-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, KqYf5sEQurLoL9b+bkDxXARCxH9jZ2Zh6cVDyW6Slg9ABL71/yy5LHnvvxQwri0S dudly6LpUxAHzDFo6KRg1w== 0000950135-96-002475.txt : 19960605 0000950135-96-002475.hdr.sgml : 19960605 ACCESSION NUMBER: 0000950135-96-002475 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 19960520 ITEM INFORMATION: Acquisition or disposition of assets ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19960604 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: NASHUA CORP CENTRAL INDEX KEY: 0000069680 STANDARD INDUSTRIAL CLASSIFICATION: CONVERTED PAPER & PAPERBOARD PRODS (NO CONTAINERS/BOXES) [2670] IRS NUMBER: 020170100 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-05492 FILM NUMBER: 96576653 BUSINESS ADDRESS: STREET 1: 44 FRANKLIN ST STREET 2: PO BOX 2002 CITY: NASHUA STATE: NH ZIP: 03061-2002 BUSINESS PHONE: 6038802323 MAIL ADDRESS: STREET 1: 44 FRANKLIN STREET STREET 2: P O BOX 2002 CITY: NASHUA STATE: NH ZIP: 03061-2002 8-K 1 NASHUA CORPORATION 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 MAY 20, 1996 ------------------------------------------------ Date of Report (Date of earliest event reported) NASHUA CORPORATION ---------------------------------------------------- (Exact name of registrant as specified in its charter) Delaware 1-5492-1 02-0170100 - ------------- ----------- ------------------ (State of (Commission (I.R.S. Employer Incorporation) File Number) Identification No.) 44 Franklin Street P.O. Box 2002 Nashua, New Hampshire 03061-2002 ---------------------------------------------------- (Address of principal executive offices) (603) 880-2323 ---------------------------------------------------- (Registrant's telephone number, including area code) 2 ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS On May 20, 1996, the Company completed the sale of its Tape Products Division, a division which manufactures and sells tape products, such as duct tape and masking tape for various industrial and consumer uses, to The Kendall Company and received $28 million for the division's net assets. Chemical Securities, Inc. assisted Nashua with bid solicitation from several prospective buyers. On May 24, the Company and its indirect wholly-owned subsidiary Cerion Technologies Inc. ("Cerion"), a manufacturer of precision-machined aluminum disk substrates for use in computer storage devices, completed the initial public stock offering of 3,840,000 shares of common stock, of which 2,225,000 shares were offered by Nashua and 1,615,000 shares by Cerion. In conjunction with the offering, the underwriter exercised its over-allotment option and purchased 576,000 additional shares of Cerion's common stock from Nashua. The initial public offering price of Cerion Technologies common stock was $13 per share. The initial public offering price was determined by negotiations among the company, Cerion and William Blair and Company L.L.C., as representative of the underwriters. As a result of the sale by Nashua of the original 2,225,000 shares and the over-allotment of 576,000 shares, Nashua Corporation will receive approximately $36 million in gross proceeds. Nashua will continue to own 37 percent of Cerion's common stock. The Company has agreed that, subject to certain exceptions, for a period of 180 days following May 24, 1996, without the prior written consent of William Blair and Company L.L.C., it will not offer, sell, contract to sell, grant any option to purchase or otherwise dispose of any Cerion common stock or securities convertible or exchangeable into or exercisable for Cerion common stock or in any other manner transfer all or a portion of the economic consequences associated with the ownership of any such common stock, or file or cause to be filed any registration statement with the Securities and Exchange Commission related to any of the foregoing. Additionally, on May 31, 1996, Cerion Technologies repaid a $10 million note payable to Nashua. Approximately $57 million of the net proceeds from these transactions will be used for the repayment of debt. ITEM 7. PRO FORMA FINANCIAL INFORMATION AND EXHIBITS (A) Pro-Forma Financial Information 1. Unaudited Pro Forma Balance Sheet of Nashua Corporation as of March 29, 1996. 2. Unaudited Pro Forma Statements of Operations of Nashua Corporation for the year ended December 31, 1995 and for the three month period ended March 29, 1996. 3. Notes to Unaudited Pro Forma Financial Information. (B) Exhibits 1.1 Underwriting agreement dated May 23, 1996 between William Blair and Company, L.L.C. and Cerion Technologies, Nashua Corporation and Cerion Holdings, Inc. 2.1 Asset Purchase Agreement by and between Nashua Corporation and The Kendall Company dated as of April 17, 1996. 99.1 Promissory Note dated March 29, 1996 made by Cerion Technologies, Inc. to the Company. Exhibit to the Cerion Technology Inc. registration statement on Form S-1 (No. 333-02590) as amended dated April 26, 1996 incorporated herein by reference. 99.2 Press release, dated May 20, 1996, announcing completion of sale of Nashua Tape Division. 99.3 Press release, dated May 24, 1996, announcing commencement of initial public offering of Cerion common stock. 99.4 Press release, dated May 28, 1996, announcing underwriters' exercise of over allotment option for Cerion common stock. -2- 3 NASHUA CORPORATION UNAUDITED PRO FORMA FINANCIAL INFORMATION On May 20, 1996, the Company completed the sale of its Tape Products Division and received $28 million for the division's net assets. On May 24, the Company and Cerion Technologies Inc. completed the initial public stock offering of 3,840,000 shares of common stock, of which 2,225,000 shares were offered by Nashua and 1,615,000 shares by Cerion. In conjunction with the offering, the underwriter exercised its over-allotment option and purchased 576,000 additional shares of Cerion's common stock from Nashua. The initial public offering price of Cerion Technologies common stock was $13 per share. As a result of the sale by Nashua of the original 2,225,000 shares and the over-allotment of 576,000 shares, Nashua Corporation will receive approximately $36 million in gross proceeds. Nashua will continue to own 37 percent of Cerion's common stock. The Company has agreed that, subject to certain exceptions, for a period of 180 days following May 24, 1996, without prior written consent of William Blair and Company L.L.C., it will not offer, sell, contract to sell, grant any option to purchase or otherwise dispose of any Cerion common stock or securities convertible or exchangeable into or exercisable for Cerion common stock or in any other manner transfer all or a portion of the economic consequences associated with the ownership of any such common stock or file or cause to be filed any registration statement with the Securities and Exchange Commission relating to any of the foregoing. Additionally, on May 31, 1996, Cerion Technologies repaid a $10 million note payable to Nashua. A majority of the net proceeds from these transactions will be used for the repayment of debt. The Unaudited Pro Forma Statements of Operations for the three month period ended March 29, 1996 and the year ended December 31, 1995 include the historical results of Nashua. The historical results have been adjusted by giving effect to assumptions and adjustments as described in the accompanying Notes to Unaudited Pro Forma Financial Information, including adjustments to reflect the impact of the divestitures as though they had occurred at the beginning of each period presented. The Unaudited Pro Forma Balance Sheet as of March 29, 1996 has been prepared based on the balance sheet of Nashua as of March 29, 1996. The historical amounts have been adjusted to give effect to the divestitures as though the transactions had occurred as of the balance sheet date presented, as further described in the accompanying Notes to Unaudited Pro Forma Financial Information. In addition, the investment in Cerion Technologies has been presented using the equity method of accounting. The following unaudited pro forma financial information may not necessarily reflect the results of operations or the financial position of Nashua which would have actually resulted had the divestitures occurred as of the date and for the periods indicated, or of future earnings or the future financial position of the Company. The unaudited pro forma financial information should be read in conjunction with the accompanying Notes to Unaudited Pro Forma Financial Information and Nashua Corporation's Annual Report on Form 10-K as amended, and Nashua Corporation's Quarterly Report on Form 10-Q. -3- 4 NASHUA CORPORATION UNAUDITED PRO FORMA BALANCE SHEET AS OF MARCH 29, 1996 (IN THOUSANDS)
HISTORICAL PRO FORMA ---------- --------------------------------------------- Nashua Adjustments (Note 2) Nashua ------ ----------- -------- ------ ASSETS Current Assets Cash and cash equivalents $ 11,064 $ 11,154 [A][B] $ 22,218 Accounts receivable 30,990 (7,394) [B] 23,596 Inventories 15,937 (673) [B] 15,264 Other current assets 31,370 (11,109) [B][D] 20,261 Net current assets of discontinued operations 7,020 (7,020) [C] - -------- -------- -------- 96,381 (15,042) 81,339 Plant and equipment, net 68,138 (6,686) [B] 61,452 Other assets 52,704 6,879 [E] 59,583 Net non-current assets of discontinued operations 5,227 (5,227) [C] - -------- -------- -------- Total Assets $222,450 $(20,076) $202,374 ======== ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities Current maturities of long-term debt $ 8,375 $ (7,130) [F] $ 1,245 Accounts payable and accrued expenses 57,553 (4,295) [B] 53,258 Income taxes payable 4,588 7,652 [B][G] 12,240 -------- -------- -------- 70,516 (3,773) 66,743 Long-term debt 60,475 (49,919) [F] 10,556 Other long-term liabilities 19,352 - 19,352 -------- -------- -------- 79,827 (49,919) 29,908 Shareholders' Equity Common stock and additional capital 18,681 - 18,681 Retained earnings 59,529 33,616 [H] 93,145 Cumulative translation adjustment (5,352) - (5,352) Treasury stock, at cost (751) - (751) -------- -------- -------- 72,107 33,616 105,723 -------- -------- -------- Total Liabilities and Shareholders' Equity $222,450 $(20,076) $202,374 ======== ======== ========
See Accompanying Notes to Unaudited Pro Forma Financial Information. -4- 5 NASHUA CORPORATION UNAUDITED PRO FORMA STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1995 (IN THOUSANDS, EXCEPT PER SHARE DATA)
HISTORICAL PRO FORMA ---------- --------------------------------------------- Nashua Adjustments (Note 2) Nashua ------ ----------- -------- ------ Net Sales $452,196 $(27,530) [I] $424,666 Cost of products sold 336,037 (19,023) [I] 317,014 Selling, distribution and administrative expenses 105,977 (1,501) [I] 104,476 Research and development expenses 9,238 (739) [I] 8,499 Restructuring charges 16,247 - 16,247 Interest expense 5,532 (4,658) [I][J] 874 Interest and other income (686) - (686) Income from equity investment - (1,275) [K] (1,275) -------- -------- -------- Total costs and expenses 472,345 (27,196) 445,149 -------- -------- -------- Loss from continuing operations before income taxes (20,149) (334) (20,483) Income tax benefit (4,679) (196) [L] (4,875) -------- -------- -------- Loss from continuing operations (15,470) (138) (15,608) Income from discontinued operations, net of tax 739 (739) [M] - -------- -------- -------- Net loss $(14,731) $ (877) $(15,608) ======== ======== ======== Earnings per common and common equivalent share: Loss from continuing operations $ (2.43) $ (.02) $ (2.45) Income from discontinued operations .12 (.12) - -------- -------- -------- Net loss $ (2.31) $ (.14) $ (2.45) ======== ======== ======== Average outstanding common shares plus common equivalents 6,374 6,374 ======== ========
See Accompanying Notes to Unaudited Pro Forma Financial Information. -5- 6 NASHUA CORPORATION UNAUDITED PRO FORMA STATEMENT OF OPERATIONS THREE MONTH PERIOD ENDED MARCH 29, 1996 (IN THOUSANDS, EXCEPT PER SHARE DATA)
HISTORICAL PRO FORMA ---------- -------------------------------------------- Nashua Adjustments (Note 2) Nashua ------ ----------- -------- ------ Net Sales $101,497 $(11,774) [I] $89,723 Cost of products sold 75,297 (7,098) [I] 68,199 Selling, distribution and administrative expenses 26,420 (1,012) [I] 25,408 Research and development expenses 2,344 (320) [I] 2,024 Interest expense 1,539 (1,275) [I][J] 264 Interest and other income (122) - (122) Income from equity investment - (684) [K] (684) -------- -------- ------- Total costs and expenses 105,478 (10,389) 95,089 -------- -------- ------- Loss from continuing operations before income taxes (3,981) (1,385) (5,366) Income tax benefit (1,741) (588) [L] (2,329) -------- -------- ------- Loss from continuing operations (2,240) (797) (3,037) Income from discontinued operations, net of tax 206 (206) [M] - -------- -------- ------- Net loss $ (2,034) $ (1,003) $(3,037) ======== ======== ======= Earnings per common and common equivalent share: Loss from continuing operations $ (.35) $ (.13) $ (.48) Income from discontinued operations .03 (.03) - -------- -------- ------- Net loss $ (.32) $ (.16) $ (.48) ======== ======== ======= Average outstanding common shares plus common equivalents 6,374 6,374 ======== =======
See Accompanying Notes to Unaudited Pro Forma Financial Information. -6- 7 NASHUA CORPORATION NOTES TO UNAUDITED PRO FORMA FINANCIAL INFORMATION 1. Basis of Presentation The unaudited pro forma financial information is presented to give effect to the disposition of the Tape Products Division, a discontinued operation, the sale of 63% of Cerion Technologies Inc. ("Cerion"), formerly a wholly-owned subsidiary of Nashua Corporation ("the Company") and the repayment of a $10 million note from Cerion to Nashua. Under the terms of the Tape Products Division sales agreement it is expected that the Company will receive net proceeds before income taxes of approximately $26 million for the net assets of the business. As a result of the sale of Cerion common stock by the Company, it is estimated that the Company will receive $32.6 million based on an initial stock price of $13 per share less the costs of issuance. The unaudited pro forma financial information should be read in conjunction with the historical financial statements of the Company. 2. Adjustments The following adjustments have been made in the preparation of the unaudited pro forma financial information: A. To record an increase in cash required to settle tax liabilities resulting from gains incurred on the dispositions and sale and repayment proceeds retained by the Company. B. To deconsolidate the assets and liabilities of Cerion from the Company's historical balance sheet. C. To eliminate the Tape Products Division's net current assets and net non-current assets from the Company's historical balance sheet. D. To record the use of tax assets totaling $11.6 million as settlement of tax liabilities resulting from the gains incurred on the dispositions and the tax benefit of $585,000 relating to the prepayment penalty of debt. E. To record the investment in Cerion under the equity method of accounting of $6,879,000 and the repayment of a $10 million note receivable to the Company from Cerion. F. To record the prepayment of debt as the result of cash proceeds from the dispositions. G. To record the tax liability relating to the Cerion transaction and the disposition of the Tape Products Division. H. To record the gain, net of taxes, on the sales of common stock by both the Company and Cerion, the disposition of the Tape Products Division, and the $1.5 million prepayment penalty on debt. -7- 8 NASHUA CORPORATION NOTES TO UNAUDITED PRO FORMA FINANCIAL INFORMATION (CONTINUED) I. To deconsolidate the results of operations of Cerion, net of certain intercompany adjustments as follows:
For the Three Month For the Year Ended Period Ended December 31, 1995 March 29, 1996 ----------------- -------------- Intercompany sales and cost of products sold $645,000 $ - Allocated selling, distribution, and administrative expenses 227,000 102,000 Allocated research and development expenses 70,000 42,000
J. To reduce interest expense due to the prepayment of debt from cash flows generated from the dispositions. K. To record income of Cerion under the equity method of accounting. L. To record the income tax benefit due to the deconsolidation of Cerion, less a reduction in the benefit due to the reduced interest expense and the recording of the income of Cerion under the equity method of accounting. M. To eliminate the net income for the Tape Products Division. -8- 9 SIGNATURES Pursuant to the requirements of the Security Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. NASHUA CORPORATION (Registrant) Date: June 4, 1996 By /s/ Daniel M. Junius ------------ --------------------------------- Daniel M. Junius Vice President-Finance and Chief Financial Officer (principal financial and duly authorized officer) -9- EX-1.1 2 UNDERWRITING AGREEMENT 1 Exhibit 1.1 CERION TECHNOLOGIES INC. 3,840,000 SHARES COMMON STOCK* UNDERWRITING AGREEMENT ---------------------- May 23, 1996 WILLIAM BLAIR & COMPANY, L.L.C. As Representative of the Several Underwriters Named in Schedule A 222 West Adams Street Chicago, Illinois 60606 Ladies and Gentlemen: SECTION 1. INTRODUCTION. Cerion Technologies Inc. (the "Company"), a Delaware corporation, upon the closing of the transaction contemplated by this Agreement will have an authorized capital stock consisting of 100,000 shares, $.01 par value per share, of Preferred Stock, of which no shares will be outstanding as of such date, and 20,000,000 shares, $.01 par value per share, of Common Stock (the "Common Stock"), of which 7,016,540 shares will be outstanding as of such date. The Company proposes, subject to the terms and conditions stated herein, to issue and sell 1,615,000 shares of its authorized but unissued Common Stock, and Cerion Holdings Inc., a Delaware corporation and the parent of the Company (the "Selling Stockholder"), proposes to sell 2,225,000 shares of the Company's issued and outstanding Common Stock owned by the Selling Stockholder, to the several underwriters named in Schedule A as it may be amended by the Pricing Agreement as hereinafter defined (the "Underwriters"),which Underwriters are acting severally and not jointly. The Selling Stockholder is a wholly owned subsidiary of Nashua Corporation, a Delaware corporation ("Nashua Corporation," and together with the Selling Stockholder, "Nashua"). Collectively, such total of 3,840,000 shares of Common Stock proposed to be sold by the Company and Nashua is ________________________ * Plus an option to acquire up to 576,000 additional shares to cover overallotments. 2 hereinafter referred to as the "Firm Shares." In addition, Nashua proposes to grant to the Underwriters an option to purchase up to an aggregate of 576,000 additional shares of Common Stock (the "Option Shares") for the purpose of covering any over-allotments in connection with the sale of the Firm Shares as provided in Section 5 hereof. The Firm Shares and, to the extent such option is exercised, the Option Shares are hereinafter collectively referred to as the "Shares." You have advised the Company and Nashua that the Underwriters propose to make a public offering of their respective portions of the Shares as soon as you deem advisable after the registration statement hereinafter referred to becomes effective, if as of the date hereof it has not yet become effective, and the Pricing Agreement as hereinafter defined has been executed and delivered. Prior to the purchase and public offering of the Shares by the several Underwriters, the Company, Nashua and the Representative, acting on behalf of the several Underwriters, shall enter into an agreement substantially in the form of Exhibit A hereto (the "Pricing Agreement"). The Pricing Agreement may take the form of an exchange of any standard form of written telecommunication between the Company, Nashua and the Representative and shall specify such applicable information as is indicated in Exhibit A hereto. The offering of the Shares will be governed by this Agreement, as supplemented by the Pricing Agreement. From and after the date of the execution and delivery of the Pricing Agreement, this Agreement shall be deemed to incorporate the Pricing Agreement. The Company and Nashua hereby confirm their respective agreements with the Underwriters as follows: SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND NASHUA. The Company and Nashua, jointly and severally, represent and warrant to the several Underwriters that: (a) A registration statement on Form S-1 (File No. 333-2590) and a related preliminary prospectus with respect to the Shares have been prepared and filed with the Securities and Exchange Commission (the "Commission") by the Company in conformity with the requirements of the Securities Act of 1933, as amended, and the rules and regulations of the Commission thereunder (collectively, the "1933 Act;" all references herein to specific rules are to rules promulgated under the 1933 Act); and the Company has so prepared and has filed such amendments thereto, if any, and such amended preliminary prospectuses as may have been required to the date hereof. If the Company and the Underwriters have elected not to rely upon Rule 430A, the Company has prepared and will promptly file an amendment to the registration statement and an amended prospectus. If the Company and the Underwriters have elected to rely upon Rule 430A, the Company will prepare and file a prospectus pursuant to Rule 424(b) that discloses the information previously omitted from the prospectus in reliance upon Rule 430A. There have been or will promptly be delivered to you three signed copies of such registration statement and all amendments, and three copies of each exhibit filed therewith, and conformed -2- 3 copies of such registration statement and amendments (but without exhibits) and of the related preliminary prospectus or prospectuses and final forms of prospectus for each of the Underwriters. The registration statement and prospectus, each as amended, on file with the Commission at the time the registration statement became or becomes effective, including the information deemed to be part of the registration statement at the time of effectiveness pursuant to Rule 430A(b), if applicable, are hereinafter called the "Registration Statement" and the "Prospectus," respectively, except that if the prospectus filed by the Company pursuant to Rule 424(b) differs from the prospectus on file at the time the Registration Statement became or becomes effective, the term "Prospectus" shall refer to the Rule 424(b) prospectus from and after the time it is filed with the Commission or transmitted to the Commission for filing. The Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission thereunder are hereinafter collectively referred to as the "Exchange Act." (b) The Commission has not issued any order preventing or suspending the use of any preliminary prospectus, and each preliminary prospectus, at the time of filing thereof, has conformed in all material respects with the requirements of the 1933 Act (except to the extent that, in conformity with the 1933 Act, such preliminary prospectus is subject to completion), and, as of its date, has not included any untrue statement of a material fact or omitted to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; and when the Registration Statement and any amendment thereto became or becomes effective, and at all times subsequent thereto, up to the First Closing Date or the Second Closing Date, each as hereinafter defined, as the case may be, the Registration Statement, or such amendment, including the information deemed to be part of the Registration Statement at the time of effectiveness pursuant to Rule 430A(b), if applicable, and the Prospectus and any amendments or supplements thereto, contained or will contain all statements that are required to be stated therein in accordance with the 1933 Act and in all material respects conformed or will in all material respects conform to the requirements of the 1933 Act, and neither the Registration Statement nor the Prospectus, nor any amendment or supplement thereto, included or will include any untrue statement of a material fact or omitted or will omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; provided, however, that the Company and Nashua make no representation or warranty as to information contained in or omitted from any preliminary prospectus, the Registration Statement, the Prospectus or any such amendment or supplement in reliance upon and in conformity with written information furnished to the Company by or on behalf of any Underwriter through the Representative regarding the Underwriters specifically for use in the preparation thereof. (c) The Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of Delaware, with corporate power and authority to own or lease its properties and conduct its business as described in the Prospectus; the Company is duly qualified to do business as a foreign corporation under the corporation law of, and is in good standing as such in, each jurisdiction in which it owns or leases substantial properties, has an office, or in which substantial business is conducted and such qualification is -3- 4 required, except in any such case where the failure to so qualify or be in good standing would not have a material adverse effect on the Company's ability to perform its obligations under this Agreement or on the condition (financial or otherwise) or results of operations of the Company; and no proceeding has been instituted in any such jurisdiction, revoking, limiting or curtailing, or seeking to revoke, limit or curtail, such power and authority or qualification. (d) The Company does not, directly or indirectly, own, of record or beneficially, any outstanding voting securities or other equity interests in or control any corporation, limited liability company, partnership, trust, joint venture or other entity. (e) The issued and outstanding shares of capital stock of the Company are as set forth in the Prospectus and such shares have been duly authorized and validly issued, are fully paid and nonassessable, and conform to the description thereof contained in the Prospectus and, except as disclosed in the Prospectus, there are no options, rights or warrants for the purchase of Common Stock, or securities convertible or exchangeable into, or exercisable for, Common Stock, and there are no agreements with respect thereto. (f) The Shares to be sold by the Company have been duly authorized and when issued, delivered and paid for pursuant to this Agreement will be validly issued, fully paid and nonassessable and will conform to the description thereof contained in the Prospectus. (g) The making and performance by the Company of this Agreement and the Pricing Agreement have been duly authorized by all necessary corporate action and (i) will not violate any provision of the Company's charter or bylaws and (ii) will not result in the breach, or be in contravention, of any provision of any agreement, franchise, license, indenture, mortgage, deed of trust or other instrument to which the Company is a party or by which the Company or its properties may be bound or affected, or any order, rule or regulation applicable to the Company of any court or regulatory body, administrative agency or other governmental body having jurisdiction over the Company or any of its properties, or any order of any court or governmental agency or authority entered in any proceeding to which the Company was or is now a party or by which it is bound. No consent, approval, authorization or other order of any court, regulatory body, administrative agency or other governmental body or of any other person is required for the execution and delivery of this Agreement or the Pricing Agreement or the consummation of the transactions contemplated herein or therein, except for compliance with the 1933 Act and blue sky laws applicable to the public offering of the Shares by the several Underwriters and clearance of such offering with the National Association of Securities Dealers, Inc. ("NASD"). This Agreement has been, and the Pricing Agreement has been or will be, duly executed and delivered by the Company. (h) The accountants who have expressed their opinions with respect to certain of the financial statements and schedules included in the Registration Statement are independent accountants as required by the 1933 Act. -4- 5 (i) The financial statements and schedules of the Company and its predecessors included in the Registration Statement present fairly the financial position of the Company and its predecessors as of the respective dates of such financial statements, and the results of operations and cash flows of the Company and its predecessors for the respective periods covered thereby, all in conformity with generally accepted accounting principles consistently applied throughout the periods involved, and the supporting schedules included in the Registration Statement present fairly the information required to be stated therein. The financial information set forth in the Prospectus under "Selected Financial Data" presents fairly on the basis stated in the Prospectus the information set forth therein. The pro forma financial statements and other pro forma information included in the Prospectus present fairly the information shown therein, have been prepared in accordance with generally accepted accounting principles and the Commission's rules and guidelines with respect to pro forma financial statements and other pro forma information, have been properly compiled on the pro forma basis described therein, and, in the opinion of the Company, the assumptions used in the preparation thereof are reasonable and the adjustments used therein are appropriate under the circumstances. (j) Neither Nashua, its subsidiaries nor the Company is in violation of its charter or is in violation of any material provision of its bylaws or is in default under any consent decree or order of any court or administrative body or in default with respect to any material provision of any lease, loan agreement, franchise, license, permit or other contractual obligation to which it is a party; and there does not exist any state of facts which constitutes an event of default as defined in such documents or which, with notice or lapse of time or both, would constitute such an event of default, in each case, except for defaults which neither singly nor in the aggregate are material to the Company. (k) There are no legal or governmental proceedings pending or, to Nashua's or the Company's knowledge, threatened to which Nashua, its subsidiaries or the Company is or may be a party in which the Company or material properties or assets owned or leased by the Company is or may be the subject, or related to environmental or discrimination matters involving the Company, which are not disclosed in the Prospectus, or which question the validity of this Agreement or the Pricing Agreement or any action taken or to be taken pursuant hereto or thereto. (l) There are no holders of securities of the Company having rights, contractual or otherwise, to cause registration thereof or preemptive rights to purchase Common Stock, except as disclosed in the Prospectus. (m) The Company has good and marketable title to (i) all the properties and assets historically used in Nashua Precision Technologies business and (ii) all the properties and assets reflected as owned in the financial statements hereinabove described (or elsewhere in the Prospectus), subject to no lien, mortgage, pledge, charge, security interest or encumbrance of any kind except those, if any, reflected in such financial statements (or elsewhere in the Prospectus) or such as are not material to the Company. The Company holds its leased properties which are material to the Company under valid and binding leases. -5- 6 (n) The Company has not taken and will not take, directly or indirectly, any action designed to or which has constituted or which might reasonably be expected to cause or result, under the Exchange Act or otherwise, in stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Shares. (o) Subsequent to the respective dates as of which information is given in the Registration Statement and Prospectus, and except as contemplated by the Prospectus, the Company has not incurred any material liabilities or obligations, direct or contingent, or entered into any material transactions not in the ordinary course of business and there has not been any material adverse change in its condition (financial or otherwise), business, assets, results of operations or prospects or any material change in its capital stock, short-term debt or long-term debt. (p) The Company has obtained agreements from its directors and officers that, for a period of 180 days after this Agreement becomes effective, each of such directors and officers will not, without the prior written consent of the Representative, offer, sell, contract to sell, grant any option to purchase or otherwise dispose of any Common Stock or securities convertible or exchangeable into, or exercisable for, Common Stock or in any other manner transfer all or a portion of the economic consequences associated with the ownership of any such Common Stock, or execute any registration rights with respect to any such Common Stock or securities. (q) There is no material document of a character required to be described in the Registration Statement or the Prospectus or to be filed as an exhibit to the Registration Statement which is not described or filed as required. (r) The Company owns and possesses all right, title and interest in and to, or has duly licensed from third parties a valid and enforceable right to use, all trademarks, copyrights, patents, trade secrets and other proprietary rights ("Trade Rights") presently employed by the Company in connection with its business or historically used by the Nashua Precision Technologies business, whether such Trade Rights are registered or unregistered. Neither Nashua, its subsidiaries nor the Company has received any notice of infringement, misappropriation or conflict from any third party as to such Trade Rights which has not been resolved or disposed of and neither the Company nor the Nashua Precision Technologies business has infringed, misappropriated or otherwise conflicted with Trade Rights of any third parties, which infringement, misappropriation or conflict would have a material adverse effect upon the condition (financial or otherwise) or results of operations of the Company. (s) The Company is (1) in compliance with any and all applicable foreign, federal, state and local laws and regulations relating to the protection of human health and safety, the environment or hazardous or toxic substances or wastes, pollutants or contaminants ("Environmental Laws"), (2) has received all permits, licenses or other approvals required of it under applicable Environmental Laws to conduct its business and (3) is in compliance with all terms and conditions of any such permit, license or approval, except where such noncompliance -6- 7 with Environmental Laws, failure to receive required permits, licenses or other approvals or failure to comply with the terms and conditions of such permits, licenses or approvals would not, singly or in the aggregate, have a material adverse effect on the Company. In the ordinary course of its business, the Company or Nashua conducts a periodic review of the effect of Environmental Laws on the business, operations and properties of the Company, in the course of which it identifies and evaluates associated costs and liabilities (including, without limitation, any capital or operating expenditures required for clean-up, closure of properties or compliance with Environmental Laws or any permit, license or approval, any related constraints on operating activities and any potential liabilities to third parties). On the basis of such review, the Company and Nashua have reasonably concluded that such associated costs and liabilities would not, singly or in the aggregate, have a material adverse effect on the Company. (t) The conduct of the business of the Company is in compliance in all respects with applicable federal, state, local and foreign laws and regulations, except where the failure to be in compliance would not have a material adverse effect upon the condition (financial or otherwise), business, assets, results of operations or prospects of the Company. (u) All offers and sales of the Company's and its predecessor's capital stock prior to the date hereof were at all relevant times exempt from the registration requirements of the 1933 Act and were duly registered with or the subject of an available exemption from the registration of the applicable state securities or blue sky laws. (v) Nashua, the Company and its predecessors have filed all necessary federal and state income and franchise tax returns and have paid all taxes shown as due thereon, and there is no tax deficiency that has been, or to the knowledge of the Company might be, asserted against the Company or its properties or assets that would or could be expected to adversely affect the financial condition, assets, operations or prospects of the Company. (w) At the time the Registration Statement becomes or became effective, the Shares will be or were registered under the Exchange Act. The Shares have been authorized for trading over-the-counter on the Nasdaq Stock Market's National Market subject to notice of issuance or sale, as the case may be. (x) The Company is not, and does not intend to conduct its business in a manner in which it would become, an "investment company" as defined in Section 3(a) of the Investment Company Act of 1940, as amended (the "Investment Company Act"). (y) The Company confirms as of the date hereof that it is in compliance with all provisions of Section 1 of Laws of Florida, Chapter 92-198, AN ACT RELATING TO DISCLOSURE OF DOING BUSINESS WITH CUBA, and the Company further agrees that if it commences engaging in business with the government of Cuba or with any person or affiliate located in Cuba after the date the Registration Statement becomes or has become effective with the Commission or with the Florida Department of Banking and Finance (the "Department"), whichever date is later, or if the information reported in the Prospectus, if any, concerning the Company's business with Cuba or -7- 8 with any person or affiliate located in Cuba changes in any material way, the Company will provide the Department with notice of such business or change, as appropriate, in a form acceptable to the Department. (z) No beneficial owner of the Company's unregistered securities, regardless of the time acquired or the source from which derived, has any direct or indirect affiliation or association with any member of the NASD. Nashua has no direct or indirect affiliation or association with any member of the NASD. SECTION 3. ADDITIONAL REPRESENTATIONS, WARRANTIES AND COVENANTS OF NASHUA. (a) Nashua represents and warrants to, and agrees with, the Company and the Underwriters that: (i) Nashua will have on the First Closing Date and the Second Closing Date (as hereinafter defined) valid marketable title to the Shares proposed to be sold by Nashua hereunder on such date, and Nashua has full right, power and authority to enter into this Agreement and the Pricing Agreement and to sell, assign, transfer and deliver such Shares hereunder, free and clear of all voting trust arrangements, liens, encumbrances, equities, claims and rights of others; and upon delivery of and payment for such Shares hereunder, the Underwriters will acquire valid marketable title thereto, free and clear of all voting trust arrangements, liens, encumbrances, equities, security interests, claims and rights of others. The Selling Stockholder holds all of the outstanding capital stock of the Company. Nashua Corporation holds all of the outstanding capital stock of the Selling Stockholder. (ii) The making and performance by Nashua of this Agreement and the Pricing Agreement have been duly authorized by all necessary corporate action and (A) will not violate any provision of Nashua's charter or bylaws, and (B) will not result in the breach, or be in contravention, of any provision of any agreement, franchise, license, indenture, mortgage, deed of trust, or other instrument to which Nashua or any subsidiary thereof is a party or by which Nashua, any subsidiary thereof or the property of any of them may be bound or affected, or any order, rule or regulation applicable to Nashua or any such subsidiary of any court or regulatory body, administrative agency or other governmental body having jurisdiction over Nashua or any such subsidiary or any of their respective properties, or any order of any court or governmental agency or authority entered in any proceeding to which Nashua or any such subsidiary was or is now a party or by which it is bound. No consent, approval, authorization or other order of any court, regulatory body, administrative agency or other government body or of any other person is required for the execution and delivery of this Agreement or the Pricing Agreement or the consummation of the transactions contemplated herein or therein, except for compliance with the 1933 Act and blue sky laws applicable to the public offering of the Shares by the several Underwriters and clearance of such offering with the NASD. This Agreement has -8- 9 been, and the Pricing Agreement has been or will be, duly executed and delivered by Nashua. (iii) Nashua has not taken and will not take, directly or indirectly, any action designed to or which might be reasonably expected to cause or result, under the Exchange Act or otherwise, in the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Shares. (b) Nashua agrees with the Company and the Underwriters that, for a period of 180 days after this Agreement becomes effective, Nashua will not, without the prior written consent of the Representative, offer, sell, contract to sell, grant any option to purchase or otherwise dispose of any Common Stock or securities convertible or exchangeable into, or exercisable for, Common Stock or in any other manner transfer all or a portion of the economic consequences associated with the ownership of any such Common Stock, or cause the Company to file with the Commission any registration statement related to any of the foregoing. Notwithstanding the foregoing, Nashua shall be permitted to pledge shares of Common Stock (including Shares until the sale thereof pursuant to this Agreement) to an agent for its creditors so long as such agent agrees to be bound by the terms of this paragraph with respect to the offer, sale or other transfer of any such pledged Common Stock, and provided that such agent shall be permitted to foreclose on and acquire ownership of such pledged Common Stock in compliance with the terms of such pledge but shall not be permitted during the 180-day period referred to above to transfer any pledged Common Stock in a manner prohibited by this paragraph to any person other than itself or its nominee. Nashua represents and warrants to the Company and the Underwriters that any pledge by it existing at the date hereof or entered into in the future of any Common Stock complies and will comply with the requirements of the preceding sentence. (c) In order to document the Underwriter's compliance with the reporting and withholding provisions of the Internal Revenue Code of 1986, as amended, with respect to the transactions herein contemplated, Nashua agrees to deliver to you prior to or on the First Closing Date, as hereinafter defined, a properly completed and executed United States Treasury Department Form W-8 or W-9 (or other applicable form of statement specified by Treasury Department regulations in lieu thereof). SECTION 4. REPRESENTATIONS AND WARRANTIES OF THE UNDERWRITERS. The Representative, on behalf of the several Underwriters, represents and warrants to the Company that the information set forth (a) in the last paragraph on the cover page of the Prospectus, (b) in the stabilization paragraph on the bottom of the inside front cover page of the Prospectus and (c) in the first and second sentences of the second paragraph and the single sentence constituting the seventh paragraph under the table of Underwriters under the caption "Underwriting" in the Prospectus is correct and complete in all material respects. The Company, Nashua and the Representative agree that the foregoing items described in this Section 4 were the only information furnished to the Company by and on behalf of the Underwriters for use in connection with the preparation of the Registration Statement and the Prospectus. -9- 10 SECTION 5. PURCHASE, SALE AND DELIVERY OF SHARES. On the basis of the representations, warranties and agreements herein contained, but subject to the terms and conditions herein set forth, the Company and Nashua, severally and not jointly, agree to sell to the Underwriters named in Schedule A hereto, and the Underwriters agree, severally and not jointly, to purchase 1,615,000 Firm Shares from the Company and 2,225,000 Firm Shares from Nashua at the price per share set forth in the Pricing Agreement. The obligation of each Underwriter to the Company shall be to purchase from the Company that number of full shares which (as nearly as practicable, as determined by you) bears to the number of Firm Shares to be sold by the Company the same proportion as the number of Shares set forth opposite the name of such Underwriter in Schedule A hereto bears to the total number of Firm Shares to be purchased by all Underwriters under this Agreement. The obligation of each Underwriter to Nashua shall be to purchase from Nashua that number of full shares which (as nearly as practicable, as determined by you) bears to the number of Firm Shares to be sold by Nashua the same proportion as the number of Shares set forth opposite the name of such Underwriter in Schedule A hereto bears to the total number of Firm Shares to be purchased by all Underwriters under this Agreement. The initial public offering price and the purchase price shall be set forth in the Pricing Agreement. At 10:00 A.M., Boston Time, on the third full business day after the first effective trade date of the initial public offering, or at such other time not later than nine full business days after the initial public offering, as you and the Company may agree, the Company and Nashua will deliver to you at the offices of Bingham, Dana & Gould, LLP, Boston, Massachusetts, counsel for the Company, or through the facilities of The Depository Trust Company for the accounts of the several Underwriters, certificates representing the Firm Shares to be sold by the Company and Nashua against payment of the purchase price therefor by wire transfer of immediately available funds to the Company and Nashua (or, in the case of Nashua, to an account designated by Nashua) as their interests appear. Such time of delivery and payment is herein referred to as the "First Closing Date." The certificates for the Firm Shares so to be delivered will be in such denominations and registered in such names as you request by notice to the Company prior to 10:00 A.M., Boston Time, on the second full business day preceding the First Closing Date, and will be made available at the Company's expense for checking and packaging by the Representative at 10:00 A.M., Boston Time, on the first full business day preceding the First Closing Date. In addition, on the basis of the representations, warranties and agreements herein contained, but subject to the terms and conditions herein set forth, Nashua hereby grants an option to the several Underwriters to purchase, severally and not jointly, up to an aggregate of 576,000 Option Shares, at the same purchase price per share to be paid for the Firm Shares, for use solely in covering any over allotments made by the Underwriters in the sale and distribution of the Firm Shares. The option granted hereunder may be exercised at any time (but not more than once) within 30 days after the date of the initial public offering upon notice by you to the Company and Nashua setting forth the aggregate number of Option Shares as to which the Underwriters are exercising the option, the names and denominations in which the certificates for such shares are to be registered and the time and place at which such certificates will be delivered. Such time of -10- 11 delivery (which may not be earlier than the First Closing Date), being herein referred to as the "Second Closing Date," shall be determined by you, but if at any time other than the First Closing Date, shall not be earlier than three nor later than ten full business days after delivery of such notice of exercise. The number of Option Shares to be purchased by each Underwriter shall be determined by multiplying the number of Option Shares to be sold by Nashua pursuant to such notice of exercise by a fraction, the numerator of which is the number of Firm Shares to be purchased by such Underwriter as set forth opposite its name in Schedule A and the denominator of which is the total number of Firm Shares (subject to such adjustments to eliminate any fractional share purchases as you in your absolute discretion may make). Certificates for the Option Shares will be made available at the Company's expense for checking and packaging at 10:00 A.M., Boston Time, on the first full business day preceding the Second Closing Date. The manner of payment for and delivery of the Option Shares shall be the same as for the Firm Shares as specified in the preceding paragraph, except that payment shall be made to the order of Nashua. You have advised the Company and Nashua that each Underwriter has authorized you to accept delivery of its Shares, to make payment and to receipt therefor. You, individually and not as the Representative of the Underwriters, may make payment for any Shares to be purchased by any Underwriter whose funds shall not have been received by you by the First Closing Date or the Second Closing Date, as the case may be, for the account of such Underwriter, but any such payment shall not relieve such Underwriter from any obligation hereunder. SECTION 6. COVENANTS OF THE COMPANY AND NASHUA. The Company and Nashua covenant and agree that: (a) The Company will advise you promptly of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or of the institution of any proceedings for that purpose, or of any notification of the suspension of qualification of the Shares for sale in any jurisdiction or the initiation or threatening of any proceedings for that purpose, and will also advise you promptly of any request of the Commission for an amendment or supplement to the Registration Statement, to any preliminary prospectus or to the Prospectus, or for additional information, and will not file any amendment or supplement to the Registration Statement, any preliminary prospectus or the Prospectus of which you have not been furnished with a copy prior to such filing or to which you reasonably object. (b) If at any time when a prospectus relating to the Shares is required to be delivered under the 1933 Act, any event occurs as a result of which the Prospectus, including any amendments or supplements thereto, would include an untrue statement of a material fact, or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, or if it is necessary at any time to amend the Prospectus, including any amendments or supplements thereto and including any revised prospectus which the Company proposes for use by the Underwriters in connection with the offering of the Shares which differs from the prospectus on file with the Commission at the time of effectiveness of the Registration Statement, whether or not such revised -11- 12 prospectus is required to be filed pursuant to Rule 424(b) to comply with the 1933 Act, the Company promptly will advise you thereof and will promptly prepare and file with the Commission an amendment or supplement which will correct such statement or omission or an amendment which will effect such compliance; and, in case any Underwriter is required to deliver a prospectus nine months or more after the effective date of the Registration Statement, the Company upon request will prepare promptly such prospectus or prospectuses as may be necessary to permit compliance with the requirements of Section 10(a)(3) of the 1933 Act. (c) The Company will not, prior to the earlier of the Second Closing Date or termination or expiration of the related option, incur any liability or obligation, direct or contingent, or enter into any material transaction, other than in the ordinary course of business, except as contemplated by the Prospectus. (d) The Company will not acquire any capital stock of the Company prior to the earlier of the Second Closing Date or termination or expiration of the related option, nor will the Company declare or pay any dividend or make any other distribution upon the Common Stock payable to stockholders of record on a date prior to the earlier of the Second Closing Date or termination or expiration of the related option, except in either case as contemplated by the Prospectus. (e) As soon as practicable, but in any event not later than August 15, 1997, the Company will make generally available to its security holders an earnings statement (which need not be audited) covering a period of at least 12 months beginning after the effective date of the Registration Statement, which will satisfy the provisions of the last paragraph of Section 11(a) of the 1933 Act. (f) During such period as a prospectus is required by law to be delivered in connection with offers and sales of the Shares by an Underwriter or dealer, the Company will furnish to you copies of the Registration Statement, the Prospectus, each preliminary prospectus and all amendments and supplements to any such documents, in each case as soon as available and in such quantities as you may reasonably request, for the purposes contemplated by the 1933 Act. (g) The Company and Nashua will cooperate with the Underwriters in qualifying or registering the Shares for sale under the blue sky laws of such jurisdictions as you designate and will continue such qualifications in effect so long as reasonably required for the distribution of the Shares. The Company shall not be required to qualify as a foreign corporation or to file a general consent to service of process in any such jurisdiction where it is not currently qualified. (h) During the period of five years hereafter, the Company will furnish you and the other Underwriters with a copy (i) as soon as practicable after the filing thereof, of each report filed by the Company with the Commission, any securities exchange or the NASD; (ii) as soon as available, of each report or communication of the Company mailed to stockholders; (iii) every -12- 13 material press release with respect to the Company; and (iv) any additional information of a public nature concerning the Company or its business that you may request. (i) The Company will use the net proceeds received by it from the sale of the Shares being sold by it in the manner specified in the Prospectus. (j) If, at the time of effectiveness of the Registration Statement, any information shall have been omitted therefrom in reliance upon Rule 430A, then immediately following the execution and delivery of the Pricing Agreement, the Company will prepare, and file or transmit for filing with the Commission in accordance with such Rule 430A and Rule 424(b), copies of an amended prospectus, or, if required by such Rule 430A, a post-effective amendment to the Registration Statement (including an amended prospectus), containing all information so omitted. (k) The Company will file with the Commission in a timely manner all reports on Form SR required by Rule 463 and will furnish you copies of any such reports as soon as practicable after the filing thereof. (l) The Company will not, for a period of 180 days after this Agreement becomes effective, without the prior written consent of the Representative, offer, sell, contract to sell, grant any option to purchase or otherwise dispose of any Common Stock or securities convertible or exchangeable into, or exercisable for, Common Stock (except Common Stock issued pursuant to the employee or director stock plans described in the Prospectus), or file any registration statement with the Commission related to any of the foregoing (except for registration statements on Form S-8 in respect of an employee benefit plan of the Company). SECTION 7. PAYMENT OF EXPENSES. Whether or not the transactions contemplated hereunder are consummated or this Agreement becomes effective as to all of its provisions or is terminated, the Company and Nashua agree, jointly and severally, to pay (i) all costs, fees and expenses (except legal fees and disbursements of counsel for the Underwriters and the expenses incurred by the Underwriters other than those contemplated by clause (ii) below) incurred in connection with the performance of the Company's and Nashua's obligations hereunder, including without limiting the generality of the foregoing, all fees and expenses of legal counsel for the Company and of the Company's independent accountants, all costs and expenses incurred in connection with the preparation, printing, filing, shipping and distribution of the Registration Statement, each preliminary prospectus and the Prospectus (including all exhibits and financial statements) and all amendments and supplements provided for herein, this Agreement, the Pricing Agreement and the blue sky memorandum, (ii) all costs, fees and expenses (including all filing fees and the reasonable legal fees and disbursements of counsel for the Underwriters relating to this clause (ii)) incurred by the Underwriters in connection with qualifying or registering all or any part of the Shares for offer and sale under blue sky laws, including the preparation of a blue sky memorandum relating to the Shares, and clearance of such offering with the NASD; and (iii) all fees and expenses of the Company's transfer agent, all fees and expenses in connection with the authorization and listing of the Shares on the Nasdaq Stock -13- 14 Market, the costs of printing the certificates for the Shares and all transfer taxes, if any, with respect to the sale and delivery of the Shares to the several Underwriters. SECTION 8. CONDITIONS OF THE OBLIGATIONS OF THE UNDERWRITERS. The obligations of the several Underwriters to purchase and pay for the Firm Shares on the First Closing Date and the Option Shares on the Second Closing Date shall be subject to the accuracy of the representations and warranties on the part of the Company and Nashua herein set forth as of the date hereof and as of the First Closing Date or the Second Closing Date, as the case may be, to the accuracy of the statements of officers of the Company and Nashua made pursuant to the provisions hereof, to the performance by the Company and Nashua of any of its obligations hereunder, and to the following additional conditions: (a) The Registration Statement shall have become effective either prior to the execution of this Agreement or not later than 1:00 P.M., Chicago Time, on the first full business day after the date of this Agreement, or such later time as shall have been consented to by you but in no event later than 1:00 P.M., Chicago Time, on to the third full business day following the date hereof; and prior to the First Closing Date or the Second Closing Date, as the case may be, no stop order suspending the effectiveness of the Registration Statement shall have been issued and no proceedings for that purpose shall have been instituted or shall be pending or, to the knowledge of the Company, Nashua or you, shall be contemplated by the Commission, and there shall not have come to the attention of the Representative any facts that would cause it to believe that the Prospectus, at the time it was required to be delivered to purchasers of the Shares, contained any untrue statement of a material fact or omitted to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. If the Company and the Underwriters have elected to rely upon Rule 430A, the information concerning the initial public offering price of the Shares and price-related information shall have been properly transmitted to the Commission for filing pursuant to Rule 424(b) within the prescribed period and the Company will provide evidence satisfactory to the Representative of such timely filing (or a post-effective amendment providing such information shall have been filed and declared effective in accordance with the requirements of Rules 430A and 424(b)). (b) The Shares shall have been qualified for sale under the blue sky laws of such states as shall have been specified by the Representative. (c) The legality and sufficiency of the authorization, issuance and sale or transfer and sale of the Shares hereunder, the validity and form of the certificates representing the Shares, the execution and delivery of this Agreement and the Pricing Agreement, and all corporate proceedings and other legal matters incident thereto, and the form of the Registration Statement and the Prospectus (except financial statements) shall have been approved by counsel for the Underwriters exercising reasonable judgment. (d) You shall not have advised the Company or Nashua that the Registration Statement or the Prospectus or any amendment or supplement thereto contains an untrue statement -14- 15 of fact, which, in the opinion of counsel for the Underwriters, is material or omits to state a fact which, in the opinion of such counsel, is material and is required to be stated therein or necessary to make the statements therein not misleading. (e) Subsequent to the execution and delivery of this Agreement, there shall not have occurred any change, or any development involving a prospective change, in or affecting particularly the business or properties of the Company or its subsidiaries, whether or not arising in the ordinary course of business, which, in the judgment of the Representative, makes it impractical or inadvisable to proceed with the public offering or purchase of the Shares as contemplated hereby. (f) There shall have been furnished to you, as the Representative of the Underwriters, on the First Closing Date or the Second Closing Date, as the case may be, except as otherwise expressly provided below: (i) An opinion of Bingham, Dana & Gould LLP, counsel for the Company and Nashua, addressed to the Underwriters and dated the First Closing Date or the Second Closing Date, as the case may be, to the effect that: (1) the Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of Delaware with corporate power and authority to own its properties and conduct its business as described in the Prospectus; and the Company has been duly qualified to do business as a foreign corporation under the corporation law of, and is in good standing as such in, every jurisdiction where the ownership or leasing of real property requires such qualification, except where the failure so to qualify would not have a material adverse effect upon the condition (financial or otherwise), business, assets, results of operations or prospects of the Company; (2) the authorized capital stock of the Company, of which there is outstanding the amount set forth in the Registration Statement and Prospectus (except for subsequent issuances, if any, pursuant to stock options described in the Prospectus), conforms as to legal matters in all material respects to the description thereof in the Registration Statement and Prospectus; and the forms of certificates used to evidence the Common Stock and the Shares comply with all applicable statutory and Nasdaq National Market requirements; (3) the issued and outstanding capital stock of the Company has been duly authorized and validly issued and is fully paid and nonassessable and free of statutory or, to the knowledge of such counsel, contractual preemptive rights; (4) the certificates for the Shares to be delivered hereunder are in due and proper form, and when duly countersigned by the Company's transfer agent and delivered to you or upon your order against payment of the agreed -15- 16 consideration therefor in accordance with the provisions of this Agreement and the Pricing Agreement, the Shares represented thereby will be duly authorized and validly issued, fully paid and nonassessable and free of preemptive rights and, to the knowledge of such counsel, will be free of any pledge, lien, encumbrance, claim or preemptive rights of, or rights of first refusal in favor of, stockholders with respect to any of the Shares or the issuance or sale thereof, and, to such counsel's knowledge, there are no contractual preemptive rights, rights of first refusal, rights of co-sale or other similar rights which exist with respect to any of the Shares or the issuance and sale thereof; and the Shares to be sold hereunder have been registered under the Exchange Act and have been authorized and qualified for inclusion on the Nasdaq Stock Market's National Market, subject to notice of issuance; (5) the Registration Statement has become effective under the 1933 Act, and, to the knowledge of such counsel, no stop order suspending the effectiveness of the Registration Statement has been issued and no proceedings for that purpose have been instituted or are pending or contemplated under the 1933 Act, and the Registration Statement (including the information deemed to be part of the Registration Statement at the time of effectiveness pursuant to Rule 430A(b), if applicable), the Prospectus and each amendment or supplement thereto (except for the financial statements and notes thereto, the financial statement schedules and other statistical or financial data included therein as to which such counsel need express no opinion) comply as to form in all material respects with the requirements of the 1933 Act; (6) this Agreement and the Pricing Agreement and the performance of the Company's and Nashua's obligations hereunder and thereunder have been duly authorized by all necessary corporate action on the part of the Company and Nashua, and this Agreement and the Pricing Agreement have been duly executed and delivered by and on behalf of the Company and Nashua and, assuming that the Company and Nashua have received the agreed to consideration therefor and that such agreements are the binding obligation of the Underwriters, are the legal, valid and binding agreements of the Company and Nashua, except as enforceability of the same may be limited by bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium, marshalling or other laws and rules of law affecting the enforcement generally of creditors' rights and remedies (including such as may deny giving effect to waivers of debtors' or guarantors' rights), and that the enforcement of any of the Underwriters' rights may in all cases be subject to an implied duty of good faith and to general principles of equity (regardless of whether such enforceability is considered in a proceeding at law or in equity), and except as to those provisions relating to indemnities or contribution for liabilities arising under the 1933 Act or any other federal or state securities law as to which no opinion need be expressed, it being understood that no opinion is given therein as to the enforceability of any particular provision of the Agreement relating to -16- 17 remedies after default or as to the availability of any specific or equitable relief of any kind; (7) no approval, order, authorization or consent of any public board, agency or instrumentality of the United States or, to the knowledge of such counsel, of any state or other jurisdiction or of any other person is necessary in connection with the sale of Shares by Nashua or the issue or sale of the Shares by the Company pursuant to this Agreement and the Pricing Agreement (other than under the 1933 Act, applicable blue sky laws and the rules of the NASD) or the consummation by the Company or Nashua of any other transactions contemplated hereby or thereby, except such as have been obtained; (8) the statements in the Registration Statement and the Prospectus under the caption "Business--Intellectual Property and Proprietary Rights," to such counsel's knowledge, are accurate summaries in all material respects of the matters set forth therein; and such counsel is not aware of any legal, governmental or administrative agency proceedings pending relating to any Trade Rights of the Company, and to such counsel's knowledge, no such proceedings are threatened or contemplated by such agencies or others; (9) to such counsel's knowledge, no person has the right, contractual or otherwise, to cause the Company to register pursuant to the 1933 Act any shares of capital stock of the Company upon the issue and sale of the Shares to be sold by the Company to the Underwriters pursuant to this Agreement; (10) the Company is not an "investment company" or a person "controlled by" an "investment company" within the meaning of the Investment Company Act; (11) to such counsel's knowledge, all sales of the Company's capital stock prior to the date hereof were at all relevant times exempt from the registration requirements of the 1933 Act; (12) Nashua has full corporate right, power and authority to enter into this Agreement and the Pricing Agreement and to sell, transfer and deliver the Shares to be sold on the First Closing Date or the Second Closing Date, as the case may be, by Nashua hereunder; upon delivery of certificates registered in the name of the Underwriters of such Shares to be sold by Nashua, each Underwriter that is a "bona fide purchaser" (as defined in Section 8-302 of the Massachusetts Uniform Commercial Code) will acquire valid marketable title to such Shares, free of any adverse claim, liens, encumbrances, security interests, rights of others or any restriction on transfer imposed on such Shares by Nashua or the Company; and -17- 18 (13) the execution and performance of this Agreement and the Pricing Agreement, the issue and sale of the Shares, and the consummation by the Company and Nashua of the transactions contemplated herein and therein, will not contravene, conflict with any of the provisions of, or result in a breach or default under, any of the terms or provisions of any agreement, franchise, license, indenture, mortgage, deed of trust, note agreement or other agreement or instrument of the Company, Nashua or its subsidiaries or by which the property of any of them is bound known to such counsel; nor will such actions violate any of the provisions of the charter or bylaws of the Company, Nashua or its subsidiaries or, so far as is known to such counsel, violate any statute, order, rule or regulation of any court or regulatory or governmental body having jurisdiction over the Company, Nashua or its subsidiaries. In rendering such opinion, such counsel may rely upon the opinions of other competent counsel and, as to factual matters, on certificates of officers of the Company and Nashua and of state officials, in which case their opinion is to state that they are so doing and copies of such opinions or certificates are to be attached to the opinion. In addition, such counsel shall state that such counsel have participated in certain conferences with officers and other representatives of the Company and Nashua, representatives of the Representative and representatives of the independent accountants of the Company, at which conferences the contents of the Registration Statement and Prospectus and related matters were discussed and, although such counsel are not passing upon and do not assume any responsibility for the accuracy, completeness or fairness of the statements contained in the Registration Statement and Prospectus, on the basis of the foregoing, no facts have come to their attention that have caused them to believe that the Registration Statement (including the information deemed to be part of the Registration Statement at the time of effectiveness pursuant to Rule 430A(b), if applicable) as amended or supplemented (except for the financial statements and notes thereto, the financial statement schedules and other statistical or financial data included therein as to which such counsel need express no belief), as of its effective date, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading or that, as of its date, the Prospectus or any amendment or supplement thereto, (except for the financial statements and notes thereto, the financial statement schedules and other statistical or financial data included therein as to which such counsel need express no belief) contained any untrue statement of a material fact or omitted to state any material fact necessary to make the statements therein not misleading in the light of the circumstances under which they were made or that, as of the First Closing Date or the Second Closing Date, as the case may be, the Prospectus or any further amendment or supplement thereto made by the Company prior to the First Closing Date or the Second Closing Date, as the -18- 19 case may be, (except for the financial statements and notes thereto, the financial statement schedules and other statistical or financial data included therein to which such counsel need express no belief) contained an untrue statement of a material fact or omitted to state any material fact necessary to make the statements therein not misleading in the light of the circumstances under which they were made; and such counsel do not know of any legal or governmental proceedings pending or threatened required to be described in the Prospectus which are not described as required, nor of any contracts or documents of a character required to be described in the Registration Statement or Prospectus or to be filed as exhibits to the Registration Statement which are not described or filed as required. (ii) Such opinion or opinions of Sidley & Austin, counsel for the Underwriters, dated the First Closing Date or the Second Closing Date, as the case may be, with respect to the incorporation of the Company, the validity of the Shares to be sold by the Company, the form of the Registration Statement and the Prospectus and other related matters as you may reasonably require, and the Company shall have furnished to such counsel such documents and shall have exhibited to them such papers and records as they may request for the purpose of enabling them to pass upon such matters. (iii) A certificate of the chief executive officer and the chief financial officer of the Company, dated the First Closing Date or the Second Closing Date, as the case may be, to the effect that: (1) the representations and warranties of the Company set forth in Section 2 of this Agreement are true and correct as of the date of this Agreement and as of the First Closing Date or the Second Closing Date, as the case may be, and the Company has complied with all the agreements and satisfied all the conditions on its part to be performed or satisfied at or prior to such Closing Date; and (2) the Commission has not issued an order preventing or suspending the use of the Prospectus or any preliminary prospectus filed as a part of the Registration Statement or any amendment thereto; no stop order suspending the effectiveness of the Registration Statement has been issued; and, to the best knowledge of the respective signers, no proceedings for that purpose have been instituted or are pending or contemplated under the 1933 Act. The delivery of the certificate provided for in this subparagraph shall be and constitute a representation and warranty of the Company as to the facts required in the immediately foregoing clauses (1) and (2) of this subparagraph to be set forth in said certificate. -19- 20 (iv) A certificate of an executive officer of Nashua dated the First Closing Date or the Second Closing Date, as the case may be, to the effect that the representations and warranties of Nashua set forth in Sections 2 and 3 of this Agreement are true and correct as of such date and Nashua has complied with all the agreements and satisfied all the conditions on the part of Nashua to be performed or satisfied at or prior to such date. The delivery of the certificate provided for in this subparagraph shall be and constitute a representation and warranty of Nashua as to the facts required in the immediately preceding sentence to be set forth in said certificate. (v) Such further certificates and documents as you may reasonably request. (g) At the time the Pricing Agreement is executed and also on the First Closing Date or the Second Closing Date, as the case may be, there shall be delivered to you a letter addressed to you, as the Representative of the Underwriters, from Price Waterhouse L.L.P., independent accountants, the first one to be dated the date of the Pricing Agreement, the second one to be dated the First Closing Date and the third one (in the event of a second closing) to be dated the Second Closing Date, to the effect set forth in Schedule B. There shall not have been any change or decrease specified in the letters referred to in this subparagraph which makes it impractical or inadvisable in the judgment of the Representative to proceed with the public offering or purchase of the Shares as contemplated hereby. (h) At the time the Pricing Agreement is executed, there shall be delivered to you a letter from each of the Company's officers and directors, in which each such person agrees for a period of 180 days after the date of the Prospectus, without the prior written consent of the Representative, not to (1) offer, sell, contract to sell, grant any option to purchase or otherwise dispose of any Common Stock, or any securities convertible or exchangeable into, or exercisable for, any Common Stock, or in any other manner transfer all or a portion of the economic consequences associated with the ownership of any such Common Stock (except for bona fide gifts to donees who agree to be bound by the restrictions of this paragraph (h)) or (2) announce an intent to offer or sell any such Common Stock or securities, or exercise any registration rights with respect to any such Common Stock or securities. All such opinions, certificates, letters and documents shall be in compliance with the provisions hereof only if they are reasonably satisfactory to you and to Sidley & Austin, counsel for the Underwriters. The Company shall furnish you with such manually signed or conformed copies of such opinions, certificates, letters and documents as you request. If any condition to the Underwriters' obligations hereunder to be satisfied prior to or at the First Closing Date is not so satisfied, this Agreement at your election will terminate upon notification to the Company and Nashua without liability on the part of any Underwriter or the Company or Nashua, except for the expenses to be paid or reimbursed by the Company and Nashua pursuant to Sections 7 and 9 hereof and except to the extent provided in Section 11 hereof. -20- 21 SECTION 9. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. If the sale to the Underwriters of the Shares on the First Closing Date is not consummated because any condition of the Underwriters' obligations hereunder is not satisfied or because of any refusal, inability or failure on the part of the Company or Nashua to perform any agreement herein or to comply with any provision hereof (unless such failure to satisfy such condition or to comply with any provision hereof is due to the default or omission of any Underwriter), the Company and Nashua agree, jointly and severally, to reimburse you and the other Underwriters upon demand for all out-of-pocket expenses (including the fees and expenses of Sidley & Austin) that shall have been incurred by you and them in connection with the proposed purchase and the sale of the Shares. Any such termination shall be without liability of any party to any other party except that the provisions of this Section, Section 7 and Section 11 shall at all times be effective and shall continue to apply. SECTION 10. EFFECTIVENESS OF REGISTRATION STATEMENT. You, the Company and Nashua will use your and their best efforts to cause the Registration Statement to become effective, if it has not yet become effective, and to prevent the issuance of any stop order suspending the effectiveness of the Registration Statement and, if such stop order be issued, to obtain as soon as possible the lifting thereof. SECTION 11. INDEMNIFICATION. (a) The Company and Nashua, jointly and severally, agree to indemnify and hold harmless each Underwriter and each person, if any, who controls any Underwriter within the meaning of the 1933 Act or the Exchange Act against any losses, claims, damages or liabilities, joint or several, to which such Underwriter or such controlling person may become subject under the 1933 Act, the Exchange Act or other federal or state statutory law or regulation, at common law or otherwise (including in settlement of any litigation if such settlement is effected with the written consent of the Company and/or Nashua, as the case may be), insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in the Registration Statement, including the information deemed to be part of the Registration Statement at the time of effectiveness pursuant to Rule 430A, if applicable, any preliminary prospectus, the Prospectus, or any amendment or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading; and will reimburse, as incurred, each Underwriter and each such controlling person for any legal or other expenses reasonably incurred by such Underwriter or such controlling person in connection with investigating or defending any such loss, claim, damage, liability or action; PROVIDED, HOWEVER, that neither the Company nor Nashua will be liable in any such case to the extent that (i) any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in the Registration Statement, any preliminary prospectus, the Prospectus or any amendment or supplement thereto in reliance upon and in conformity with written information furnished to the Company by or on behalf of any Underwriter through the Representatives regarding the Underwriters and specifically for use therein or (ii) if such statement or omission was contained or made in any preliminary prospectus and corrected in the Prospectus and (1) any such loss, -21- 22 claim, damage or liability suffered or incurred by any Underwriter (or any person who controls any Underwriter) resulted from an action, claim or suit by any person who purchased Shares which are the subject thereof from such Underwriter in the offering and (2) such Underwriter failed to deliver or provide a copy of the Prospectus to such person at or prior to the confirmation of the sale of such Shares in any case where such delivery is required by the 1933 Act. In addition to their other obligations under this Section 11(a), the Company and Nashua, jointly and severally, agree that, as an interim measure during the pendency of any such claim, action, investigation, inquiry or other proceeding arising out of or based upon any statement or omission, or any alleged statement or omission, described in this Section 11(a), they will reimburse the Underwriters on a monthly basis for all reasonable legal and other expenses incurred in connection with investigating or defending any such claim, action, investigation, inquiry or other proceeding, notwithstanding the absence of a judicial determination as to the propriety and enforceability of the Company's and Nashua's obligation to reimburse the Underwriters for such expenses and the possibility that such payment might later be held to have been improper by a court of competent jurisdiction. This indemnity agreement will be in addition to any liability which the Company and Nashua may otherwise have. (b) Each Underwriter will severally indemnify and hold harmless the Company, each of its directors, each of its officers who signed the Registration Statement, and Nashua and each person, if any, who controls the Company within the meaning of the 1933 Act or the Exchange Act, against any losses, claims, damages or liabilities to which the Company, or any such director, officer, Nashua or controlling person may become subject under the 1933 Act, the Exchange Act or other federal or state statutory law or regulation, at common law or otherwise (including in settlement of any litigation, if such settlement is effected with the written consent of such Underwriter), insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue or alleged untrue statement of any material fact contained in the Registration Statement, any preliminary prospectus, the Prospectus, or any amendment or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission in the Registration Statement, any preliminary prospectus, the Prospectus, or any amendment or supplement relates the information furnished to the Company by and on behalf of the Underwriters for use in the Registration Statement as set forth in Section 4 of this Agreement; and will reimburse, as incurred, any legal or other expenses reasonably incurred by the Company, or any such director, officer, Nashua or controlling person in connection with investigating or defending any such loss, claim, damage, liability or action. In addition to their other obligations under this Section 11(b), the Underwriters agree that, as an interim measure during the pendency of any such claim, action, investigation, inquiry or other proceeding arising out of or based upon any statement or omission, or any alleged statement or omission, described in this Section 11(b), they will reimburse the Company and Nashua on a monthly basis for all reasonable legal and other expenses incurred in connection with investigating or defending any such claim, action, investigation, inquiry or other proceeding, notwithstanding the absence of a judicial determination as to the propriety and enforceability of the Underwriters' obligation to reimburse the Company and Nashua for such -22- 23 expenses and the possibility that such payments might later be held to have been improper by a court of competent jurisdiction. This indemnity agreement will be in addition to any liability which such Underwriter may otherwise have. (c) Promptly after receipt by an indemnified party under this Section of notice of the commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against an indemnifying party under this Section, notify the indemnifying party of the commencement thereof; but the omission so to notify the indemnifying party will not relieve it from any liability which it may have to any indemnified party except to the extent that the indemnifying party was prejudiced by such failure to notify. In case any such action is brought against any indemnified party, and it notifies an indemnifying party of the commencement thereof, the indemnifying party will be entitled to participate in, and, to the extent that it may wish, jointly with all other indemnifying parties similarly notified, to assume the defense thereof, with counsel reasonably satisfactory to such indemnified party; provided, however, if the defendants in any such action include both the indemnified party and the indemnifying party and the indemnified party shall have reasonably concluded that there may be legal defenses available to it and/or other indemnified parties which are different from or additional to those available to the indemnifying party, or the indemnified and indemnifying parties may have conflicting interests which would make it inappropriate for the same counsel to represent both of them, the indemnified party or parties shall have the right to select separate counsel to assume such legal defense and otherwise to participate in the defense of such action on behalf of such indemnified party or parties. Upon receipt of notice from the indemnifying party to such indemnified party of its election so to assume the defense of such action and approval by the indemnified party of counsel, the indemnifying party will not be liable to such indemnified party under this Section for any legal or other expenses subsequently incurred by such indemnified party in connection with the defense thereof unless (i) the indemnified party shall have employed such counsel in connection with the assumption of legal defense in accordance with the proviso to the next preceding sentence (it being understood, however, that the indemnifying party shall not be liable for the expenses of more than one separate counsel, approved by the Representative in the case of paragraph (a), representing all indemnified parties not having different or additional defenses or potential conflicting interest among themselves who are parties to such action), (ii) the indemnifying party shall not have employed counsel satisfactory to the indemnified party to represent the indemnified party within a reasonable time after notice of commencement of the action or (iii) the indemnifying party has authorized the employment of counsel for the indemnified party at the expense of the indemnifying party. No indemnifying party shall, without the prior written consent of the indemnified party (which consent shall not be unreasonably withheld), effect any settlement of any pending or threatened proceeding in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party, unless such settlement includes an unconditional release of such indemnified party from all liability arising out of such proceeding. It is agreed that any controversy arising out of the operation of the interim reimbursement arrangements set forth in Section 11(a) or (b) hereof, including the amount of any requested reimbursement payments, the method of determining such amounts and the basis on which such amounts shall be apportioned among the indemnifying parties, shall be settled by arbitration conducted pursuant to the Code of Arbitration Procedure of the National Association -23- 24 of Securities Dealers, Inc. Any such arbitration must be commenced by service of a written demand for arbitration or a written notice of intention, therein electing the arbitration tribunal. In the event the party demanding arbitration does not make such designation of an arbitration tribunal in such demand or notice, then the party responding to said demand or notice is authorized to do so. Any such arbitration will be limited to the operation of the interim reimbursement provisions contained in Section 11(a) or (b) hereof and will not resolve the ultimate propriety or enforceability of the obligation to indemnify for expenses that are created by the provisions of such Section 11(a) or (b) hereof. No indemnifying party shall be liable for the expenses of any settlement effected without its prior consent, which consent shall not be unreasonably withheld. (d) If the indemnification provided for in this Section is unavailable to an indemnified party under paragraph (a) or (b) of this Section 11 in respect of any losses, claims, damages or liabilities referred to therein, then each applicable indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (i) in such proportion as is appropriate to reflect the relative benefits received by the Company, Nashua and the Underwriters from the offering of the Shares or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company, Nashua and the Underwriters in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations. The respective relative benefits received by the Company, Nashua and the Underwriters shall be deemed to be in the same proportion, in the case of the Company and Nashua, as the total price paid to the Company and Nashua for the Shares by the Underwriters (net of underwriting discount but before deducting expenses), and, in the case of the Underwriters, as the underwriting discount received by them bears to the total of such amounts paid to the Company and Nashua and received by the Underwriters as underwriting discount, in each case as contemplated by the Prospectus. The relative fault of the Company, Nashua and the Underwriters shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company or Nashua, on the one hand, or by the Underwriters as set forth in Section 4 hereof, on the other hand, and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The amount paid or payable by a party as a result of the losses, claims, damages and liabilities referred to above shall be deemed to include any legal or other fees or expenses reasonably incurred by such party in connection with investigating or defending any action or claim. The Company, Nashua and the Underwriters agree that it would not be just and equitable if contribution pursuant to this Section were determined by pro rata allocation, even if the Underwriters were considered as one person, or by any other method of allocation which does not take account of the equitable considerations referred to in the immediately preceding paragraph. Notwithstanding the provisions of this Section, no Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the Shares -24- 25 underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages which such Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Underwriters' obligations to contribute pursuant to this Section are several in proportion to their respective underwriting commitments and not joint. (e) The provisions of this Section shall survive any termination of this Agreement. SECTION 12. DEFAULT OF UNDERWRITERS. It shall be a condition to the agreement and obligation of the Company and Nashua to sell and deliver the Shares hereunder, and of each Underwriter to purchase the Shares hereunder, that, except as hereinafter in this paragraph provided, each of the Underwriters shall purchase and pay for all Shares agreed to be purchased by such Underwriter hereunder upon tender to the Representative of all such Shares in accordance with the terms hereof. If any Underwriter or Underwriters default in their obligations to purchase Shares hereunder on the First Closing Date and the aggregate number of Shares which such defaulting Underwriter or Underwriters agreed but failed to purchase does not exceed 10 percent of the total number of Shares which the Underwriters are obligated to purchase on the First Closing Date, the Representative may make arrangements satisfactory to the Company and Nashua for the purchase of such Shares by other persons, including any of the Underwriters, but if no such arrangements are made by such date the nondefaulting Underwriters shall be obligated severally, in proportion to their respective commitments hereunder, to purchase the Shares which such defaulting Underwriters agreed but failed to purchase on such date. If any Underwriter or Underwriters so default and the aggregate number of Shares with respect to which such default or defaults occur is more than the above percentage and arrangements satisfactory to the Representative, the Company and Nashua for the purchase of such Shares by other persons are not made within 36 hours after such default, this Agreement will terminate without liability on the part of any nondefaulting Underwriter or the Company or Nashua, except for the expenses to be paid by the Company and Nashua pursuant to Section 7 hereof and except to the extent provided in Section 11 hereof. In the event that Shares to which a default relates are to be purchased by the nondefaulting Underwriters or by another party or parties, the Representative or the Company shall have the right to postpone the First Closing Date for not more than seven business days in order that the necessary changes in the Registration Statement, Prospectus and any other documents, as well as any other arrangements, may be effected. As used in this Agreement, the term "Underwriters" includes any person substituted for an Underwriter under this Section. Nothing herein will relieve a defaulting Underwriter from liability for its default. SECTION 13. EFFECTIVE DATE. This Agreement shall become effective immediately as to Sections 7, 9, 11 and 14 and as to all other provisions at the time at which the Pricing Agreement is executed and delivered, unless such a day is a Saturday, Sunday or holiday -25- 26 (and in that event this Agreement shall become effective at such hour on the business day next succeeding such Saturday, Sunday or holiday); but this Agreement shall nevertheless become effective at such earlier time after the Pricing Agreement is executed and delivered as you may determine on and by notice to the Company and Nashua or by release of any Shares for sale to the public. For the purposes of this Section, the Shares shall be deemed to have been so released upon the release for publication of any newspaper advertisement relating to the Shares or upon the release by you of telegrams (i) advising Underwriters that the Shares are released for public offering, or (ii) offering the Shares for sale to securities dealers, whichever may occur first. SECTION 14. TERMINATION. Without limiting the right to terminate this Agreement pursuant to any other provision hereof: (a) This Agreement may be terminated by the Company by notice to you or by you by notice to the Company and Nashua at any time prior to the time this Agreement shall become effective as to all its provisions, and any such termination shall be without liability on the part of the Company or Nashua to any Underwriter (except for the expenses to be paid or reimbursed pursuant to Section 7 hereof and except to the extent provided in Section 11 hereof) or of any Underwriter to the Company or Nashua. (b) This Agreement may also be terminated by you prior to the First Closing Date, and the option referred to in Section 5, if exercised, may be cancelled at any time prior to the Second Closing Date, if (i) trading in securities on the New York Stock Exchange shall have been suspended or minimum prices shall have been established on such exchange, or (ii) a banking moratorium shall have been declared by Illinois, New York, or United States authorities, or (iii) there shall have been an outbreak of major armed hostilities between the United States and any foreign power which in the opinion of the Representative makes it impractical or inadvisable to offer or sell the Shares. Any termination pursuant to this paragraph (b) shall be without liability on the part of any Underwriter to the Company or Nashua or on the part of the Company or Nashua to any Underwriter (except for expenses to be paid or reimbursed pursuant to Section 7 hereof and except to the extent provided in Section 11 hereof). SECTION 15. REPRESENTATIONS AND INDEMNITIES TO SURVIVE DELIVERY. The respective indemnities, agreements, representations, warranties and other statements of the Company, of its officers, of Nashua and of the several Underwriters set forth in or made pursuant to this Agreement will remain in full force and effect, regardless of any investigation made by or on behalf of any Underwriter or the Company or any of its or their partners, officers or directors or any controlling person, or Nashua, as the case may be, and will survive delivery of and payment for the Shares sold hereunder. SECTION 16. NOTICES. All communications hereunder will be in writing and, if sent to the Underwriters will be mailed, delivered or telegraphed and confirmed to you c/o William Blair & Company L.L.C., 222 West Adams Street, Chicago, Illinois 60606, with a copy to John J. Sabl, Sidley & Austin, One First National Plaza, Chicago, Illinois 60603; if sent to the Company will be mailed, delivered or telegraphed and confirmed to the Company at its corporate -26- 27 headquarters at 1401 Interstate Drive, Champaign, Illinois 61821-1090, with a copy to Michael P. O'Brien, Bingham, Dana & Gould LLP, 150 Federal Street, Boston, Massachusetts 02110; and if sent to Nashua will be mailed, delivered or telegraphed and confirmed to Nashua at its corporate headquarters at 44 Franklin Street, P.O. Box 2002, Nashua, New Hampshire 03061-2002. SECTION 17. SUCCESSORS. This Agreement and the Pricing Agreement will inure to the benefit of and be binding upon the parties hereto and their respective successors, personal representatives and assigns, and to the benefit of the officers and directors and controlling persons referred to in Section 11, and no other person will have any right or obligation hereunder. The term "successors" shall not include any purchaser of the Shares as such from any of the Underwriters merely by reason of such purchase. SECTION 18. REPRESENTATION OF UNDERWRITERS. You will act as the Representative for the several Underwriters in connection with this financing, and any action under or in respect of this Agreement taken by you will be binding upon all the Underwriters. SECTION 19. PARTIAL UNENFORCEABILITY. If any section, paragraph or provision of this Agreement is for any reason determined to be invalid or unenforceable, such determination shall not affect the validity or enforceability of any other section, paragraph or provision hereof. SECTION 20. APPLICABLE LAW. This Agreement and the Pricing Agreement shall be governed by and construed in accordance with the laws of the State of Illinois. * * * * * * -27- 28 If the foregoing is in accordance with your understanding of our agreement, kindly sign and return to us the enclosed duplicates hereof, whereupon it will become a binding agreement among the Company, Nashua and the several Underwriters, including you, all in accordance with its terms. Very truly yours, CERION TECHNOLOGIES INC. By: /s/ David A. Peterson ------------------------- Chief Executive Officer NASHUA CORPORATION By: /s/ Gerald G. Garbacz ------------------------- CERION HOLDINGS INC. By: /s/ Gerald G. Garbacz ------------------------- The foregoing Agreement is hereby confirmed and accepted as of the date first above written. WILLIAM BLAIR & COMPANY, L.L.C. Acting as Representative of the several Underwriters named in Schedule A. WILLIAM BLAIR & COMPANY, L.L.C. By: /s/ Richard M. King ------------------------------ -28- 29 EXHIBIT A CERION TECHNOLOGIES INC. 3,840,000 SHARES COMMON STOCK* PRICING AGREEMENT ----------------- _______, 1996 WILLIAM BLAIR & COMPANY, L.L.C. As Representative of the Several Underwriters 222 West Adams Street Chicago, Illinois 60606 Ladies and Gentlemen: Reference is made to the Underwriting Agreement dated , ________ 1996 (the "Underwriting Agreement") relating to the sale by the Company and Cerion Holdings Inc., a Delaware corporation and the parent of the Company (the "Selling Stockholder"), and the purchase by the several Underwriters for whom William Blair & Company, L.L.C. is acting as the representative (the "Representative"), of the above Shares. All terms herein shall have the definitions contained in the Underwriting Agreement except as otherwise defined herein. Pursuant to Section 5 of the Underwriting Agreement, the Company and Nashua agree with the Representative as follows: 1. The initial public offering price per share for the Shares shall be $______. 2. The purchase price per share for the Shares to be paid by the several Underwriters shall be $______, being an amount equal to the initial public offering price set forth above less $_____ per share. Schedule A is amended as follows: [If Applicable] _______________________________ * Plus an option to acquire up to 576,000 additional shares to cover over allotments. 30 If the foregoing is in accordance with your understanding of our agreement, kindly sign and return to us the enclosed duplicates hereof, whereupon it will become a binding agreement among the Company, Nashua and the several Underwriters, including you, all in accordance with its terms. Very truly yours, CERION TECHNOLOGIES INC. By: -------------------------- Chief Executive Officer NASHUA CORPORATION By: -------------------------- CERION HOLDINGS INC. By: -------------------------- The foregoing Agreement is hereby confirmed and accepted as of the date first above written. WILLIAM BLAIR & COMPANY, L.L.C. Acting as Representative of the several Underwriters WILLIAM BLAIR & COMPANY, L.L.C. By: ------------------------------ -2- 31 SCHEDULE A Number of Firm Shares to be Underwriter Purchased - ----------- --------- William Blair & Company, L.L.C. .............................. 1,700,000 Alex. Brown & Sons Incorporated .............................. 95,000 Dean Witter Reynolds Inc...................................... 95,000 Dillon, Read & Co. Inc........................................ 95,000 A.G. Edwards & Sons, Inc...................................... 95,000 Goldman, Sachs & Co........................................... 95,000 Hambrecht & Quist LLC......................................... 95,000 Merrill Lynch, Pierce, Fenner & Smith Incorporated ........... 95,000 Montgomery Securities......................................... 95,000 Morgan Stanley & Co. Incorporated ............................ 95,000 PaineWebber Incorporated...................................... 95,000 Prudential Securities Incorporated ........................... 95,000 Robertson, Stephens & Company LLC ............................ 95,000 Salomon Brothers Inc.......................................... 95,000 C.L. King & Associates, Inc. ................................. 95,000 George K. Baum & Company...................................... 45,000 Brean Murray, Foster Securities Inc. ......................... 45,000 The Chicago Corporation....................................... 45,000 Dain Bosworth Incorporated.................................... 45,000 First of Michigan Corporation ................................ 45,000 Gabelli & Company, Inc........................................ 45,000 J.J.B. Hilliard, W.L. Lyons, Inc. ............................ 45,000 Howe Barnes Investments, Inc. ................................ 45,000 EVEREN Securities, Inc........................................ 45,000 McDonald & Company Securities, Inc. .......................... 45,000 Mesirow Financial, Inc. ...................................... 45,000 Needham & Company, Inc. ...................................... 45,000 Piper Jaffray Inc............................................. 45,000 Principal Financial Securities, Inc........................... 45,000 Sutro & Co. Incorporated...................................... 45,000 Tucker Anthony Incorporated .................................. 45,000 Van Kasper & Company.......................................... 45,000 Wheat First Butcher Singer.................................... 45,000 --------- Total ............................................ 3,840,000 ========= 32 SCHEDULE B Comfort Letter of Price Waterhouse, L.L.P. (1) They are independent public accountants with respect to the Company within the meaning of the 1933 Act. (2) In their opinion the financial statements and schedules of the Company included in the Registration Statement and Prospectus and the financial statements of the Company from which the information presented under the caption "Selected Financial Data" has been derived which are stated therein to have been examined by them comply with the applicable accounting requirements of the 1933 Act. (3) Based upon limited procedures set forth in detail in such letter, nothing has come to their attention which causes them to believe that (a) the unaudited financial information of the Company included in the Registration Statement and Prospectus do not comply as to form in all material respects with the applicable accounting requirements of the 1933 Act, or are not presented in conformity with generally accepted accounting principles applied on a basis substantially consistent with that of the audited financial statements included in the Registration Statement and Prospectus or (B) at the date of the latest available balance sheet read by such accountants, or at a subsequent specified date not more than five days prior to the date of this Agreement (in the case of the first letter of such accountants), there was any increase in long-term or short-term (other than normal payments) debt or any decrease in total assets, net current assets, stockholders's equity or common stock, as compared with amounts shown on the latest balance sheet included in the Registration Statement and Prospectus, or (C) for the period from the closing date of the latest income statement included in the Registration Statement and Prospectus to the closing date of the latest available income statement read by such accountants there were any decreases, as compared with the corresponding period of the previous year and with the period of corresponding length ended the date of the latest income statement included in the Registration Statement and Prospectus, in the amounts of net sales, income before income taxes or in the total or per share amounts of net income, except in all cases set forth in this Paragraph 3 for changes, increases or decreases which the Registration Statement and Prospectus disclose have occurred or may occur or which are described in such letter. (4) Based upon the procedures set forth in Paragraph 3 above and Paragraph 5 below and a reading of the "Selected Financial Data," and the pro forma financial information contained in the Prospectus and the information contained under the caption "Management" included in the Registration Statement and Prospectus, nothing has come to their attention that caused them to believe that the "Selected Financial Data" and the pro forma financial information included in the Registration Statement and Prospectus do not comply in all material respects with the applicable requirements of Regulation S-K under the 1933 Act and the Exchange Act (e.g. "Selected Financial Data" (Item 301) and "Supplementary Financial Information" (Item 302)), or that the information set forth therein is not fairly stated in relation to the financial statements from 33 which it was derived, and nothing has come to their attention that caused them to believe that the information under the caption "Management" contained in the Registration Statement and Prospectus does not comply in all material respects with the applicable requirements of Item 402 ("Executive Compensation") of such Regulation S-K. (5) They are unable to and do not express any opinion on the pro forma financial information contained in the Prospectus or on the pro forma adjustments applied to the historical amounts included in such information; however, for purposes of such letter they have: (A) read the pro forma financial information contained in the Prospectus, (B) made inquiries of certain officials of the Company who have responsibility for financial and accounting matters about the basis for their determination of the pro forma adjustments and whether the pro forma financial information contained in the Prospectus comply in form in all material respects with the applicable accounting requirements of Regulation S-X and (C) proved the arithmetic accuracy of the application of the pro forma adjustments to the historical amounts in the pro forma financial information contained in the Prospectus. Nothing has come to their attention as a result of such procedures, however, that caused them to believe that such pro forma financial information does not comply as to form in all material respects with the applicable requirements of Article XI of Regulation S-X and that the pro forma adjustments have not been properly applied to the historical amounts in the compilation of the pro forma financial information. (6) In addition to the examination referred to in their opinions and the limited procedures referred to in Paragraph 3 above, they have carried out certain specified procedures, not constituting an audit, with respect to certain amounts, percentages, ratios and financial information that has been derived from the accounting and financial records of the Company that are subject to internal accounting controls which are included in the Registration Statement and Prospectus and which are specified by the Representative, and have found such amounts, percentages, ratios and financial information to be in agreement with the relevant accounting and financial records of the Company identified in such letter. (7) In the case of the second or third letter of such accountants, they reaffirm the statements made pursuant to Paragraphs 1 through 6 above, except that the specified date referred to shall be a date not more than two days prior to the date of such letter and, if the Company has elected to rely on Rule 430A under the 1933 Act, to the further effect that they have carried out procedures as specified in Paragraph 6 with respect to certain amounts, percentages and financial information specified by the Representative and deemed to be a part of the Registration Statement pursuant to Rule 430(A)(b) and have found such amounts, percentages and financial information to be in agreement with the records specified in Paragraph 6. -2- EX-2.1 3 ASSET PURCHASE AGREEMENT 1 EXHIBIT 2.1 EXECUTION COPY ASSET PURCHASE AGREEMENT BY AND BETWEEN NASHUA CORPORATION AND THE KENDALL COMPANY DATED AS OF APRIL 17, 1996 2 TABLE OF CONTENTS -----------------
Page ---- 1. SALE OF ASSETS; EXCLUDED ASSETS................................ 1 2. LIABILITIES OF SELLER.......................................... 3 3. PURCHASE PRICE................................................. 5 4. PAYMENT OF PURCHASE PRICE AND PURCHASE PRICE ADJUSTMENT............................................. 5 5. ALLOCATION OF THE PURCHASE PRICE............................... 7 6. WARRANTY CLAIMS................................................ 7 7. SALE OF FACILITY............................................... 7 8. BILL OF SALE................................................... 8 9. ASSIGNMENT OF INTELLECTUAL PROPERTY............................ 8 10. INSTRUMENT OF ASSUMPTION....................................... 8 11. LICENSE OF NAME................................................ 8 12. WATER BASED ADHESIVE LICENSE................................... 8 13. UNION CONTRACTS................................................ 8 14. EMPLOYEES...................................................... 9 15. EMPLOYEE BENEFITS PLANS........................................ 9 16. SELLER'S REPRESENTATIONS AND WARRANTIES........................ 10 17. PRE-CLOSING COVENANTS OF SELLER................................ 18 18. ACCOUNTS RECEIVABLE............................................ 18 19. BUYER'S REPRESENTATIONS AND WARRANTIES......................... 19 20. CLOSING........................................................ 20 21. CONDITIONS TO CLOSING.......................................... 22 22. BEST EFFORTS TO CONSUMMATE; FURTHER ASSURANCES................. 24 23. PARTIES IN INTEREST; NO THIRD PARTY BENEFICIARIES.............. 25 24. BULK SALES ACT COMPLIANCE...................................... 25 25. NONCOMPETITION................................................. 25 26. RECORDS........................................................ 26 27. BROKERAGE COMMISSION........................................... 26 28. SURVIVAL OF REPRESENTATIONS AND WARRANTIES..................... 26 29. SELLER'S INDEMNIFICATION....................................... 26 30. SPECIAL ENVIRONMENTAL AGREEMENT................................ 30 31. BUYER'S INDEMNIFICATION........................................ 31 32. INDEMNIFICATION................................................ 32 33. EXCLUSIVE REMEDY............................................... 33 34. SEVERABILITY................................................... 33 35. COMPLETE AGREEMENT............................................. 34 36. STRICT CONSTRUCTION............................................ 34 37. KNOWLEDGE OF SELLER DEFINED.................................... 34 38. EXPENSES....................................................... 34 39. SALES TAX...................................................... 34 40. APPLICABLE LAW................................................. 34 41. LITIGATION RELATING TO THE BUSINESS............................ 34 42. SECTION HEADINGS............................................... 35
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Page ---- 43. EXHIBITS....................................................... 35 44. WAIVER......................................................... 35 45. ASSIGNMENT..................................................... 35 46. NOTICES........................................................ 35 47. PRESS RELEASES AND ANNOUNCEMENTS; CONFIDENTIALITY.............. 36 48. SPECIFIC PERFORMANCE........................................... 36 49. COUNTERPARTS .................................................. 37
Attachment I Product Lines Schedule 1(c) Real Property Schedule 1(f) Data Processing Assets Schedule 1(g) Trademarks Schedule 1(k) Equipment Leases Schedule 4 December 31 Net Asset Disclosure Schedule 4(b)(ii) Closing Date Net Asset Disclosure Schedule 7 Sale of Facility Schedule 13 Union Contracts Schedule 16(d) Absence of Certain Changes or Events Schedule 16(f) Suitability of Purchased Assets Schedule 16(h) Intellectual Property Schedule 16(i) Inventory Schedule 16(j) Contracts Schedule 16(k) Advance Payments and Deposits Schedule 16(l) Employment Matters Schedule 16(m) ERISA Schedule 16(n) Litigation and Investigations Schedule 16(o) Product Liability History Schedule 16(q) Compliance with Laws; Permits Schedule 16(r) Environmental Matters Schedule 16(v) Consents of Third Parties Schedule 37 Knowledge of Seller Exhibit A Access Easement Exhibit B Bill of Sale Exhibit C Assignment of Intellectual Property Exhibit D Instrument of Assumption Exhibit E Trademark License Agreement Exhibit F Temporary Services Agreement Exhibit G Water Based Adhesive License Exhibit H Opinion of Paul Buffum, Esq. Exhibit I Guaranty of Tyco International Ltd. Exhibit J-1 Opinion of John H. Masterson, Esq. Exhibit J-2 Opinion of Byron S. Kalogerou, Esq. -ii- 4 ASSET PURCHASE AGREEMENT ------------------------ This Agreement made on or as of the 17th day of April, 1996, by and between NASHUA CORPORATION ("Seller"), a Delaware corporation, having a principal place of business at 44 Franklin Street, Nashua, New Hampshire 03061 and THE KENDALL COMPANY ("Buyer"), a Delaware corporation, having a principal place of business at 15 Hampshire Street, Mansfield, Massachusetts 02048. W I T N E S S E T H ------------------- WHEREAS, Seller is a diversified manufacturing company which has been engaged, through its Nashua Tape Products Division ("Nashua Tape"), in the business of selling a broad range of tape and adhesive products for various industrial and commercial uses, which products are principally manufactured by Nashua Tape ("Business"); and WHEREAS, the Business of Nashua Tape has been principally conducted at a facility located at 2600 7th Avenue, Watervliet, New York ("Facility"); and WHEREAS, the Business manufactures and sells those products described on ATTACHMENT I hereto ("Products"); and WHEREAS, Seller desires to sell and Buyer desires to purchase certain assets and assume certain liabilities of Nashua Tape relating to the Business as more fully described herein; and WHEREAS, the assets being purchased constitute a going concern. NOW, THEREFORE, in consideration of the mutual promises herein contained and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties, intending to be bound, agree as follows: 1. SALE OF ASSETS; EXCLUDED ASSETS. -------------------------------- 1.1 Subject to the terms and conditions hereinafter set forth, Seller shall sell, transfer, convey and assign and deliver to Buyer, and Buyer shall purchase at the Closing (as defined below), free and clear of all Liens (as defined below) except as hereinafter described; all of Seller's right, title and interest in and to certain of the property and assets relating to the Business as set forth below: (a) The Business as a going concern and all customer relations and goodwill related thereto ("Goodwill"); 5 (b) All of Seller's tangible personal property used in the conduct of the Business and located at the Facility or in the possession of Nashua Tape's employees including Seller's furniture, fixtures, machinery, equipment, computers and tools; (c) Seller's land, buildings and building equipment located at 2600 7th Avenue, Watervliet, New York subject to any leasehold interests as more particularly described in SCHEDULE 1(c) attached hereto ("Facility" or "Real Property"); (d) Seller's accounts receivable existing on the Closing Date (as defined below) relating to the Business ("Accounts Receivable"); (e) All of the inventory of the Business (finished goods, work in process, raw materials and supplies) that exist on the Closing Date ("Inventory"); (f) Seller's data processing equipment and related software used in the conduct of the Business and located at the Facility as more particularly described in SCHEDULE 1(f) attached hereto ("Data Processing Assets"); (g) Seller's right, title and interest in and to those trademarks and tradenames used in the conduct of the Business which are set forth in SCHEDULE 1(g) attached hereto ("Trademarks"); (h) To the extent necessary to make the Products, all of Seller's rights to copyrights, and copyright applications; and, to the extent documented, all trade secrets, processes, inventions, technical knowledge, formulae, know-how and similar property which are used in the Business, and all rights under patent and other intellectual property licenses with regard to the Business, but, except as provided by the Water Based Adhesive License, as hereinafter defined, excluding any and all proprietary information regarding the manufacture and application of Seller's water based adhesive and water dispersible release agent technology, included but not limited to formulations, know-how, trade secrets, processes and related properties (collectively such exceptions are referred to as "Seller's Water Based Technology" and where used singularly referred to as "Seller's Water Based Adhesive Technology" or "Seller's Water Based Release Agent Technology") ("Intellectual Property"); (i) All of Seller's oral and written contracts relating to the Business, including open purchase and supply orders ("Contracts"); (j) Seller's customer lists relating to the Business ("Customer Lists"); -2- 6 (k) Seller's leasehold interests in equipment leases with regard to the Business as set forth in SCHEDULE 1(k) attached hereto ("Equipment Leases"); (l) Seller's prepaid expenses existing on the Closing Date with regard to the Business (other than the Seller's insurance policies) which are transferable and of a benefit to Buyer; (m) Seller's pre-printed forms and other documents possessed by the Seller and used in the Business, including sales brochures, stationery, advertising literature, etc. ("Forms and Brochures"); (n) Seller's business and operational records relating primarily to the Business, including customer files, collection and credit records, environmental compliance records, supplier lists, personnel records, accounting records, bills of material and vendor lists (collectively "Records"); and (o) All governmental licenses, permits, approvals, authorizations and registrations ("Permits") that are held by Seller and necessary to the operation of the Business, to the extent such Permits are freely transferable. All of the foregoing being hereinafter referred to as the "Purchased Assets" or the "Assets." 1.2 Notwithstanding the provisions of Section 1.1 above, the Purchased Assets shall not include the following, regardless of whether such assets are related to the Business (the "Excluded Assets"): cash, cash equivalents, notes receivable, intercompany accounts, the Logistics Management Services Agreement dated as of November 8, 1995 between Seller and Logicorp, a division of Ryder Dedicated Logistics, Inc., the Employment Agreement dated July 5, 1989, with Robert A. Geiger, Seller's obligations to any employee of the Business with respect to incentive stay bonuses, rights under insurance policies of the Seller, litigation awards and/or proceeds which relate to events occurring on or prior to the Closing, investments, tax rebates and/or refunds, except as provided by Section 11 hereof, all rights to the names "Nashua" and "Nashua Tape," the logo and designs incorporating those names and all other assets of the Seller not used in connection with the Business. 2. LIABILITIES OF SELLER. At the Closing, the Buyer, without further action or the execution of any other instruments, shall assume and shall perform, pay or discharge, as the same shall become due, the following liabilities relating to the Business: -3- 7 (a) accounts payable and accrued expenses of Nashua Tape as and in the amounts set forth on the December 31 Net Asset Disclosure, as hereinafter defined, and all accounts payable and accrued expenses of Nashua Tape which are incurred in the ordinary course of business after December 31, 1995 and prior and up to the Closing Date and which are required to be set forth on the Closing Date Net Asset Disclosure (as defined below) (the "Accrued Liabilities"); (b) the Warranty Claims (as defined in Section 6), all obligations of the Seller arising under the Contracts from and after the Closing, the Union Contracts (as defined, and subject to the conditions set forth, in Section 13) and the employee benefit plan obligations referred to in Section 15 (together with the Accrued Liabilities, the "Assumed Liabilities"); (c) Notwithstanding any implication to the contrary contained in Sections 2(a) and (b) hereof, Buyer shall not assume, pay or in any way be liable or responsible for any of the following debts, liabilities or obligations (collectively, the "Excluded Liabilities"): (i) any liability or obligation of Seller under this Agreement or on account of any of the transactions contemplated hereby, including, without limitation, any liability or obligation of Seller to attorneys, accountants, brokers, or others for services rendered or expenses incurred by or on behalf of Seller, and, except as otherwise provided herein, all other expenses associated with the transfer of the Purchased Assets or the Assumed Liabilities; (ii) any wages, salaries, bonuses, commissions, vacation or holiday pay, post retirement medical benefits, fringe benefits, long-term disability benefits, life insurance benefits, any duties, obligations or liabilities arising under any employee benefit plan, policy or practice, whether defined by Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended and in effect ("ERISA") or otherwise, relating to the employees of the Business or other amounts due to any employees or former employees of the Business which accrue on or prior to the Closing Date and which are not set forth on the Closing Date Net Asset Disclosure; (iii) any liabilities and obligations of Seller for any federal, state, provincial, local or foreign income, excise, sales, real estate, personalty, payroll or other taxes of any kind whatsoever payable with respect to the operations of the Business on or prior to the Closing Date and which are not set forth on the Closing Date Net Asset Disclosure; -4- 8 (iv) any liability or obligation of Seller relating to, resulting from, caused by, or arising out of the ownership, operation or control of the Business by Seller on or prior to the Closing Date, and which arises out of the following: (A) any accident or occurrence occurring on or prior to the Closing Date resulting in personal injury, sickness, death, property damage, property destruction or loss of use of property arising out of or resulting from the operation of the Business by Seller, (B) any breach of contract (other than Warranty Claims), workers' compensation claim or violation of any law or final order of any federal, state, judicial, quasi-judicial or governmental body, or (C) any personal injury, sickness, death or property damage resulting from (i) occurrences occurring on or prior to the Closing Date arising out of a defect or alleged defect of products manufactured or sold by Seller prior to the Closing Date including, without limitation, any such liabilities or obligations for defects or alleged defects in design or failure to warn, or (ii) any negligence or alleged negligence in inspection, maintenance or service; (v) any liability or obligation of the Seller with respect to the Excluded Assets; and (vi) any and all claims, legal actions, suits, arbitrations, government investigations or other legal proceedings relating to, resulting from, caused by, or arising out of the ownership, operation, use or control of the Business by Seller on or prior to the Closing Date, including, without limitation, those identified on SCHEDULE 16(n). (d) Any and all liabilities or obligations of which may be incurred by Buyer following the Closing with respect to the Business which are neither Assumed Liabilities nor Excluded Liabilities are hereinafter referred to as "Unknown Liabilities." 3. PURCHASE PRICE. In consideration for the purchase of the Purchased Assets and the assumption of the Assumed Liabilities, the Buyer shall pay to the Seller an amount equal to $28,000,000, subject to the Purchase Price Adjustment, as hereinafter defined (the "Purchase Price"). 4. PAYMENT OF PURCHASE PRICE AND PURCHASE PRICE ADJUSTMENT. -------------------------------------------------------- (a) The Purchase Price shall be paid by Buyer to Seller by federal funds wire transfer at the Closing. -5- 9 (b). Purchase Price shall be adjusted subsequent to the Closing as follows: (i). The Seller has delivered to the Buyer an unaudited summary of certain current assets and certain current liabilities of the Business as of December 31, 1995 (the "December 31 Net Asset Disclosure"). A copy of the December 31 Net Asset Disclosure is attached hereto as SCHEDULE 4. The excess of current assets of the Business over its current liabilities as set forth on the December 31 Net Asset Disclosure is referred to here in as the "December 31 Net Assets." (ii). Within forty-five (45) days following the Closing Date, the Buyer shall prepare and deliver to the Seller an unaudited summary of certain current assets and certain current liabilities of the Business as of the Closing Date (the "Closing Date Net Asset Disclosure"). Except as set forth in SCHEDULE 4(b)(ii), the Closing Date Net Asset Disclosure shall accurately reflect all Inventory, Accounts Receivable, prepaids and other assets, accounts payable and accrued expenses which are accrued on the books and records of the Seller, shall be prepared in accordance with generally accepted accounting principals ("GAAP") and shall in all material respects be prepared consistently with the December 31 Net Asset Disclosure. The excess of the current assets of the Business over its current liabilities as set forth on the Closing Date Net Asset Disclosure is referred to herein as the "Closing Date Net Assets." In the event that the Closing Date Net Assets have either increased or decreased by any amount from the December 31 Net Assets, the amount of the increase or decrease shall be paid by Buyer to Seller, (if the Closing Date Net Assets exceed the December 31 Net Assets) or by Seller to Buyer (if the December 31 Net Assets exceed the Closing Date Net Assets) (the "Purchase Price Adjustment"). The Purchase Price Adjustment shall be made by certified or bank check or, at the payee's option, by wire transfer in immediately available funds to a bank account designated by the payee not later than the close of business on the third business day immediately following the date on which the Purchase Price Adjustment is finally determined, and shall include simple interest on such amount at the prime rate or base rate of interest publicly quoted by Chase Bank as of and commencing on the Closing Date and continuing until the date of full payment hereunder. The Closing Date Net Asset Disclosure delivered by Buyer and the calculation of the Purchase Price Adjustment shall be final and binding on the parties hereto, unless within thirty (30) days following Buyer's delivery of the Closing Date Net Asset Disclosure to the Seller, Buyer receives from Seller a written statement setting forth in reasonable detail Seller's objections to such calculation. Seller and Buyer shall use -6- 10 reasonable efforts to resolve any such dispute, and such resolution shall be in writing and shall be final and binding on the parties hereto. Until the earlier to occur of (i) the mutual agreement of the Buyer and Seller as to the appropriate amount of the Purchase Price Adjustment, or (ii) the final determination of the Purchase Price Adjustment by the Independent Accountants as set forth below, Buyer shall allow Seller reasonable access to its books and records pertaining to the Business and cooperate with Seller during normal business hours for purposes of computing and/or verifying the information set forth in the Closing Date Net Asset Disclosure. If Seller and Buyer have not reached a final resolution of any dispute within thirty (30) days following Buyer's receipt of Seller's objections, such dispute shall be resolved by Ernst & Young LLP (the "Independent Accountants"). The fees and expenses of the Independent Accountants shall be paid one-half by Buyer and one-half by Seller. The determination of the Purchase Price Adjustment by the Independent Accountants shall be final and binding upon the parties hereto. 5. ALLOCATION OF THE PURCHASE PRICE. The allocation of the Purchase Price among the Purchased Assets shall be mutually agreed upon between the Buyer and the Seller no later than 90 days following the Closing Date in order to reflect the fair market value of the Purchased Assets. The parties agree to use such allocation on IRS Form 8594 to comply with the provisions of Section 1060 of the Internal Revenue Code. 6. WARRANTY CLAIMS. Buyer shall assume Seller's obligation and liability for warranty claims under Seller's written warranties covering Products manufactured prior to the Closing Date (the "Warranty Claims"). 7. SALE OF FACILITY. Seller shall convey title to the Facility by Bargain and Sale Deed with Covenant against Grantor's Acts and Lien Coverage and Buyer shall accept such title subject to all existing leasehold interests, all covenants, conditions, restrictions and easements of record so long as the Facility is not in violation thereof and any of the foregoing does not materially impair the use of the Facility for industrial purposes and subject further to an access easement to be reserved in the deed in the form of EXHIBIT A attached hereto (the "Access Easement"). Except as set forth in SCHEDULE 7 attached hereto, Seller is selling the Facility in "as is" condition and makes no other warranty, express or implied, with respect thereto. Buyer acknowledges that the buildings comprising the Facility may contain asbestos-containing materials on pipes and related areas. Buyer further acknowledges that it has fully and completely inspected the Facility and is satisfied with its conditions. This Section shall survive the delivery of the deed hereunder. -7- 11 8. BILL OF SALE. At the Closing, Seller and Buyer shall execute and deliver a bill of sale in the form of EXHIBIT B attached hereto (the "Bill of Sale") whereby Seller shall sell, transfer, convey, assign and deliver to Buyer all of Seller's right, title and interest in and to the Purchased Assets insofar as such are assignable. To the extent that the assignment of any Contract or Permit requires the consent of any other party, this Agreement shall not constitute a contract to assign the same if an attempted assignment would cause a breach of the same. If any such consent is not obtained prior to Closing, the Seller shall cooperate with the Buyer in any reasonable arrangement requested by the Buyer designed to provide the Buyer the benefits under any such Contract or Permit, including enforcement of any and all rights of the Seller against the other party thereto arising out of breach or cancellation thereof by such other party or otherwise. 9. ASSIGNMENT OF INTELLECTUAL PROPERTY. At the Closing, Seller shall execute assignments of the Intellectual Property in the form of EXHIBIT C attached hereto. 10. INSTRUMENT OF ASSUMPTION. At the Closing, Seller and Buyer shall execute and deliver an instrument of assumption in the form of EXHIBIT D attached hereto (the "Assumption Agreement"), whereby Buyer shall assume full responsibility from and after the Closing Date with respect to the Assumed Liabilities. Buyer shall satisfy its obligations with respect to the Assumed Liabilities by use of its best efforts and in a commercially reasonable manner. 11. LICENSE OF NAME. At the Closing Seller and Buyer shall enter into a license agreement in the form of EXHIBIT E attached hereto (the "Trademark License"). 12. WATER BASED ADHESIVE LICENSE. At the Closing Seller and Buyer shall enter into a license agreement in the form of EXHIBIT F attached hereto whereby the Seller shall grant Buyer the right to use Seller's Water Based Adhesive Technology (the "Water Based Adhesive License"). Nothing herein shall be construed to provide Buyer with any rights to Seller's Water Based Release Agent Technology. 13. UNION CONTRACTS. Nashua Tape is a party to those collective bargaining agreements set forth in SCHEDULE 13 attached hereto ("Union Contracts"). Buyer is a successor employer with respect to the Union Contracts. Buyer shall, as of the Closing Date, assume all of Seller's obligations accruing from and after the Closing Date with respect to the Union Contracts; PROVIDED, HOWEVER, that in lieu of assuming the Nashua Hourly Defined Benefit Plan or establishing a comparable defined benefit pension plan, Buyer may substitute a qualified defined contribution plan with monthly contributions by Buyer which will provide benefits -8- 12 equivalent to $40 per month per year of service (as determined on a reasonable actuarial equivalent basis by Buyer's actuary). 14. EMPLOYEES. On or prior to the Closing Date, effective as of and conditioned on the occurrence of the Closing, the Buyer shall offer employment to all employees of Seller who are employed by Nashua Tape immediately prior to Closing, except for employees who are on long-term disability as of the Closing Date (the "Transferred Employees") and employees who are on short-term disability as of the Closing Date and are reasonably likely to be candidates for long-term disability. Seller agrees to encourage such employees to whom Buyer offers employment to accept employment with Buyer. Buyer shall offer to employ employees of Nashua Tape who are not union employees on terms and conditions, including salary and benefits, which, in the aggregate, are substantially equivalent to the terms and conditions of their employment by Seller immediately prior to Closing. Buyer shall offer to employ employees of Nashua Tape who are union employees pursuant to the terms and conditions of the Union Contracts. 15. EMPLOYEE BENEFITS PLANS. ------------------------ (a) The rights of all Nashua Tape employees under the Seller's qualified defined benefit plans, to wit: Nashua Corporation's Retirement Plan for Salaried Employees and Nashua Corporation's Hourly Retirement Plan (each a "Defined Benefit Plan" and collectively the "Defined Benefit Plans") who become employees of Buyer shall be governed by the provisions of the Defined Benefit Plans as amended to the date of such employees' termination of employment with Seller. If it is determined that the sale of the Business and the termination of the employment of the employees of Nashua Tape as a result thereof did not constitute a "partial termination" of the Defined Benefit Plans, or either of them, within the meaning of Section 411(d)(3) of the Internal Revenue Code, then Seller shall take such steps as are necessary to amend such Defined Benefit Plan or Plans so that service with Buyer shall constitute service under such Defined Benefit Plan or Plans but only for purposes of and only to the extent that such service with Buyer would have constituted vesting service under such Defined Benefit Plan or Plans if such service had been rendered to Seller rather than Buyer. Buyer shall cause each individual who was an employee of Nashua Tape and who becomes an employee of Buyer within three (3) months of the Closing Date, to receive credit under each qualified plan (as determined under Section 401(a) of the Internal Revenue Code) maintained by Buyer for service with Nashua Tape for purpose of eligibility and vesting (but not benefit accrual). Buyer and Seller shall cooperate and exchange such information as may be necessary or appropriate to carry out the intention of this Section. -9- 13 (b) As soon as possible following the Closing Date, Buyer shall adopt a new section 401(K) savings plan and trust (or amend Buyer's existing 401(K) savings plans) ("Buyer's Plans") for the Transferred Employees. The level of employer matching contribution under Buyer's Plans shall be at least equivalent to the level of employer matching contribution under the Nashua Corporation Employees' Savings Plan and Trust ("Seller's Plan"). Buyer agrees that all service credited to the Transferred Employees under Seller's Plan for purposes of eligibility and vesting shall be credited to the Transferred Employees under Buyer's Plans. As soon as possible following Buyer's adoption of Buyer's Plans (but in no event more than 60 days following such adoption), Seller shall cause an amount in cash (or property acceptable to Buyer) equivalent to the entire account balances of the Transferred Employees to be transferred from the trust account maintained under Seller's Plan to the new trust maintained pursuant to Buyer's Plans, provided, however, that no such transfer shall be made until Buyer has received a favorable determination letter from the IRS as to the tax qualified status of Buyer's Plans or Buyer's counsel has provided an opinion reasonably satisfactory to Seller as to the tax qualified status of Buyer's Plans. Buyer and Seller agree to cooperate with each other to ensure the proper transfer of account balances as described above, and Seller agrees to provide Buyer with such information under Seller's Plan with respect to the Transferred Employees as Buyer shall reasonably request. (c) At or prior to the Closing, Buyer shall assume from Seller, as plan sponsor, all of the rights, duties and obligations of Seller with respect to the Transferred Employees under the group welfare benefit plans maintained by Seller for employees of the Business; PROVIDED, HOWEVER, that the Seller shall remain liable and shall hold Buyer harmless for obligations with respect to retirement medical benefits for all Nashua Tape employees who are not on active employment status as of the Closing. (d) Buyer shall assume all obligations of Seller accrued through the Closing Date to Transferred Employees with respect to vacation, sick leave and severance benefits. For all such assumed employee benefits and programs, Buyer shall credit Transferred Employees with tenure for their employment by the Seller and any predecessor to the Seller. If Buyer terminates the employment of any employee of the Business after Closing, Buyer shall be responsible for all obligations in connection with such termination, including, without limitation, obligations under the Worker Adjustment and Retraining Notification Act of 1988 or COBRA. 16. SELLER'S REPRESENTATIONS AND WARRANTIES. Except as specifically set forth in the Schedules referenced in this Section 16, as the same may be amended prior to Closing, Seller represents and warrants to Buyer as follows: -10- 14 (a) ORGANIZATION AND GOOD STANDING. Seller has been duly organized and is validly existing and in good standing under the laws of the State of Delaware with full power and authority to own the Purchased Assets and operate the Business in the manner and places where the Business is presently being conducted. (b) NO DEFAULTS. Except where waivers or consents have been obtained, the consummation of the transactions contemplated herein will not violate or result in the breach of any term or provision of or constitute a default under the Certificate of Incorporation or By-Laws of Seller or constitute a default under any indenture, mortgage, deed or trust or other agreement or instrument to which Seller is a party, or by which it may be bound, nor will same result in the acceleration of any debt or liability of, or the creation of any lien against Seller, nor will same result in any violation of any other, writ, injunction or decree of any court, administrative agency or governmental body. Except where waivers or consents have been obtained, the execution of this Agreement and the performance of the covenants herein contemplated do not result in the creation of any lien, charge or encumbrance upon any of the Purchased Assets pursuant to any indenture, agreement or other instrument to which the Seller is a party, or by which the Seller is bound or by which the Business or Purchased Assets may be affected. (c) AUTHORIZATION. Seller's execution and delivery of this Agreement and the consummation of the sale contemplated in accordance with all the terms hereof have been duly authorized by all necessary corporate action of Seller. This Agreement is a valid and enforceable obligation of the Seller, enforceable in accordance with its terms except as such enforceability may be limited by general principles of equity or by applicable bankruptcy, insolvency or similar laws in effect which affect creditor's rights generally. (d) ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as set forth in SCHEDULE 16(d) hereto, since December 31, 1995: (i) The Business has been conducted in the usual, regular and ordinary course in substantially the same manner as theretofore; (ii) There has not been any material adverse change in the corporate status, business, operations or financial or other condition of the Business or in the assets, properties, obligations, or liabilities thereof. (iii) With respect to the Business, Seller has not incurred any obligation or liability or made any disbursement or disposition of any of its properties other than in the ordinary course of business and except as fully reflected or -11- 15 reserved against on the books of account of Seller or Nashua Tape; (iv) There has not been any material damage, destruction or loss, whether or not covered by insurance, regarding the Business or Purchased Assets; (v) Except as contemplated by this Agreement, there has not been any change in the accounting methods or practices followed by Seller relating to the Business or any change in depreciation methods or rates theretofore adopted; (vi) There has not been any material increase in the compensation or rate of compensation or commissions payable by Seller to any of the officers, employees, salesmen or agents of the Business; (vii) With respect to union labor relations, there has not been any actual or threatened work interruption or actual or threatened unfair labor practices in connection with any employees of the Business; (viii) Seller has exerted its best efforts to preserve the Business and to maintain the goodwill of the Business and its present customers and suppliers. (e). TITLE TO PURCHASED ASSETS. Seller has and shall convey to Buyer good and marketable title to, or a valid leasehold interest in, all of the Purchased Assets which do not constitute real property (the title to which shall be as provided by Section 7 of this Agreement), free and clear of all liens, claims, mortgages, security interests, pledges, conditional sales agreements, restrictions and encumbrances, or charges whatsoever (collectively, "Liens"), except for the Assumed Liabilities and such imperfections of title, liens and encumbrances, if any, as do not, individually or in the aggregate, materially detract from the value of or interfere with the present use of such properties or otherwise impair the operations of the Business. (f). SUITABILITY OF PURCHASED ASSETS. Except as set forth in SCHEDULE 16(f) hereto, the Purchased Assets and the Water Based Adhesive License include all of the rights of the Seller in the Products and such rights will furnish Buyer with all of the capacity and rights to formulate, manufacture, sell, ship and deliver the Products and perform the same services in the same manner as presently being manufactured or performed by the Seller with respect to the Business, including the capacity and rights to manufacture, use and sell all such Products and perform such services and conduct the Business in substantially the same manner without incurring any liability for license fees, royalties, claims of infringement of patents or trademark rights or claims or -12- 16 rights of others (except such claims or rights arising out of the Assumed Liabilities). (g) TANGIBLE PROPERTY. Seller has delivered to Buyer a true and complete list of all material tangible personal property owned by Seller used in the Business (other than Inventory) which list includes all material tangible personal property used in the Business. (h) INTELLECTUAL PROPERTY. The Seller does not own or otherwise use any patents in connection with the Business. Seller owns or has, royalty-free, the right to use all of the Intellectual Property. The property identified in SCHEDULE 16(h) hereto constitutes all of the copyrights, copyright applications, licenses and royalty rights within the Intellectual Property. Except as set forth in SCHEDULE 16(h) hereto, Seller has not granted to any person, firm or corporation, any right, license or privilege in any of the Intellectual Property and, to the best knowledge of Seller, none of the Intellectual Property infringes upon similar rights of others, nor is there infringement by others in the rights represented thereby. Except as set forth in SCHEDULE 16(h) hereto, Seller's rights in all the Intellectual Property are freely assignable to Buyer. Seller possesses, and Buyer will obtain upon the transfers contemplated by this Agreement, all such rights necessary to continue to conduct the Business, and to utilize the processes and market the Products heretofore utilized and marketed in the conduct of the Business, without payment of any royalties, fees or other consideration. Provided, however, it is understood that Buyer is not obtaining any rights to (i) the names Nashua and Nashua Tape and the logo and designs incorporating those names except to the extent provided by the Trademark License and (ii) Seller's Water Based Technology except to the extent provided by the Water Based Adhesive License. (i) INVENTORY. All items of Inventory are of a quality and quantity salable or usable in the ordinary course of business, except for obsolete items and items of below standard quality, all of which have been written-off or written-down on the Seller's books and records. Except as set forth in SCHEDULE 16(i), all such inventories are valued on the Seller's books and records at the lower of cost (calculated using the first-in, first-out valuation method) or market and have net realizable market values in the ordinary course of business of not less than their book value. (j) CONTRACTS. SCHEDULE 16(j) sets forth a true and complete list of each oral and written arrangement (or group of related written arrangements) for the purchase or sale of raw materials, commodities, supplies, products or other personal property or for the furnishing or receipt of services which by its terms may not be terminated upon 30 days notice by the Seller -13- 17 without any premium, penalty or termination fee and (i) which calls for performance over a period of more than one year, (ii) which involves more than the sum of $1,000 or, in the case of open customer purchase orders or purchase orders from any one purchaser or group of related purchasers, involves in the aggregate more than $10,000 for any such one purchaser or group of related purchasers, or (iii) in which the Seller has granted manufacturing rights, "most favored nation" pricing provisions or marketing or distribution rights relating to any products or territory or has agreed to purchase a minimum quantity of goods or services or has agreed to purchase goods or services exclusively from a certain party. Seller is not in default, to the best of Seller's knowledge no other party to any Contract is in default, and no notices of default been received by Seller with respect to the Contracts. All Contracts have been made in the ordinary course of business consistent with past practice. (k) ADVANCE PAYMENTS AND DEPOSITS. Except as set forth in SCHEDULE 16(k) attached hereto, no advance payments or deposits have been made to or with Seller with respect to the Business on any contracts or accounts. (l) EMPLOYMENT MATTERS. Except as set forth in SCHEDULE 16(l) attached hereto, in connection with its operation of the Business Seller has complied in all material respects with all applicable laws, rules and regulations relating to the employment of labor, including those relating to wages, hours, collective bargaining, health and safety and the payment or withholding of taxes. Seller has withheld from amounts paid to employees of the Business, and, to the extent due, have paid to the appropriate governmental agencies, all taxes or other amounts required to be withheld by law or agreement, including, without limitation, social security, federal, state and local withholding taxes. Seller is not liable for any arrears of wages or of any taxes or penalties for failure to comply with any of the foregoing. Except as set forth in SCHEDULE 16(l) attached hereto, to the best knowledge of Seller, the employment of all persons presently employed by Seller in the Business is terminable at will without any penalty or severance obligation of any kind, except as set forth in any written employment agreement referred to elsewhere herein. (m) ERISA. With respect to the Business and except as described in SCHEDULE 16(m) hereto, Seller is not a party to any written or oral deferred or incentive compensation agreement or employee welfare, benefit or pension plan with or for the benefit of any employee of the Business (collectively "Employee Benefit Plans"). Except as set forth in SCHEDULE 16(m), all Employee Benefit Plans which are pension benefit plans within the meaning of the Employee Retirement Income Security Act of 1974, as amended, ("ERISA") are qualified plans within the meaning of Section 401(a) of the Internal Revenue Code and have received a -14- 18 favorable determination letter from the Internal Revenue Service regarding their qualification under such section. All Employee Benefit Plans are structured and operated in material compliance with ERISA and the rules and regulations promulgated pursuant thereto and in material compliance with all other applicable laws and regulations. All contributions required to be paid by Seller to any Employee Benefit Plan by the terms of the Plan and/or by reason of the minimum funding standards of ERISA for periods ending on or before the Closing Date have been paid by the Closing. All reporting, disclosure, fiduciary and other requirements and limitations imposed by the Internal Revenue Code and rulings and regulations thereunder, applicable to the Employee Benefit Plans have been met in all material respects and no application for funding, waivers, rulings, determination letters, advisory opinions or prohibited transaction exemptions are pending before the United States Department of Labor, the Internal Revenue Service or the Pension Benefit Guaranty Corporation with respect to any of the Employee Benefit Plans. No Employee Benefit Plan is the subject of any lawsuit, arbitration or other proceeding concerning any benefit claim (other than actions seeking qualified domestic relations orders), breach of fiduciary duty or other matter, whether brought by or against a participant, a beneficiary, a trustee, a plan administrator, Seller or any officer, employee or director thereof. With respect to the Business, Seller is not a contributing employer to nor does it have any obligation under any "multi-employer plan" within the meaning of ERISA. (n) LITIGATION; INVESTIGATIONS. Except as set forth in SCHEDULE 16(n) attached hereto, Seller is not engaged in or, to the best of Seller's knowledge, threatened with any suit, action or proceeding which might give rise to any claim against the Business or which might affect the Business; and Seller is not subject to any outstanding judgment, order, decree or injunction of any court or governmental body with respect to the Business. (o) PRODUCT LIABILITY HISTORY. Except as set forth in SCHEDULE 16(o) attached hereto, there has not been any material liability, claim or obligation arising from or alleged to arise from any actual or alleged injury to persons or property as a result of the ownership, possession, or use of any product manufactured or sold by Nashua Tape. (p) TAXES. Seller has timely and properly filed all federal, state, county and local tax returns, reports and estimates for all years and periods (and portions thereof) for which such returns and periods or estimates were due with respect to the Business (including, without limitation, those taxes due in respect of income, gross receipts, sales, use, withholding, employment, franchise, transfer and property taxes) and has paid, accrued or withheld all amounts required to be paid, accrued or withheld with respect to the Business. Each such tax return and -15- 19 report required to be filed with respect to the Business was correct and complete in all material respects. Seller has properly withheld accurate amounts from its employees in compliance with the tax withholding provisions of the Internal Revenue Code of 1986, as amended, and other applicable federal, state and local laws. All payments due from Seller with respect to the Business on account of employee income tax withholding or social security and unemployment taxes in respect of years or periods ending on or prior to the Closing Date were duly paid prior to the Closing Date, or are otherwise accrued on the Closing Date Net Asset Disclosure. (q) COMPLIANCE WITH LAWS; PERMITS. Except as set forth in SCHEDULE 16(q) attached hereto, Seller has complied in all material respects with all applicable statutes and regulations of the United States of America and of all state, municipalities and agencies of any thereof, respecting the conduct of the Business and the maintenance and operation of the Purchased Assets (except for laws protecting the environment or relating to the storage or disposal of hazardous waste materials which are the subject of the special warranty set forth in Section (16)(r) hereof). Seller holds all Permits necessary to conduct the Business in the same manner as it has been conducted heretofore, except where the failure to hold such a Permit would not have a material adverse effect on the business, assets, properties, condition (financial or otherwise) or prospects of Nashua Tape (a "Material Adverse Effect"). All Permits held by Nashua Tape are listed in SCHEDULE 16(q) attached hereto. All of the Permits are up to date and in good standing, and no fees or charges are currently due with respect thereto, except to the extent accrued on the books and records of the Seller. (r) ENVIRONMENTAL MATTERS. Except as set forth in SCHEDULE 16(r) hereto: (i) Seller has been and is conducting the Business in substantial compliance with all federal, state and local laws, rules and regulations governing environmental protection and with all applicable pollution standards. (ii) Seller has obtained and is in compliance with all permits which it is required by law to have as of the Closing Date and which are material to its ability to carry on the Business as it is presently being conducted, relating to: (A) pollution or protection of the environment, including, without limitation, all permits relating to emissions, discharges, pollutants, contaminants, or hazardous or toxic materials or wastes into ambient air, surface water, ground water or land, or -16- 20 (B) the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of pollutants, contaminants or hazardous or toxic materials or wastes, and the transactions contemplated hereby will not alter or impair any such permits. (iii) In connection with the conduct of the Business: (A) There are no conditions, circumstances, activities, practices, incidents, actions or plans which would materially interfere with or prevent compliance or continued compliance with any existing environmental laws or with any existing regulation, code, order, judgment, injunction, notice or demand letter issued, entered, promulgated or approved thereunder relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling, or the emission, discharge, release or threatened release into the environment, of any pollutant, contaminant, chemical, or industrial, toxic or hazardous material, substance or waste; (B) No release, emission or discharge into the environment of any hazardous substance (as that term is currently defined under the Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA") or any applicable analogous state law) is currently occurring in connection with the conduct of the Business beyond the permissible levels provided for in any applicable permits; and (C) There are no outstanding judicial or administrative notices, demand letters, complaints, orders, judgments or decrees concerning any federal, state and local laws, rules and regulations governing environmental protection or applicable pollution standards. Nothing in this Agreement shall render Seller liable in any way for the consequences of any actions of Buyer in operating the Business after the Closing. (s) DECEMBER 31 NET ASSET DISCLOSURE. Except as set forth in SCHEDULE 4(b)(ii), the items set forth on the December 31 Net Asset Disclosure has been prepared in accordance and consistent with GAAP and with past divisional reporting and accounting practices of Nashua Tape, and fairly presents the financial information set forth therein and no adjustments are or will be required to make such disclosures not misleading. (t) FULL DISCLOSURE. The documents delivered or to be delivered by Seller pursuant to this Agreement are true copies of all such documents. All statements contained in any exhibit, -17- 21 schedule, certificate or other instrument delivered by or on behalf of Seller in accordance with this Agreement shall be deemed representations and warranties of the Seller when made. No representation, warranty, covenant or statement by Seller in this Agreement (including any exhibits or schedules annexed hereto) contains or will contain any untrue statement of a material fact, or omits or will omit a material fact known to Seller, the omission of which will make the statement contained herein or therein misleading. (u) ACCOUNTS RECEIVABLE. All of the notes, accounts and royalties receivable of Nashua Tape arose in the ordinary course of the business, constitute valid and binding claims of Nashua Tape against independent third parties and are collectible, in the aggregate, in amounts not less than as reflected in Seller's books and records or financial statements. None of the notes, accounts and royalties receivable are subject to any rights of set-off. (v) CONSENTS OF THIRD PARTIES. Except as set forth in SCHEDULE 16(v), no consent, approval or agreement of any person, party, court, government or entity is required to be obtained by the Seller in connection with the execution and delivery of this Agreement which has not already been obtained by Seller. 17. PRE-CLOSING COVENANTS OF THE SELLER. Seller hereby covenants with Buyer as follows: (a) Prior to Closing the Seller will use its best efforts to obtain: (i) Consents of third parties to the assignment to Buyer of all material contracts, permits, registrations, leases, licenses and agreements relating to the Business that may be required in accordance with the terms and conditions of such contracts, permits, registrations, leases, license and agreements; and (ii) Novation agreements to all such contracts, permits, registrations, leases, licenses and agreements that may not be so assignable. (b) Immediately upon Closing, Seller will give over to Buyer all the books, records, accounts, contracts, correspondence and other documents and all files which have been regularly maintained by it with respect to the Business, which books, records, etc. will be maintained by Buyer for the benefit of both Buyer and Seller at its place of business in a safe, fireproof location. 18. ACCOUNTS RECEIVABLE. From and after the Closing Date, Seller may, from time to time receive payments from Nashua Tape's -18- 22 customers which are on account of accounts receivable of Buyer. Seller shall remit any such amount to Buyer within ten (10) business days of receipt. 19. BUYER'S REPRESENTATIONS AND WARRANTIES. Buyer represents and warrants to Seller as follows: (a) Buyer has been duly organized and is validly existing and in good standing under the laws of the State of Delaware with full power and authority to own its assets and operate its business in the manner and places where such business is presently being conducted. (b) Buyer is not engaged in or threatened with any suit, action, proceeding, governmental investigation or other controversy, which might give rise to any claim against it or which might materially affect any of its contractual rights or its business, nor is there any basis for any such suit, action, proceeding, governmental investigation or other controversy known to Buyer; and Buyer is not subject to any outstanding judgment, order, decree or injunction of any court or governmental body. (c) Except for any filings pursuant to the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, no consent, approval or authorization of, or designation, declaration or filing with any governmental authority or other third party on the part of Buyer is required in connection with the execution and delivery of this Agreement or the consummation of the transactions contemplated herein. (d) This Agreement and the various documents, instruments and agreements called for herein have been duly authorized, executed and delivered by the Buyer, and constitute legal, valid, binding obligations of Buyer, enforceable against Buyer in accordance with its terms except as such enforceability may be limited by general principles of equity or by applicable bankruptcy, insolvency or similar laws in effect which affect creditor's rights generally. (e) Subject to Seller's compliance with its obligations under this Agreement, Buyer has the capability and facilities necessary to operate the Business after the Closing. (f) The documents delivered or to be delivered by or on behalf of Buyer pursuant to this Agreement are true copies of all such documents. All statements contained in any exhibit, schedule, certificate or other instrument delivered by or on behalf of Buyer in accordance with this Agreement, shall be deemed representations and warranties of Buyer when made. No representation, warranty, covenant or statement by Buyer in this Agreement (including any exhibits or schedules annexed hereto) contain any untrue statement of a material fact, or omits or will -19- 23 omit a material fact known to Buyer, the omission of which will make the statement contained herein or therein misleading. (g) Buyer has been provided the opportunity to conduct due diligence and to obtain such information about the Business and the Purchased Assets as the Buyer deems relevant. The Buyer has not relied on any oral statement, representation or warranty as to the Purchased Assets. Buyer understands and acknowledges that no representation or warranty is being made by Seller, or any of its affiliates or representatives, as to the future operations or prospects of Nashua Tape and Buyer is not relying on any forecasted operating results or budgets with respect to Nashua Tape prepared by or on behalf of Seller. 20. CLOSING. The time, place and manner of closing this transaction shall be as follows: (a) The closing of the transactions contemplated by this Agreement and the payment of the Purchase Price shall take place on the third business day following the date on which all conditions set forth in Section 21 have been satisfied (the "Closing" or the "Closing Date") at the offices of Hale and Dorr, 60 State Street, Boston, Massachusetts, or such other date and place as may be mutually agreed upon by the parties. The Closing shall be effective and the transfer of ownership of the Purchased Assets and assumption of the Assumed Liabilities shall be deemed to have occurred as of the close of business on the date of the Closing. (b) At the Closing, all transactions shall be conducted substantially concurrently and no transaction shall be deemed to be completed until all are completed. (c) At the Closing, Seller shall execute, acknowledge and deliver to Buyer necessary instruments, in form and substance reasonably satisfactory to counsel for Buyer and Seller, as may be required or as may be appropriate to transfer to Buyer title to the Purchased Assets as required by this Agreement, including: (i) The Bill of Sale; (ii) The deed for the Facility, including the Access Easement; (iii) The assignments described in Section 9 hereof; (iv) The Trademark License; (v) The Water Based Adhesive License; -20- 24 (vi) A temporary services agreement in the form of Exhibit G attached hereto (the "Temporary Services Agreement"); (vii) An officer's certificate as to the accuracy of the representations and warranties set forth herein and as to the absence of material adverse changes; and (viii) An opinion of Paul Buffum, Esq., dated the date of the Closing and substantially in the form of Exhibit H attached hereto. (d). At the Closing, Buyer shall, upon due performance by the Seller of its obligations hereunder, execute, issue or deliver to Seller as the case may be: (i) An amount equal to the Purchase Price via federal funds wire transfer; (ii) The Assumption Agreement; (iii) The assignment described in Section 9 hereof; (iv) A guaranty of Tyco International Ltd. ("Tyco") in the form of Exhibit I attached hereto; (v) The Trademark License; (vi) The Water Based Adhesive License; (vii) Evidence of compliance with Sections 13, 14 and 15 hereof (relating to collective bargaining agreements, employees and employee benefits plans); (viii) Opinions of Buyer's counsel, dated the date of the Closing, and substantially in the form of EXHIBITS J-1 and J-2 attached hereto; and (ix) The deed for the Facility, including the Access Easement; (x) The Temporary Services Agreement; and (xi) All necessary documents as counsel for Seller may reasonably determine as required or appropriate to assume the obligations which Buyer has agreed to assume hereunder. (e) The parties shall deliver at the Closing such certificates and other documents not theretofore delivered as may be required to be delivered by this Agreement or the delivery of which is required to satisfy the conditions herein expressed. -21- 25 21. CONDITIONS TO CLOSING. 21.1 CONDITIONS PRECEDENT TO THE OBLIGATION OF SELLER. The obligations of Seller to consummate the transactions contemplated by this Agreement are subject to the satisfaction (or waiver by the Seller) on or prior to the Closing of the following conditions: (a) All of the agreements and covenants contained in this Agreement that are to be complied with, satisfied or performed by Buyer on or before the Closing Date shall, in all material respects, have been complied with, satisfied and performed; (b) All of the representations and warranties made by Buyer in this Agreement shall be true and correct in all respects both on and as of the date of this Agreement and on and as of the Closing Date; (c) The Seller shall have obtained all of the waivers, permits, consents, approvals or other authorizations, and effected all of the registrations, filings and notices, as may be required by or with respect to the Seller in connection with the transactions contemplated by this Agreement, except for any which if not obtained or effected would not have a Material Adverse Effect or materially impair the ability of the parties to consummate the transactions contemplated by this Agreement. (d) No action, suit, investigation or proceeding shall be threatened or pending before any court or governmental agency by any governmental agency, entity or person to restrain, prohibit, collect damages as a result of or otherwise challenge this Agreement or the transactions contemplated hereby; and (e) All releases of any liens, mortgages, pledges, security interests, restrictions, charges of other similar encumbrances or consents of lenders affecting the Business shall have been received. 21.2 CONDITIONS PRECEDENT TO THE OBLIGATION OF BUYER. The obligations of Buyer to consummate the transactions contemplated by this Agreement are subject to the satisfaction (or waiver by the Buyer) on or prior to the Closing of the following conditions: (a) All of the agreements and covenants contained in this Agreement that are to be complied with, satisfied or performed by Seller on or before the Closing Date shall, in all material respects, have been complied with, satisfied and performed; (b) All of the representations and warranties made by Seller in this Agreement shall be true and correct in all -22- 26 respects both on and as of the date of this Agreement and on and as of the Closing Date. It is understood and agreed that all of the representations and warranties contained in Section 16 of this Agreement that are not expressly limited to some other date shall be deemed to state the facts contained therein as they existed both as of the date of this Agreement and as of the Closing Date; and (c) The Seller shall have obtained all of the waivers, permits, consents, approvals or other authorizations, and effected all of the registrations, filings and notices, as may be required by or with respect to the Seller in connection with the transactions contemplated by this Agreement, except for any which if not obtained or effected would not have a Material Adverse Effect or materially impair the ability of the parties to consummate the transactions contemplated by this Agreement; (d) No action, suit, investigation or proceeding shall be threatened or pending before any court or governmental agency by any governmental agency, entity or person to restrain, prohibit, collect damages as a result of or otherwise challenge this Agreement or the transactions contemplated hereby; and (e) The Board of Directors of Tyco (the "Tyco Board") shall have duly approved the transactions contemplated by this Agreement no later than April 22, 1996. In the event the Seller does not receive written notice from Buyer by the close of business on April 22, 1996 that the Tyco Board has not given such approval, this condition shall be deemed satisfied. 21.3 HART-SCOTT-RODINO. The parties agree that the Closing is expressly conditioned upon the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the "HSR Act") having expired or the parties having received written confirmation from the United States Government of the early termination of the waiting period or other notification that the parties may proceed with the Closing. Buyer and Seller shall make an HSR Act filing no later than April 18, 1996 (the "HSR Filing Date"), and shall coordinate their filing dates to enable contemporaneous filing. Buyer shall pay all fees required in connection with such filings (other than Seller's legal fees). Both parties shall use reasonable efforts to advance the HSR Act filing in good faith. Buyer and Seller shall cooperate with each other and promptly take or cause to be taken all actions and do or cause to be done all things necessary, proper or advisable to obtain favorable review of the proposed transaction under the HSR Act, which efforts shall include, without limitation, except as otherwise may be required by applicable law, obtaining mutual agreement concerning agency appearances and submissions and allowing each party or its attorneys to (1) assist in all preparation for any agency -23- 27 interviews, depositions or voluntary agency appearances and attend such appearances to the extent permitted by agency rules and (2) review in advance of submission any written materials to be submitted to the agency, all to the extent consistent with applicable law. Each of the parties agrees to use reasonable efforts to resolve any objections that may be asserted with respect to the transaction hereunder by the Department of Justice, the Federal Trade Commission, any State Attorney General or any other governmental entity (including, without limitation, objections under any antitrust laws); PROVIDED, HOWEVER, that neither party shall be required to comply with any condition or restriction, including, without limitation, the disposition of assets, which would materially adversely impact the economic or business benefits of the transactions contemplated hereby. The parties agree to use reasonable efforts to take such action as may be required: (a) by the Department of Justice, the Federal Trade Commission, any State Attorney General or any other governmental entity in order to resolve such objections as any of them may have to the transaction hereunder, or (b) by any federal or state court of the United States, in any suit brought by a private party or governmental entity challenging the transaction hereunder as violative of the antitrust laws, in order to avoid the entry of, or to cause the withdrawal or voiding of, any injunction, temporary restraining order or other order which has the effect of preventing the consummation of the Agreement. 21.4 TERMINATION. In the event a suit is instituted challenging the transactions contemplated hereunder as violative of any antitrust laws, or if an HSR Act investigation ensues which continues beyond the 30th day following the HSR Filing Date (the "30th Day"), then at any time during the three (3) business days following the 30th Day, the Buyer and the Seller shall each have the unilateral right to cancel this Agreement and neither party shall have any further obligations hereunder to the other, except for breach. In the event an HSR Act investigation ensues which continues beyond the 60th day following the HSR Filing Date (the "60th Day"), then at any time following the 60th day, the Buyer and Seller shall each have the unilateral right to cancel this Agreement and neither party shall have any further obligations hereunder to the other, except for breach. 22. BEST EFFORTS TO CONSUMMATE; FURTHER ASSURANCES. Each of the parties agrees to use its best efforts to complete the purchase and sale of assets as contemplated by this Agreement, and in so doing, to satisfy each and all of the conditions to the Closing set forth herein. From time to time on and after the Closing Date, at Buyer's request, Seller will execute and deliver such further instruments of conveyance, transfer and assignment and take such other action as Buyer may require to more effectively convey and transfer to Buyer any of the assets, property and rights to be sold hereunder and will assist Buyer in the collection or reduction to possession of such assets and -24- 28 property. Buyer shall deliver or cause to be delivered such additional instruments and do and perform all such other acts as may reasonably be required by Seller for the purpose of carrying out this Agreement. 23. PARTIES IN INTEREST; NO THIRD PARTY BENEFICIARIES. This Agreement shall inure to the benefit of and be binding upon the parties named herein and their respective successors and assigns. Nothing in this Agreement, express or implied, is intended to confer upon any person other than the parties named herein and their respective successors or assigns any rights or remedies under or by reason of this Agreement. 24. BULK SALES ACT COMPLIANCE. Seller and Buyer mutually agree to waive each other's compliance with any applicable bulk sales law. 25. NONCOMPETITION. -------------- (a) Seller, by execution hereof, agrees that for a period of five (5) years (the "Noncompetition Period") following the Closing, Seller will not for itself or on behalf of any other person, partnership, trust, corporation or other entity, other than Buyer, for whatever reason engage, directly or indirectly, in the manufacture or sale of any tape product which is competitive with any Product set forth on ATTACHMENT I. (b) Seller agrees that Seller will not at any time during the Noncompetition Period, directly or indirectly, for itself or any person or entity, solicit, or endeavor to entice away from the Buyer any employee of the Business. (c) Seller agrees that this Section is necessary to maintain the customer base and goodwill of the Business, and to assist Buyer in the orderly transfer of the management of the Business. (d) Notwithstanding anything contained in this Agreement to the contrary, the Buyer acknowledges that Seller may be licensing or selling in the same or similar industry Seller's Water Based Adhesive Technology to third parties engaged in businesses which are competitive with the Business and such future activities of Seller will not be deemed to violate the terms set forth in this Section. (e) If in any judicial proceeding, a court shall refuse to enforce this Section, whether because the time limit is too long or because the restrictions contained herein are more extensive (whether as to geographic area, scope of business or otherwise) than is necessary to protect the business and goodwill of the Buyer, it is expressly understood and agreed between the parties hereto that this Agreement be modified to the extent -25- 29 necessary to permit this Agreement to be enforced in any such proceedings. 26. RECORDS. Buyer shall keep the Records for a period of eight (8) years from the Closing Date. Buyer shall provide Seller with copies of any of the Records requested by Seller and the original of any of the Records required by Seller in any litigation, audit or other adversarial context within ten (10) business days of any request by Seller and shall make its offices available for Seller during normal business hours. Buyer shall provide the Seller with prompt written notice if at any time the Records are moved to a new location, which notice shall identify the new location. 27. BROKERAGE COMMISSION. Seller has engaged the firm of Chase Securities, Inc. to assist it in connection with the transaction contemplated by this Agreement. Seller shall be solely responsible for the fees and expenses of such firm pursuant to its contract therewith. Except for the foregoing, Seller and Buyer each represent and warrant to the other that they have dealt with no brokers or finders in connection with this transaction. 28. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The parties hereto acknowledge that all of the representations and warranties contained in Section 16 of this Agreement shall survive the Closing of this transaction for a period of nine (9) months except for representations and warranties which relate to Taxes (as defined below), title or environmental matters which representations and warranties shall survive for as long as the applicable statute of limitations. 29. SELLER'S INDEMNIFICATION. ------------------------ (a) Subject to the limitations set forth in subsections (c), (d), (e) and (f) of this Section 29, Seller agrees to defend, indemnify, protect and hold Buyer harmless from any and all suits, claims, defenses, proceedings, hearings and any other actions (collectively referred to in this Section as "Claims") and any and all expenditures, damages, losses, liabilities, judgments, expenses (including, without limitation, expenses of litigation and reasonable legal fees), costs and disbursements (collectively referred to in this Section as "Costs") which may at any time be incurred by, imposed upon, or asserted or awarded against Buyer with respect to or resulting from: (i) any federal, state and/or local environmental and/or cleanup statutes, laws, rules, regulations, ordinances, orders, decrees, which are applicable to the Business or Purchased Assets and which arise from the ownership, operation and/or the condition of the Business or Purchased Assets prior to the Closing of the transactions contemplated by this Agreement; -26- 30 (ii) Any breach of representation or warranty, omission from any representation or warranty under Section 16 of this Agreement, or from any misrepresentation in or omission from any schedule, certificate or other instrument furnished under this Agreement (but only for the period such warranty survives the Closing pursuant to Section 28 hereof); (iii) Any failure by Seller to perform any obligation or duty required to be performed by it under any provision of this Agreement; (iv) Unknown Liabilities; and (v) Excluded Liabilities. (b) The obligations and liabilities of Seller with respect to Claims resulting from the assertion of the matters to be indemnified against shall be subject to the following terms and conditions: (i) In the case of any assertion, claim or demand requiring the incurring of any Costs in connection with the performance of investigatory, removal or remedial work with respect to environmental conditions for which Buyer may seek indemnification, Buyer shall permit Seller to conduct and control such work (at its sole expense) in cooperation with Buyer, and shall give Seller access to the Facility and to books and records in Buyer's possession or control as may be required and will make available relevant employees of Buyer as may be reasonably required. (c) Notwithstanding anything contained in this Agreement, the obligation of Seller to indemnify Buyer with respect to environmental contamination of the Facility shall be subject to the limitations contained in this subsection (c). The reports, studies and other investigation results identified in SCHEDULE 16(r) hereto provide to the best of Seller's knowledge the extent of the environmental contamination of the Facility as of the Closing Date ("Existing Contamination"). Seller acknowledges and agrees that, as between Buyer and Seller remediation of the Existing Contamination is not the responsibility of Buyer. Seller shall, in a commercially reasonable manner, take such steps as are necessary to remediate the Existing Contamination so as to satisfy the requirements of either the New York State Department of Environmental Conservation or the United States Environmental Protection Agency or any other agency which asserts jurisdiction over the Existing Contamination (the "Agency") and, in furtherance thereof, Seller shall reserve in the deed to the Facility an easement for access to the Facility as set forth in the Access Easement. Buyer shall be solely responsible for any and all environmental contamination resulting from its operations or ownership and occurring after the Closing. -27- 31 Seller's indemnity to Buyer with respect to the environmental contamination set forth in this Section 29 shall inure solely to the benefit of Buyer and any claim for such indemnity by Buyer shall be prohibited with respect to, and to the extent of, any environmental contamination which was caused at any time by any successor in title to Seller. For purposes of this Agreement environmental contamination shall mean pollutants, contaminants and chemical, industrial and hazardous materials and waste, and shall include, but not be limited to, all substances regulated under all federal, state and local laws, statutes, regulations and ordinances related to pollution or protection of the environment. (d) Notwithstanding anything in this Section 29 or elsewhere in this Agreement to the contrary, the amount recoverable from the Indemnifying Party (as defined below) in respect of any claim for indemnity shall be calculated after taking into account: (i) the extent to which, acting reasonably, the Indemnified Party (as defined below) mitigates or should have mitigated the claim or cost suffered including costs incurred in any settlement or arising out of any legal proceedings; and (ii). the value of any corresponding saving for the Buyer which results from the matter giving rise to the claim. (e) The Seller shall not be liable in respect of any claim for indemnity under Sections 29(a)(ii) and (a)(iv) insofar as the amount recoverable from the Seller under such claim, when added to all the other amounts recoverable under all claims for indemnity under Sections 29(a)(ii) and (a)(iv) made by the Buyer, exceeds $2,000,000. (f) The Seller shall not be liable in respect of any claim of indemnity under Sections 29(a)(ii) and (a)(iv) to the extent that: (i) the amount recoverable in respect of the facts or matters giving rise to any such claim shall be less than $10,000; or (ii) the amount recoverable in respect of the facts or matters giving rise to any claim under Sections 29(a)(ii) and (a)(iv) shall, together with all other amounts recoverable from Seller with respect to all other claims under Sections 29(a)(ii) and (a)(iv), be less than $175,000 in the aggregate. For the avoidance of doubt no amount which would fail to be recoverable against the Seller pursuant to (i) above shall be included for the purpose of calculating the amount of $175,000 aforesaid. -28- 32 (g) Any payment by the Seller under this Agreement to Buyer shall reduce by that amount any claim in respect of the same subject matter by the Buyer and Buyer shall take all necessary action so far as it is able to ensure that there shall be no duplication of any claim of indemnity relating to the same subject matter under this Agreement. (h) Upon payment by Seller of any claim for indemnification pursuant to this Section 29, Seller shall be subrogated to the rights of Buyer, if any, to receive payments from third parties with respect to such claim. (i) Any Costs actually paid by Buyer shall bear simple interest at the prime or base rate of Chase Bank from the date Seller is notified of such Costs, in accordance with Section 46 of this Agreement, until the date Seller reimburses Buyer for such costs. (j) Tax Matters. (i) Taxes Through Closing Date. -------------------------- (A) Seller shall be solely responsible for and shall indemnify and hold harmless Buyer with respect to all taxes, fees, duties or similar charges, including, without limitation, net income, gross income, gross receipts, sales, use, occupancy, excise, ad valorem, payroll, profits, withholding, employment or real or personal property taxes and any interest, penalties or additional amounts with respect thereof imposed by any taxing authority ("Taxes") with respect to the Business for or pertaining to all periods up to an including the Closing Date except to the extent accrued for on the Closing Date Net Asset Disclosure, and Buyer shall be responsible for an indemnify and hold harmless the Seller for all Taxes with respect to the Business for or pertaining to all periods thereafter. Any claim for indemnification hereunder shall be subject to the procedures set forth in Section 32 hereof. (B) Buyer and Seller agree that, in accordance with the "Alternative Procedure" provided in Section 5 of Revenue Procedure 84-77 1984-2 Cumulative Bulletin 753, with respect to filing and furnishing Internal Revenue Service Forms W-2, W-3 and 941, from and after the Closing Date (i) Buyer and Seller shall report on a "predecessor-successor" basis with respect to any of Seller's employees which buyer employs after the Closing Date, (ii) Seller shall be relieved of furnishing forms W-2 to such employees to whom it would have been obligated to furnish such form for the present calendar year, and (iii) Buyer shall assume the obligations of Seller to furnish such forms to employees for the present calendar year. -29- 33 (ii) COOPERATION AND EXCHANGE OF INFORMATION. Each party hereto shall provide the other with such cooperation and information as each may reasonably request with respect to the filing of any tax return, amended return or claim for refund, the determination of a liability for taxes, or a right to refund of taxes, or the conduct of any audit or other proceeding in respect of taxes. Such cooperation and information shall include providing copies of all relevant tax returns, together with accompanying schedules and related work papers, documents relating to rulings or other determinations by taxing authorities, and records concerning the ownership and tax basis of property, which either party may possess concerning the Business. Each party shall make its employees available to the other on a mutually convenient basis to provide explanation of any documents or information provided hereunder. Notwithstanding the foregoing, neither party shall be required to prepare any documents, or determine any information not then in its possession in response to a request under this Section. Buyer shall retain all returns, schedules and work papers and all material records or other documents relating thereto, until the expiration of the period of time beginning on the Closing Date and ending on the date on which taxes may no longer be assessed under the applicable statutes of limitation, including the period of waivers or extensions thereof. Any information obtained under this Section shall be kept confidential, except as may be otherwise necessary in connection with the filing of returns or claims for refund or in conducting any audit or other proceeding. (k) The limitations on indemnity set forth in subsections (e) and (f) of this Section 29 shall in no event be applicable to any claim for indemnity under subsections (a)(i), (a)(iii) and (a)(v) of this Section 29. 30. SPECIAL ENVIRONMENTAL AGREEMENT. ------------------------------- (a) Seller hereby represents to Buyer that with respect to the Existing Contamination (i) Norton Company owned and operated the Facility before such property was purchased by Seller (ii) that Seller is cooperating with the Agency to investigate and remediate the Existing Contamination and has submitted a workplan for Agency approval and (iii) that the Seller is presently engaged in litigation in the United States District Court for the Northern District of New York with Norton Company seeking a recovery of past investigative costs and a court declaration of prospective liability under CERCLA, among other causes of action ("the Norton Litigation"). (b) Buyer covenants and agrees that Seller shall solely be entitled to any monetary recoveries or other equitable relief granted by the Court in the Norton Litigation and such recoveries or relief shall inure to the Seller's sole benefit and that it will permit Seller access at the Facility to the extent provided -30- 34 in the Access Easement so as to allow Seller to further investigate and remediate the Existing Contamination pursuant to the submitted workplan or supplemental workplans as agreed between Seller and the Agency (the "Workplan"). Subject to Seller's obtaining Agency approval of the Workplan and satisfying Seller's obligations pursuant thereto, with respect to the Existing Contamination, the Buyer acknowledges that the Facility may contain residual subsurface soil and groundwater environmental contamination after Seller's performance of its obligations under the Workplan. Notwithstanding the immediately preceding sentence, any liability with respect to such subsurface soil and groundwater environmental contamination shall remain the exclusive responsibility of Seller. Buyer further covenants and agrees that with respect to the Existing Contamination, except as required by applicable law, Buyer shall not request, demand or otherwise insist upon or attempt to influence, directly or indirectly, the Agency to require any additional investigation or remediation of the Existing Contamination other than to what Seller and the Agency may agree in the Workplan. Except as required by applicable law, in the event that Buyer requests, demands or otherwise insists upon or attempts to influence, directly or indirectly, the Agency to require any additional investigation or remediation over and above the remediation limits agreed to between Seller and the Agency so as to create any additional liability or expense, Buyer shall indemnify and hold harmless Seller against such liability and/or expense. In the event that a bona fide prospective purchaser of the Facility (a "Bona Fide Purchaser") proposes to conduct environmental due diligence at the Facility, the Buyer shall provide Seller with ten (10) days notice prior to the commencement of such investigation and shall promptly provide Seller with copies of all test results, reports and any other materials prepared by the Bona Fide Purchaser or its agents with respect to the Facility. If, as a result of such investigation, Buyer reasonably determines that it is legally required to notify applicable regulatory authorities with respect to the results of such investigation, such notification shall not be deemed a breach of Buyer's obligations to Seller under this Section 30. d (c) Seller reserves the right to access the Facility for purposes of remediating the Existing Contamination as set forth in the Access Easement. 31. BUYER'S INDEMNIFICATION. ----------------------- (a) Buyer shall defend, indemnify, protect and hold Seller and any of its directors, officers and employees harmless against and in respect of: (i) Any loss, liability and costs arising out of or as a consequence of, the ownership or operation of the Business or Purchased Assets after the Closing; -31- 35 (ii) Any loss, liability, cost or expense resulting from any material misrepresentation, breach of warranty, omission from any representation or warranty or nonfulfillment of any agreement on the part of Buyer under this Agreement, or from any material misrepresentation in or omission from any schedule, certificate or other instrument furnished under this Agreement; (iii) Any material failure by Buyer to perform any obligation or duty required to be performed by it under any provision of this Agreement, including, without limitation, the Assumed Liabilities; (iv) Any failure by Buyer to perform its obligations required to be performed by it under Section 13; and (v) All actions, suits, proceedings, claims, demands, judgments, assessments, costs and expenses (including reasonable attorneys' fees) incident to any of the foregoing. 32. INDEMNIFICATION. --------------- 32.1 CLAIMS FOR INDEMNIFICATION. Whenever any claim shall arise for indemnification under Section 29 or 31, the party seeking indemnification (the "Indemnified Party"), shall promptly notify the party from whom indemnification is sought (the "Indemnifying Party") of the claim and, when known, the facts constituting the basis for such claim; PROVIDED, HOWEVER, that any delay on the part of the Indemnified Party in notifying any Indemnifying Party shall relieve the Indemnifying Party from any liability or obligation hereunder to the extent of any damage or liability caused by or arising out of such failure. In the event of any such claim for indemnification hereunder resulting from or in connection with any claim or legal proceeding by a third party, the notice shall specify, if known, the amount or an estimate of the amount of the liability arising therefrom. The Indemnified Party shall not settle or compromise any claim by a third party for which it is entitled to indemnification hereunder without the prior written consent, which shall not be unreasonably withheld or delayed, of the Indemnifying Party; PROVIDED, HOWEVER, that if suit shall have been instituted against an Indemnified Party and the Indemnifying Party shall not have taken control of such suit after notification thereof as provided in Section 32.2 of this Agreement, the Indemnified Party shall have the right to settle or compromise such claim as provided in Section 32.2. 32.2 DEFENSE BY THE INDEMNIFYING PARTY. In connection with any claim which may give rise to indemnity hereunder resulting from or arising out of any claim or legal proceeding by a person other than the Indemnified Party, the Indemnifying Party, -32- 36 at its sole cost and expense, may, upon written notice to the Indemnified Party, assume the defense of any such claim or legal proceeding if the Indemnifying Party acknowledges to the Indemnified Party in writing the obligation of the Indemnifying Party to indemnify the Indemnified Party with respect to all elements of such claim. If the Indemnifying Party assumes the defense of any such claim or legal proceeding, the Indemnifying Party shall select counsel reasonably acceptable to the Indemnified Party to conduct the defense of such claims or legal proceedings and at the sole cost and expense of the Indemnifying Party shall take all steps necessary in the defense or settlement thereof. The Indemnifying Party shall not consent to a settlement of, or the entry of any judgment arising from, any such claim or legal proceeding that (i) involves any non-monetary judgement affecting the Indemnified Party or (ii) does not involve the delivery of a general release in favor of the Indemnified Party, without the prior written consent of the Indemnified Party (which consent shall not be unreasonably withheld or delayed). The Indemnified Party shall be entitled to participate in (but not control) the defense of any such action, with its own counsel and at its own expense (except that the Indemnifying Party will be responsible for the fees and expenses of the separate co-counsel to the extent the Indemnified Party reasonably concludes that the counsel the Indemnifying Party has selected has a conflict of interest). If the Indemnifying Party does not assume the defense of any such claim or litigation resulting therefrom as provided in this Section 32 within 15 days after the date that the Indemnified Party has given notice of the claim to the Indemnifying Party: (a) the Indemnified Party may defend against such claim or litigation in such manner as it may deem appropriate, including, but not limited to, settling such claim or litigation on such terms as the Indemnified Party may deem appropriate; and (b) the Indemnifying Party shall be entitled to participate in (but not control) the defense of such action, with its counsel and at its own expense. 33. EXCLUSIVE REMEDY. The parties intend that the indemnification provisions set forth herein shall be the exclusive remedy for a breach of a representation, warranty and covenant contained herein. Notwithstanding the foregoing, the Buyer shall be entitled to avail itself of remedies for fraud and for specific performance which may be available to the Buyer under applicable law. 34. SEVERABILITY. The provisions of this Agreement shall be interpreted in such a manner as to comply with all applicable laws to the fullest extent possible; but if, notwithstanding such interpretation, any provision is determined to be illegal, invalid, or unenforceable, the remaining provisions of this Agreement shall not be affected, shall remain in full force, and shall continue to be binding upon the parties. -33- 37 35. COMPLETE AGREEMENT. This Agreement contains the entire understanding among the parties with respect to the transactions contemplated hereby and supersedes all other agreements and understandings among the parties and their officers, directors or employees. Except as expressly set forth in this Agreement, none of the parties has relied upon any oral representation or oral information given to it by any representative of either party. 36. STRICT CONSTRUCTION. The parties acknowledge that this Agreement is the result of their joint efforts. Therefore, no party shall advance a position that any provision should be more strictly construed against another party on the basis that such other party was responsible for drafting any provision in dispute. 37. KNOWLEDGE OF SELLER DEFINED. For purposes of this Agreement the terms "best knowledge of Seller", "best of Seller's knowledge" and similar terms shall mean the conscious awareness of any of the officers and employees of Seller set forth in SCHEDULE 37 attached hereto. 38. EXPENSES. Whether or not the transactions contemplated herein shall be consummated, except for HSR Act filing fees which shall be the responsibility of the Buyer, each party hereto shall pay its own expenses incidental to the preparation for carrying this Agreement into effect and consummating this transaction. Seller shall be responsible for the payment of any "gains tax" imposed by the State of New York with respect to the sale of the Facility. 39. SALES TAX. Buyer shall be responsible for the timely payment of New York Sales and Use Taxes and similar taxes imposed on the transactions contemplated hereby and Seller shall promptly remit to Buyer fifty percent (50%) of all amounts so paid upon receipt of evidence of payment thereof. Seller agrees to assist Buyer in any manner reasonably necessary to qualify for any New York Sales Tax exemptions available with respect to this transaction. 40. APPLICABLE LAW. This Agreement shall be governed by and construed in accordance with the laws of the State of New Hampshire without regard to the conflicts of laws principles thereof and the parties agree that the exclusive venue and jurisdiction shall be in the United States District Court in the State of New Hampshire regarding any dispute, controversy or performance arising from this Agreement, except for the calculation of the Purchase Price Adjustment as set forth in Section 4(b). 41. LITIGATION RELATING TO THE BUSINESS. It is possible that in the future, litigation may arise relating to the Business and which may relate directly or indirectly to the period prior to the Closing or the period subsequent to the Closing, or both. -34- 38 Each of the parties agrees, therefore, that to the extent reasonable under the circumstances, it will fully cooperate with and provide information, records and documents to the other party with respect to any such litigation or potential litigation in which such other party or parties is or may be involved. 42. SECTION HEADINGS. The section headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. 43. EXHIBITS. The Exhibits and Schedules attached hereto are an integral part of this Agreement and are incorporated herein by reference. The Schedule numbers refer to the number of the Section of this Agreement to which they relate. 44. WAIVER. Each party may, at its option, waive in writing any or all of the conditions herein contained to which its obligations hereunder are subject. 45. ASSIGNMENT. Neither party shall assign or transfer or purport to assign or transfer any of its rights or obligations under this Agreement without the written consent of the other party. 46. NOTICES. ------- (a) All notices, requests, demands and other communications hereunder shall be in writing and shall be delivered personally or by facsimile or sent by registered or certified mail, postage prepaid, addressed as follows: (i) If to the Buyer: The Kendall Company 15 Hampshire Street Mansfield, MA 02048 Attention: General Counsel Facsimile: (508) 261-8544 With a copy to: Tyco International Ltd. One Tyco Park Exeter, NH 03833 Attention: General Counsel Facsimile: (603) 778-7700 -35- 39 (ii) If to the Seller: Nashua Corporation 44 Franklin Street Nashua, New Hampshire 03061 Attention: Counsel Facsimile: (603) 880-2747 With a copy to: Hale and Dorr 60 State Street Boston, MA 02109 Attention: John K. Stone III, Esq. Facsimile: (617) 526-5000 or at such other addresses or to the attention of such other office, as either party shall have designated in writing to the other. (b) In the absence of evidence of earlier receipt, any notice or other communication shall be deemed to have been duly given: (i) if delivered personally, when left at the address referred to in this Section; (ii) if by facsimile, on completion of its transmission; or (iii) if by registered or certified mail, upon receipt. 47. PRESS RELEASES AND ANNOUNCEMENTS; CONFIDENTIALITY. The parties agree that, promptly following the execution and delivery of this Agreement, Seller shall issue a press release in mutually agreed upon form. Thereafter neither party shall issue any press release or public disclosure relating to the subject matter of this Agreement without the prior written approval of the other; PROVIDED, HOWEVER, that the Seller or Buyer may make any public disclosure it believes in good faith is required by law or regulation (in which case the disclosing party shall advise the other parties and provide the non-disclosing party with a copy of the proposed disclosure prior to making the disclosure). Prior to the Closing, Buyer shall not contact, directly or indirectly, (i) any existing or potential supplier, customer, creditor or competitor of Nashua Tape with respect to the transactions contemplated by this Agreement without the express prior written consent of the Seller; or (ii) any existing or former employee of Nashua Tape with respect to the transactions contemplated by this Agreement without the prior consent of the Seller. 48. SPECIFIC PERFORMANCE. Each of the parties acknowledges and agrees that the other party would be damaged irreparably in the event any of the provisions of this Agreement are not performed in accordance with their specific terms or otherwise are breached. Accordingly, each of the parties agrees that the other party shall be entitled to an injunction or injunctions to prevent -36- 40 breaches of the provisions of this Agreement and to enforce specifically this Agreement and the terms and provisions hereof. 49. COUNTERPARTS. This Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same instrument. -37- 41 IN WITNESS WHEREOF, the parties hereto have executed or caused duly authorized officers to execute this Agreement all as of the day first above written. BUYER: SELLER: THE KENDALL COMPANY NASHUA CORPORATION By: /s/ Mark H. Swartz By: -------------------------------- --------------------------- Mark H. Swartz As Its: Vice President As Its: --------------------------- ----------------------- -38- 42 IN WITNESS WHEREOF, the parties hereto have executed or caused duly authorized officers to execute this Agreement all as of the day first above written. BUYER: SELLER: THE KENDALL COMPANY NASHUA CORPORATION By: By: /s/ ??????????????? -------------------------------- --------------------------- As Its: As Its: Vice President ----------------------------- -------------------- EX-99.2 4 PRESS RELEASE 5/20/96 1 EXHIBIT 99.2 Nashua Corporation 44 Franklin Street Nashua, NH 03061 603 880 2323 NEWS RELEASE Contact: Daniel M. Junius For Immediate Release Vice President-Finance & CFO May 20, 1996 (603) 880-2363 NASHUA CORPORATION COMPLETES SALE OF TAPE PRODUCTS DIVISION NASHUA, NH, May 20, 1996 -- Nashua Corporation (NYSE:NSH) today announced that it has completed the sale of its Tape Products Division, formerly part of its Commercial Products Group, to The Kendall Company, a wholly owned subsidiary of Tyco International Ltd. Nashua received $28 million for the net assets of the business which will be used to reduce Nashua's debt. The Company expects to record a pretax gain of approximately $12 million on the sale. As a result of the divestiture, Nashua's Commercial Products Group is now composed of three divisions: Specialty Coated Products, Label Products and Imaging Supplies. Nashua Corporation offers a diverse mix of products including thermal papers, pressure-sensitive labels, specialty papers, copier and laser printer supplies, aluminum substrates and photofinishing services. ### [LOGO] EX-99.3 5 PRESS RELEASE 5/24/96 1 EXHIBIT 99.3 Nashua Corporation 44 Franklin Street Nashua, NH 03061 603-880-2323 NEWS RELEASE FOR IMMEDIATE RELEASE Contact: Richard Clark or Daniel M. Junius or Shez K. Bandukwala Chief Financial Officer Chief Financial Officer William Blair & Co., L.L.C. Cerion Technologies Nashua Corporation 312/236-1600 217/359-3700 603/880-2363
CERION TECHNOLOGIES ANNOUNCES COMMENCEMENT OF INITIAL PUBLIC OFFERING OR COMMON STOCK NASHUA, N.H., May 24, 1996 -- Nashua Corporation (NYSE:NSH) and Cerion Technologies Inc. today jointly announced the commencement of the initial public offering of 3,840,000 shares of common stock of Cerion Technologies Inc. (NASDAQ:CEON) at a price of $13.00 per share. Of the shares being offered, 1,615,000 are being sold by Cerion and 2,225,000 are being offered by Nashua as the selling stockholder. The Cerion common stock is being sold in an underwritten public offering managed by William Blair & Company, L.L.C. Nashua Corporation has granted the underwriters an option to purchase up to 576,000 additional shares to cover over-allotments, if any. Upon completion of the public offering, Nashua will continue to own approximately 45.3 percent of Cerion's common stock (approximately 37.0 percent if the underwriters' over-allotment option is exercised in full). The net proceeds to Cerion will be used for capital expenditures, primarily in connection with an additional manufacturing facility, repayment of certain indebtedness, working capital and other general corporate purposes. The net proceeds from the sale of shares by Nashua in the offering will be used for the repayment of indebtedness. Headquartered in Champaign, Illinois, Cerion Technologies Inc. manufactures precision-machined aluminum disk substrates, which are the metallic platforms of magnetic thin film disks used in the hard drives of desktop computers, network servers, add-on storage devices and storage upgrades. Cerion also uses its core competencies in precision machining to produce aluminum photoconductor drum substrates for laser printer cartridges. Nashua Corporation offers a diverse mix of products, including thermal papers, pressure-sensitive labels and specialty papers, copier and laser printer supplies, and photofinishing services. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any state in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any state. ### [LOGO] EX-99.4 6 PRESS RELEASE 5/28/96 1 EXHIBIT 99.4 Nashua Corporation 44 Franklin Street Nashua, NH 03061 603-880-2323 NEWS RELEASE FOR IMMEDIATE RELEASE Contact: Richard Clark or Daniel M. Junius or Shez K. Bandukwala Chief Financial Officer Chief Financial Officer William Blair & Co., L.L.C. Cerion Technologies Nashua Corporation 312/236-1600 217/359-3700 603/880-2363
UNDERWRITER EXERCISES OVER-ALLOTMENT OPTION FROM RECENT CERION TECHNOLOGIES PUBLIC OFFERING NASHUA, N.H., May 28, 1996 -- Nashua Corporation (NYSE: NSH) and Cerion Technologies Inc. (NASDAQ: CEON) today jointly announced that the underwriter of Cerion's recently completed public stock offering, William Blair & Company, L.L.C., has exercised its over-allotment option and purchased 576,000 additional shares of Cerion's common stock from Nashua. As a result of this over-allotment purchase, Nashua Corporation will receive approximately $7.5 million in gross proceeds. The net proceeds from the over-allotment sale by Nashua will be used principally for the repayment of indebtedness. Nashua continues to own 37.1 percent of Cerion's common stock. Headquartered in Champaign, Illinois, Cerion Technologies, Inc. manufactures precision-machined aluminum disk substrates, which are the metallic platforms of magnetic thin film disks used in the hard drives of desktop computers, network servers, add-on storage devices and storage upgrades. Cerion also uses its core competencies in precision machining to produce aluminum photoconductor drum substrates for laser printer cartridges. Nashua Corporation offers a diverse mix of products, including thermal papers, pressure-sensitive labels and specialty papers, copier and laser printer supplies, and photofinishing services. ### [LOGO] -----END PRIVACY-ENHANCED MESSAGE-----