01(c) 6.05 1.01 1.03 3.18(a)(v) 3.18(d)(i) 3.18(d)(ii) 3.14(a) 2.04(b) 2.04(b) 9.04(d) 3.10(b) 3.18(d)(iii) 2.01(c)
Section ------9.04(e) 3.18(d)(iv) 3.04 2.04(e) 3.12 3.16(b) Preamble 9.04(f) 3.03(b) 3.19(a) 9.04(g) 9.04(h) Recitals 2.01(c) Preamble 3.14(d) 2.04(d) 2.04(d) 3.19(a) Preamble 2.02(a) 2.01(c) 3.06(b) 3.19(e) 9.04(i) 2.01(c) 3.14(a) 3.19(a) 7.01(b) 3.10(a)
SEC Reports.................................................... Section 262.................................................... Securities Act................................................. Senior Notes................................................... Stockholder Approvals.......................................... Stockholder Representative..................................... Subsidiary..................................................... Subsidiary Shares.............................................. Surviving Corporation.......................................... Surviving Corporation Representative........................... Target Working Capital......................................... Tax............................................................ vi Table of Defined Terms ---------------------Term ---Tax Returns.................................................... Title IV Plan.................................................. Transaction Expenses........................................... Transactions................................................... VHH............................................................ VHH Merger Agreement........................................... WC Difference.................................................. Working Capital................................................ Working Capital Escrow Amount.................................. Working Capital Statement...................................... vii AGREEMENT AND PLAN OF MERGER
3.10(a) 2.01(d) 9.04(j) 2.01(c) Recitals 2.04(a) 9.04(k) 3.08(b) 1.01(b) 2.04(a) 2.01(c) 3.16
Section ------3.16 3.14(d) 6.06 Recitals Recitals Recitals 2.04(g) 2.04(f) 2.02(a) 2.04(c)
This AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of July 21, 2004, is among FUSION ACQUISITION LLC, a Delaware limited liability company ("Parent"), AHC MERGER, INC., a Delaware corporation and a wholly-owned Subsidiary of Parent ("Merger Sub"), and AHC I ACQUISITION CORP., a Delaware corporation (the "Company"). WHEREAS, the Board of Directors of each of Merger Sub and the Company has approved and declared advisable, and the Board of Directors of Parent has approved, this Agreement and the merger of Merger Sub with and into the Company (the "Merger"), upon the terms and subject to the conditions set forth in this Agreement.
WHEREAS, the Board of advisable the Certificate described below.
Directors of the Company has approved and declared of Designations Amendment as defined and furth er
WHEREAS, the holders of a majority of the outstanding shares of Company Common Stock and Company Preferred Stock have executed a written consent approving and adopting this Agreement, and the holders of a majority of the outstanding shares of Company Preferred Stock have executed a written consent approving and adopting the Certificate of Designations Amendment (the "Stockholder Approvals"). WHEREAS, concurrently herewith, Parent has entered into that certain Agreement and Plan of Merger, dated as of even date herewith, among Parent, VHH Merger, Inc. and Von Hoffmann Holdings Inc. ("VHH"), pursuant to which VHH Merger, Inc. will merge with and into VHH (the "VHH Merger Agreement"). WHEREAS, concurrently herewith, Parent has entered into that certain Contribution Agreement among Parent and Jostens Holding Corp. ("JHC") (the "Contribution Agreement") substantially in the form attached hereto as Exhibit A. WHEREAS, the transactions contemplated by this Agreement, the VHH Merger Agreement and the Contribution Agreement are collectively referred to herein as the "Transactions"). WHEREAS, Parent, Merger Sub and the Company desire to make certain representations, warranties, covenants and agreements in connection with the Merger and also to prescribe various conditions to the Merger. NOW, THEREFORE, in consideration of the representations, warranties, covenants and agreements contained in this Agreement, the parties hereto agree as follows: 1 ARTICLE I THE MERGER SECTION 1.01 The Certificate of Designations Amendment and the Merger.
(a) Upon the terms and subject to the conditions set forth in this Agreement, as soon as is reasonably practicable after the date hereof, the Company shall file with the Secretary of State of the State of Delaware a Certificate of Amendment to the Certificate of Designations, Rights and Preferences (the "Certificate of Designations") of the 15% Senior Preferred Stock, par value $0.01 per share, of the Company ("Company Preferred Stock") effecting the amendment to the Certificate of Designations set forth on Exhibit B hereto (such amendment, the "Certificate of Designations Amendment") (which Certificate of Amendment shall provide for the effectiveness of the Certificate of Designations Amendment upon the filing of such Certificate of Amendment).
(b) Upon the terms and subject to the conditions set forth in this Agreement and in accordance with the General Corporation Law of the State of Delaware (the "DGCL"), Merger Sub shall be merged with and into the Company at the Effective Time. Following the Effective Time, the separate corporate existence of Merger Sub shall cease, and the Company shall continue as the surviving corporation in the Merger (the "Surviving Corporation") and shall succeed to and assume all the rights and obligations of Merger Sub in accordance with the DGCL. SECTION 1.02 Closing. The closing of the Merger (the "Closing") will take place at 10:00 a.m. on a date to be specified by the parties (the "Closing Date"), which shall be no later than the tenth day after satisfaction or waiver of the conditions set forth in Article VII (other than those conditions that by their terms are to be satisfied at the Closing, but subject to the satisfaction or waiver of those conditions), at the offices of Weil, Gotshal & Manges LLP, 767 Fifth Avenue, New York, New York 10153, unless another date or place is agreed to by the parties hereto. SECTION 1.03 Effective Time. Subject to the provisions of this Agreement, as soon as practicable on the Closing Date, the parties shall file a certificate of merger (the "Certificate of Merger") executed in accordance with the relevant provisions of the DGCL and, as soon as practicable on or after the Closing Date, shall make all other filings or recordings required under the DGCL. The Merger shall become effective at such time as the Certificate of Merger is duly filed with the Secretary of State of the State of Delaware, or at such other time as Parent and the Company shall agree and shall specify in the Certificate of Merger (the time the Merger becomes effective being the "Effective Time"). SECTION 1.04 Effects of the Merger. forth in Section 259 of the DGCL. 2 SECTION 1.05 Certificate of Incorporation and By-laws. (a) The Certificate of Incorporation of the Surviving Corporation shall be the Certificate of Incorporation of the Company in effect immediately prior to the Effective Time until thereafter changed or amended as provided therein and by applicable Law. (b) The By-laws of the Surviving Corporation shall be the By-laws of the Company in effect immediately prior to the Effective Time until thereafter changed or amended as provided therein and by applicable Law. SECTION 1.06 Directors. The directors of Merger Sub immediately prior to the Effective Time shall be the directors of the Surviving Corporation until the earlier of their resignation or removal or until their respective successors are duly elected and qualified, as the case may be. SECTION 1.07 Officers. The officers of the Company immediately prior to the Effective Time shall be the officers of the Surviving Corporation, until the The Merger shall have the effects set
earlier of their resignation or removal or until their respective successors are duly elected and qualified, as the case may be. ARTICLE II EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES AND THE COMPANY STOCK OPTIONS SECTION 2.01 Effect on Capital Stock. As of the Effective Time, by virtue of the Merger and without any action on the part of the holders of any shares of common stock, par value $0.01 per share, of the Company ("Company Common Stock"), any shares of Company Preferred Stock or any shares of capital stock o f Merger Sub: (a) Capital Stock of Merger Sub. Each issued and outstanding share of capital stock of Merger Sub shall be converted into and become one validly issued, fully paid and nonassessable share of common stock, par value $0.01 pe r share, of the Surviving Corporation. (b) Cancellation of Company Common Stock and Treasury Stock. Each share of Company Common Stock shall automatically be canceled and retired and shall cease to exist, and no consideration shall be delivered in exchange therefor. Each share of Company Preferred Stock that is owned by the Company shall automatically be canceled and retired and shall cease to exist, and no consideration shall be delivered in exchange therefor. (c) Conversion of Company Preferred Stock. Each issued and outstanding share of Company Preferred Stock other than the Appraisal Shares) shall be converted into the right to receive an amount in cash, without interest, equal to the Merger Consideration divided by the number of shares of Company Preferred Stock 3 issued and outstanding immediately prior to the Effective Time (other than shares to be canceled in accordance with Section 2.01(b)) (the "Per Share Merger Consideration"). At the Effective Time, all such shares of Company Preferred Stock shall no longer be outstanding and shall automatically be canceled and retired and shall cease to exist, and each holder of a certificate which immediately prior to the Effective Time represented any such shares of Company Preferred Stock (each, a "Certificate") shall cease to have any rights with respect thereto, except the right to receive the Per Share Merger Consideration with respect to such shares. The Merger Consideration to be received by any holder of Company Preferred Stock will be reduced by any outstanding amounts owing by such holder to the Company pursuant to any loans or advances, to the extent not repaid prior to the Closing Date. "Merger Consideration" means an amount equal to (a) $250,000,000 plus (b) the aggregate amount of Transaction Expenses actually paid by the Company prior to the determination of Company Cash minus (c) the aggregate
amount of all Company Indebtedness net of Company Cash minus (d) an amount not to exceed $2,000,000 to be determined by the Board of Directors of the Company or a committee thereof for transaction success or retention bonuses to be paid to employees of the Company minus (e) a transaction advisory fee in the amount of $2,000,000 to be paid to DLJ Merchant Banking II, Inc. minus (f) any amount payable to Renaissance Brands LLC as set forth in Section 3.07(iii) of the Company Disclosure Schedule plus (g) the amount, if any, by which the Closing Working Capital exceeds $16,292,000 (the "Target Working Capital") minus (h) the amount, if any, by which the Target Working Capital exceeds the Closing Working Capital. "Company Cash" means, collectively, the aggregate amount held as of the close of business on the day immediately preceding the Closing Date by the Company and its Subsidiaries in cash, cash equivalents and other liquid short-term investments, minus any unpaid checks, drafts and wire transfers issued on or prior to the close of business on the day immediately preceding the Closing Date. "Company Indebtedness" means, collectively, as of the close of business on the day immediately preceding the Closing Date, (i) all amounts, including accrued but unpaid interest, required to repay, redeem or repurchase (by tender offer or otherwise), whether prior to, at or following the Closing, the Company's Floating Rate Exchangeable PIK Notes due 2009 (the "PIK Notes") and AKI's 10.5% Senior Notes due 2008 (the "Senior Notes"), and all costs and expenses arising from or relating thereto including any termination or prepayment penalties, repayment or redemption premiums or consent solicitation costs (including related fees and expenses of counsel, advisors, consultants, investment bankers, dealer managers, actuaries, auditors and accountants in connection with such repayments, redemptions or repurchases, including such tender offers and consent solicitations), and (ii) all amounts outstanding under the Credit Agreement, dated December 18, 2001, among AKI, Inc. ("AKI"), as borrower, Heller Financial, Inc., as agent, issuing lender and a lender and the lenders party thereto, as amended (the "Credit Facility") and all costs and expenses arising from 4 or relating thereto, including any accrued and unpaid interest and any termination or prepayment penalties, (iii) any other indebtedness for borrowed money (including any notes, bonds, debentures, drawn letters of credit or similar instruments or obligations but excluding any undrawn letters of credit) of the Company outstanding, in each case including accrued and unpaid interest and any termination or prepayment penalties or premiums relating thereto, and (v) the amount of all obligations of the Company under leases required to be capitalized in accordance with generally accepted accounting principles in the United States as of the date hereof ("GAAP") that would be required to be set forth as a liability on a balance sheet prepared in accordance with GAAP. (d) Appraisal Rights. Notwithstanding anything in this Agreement to the contrary, shares (the "Appraisal Shares") of Company Common Stock and Company
Preferred Stock issued and outstanding immediately prior to the Effective Time that are held by any holder who is entitled to demand and properly demands appraisal of such shares pursuant to, and who complies in all respects with, the provisions of Section 262 of the DGCL ("Section 262") shall be entitled to payment of the fair value of such shares in accordance with the provisions of Section 262. At the Effective Time, all Appraisal Shares shall no longer be outstanding and shall automatically be canceled and shall cease to exist, and each holder of Appraisal Shares shall cease to have any rights with respect thereto, except the right to receive the fair value of such Appraisal Shares in accordance with the provisions of Section 262. Notwithstanding the foregoing, if any such holder shall fail to perfect or otherwise shall waive, withdraw or lose the right to appraisal under Section 262 or a court of competent jurisdiction shall determine that such holder is not entitled to the relief provided by Section 262, then the right of such holder to be paid the fair value of such holder's Appraisal Shares under Section 262 shall cease and such Apprais al Shares shall be deemed to have been canceled and retired at the Effective Time as provided in Section 2.01(b) or converted at the Effective Time as provided in Section 2.01(c). The Company shall serve prompt notice to Parent of any demands for appraisal of any shares of Company Common Stock or Company Preferred Stock, and Parent shall have the right to participate in all negotiations and proceedings with respect to such demands. Prior to the Effective Time, the Company shall not, without the prior written consent of Parent, make any payment with respect to, or settle or offer to settle, any such demands, or agree to do any of the foregoing. SECTION 2.02 Exchange of Certificates. (a) At the Closing, Parent will contribute to the Surviving Corporation, by wire transfer of immediately available funds denominated in U.S. dollars to the account designated in writing to Parent by the Company prior to the Closing, an amount in cash equal to the Merger Consideration determined based on the Estimated Working Capital Statement (such amount, the "Payment Fund"). The Surviving Corporation shall, pursuant to irrevocable instructions, pay, at the Closing, the Merger Consideration payable to each holder of Company Pref erred Stock, determined based upon the Estimated Working Capital Statement, less the Working Capital Escrow Amount, in accordance with Section 2.01(c) out of the Payment Fund. The Surviving Corporation shall deposit $5,000,000 (the "Working Capital Escrow Amount") with an 5 escrow agent and pursuant to an escrow agreement, each to be agreed upon by the parties hereto, and any adjustment as determined pursuant to Section 2.04 shall be applied against the Working Capital Escrow Amount. (b) Exchange Procedures. As soon as reasonably practicable after the date hereof, the Surviving Corporation shall mail to each holder of record of a Certificate (i) a form of letter of transmittal (which shall specify that delivery shall be effected, and risk of loss and title to the Certificates shall pass, only upon delivery of the Certificates to the Surviving Corporation and which shall be in such form (including representations and warranties) as Parent and the Company may reasonably agree to use) and (ii) instructions for use in
surrendering the Certificates in exchange for the Merger Consideration. At the Effective Time, the Surviving Corporation shall pay to each holder of Com pany Preferred Stock that has delivered to the Surviving Corporation at the Closing a Certificate and a Letter of Transmittal the amount of cash into which the shares of Company Preferred Stock formerly represented by such Certificate shall have been converted pursuant to Section 2.01(c), and the Certificate so surrendered shall forthwith be canceled. In the event of a transfer of ownership of shares of Company Preferred Stock that is not registered in the transfer records of the Company, the proper amount of cash may be paid in exchange therefor to a person other than the person in whose name the Certificate so surrendered is registered if such Certificate shall be properly endorsed or otherwise be in proper form for transfer and the person requesting such issuance shall pay any transfer or other taxes required by reason of the payment to a person other than the registered holder of such Certificate or establish to the reasonable satisfaction of the Surviving Corporation that such tax has been paid or is not applicable. Until surrendered as contemplated by this Section 2.02(b), each Certificate shall be deemed at any time after the Effective Time to represent only the right to receive upon such surrender the Merger Consideration. No interest will be paid or will accrue on the cash payable upon surrender of any Certificate. (c) No Further Ownership Rights in Company Preferred Stock. All cash paid upon the surrender of Certificates in accordance with the terms of this ARTICLE II shall be deemed to have been in full satisfaction of all rights pertaining to the shares of Company Preferred Stock previously represented by such Certificates. At the close of business on the day on which the Effective Time occurs, the st