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EXHIBIT A
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (herein “this Agreement”) made and entered into this 21st
day of September, 1978 by and between GELCO CORPORATION, a Minnesota corporation (“Gelco”) and
THE GROSSMAN CORPORATION, a Minnesota corporation (“TGC”), both parties acting through a majority
of their respective directors.
WITNESSETH:
WHEREAS each of Norman Grossman and Harold I. Grossman owns 1,934 shares of the common stock,
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without par value (being all outstanding shares) of TGC, which for years has reported, and currentl y reports, its
income under Subchapter S of the Internal Revenue Code; and
WHEREAS TGC is presently the owner of 919,161 shares of the common stock of Gelco, $.50 par value ;
and
WHEREAS the annual meeting of the shareholders of Gelco is scheduled to be held at i ts registered office
in Eden Prairie, Minnesota on the 15th day of December, 1978; and
WHEREAS it is contemplated that at said meeting the shareholders of Gelco will be asked (i) to vote on a
proposal for the amendment of its Restated Articles of Incorporation so as to enlarge i ts authorized capital from
10,000,000 shares of common stock of the par value of $.50 to 25,000,000 such shares, and (ii) thereafter, to
vote for the approval and adoption of this Agreement and the plan of merger provided for herein; and
WHEREAS within a reasonable time after unaudited balance sheets for TGC and Gelc o as of the close of
their fiscal year on July 31, 1978, and the related statements of their income for the ye ar then ended will be
available, the parties hereto shall make application to the Internal Revenue Service for a ruling to the effect that
the consummation of the merger called for by this Agreement will not result in the realization of taxable income
by either Gelco, TGC or the shareholders of the latter; and
WHEREAS the parties hereto deem it advisable for the mutual benefit of Gelco a nd TGC, and their
respective shareholders, that TGC be merged with and into Gelco as the surviving corporati on, and have
therefore entered into this Agreement; and
WHEREAS Messrs. Leonard, Street and Deinard, of Minneapolis, Minnesota, with the full knowledge and
consent of the parties hereto, have acted, and continue to act, as outside counsel to both Gelco and TGC and the
shareholders of the latter:
1. REPRESENTATIONS AND WARRANTIES OF TGC.
TGC hereby represents and warrants to Gelco as follows:
1.1. TGC is a corporation duly organized, validly existing and in good standing under
the laws of the State of Minnesota.
1.2. The authorized capital stock of TGC consists of 15,000 shares of common stock, without par va lue, of
which 3,868 are validly issued and outstanding, fully paid and non-assessable. There are no outstanding
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subscriptions, options, warrants, calls, commitments
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or agreements to which TGC is a party, or by which it is bound, calling for or requiring the issua nce of
additional shares of TGC's capital stock.
1.3. TGC has furnished Gelco with copies of the balance sheet of TGC as at July 31, 1977, and t he related
statement of income for the year then ended, certified by Touche Ross & Co., independent certified public
accountants, and as soon as received, will furnish Gelco with like financial stat ements as at July 31, 1978,
similarly certified. Said financial statements are and will be true and correct, and fairly present the financial
position of TGC as at the respective dates of such balance sheets, and the result of its operation for the
respective years then ended, in conformity with generally accepted accounting princi ples applied on a consistent
basis.
1.4. Since July 31, 1977, there has not been (1) any material adverse change in the financial condition of
TGC from that shown on the July 31, 1977 financial statements referred to in Section 1.3; (2) a ny issuance of
capital stock by TGC, or any redemption or other acquisition of any such stock; or (3) any othe r event or
condition of any character pertaining to and materially adversely affecting the assets or business of TGC.
1.5. TGC has filed all tax returns which it is required to file, and has pai d all taxes as shown on said returns
and all assessments received by it to the extent that such taxes and assessments have become due or are not
being contested in proceedings with respect thereto. The provision made for taxes on the T GC July 31, 1977
balance sheet is sufficient for the payment of all unpaid taxes due from TGC for the fi scal year ended on said
date, and all periods prior thereto.
1.6. On the Effective Date of the Merger, the assets and properties of TGC will consist sole ly of shares of
the common stock of Gelco, and TGC will have good and marketable title to such shares (including additional
shares of the common stock of Gelco purchased by it between the date hereof and the Effec tive Date of the
Merger), free and clear of any mortgage, lien, pledge, charge or encumbrance of any nature whatsoever.
1.7. TGC does not know of or have any reasonable grounds to know of the assertion against it of any
liability existing at July 31, 1978 which should have been reflected or reserved against i n a balance sheet, or the
notes thereto, as of such date prepared in accordance with generally accepted accounting principles, which will
not be reflected or reserved against in the TGC July 31, 1978 balance sheet, or the notes thereto.
1.8. The information provided and to be provided by TGC to Gelco for inclusion in the proxy sta tement to
be used by Gelco in connection with the approval of this Agreement or for use in any regist ration statement
which Gelco may determine to file with the Securities and Exchange Commission wi ll not contain any
statement which, at the time and in the light of the circumstances in whic h it is made, is false or misleading with
respect to any material fact, and does not and will not omit to state any m aterial fact necessary in order to make
the statements therein not false or misleading.
1.9. There is no suit, action or legal or administrative proceeding pending or, to the knowl edge of TGC,
threatened against it of which Gelco has not been advised by TGC. TGC has not violate d in any material respect
and is not in default with respect to, nor by the execution, delivery and performance of thi s Agreement will it
violate in any material respect or become in default with respect to, any mat erial order, rule or regulation or any
return
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or report payable to or required to be filed with, any federal, state, municipal, or other governmental agency,
department, commission, board, bureau or instrumentality.
1.10. At the Effective Date of the Merger, the performance of this Agreement and the consumm ation of
the transactions contemplated by this Agreement will not violate in any respec t or result in the breach of any
term or provision of or constitute a default with respect to the Restated Articles of Incorporation or Bylaws of
TGC or any indenture, mortgage, deed of trust or other agreement or instrument to which TGC is a party or any
order, rule or regulation of any federal, state, municipal, or other governmental agency, depart ment,
commission, board, bureau or instrumentality. At the Effective Date of the Merger, TGC will not be a party to
any contract or commitment not fully performed on its part.
1.11. TGC has the corporate power to enter into and perform this Agreement and, subject to approval by
its shareholders, TGC has taken all necessary and proper corporate action to authorize a nd approve this
Agreement and the consummation thereof, and this Agreement is the valid obligation of TGC, legally binding
upon it in accordance with its terms.
2. REPRESENTATIONS AND WARRANTIES OF GELCO.
Gelco represents and warrants to TGC as follows:
2.1. Gelco is a corporation duly organized, validly existing and in good standing under the laws of the
State of Minnesota.
2.2. The authorized capital stock of Gelco consists of 10,000,000 shares of common stock, par value $.50
per share; the shares of common stock of Gelco which are to be issued pursuant to the terms of this Agreement
will, prior to the effectiveness of the merger, be duly reserved for issuance for such purpose, and whe n issued
and delivered pursuant to the terms of this Agreement, will have been legally and validly issued.
2.3. At the Effective Date of the Merger, the performance of this Agreement and the consum mation of the
transactions contemplated hereby will not violate in any material respect or result in the breach of the Restated
Articles of Incorporation or Bylaws of Gelco, or any term or provision of or constitute a default with respect to
any indenture, mortgage, deed of trust or other material agreement or instrument to whic h Gelco or any of its
subsidiaries is a party, or any material order, rule or regulation of any federal, state, m unicipal, or other
governmental agency, department, commission, board, bureau or instrumentality.
2.4. Gelco has the corporate power to enter into and perform this Agreement and, subject to approval by its
shareholders, Gelco has taken all necessary and proper corporate action to authorize and a pprove this
Agreement and the consummation thereof, and this Agreement is the valid obligation of Gelco, legally binding
upon Gelco in accordance with its terms.
NOW, THEREFORE, in consideration of the foregoing recited facts and in reliance upon t he
representations and warranties hereinbefore set forth, the parties hereby agree with each other as follows:
3. AGREEMENT AND PLAN OF MERGER.
3.1. On the Effective Date of the Merger, TGC shall be merged with and into Gelco, the separate existence
of TGC shall cease, and Gelco shall continue in existence and, without other transfe r, succeed to and possess all
the properties, rights, privileges, immunities, powers,
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purposes and franchises, public and private, and shall be subject to all of the obligations, rest rictions, disabilities
and duties of TGC, all without further act or deed, as provided in Section 301.42 of Minnesota Statutes.
3.2. Prior to the Effective Date of the Merger, Gelco and TGC shall each take all such action as shall be
necessary or appropriate in order to effectuate the merger.
3.3. If at any time after the Effective Date of the Merger Gelco shall determi ne that any further
conveyance, assignment or action is necessary or desirable to vest in or confirm to Gel co full title to all the
properties, assets, rights, privileges and franchises of TGC, the officers and directors of TGC shall execute and
deliver all such instruments and take all such action as Gelco may determine to be necessary or desirable in
order to vest in and confirm to Gelco title to and possession of all such properties, assets, rights, privileges and
franchises, and otherwise to carry out the purposes of this Agreement.
4. TERMS AND CONDITIONS OF THE MERGER.
The terms and conditions of the Merger, including the nature and amount of securities of Gelco which the
holders of shares of common stock of TGC are to receive in exchange for such TGC shares, shall be as follows:
4.1. Restated Articles of Incorporation. From and after the Effective Date of the Merger and until
thereafter amended as provided by law, the Restated Articles of Incorporation of Gelco, as amended at its
annual meeting on December 15, 1978, shall be, and may be separately certified as, the Restated Articles of
Incorporation of the surviving corporation.
4.2. Bylaws. The Bylaws of Gelco in force as of the Effective Date of the Merger shall continue in force
and be the Bylaws of the surviving corporation until altered, amended or repealed.
4.3. Directors and Officers. The Directors and Officers of Gelco in office on the Effective Date of the
Merger shall continue in office until their successors are elected in accordance wit h the Restated Articles of
Incorporation and Bylaws of Gelco.
4.4. Shares of Gelco. Each share of common stock of Gelco issued and outstanding on the Effective Date
of the Merger, other than shares then owned by TGC, shall continue to be one share of common stock of Gelco
as the surviving corporation. The shares of common stock of Gelco owned by TGC on the Effecti ve Date of the
Merger shall be retired and cancelled.
4.5. Shares of TGC. Each share of common stock, without par value, of TGC issued and outstanding on the
Effective Date of the Merger shall be converted into and be exchanged for shares of common stock, par value
$.50 per share, of Gelco, as follows: In exchange for all of his shares of TGC, each of Norman Grossman and
Harold I. Grossman shall receive that number of shares of Gelco common stock (which shall be “ Restricted
Stock” as defined in Rule 144 promulgated by the Securities and Exchange Commission) whi ch is equal to one-
half of the number of shares of Gelco common stock owned by TGC on the Effective Date of the Merger. No
fractional share of common stock of Gelco shall be issued; if a shareholder of TGC would otherwi se be entitled
to receive a fractional share, he shall receive the next lower number of whole shares to which he is entitled.
4.6. Exchange. As soon as practicable after the Effective Date of the Merger, each holder of ce rtificates
theretofore representing shares of TGC common stock shall, upon
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presentation of such certificates for surrender to Gelco or its agents, receive in exchange therefor a certificate or
certificates representing the number of shares of common stock of Gelco to which he i s entitled upon the basis
of exchange set forth in Section 4.5 hereof.
5. EFFECTIVE DATE.
5.1. This Agreement shall be submitted to the shareholders of Gelco and TGC at meet ings which shall be
held on December 15, 1978, or such other date as may be agreed on by the parties, as provide d by the applicable
laws of the State of Minnesota.
5.2. If this Agreement is duly approved and adopted by the requisite votes of the shareholders and is not
terminated pursuant to the provisions of Article 9 hereof, it shall be re-executed by the Pre sident or Vice
President and Secretary or Assistant Secretary of Gelco and TGC, and its adoption duly c ertified to, and filed in
accordance with the laws of the State of Minnesota.
5.3. The merger shall become effective upon the filing of this Agreement with the Sec retary of State of the
State of Minnesota on such date as the President of Gelco will prescribe (the “Effective Date of the Merger”).
6. INSPECTION; EXPENSES.
6.1. TGC and Gelco each grants to the other, and its officers, employees, attorneys and age nts, the right,
during normal business hours, to inspect and copy its records and to consult with its officers, em ployees,
attorneys and agents for the purpose of determining the accuracy of the representations and warra nties
hereinabove set forth.
6.2. Whether or not the merger provided for herein becomes effective, TGC shall bear all of the costs and
expenses of TGC and Gelco in connection with the preparation and execution of this Agreem ent and the
consummation of the transactions provided for herein, other than, with respect to the mee ting of shareholders of
Gelco, the expenses which Gelco would have incurred in connection with its annual me eting of shareholders if
this Agreemeent had not been submitted to such meeting for approval.
7. TRANSACTIONS PRIOR TO MERGER.
7.1. Prior to the Effective Date of the Merger, and unless waived by Gelco pursuant to Section 10.3 hereof,
TGC shall:
(a) dispose of all of its assets other than shares of common stock of Gelco;
(b) satisfy all its accrued liabilities and secure from Norman Grossman and Harold I. Grossman the
indemnification provided by Exhibit 1 against any and all other liabilities, contingent or otherwise;
(c) maintain its books of account and records in the usual and regular manner, in accordance with
generally accepted accounting principles applied on a consistent basis;
(d) duly comply with all laws applicable to it;
(e) neither amend its Restated Articles of Incorporation nor merge or consolidate with or i nto any
other corporation or change in any manner the rights of its common stock or other securiti es;
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(f) not issue, reissue or sell, or issue options or rights to subscribe to, or enter into any contra ct or
commitment to issue, reissue or sell (upon conversion or otherwise) any shares of its capital stock.
7.2. Gelco shall take such steps as may reasonably be required to accomplish, as of the E ffective Date of
the Merger, the listing upon the New York Stock Exchange, upon notice of issuance, of the shares of com mon
stock of Gelco to be issued upon the effectiveness of the merger.
8. CONDITIONS PRECEDENT TO MERGER,
8.1. The obligation of Gelco to consummate and effect the merger hereunder shall be subj ect to the
satisfaction on or prior to the Effective Date of the Merger, of the following conditions, unle ss waived by Gelco
pursuant to Section 10.3 hereof:
(a) The representations and warranties of TGC herein contained will be true as of and at the
Effective Date of the Merger with the same effect as though made at such date ; TGC will have performed
all obligations and complied with all covenants required by this Agreement to be performed or complied
with by it prior to the Effective Date of the Merger; and TGC will have delive red to Gelco a certificate dated
the Effective Date of the Merger and signed by its Chairman of the Board or President a nd by its Secretary
or its Treasurer to the foregoing effect.
(b) Gelco will have received a certified copy of the resolutions of the Board of Direct ors and
shareholders of TGC approving and adopting this Agreement.
(c) The holders of all of the outstanding shares of common stock of TGC will have voted in fa vor of
the approval of this Agreement arid the merger contemplated hereby and the holders of more than one-half
of the outstanding shares of common stock of Gelco will have voted in favor of the approval and a doption
of this Agreement and the merger contemplated hereby.
(d) All transactions contemplated hereby, and the form and substance of all legal proce edings and of
all papers used or delivered hereunder, will be acceptable to counsel for Gelco.
(e) Gelco will have received a favorable opinion, dated as of the Effective Date of the Merger, from
counsel for TGC, in form and substance satisfactory to Gelco and its counsel, to the e ffect that the corporate
existence, good standing and authorized and issued stock of TGC is as stated or referred to in this
Agreement; that TGC has taken all corporate actions which are conditions prece dent to TGC's obligations
under this Agreement: that, except as may be specified by said counsel (such except ions to be acceptable to
Gelco), they do not know of any litigation, proceeding or governmental investigation pending or threa tened
against or relating to TGC or its property or business; that to the best of their knowledge a ll proceedings
required to be taken by or on the part of TGC to authorize and carry out this Agreement and to effect the
merger contemplated hereby have been duly and properly taken; that this Agreement is the valid obligation
of TGC, legally binding upon it in accordance with its terms; and that the share s of common stock of Gelco
to be issued upon the effectiveness of the merger may be issued without registration there of pursuant to the
Securities Act of 1933, as amended.
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(f) The New York Stock Exchange will have approved for listing, on official notice of issuance, the
shares of common stock of Gelco to be issued upon the effectiveness of the merger.
(g) There will not be any actual or threatened litigation to restrain or inval idate the merger, the
defense of which would, in the judgment of the Board of Directors of Gelco, involve expense or la pse of
time that would be materially adverse to the interests of Gelco.
(h) Norman Grossman and Harold I. Grossman will have executed and delivered to Gelco an
agreement, substantially in the form of Exhibit 1 hereto, with respect to indemnifica tion and the acquisition
of the shares of common stock of Gelco to be issued upon the effectiveness of the merger.
(i) Gelco will have received a balance sheet of TGC as of the Effective Date of the Merger certified
by the Chairman of the Board or the President of TGC, which shall indicate that the assets of TGC consist
solely of shares of common stock of Gelco and that TGC will have no accrued and unpaid liabilities.
8.2. The obligation of TGC to consummate and effect the merger hereunder will be subject to the
satisfaction, on or prior to the Effective Date of the Merger, of the following conditions, unle ss waived by TGC
pursuant to Section 10.3 hereof:
(a) The representations and warranties of Gelco herein contained will be true as of a nd at the
Effective Date of the Merger with the same effect as though made at such date ; Gelco will have performed
all obligations and complied with all covenants required by this Agreement to be performed or complied
with by it prior to the Effective Date of the Merger; and Gelco will have de livered to TGC a certificate,
dated the Effective Date of the Merger and signed by the Senior Executive Vice Presi dent or other Vice
President and by its Secretary or its Treasurer to the foregoing effect.
(b) TGC will have received certified copies of the resolutions of the Board of Direct ors of Gelco and
the shareholders of Gelco approving and adopting this Agreement.
(c) The holders of all of the outstanding shares of common stock of TGC will have voted in fa vor of
the approval and adoption of this Agreement and the merger contemplated hereby, and the holders of more
than one-half of the outstanding shares of common stock of Gelco will have voted in favor of t he approval
and adoption of this Agreement and the merger contemplated hereby.
(d) All transactions contemplated hereby, and the form and substance of all legal proce edings and of
all papers used or delivered hereunder will be acceptable to counsel for TGC.
(e) TGC will have received a favorable opinion, dated as of the Effective Date of the Merger, from
Messrs. Leonard, Street and Deinard, counsel for Gelco, in form and substance satisfactory to TGC and its
counsel, to the effect that the corporate existence and good standing of Gelco are as stated or referred to in
this Agreement; that Gelco has taken all corporate actions which are conditions precedent to its obligations
under this Agreement; that the shares of common stock of Gelco which are to be issued pursuant to the
terms of this Agreement have been duly authorized and, when issued and delivered pursuant t o the terms of
this Agreement, will have been legally and validly issued, and
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no shareholder of Gelco will have any preemptive right of subscription or purchase in respect the reof; that
to the best of their knowledge all corporate and other proceedings required to be taken by or on the part of
Gelco to authorize and to carry out this Agreement and to effect the merger contem plated hereby have been
duly and properly taken; and that this Agreement is the valid obligation of Gelco, le gally binding upon it in
accordance with its terms.
(f) The New York Stock Exchange will have approved for listing on official notice of issuance t he
shares of common stock of Gelco to be issued pursuant to this Agreement.
8.3. Upon satisfaction of such conditions, or waiver thereof, and unless this Agreement will have bee n
terminated as provided in Article 9 hereof, the merger will be consummated as herein provided.
9. TERMINATION.
Anything herein or elsewhere to the contrary notwithstanding, this Agreement may be terminat ed at any
time on or before the date of the filing of this Agreement with the Secretary of Sta te of the State of Minnesota,
whether before or after approval thereof by the shareholders of TGC and Gelco:
9.1. By mutual consent of the Boards of Directors of Gelco and TGC;
9.2. By Gelco, if any of the conditions set forth in Section 8.1 of this Agreement will not have been met;
9.3. By TGC, if any of the conditions set forth in Section 8.2 of this Agreement will not have been met;
9.4. By Gelco or TGC, if it will be subject to a permanent injunction restraini ng it from consummating the
merger herein provided for or from causing it to be consummated, as the case may be;
9.5. By Gelco or TGC, if the Agreement has not been filed with the Secretary of St ate of the State of
Minnesota within one year following the date of the shareholders meetings referred to in Section 5.1 hereof, or
such later time as may be fixed by mutual consent of the Boards of Directors of Gelco and TGC;
9.6. If, within one year after the filing of the application referred to in the fifth prea mble hereof, the parties
hereto will not have secured from the Internal Revenue Service the favorable ruling referred to in said preamble.
10. GENERAL.
10.1. Entire Agreement. This instrument contains the entire agreement between Gelco and TGC with
respect to the transactions provided for herein; all prior negotiations and understandings betwe en the parties
hereto are superseded by this Agreement; and there are no representations, warranties, understandi ngs or
agreements other than those expressly set forth herein, except as modified in writing subsequent hereto.
10.2. Amendment. The parties hereto, by consent of a majority of their respective Boards of Directors, may
amend, modify or supplement this Agreement in such manner as may be
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agreed upon by them in writing at any time before approval and adoption of this Agreement by the shareholders
of either or both of Gelco and TGC. 10.3. Waivers, Extensions. Either party to this Agreement may, by written notice to the other party hereto,
(a) extend the time for the performance of any of the obligations or other actions of the other party,
(b) waive any inaccuracies in the representations and warranties of the other party conta ined in this
Agreement or in any document delivered or required pursuant hereto,
(c) waive compliance with any of the covenants or agreements of the other party contai ned in this
Agreement, and
(d) waive or modify performance of any of the obligations of the other party,
provided, however, that after a favorable vote of the shareholders of Gelco, any such action shal l be taken by
Gelco only if, in the opinion of its Board of Directors, such waiver, extension or modification wi ll not have any
material adverse effect on Gelco or its shareholders, and will not require resolicita tion of any proxies from such
shareholders. Any such extension or waiver shall be conclusively evidenced by the signature of the Chairman of
the Board or the President of TGC and by the signature of the Senior Executive Vice Preside nt or other Vice
President of Gelco.
10.4. Notices. Any approval, notice, request, waiver or other communication required or permitted to be
given by any party hereunder shall be in writing and shall be given in person or sent by registere d or certified
mail (return receipt requested), postage prepaid, addressed if given to Gelco to:
Gelco Corporation
One Gelco Drive
Eden Prairie, Minnesota 55344
Attention: Michael J. Morris Senior Executive Vice President
and if given to TGC to: The Grossman Corporation
P.O. Box 875
Hopkins, Minnesota 55343
Attention: Norman GrossmanChairman of the Board
or mailed to such other address or delivered to such other persons as either party may designa te by notice given
in like manner. Any such notice, request or other communication shall be deemed to ha ve been given when
delivered in person or 48 hours after mailing as aforesaid.
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10.5.Applicable Law. This Agreement shall be governed by and construed and enforced in accordance
with the laws of the State of Minnesota.
10.6. Headings. The article and section headings contained herein are for reference purposes only and
shall not in any way affect the meaning or interpretation of this Agreement.
10.7. Nonassignability. Neither this Agreement nor any right, title or interest of any party herein shall be
assignable.
10.8. Counterparts. If executed in counterparts, the same shall together constitute this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly execut ed as of the day
and year first above written.
THE GROSSMAN CORPORATION GELCO CORPORATION
By: By:
NORMAN GROSSMAN HERBERT D. BISSELL
Norman Grossman Herbert D. Bissell
HAROLD I. GROSSMAN JAYE F. DYER
Harold I. Grossman Jaye F, Dyer
(Constituting a majority of the Directors) SAM SINGER Sam Singer
C. W. SPANGLE
Clarence W. Spangle
W. F, FOSS
William Foss
SAMUEL D. ADDOMS
Samuel D. Addoms
M. J. MORRIS
Michael J. Morris
MORTON L. ZALK
Morton L. Zalk
(Constituting a majority ofthe Directors)
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EXHIBIT 1
................., 197..
Gelco Corporation
One Gelco Drive
Eden Prairie, Minnesota 55344
Dear Sirs: The undersigned are the owners of all of the issued and outstanding capital stock of The Grossma n
Corporation, a Minnesota corporation (“TGC”).
On September 21, 1978, TGC and Gelco entered into an Agreement and Plan of Merger (the “Me rger
Agreement”), which provides for the merger of TGC with and into Gelco.
To induce Gelco to close the transactions contemplated by the Merger Agreement a nd to carry the merger
into effect, the undersigned represent, warrant, covenant and agree as follows:
1. The undersigned, and each of them, jointly and severally, represent and warrant to Gelco tha t all of the
representations and warranties of TGC contained in the Merger Agreement are true and acc urate as of and at the
date hereof with the same effect as though made at such date, and no such represent ation or warranty contains
any untrue statement or omits any statement which is necessary in order to make any statement therein not
misleading, and TGC has performed all obligations and complied with all covenants required by the Merger
Agreement to be performed or complied with by TGC prior to the Effective Date of the Merger. These
representations and warranties shall survive the Effective Date of the Merger.
2. The undersigned, jointly and severally, agree to indemnify Gelco against and hold Gelco harmless from
any and all liabilities and obligations of TGC of every kind, nature and description, fi xed or contingent
(including, without limitation, attorneys' fees paid or incurred in connection with any cla im, demand or
proceeding relating thereto). In addition, the undersigned, jointly and severally, agree that if any of the
representations and warranties made by TGC in the Merger Agreement or in any stateme nt (including Financial
Statements), deed, certificate, schedule or other document delivered pursuant thereto i n connection with the
transactions contemplated thereby shall be determined to be incorrect, then the undersigned, jointly and
severally, will pay to Gelco a sum equal to the amount which it would then cost t o put Gelco in the position that
it would have been in, had such representation and warranty been true and correct.
3. The undersigned, jointly and severally, further agree to indemnify Gelco and the dire ctors and officers
of Gelco (other than the undersigned) against and hold them harmless from any and all li abilities, obligations of
every kind, nature and description, expenses (including, without limitation, attorneys' fees), judgme nts, fines
and amounts paid in settlement of or in connection with any claim, demand, threate ned, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or investigative (including any action by or in
the right of Gelco), in connection with the origin, negotiation, execution or performance of t he Merger
Agreement.
4. If any legal process will be instituted or if any claim or demand will be made against Gelco or any of its
directors and officers (other than the undersigned) in respect of which
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the undersigned might be liable under paragraphs 2 and/or 3 above, Gelco or such director or
officer will cause notice of such legal process, claim or demand to be promptly give n to the
undersigned. Each of the undersigned will be entitled, at his own expense, to participate in any
such legal proceedings or the negotiation and settlement of any such claim or dem and, or, if
either of the undersigned so elects, to assume, at his own expense, the full defense of suc h legal
proceedings or the full burden of such negotiation and settlement. Neither Gelco nor any of its
directors and officers will make any settlement or other disposition of any claim or demand, or
abandon any administrative, judicial or quasi-judicial proceedings or remedies (including,
without limitation, any right to appeal an adverse adjudication), without prior written consent of
the undersigned. In the event that any proposed settlement acceptable to the clai mant will not be
consented to by Gelco and/or its directors and officers, the undersigned may elect to pay over to
Gelco and/or its directors and officers an amount equal to the proposed settlement a nd, in such
case, the undersigned will thereupon cease to be liable or obligated in any manner whatsoever for
such claim or demand.
5. Each of the undersigned represents, warrants, covenants and agrees. to and with Gelco
that:
(a) He is acquiring the shares of common stock of Gelco to be issued to him upon the
effectiveness of the merger pursuant to the Merger Agreement for his own account and not
with a view to, or for sale in connection with, any distribution of such shares within the
meaning of the Securities Act of 1933, as amended;
(b) A legend shall be placed on each certificate representing shares of common stock of
Gelco issued upon the effectiveness of the merger, or issued in substitution of any thereof, t o
the effect that such shares have not been registered pursuant to the Securities Ac t of 1933, as
amended, and may not be sold, transferred or otherwise disposed of in the absence of an
effective registration statement under said Act or an opinion of counsel to Gelco that
registration thereof is not required; and
(c) Appropriate “stop transfer” orders will be given to the transfer agent of the common
stock of Gelco with respect to the shares issued upon the effectiveness of the merger.
6. Each and all of the representations, warranties, agreements and covenants contained
herein shall extend to the benefit of Gelco and its successors in interest, and shal l bind the
undersigned and each of them, and their respective heirs, personal. representatives and assigns.
Very truly yours,
NORMAN GROSSMAN
Norman Grossman
HAROLD I. GROSSMAN
Harold I. Grossman
Accepted and Agreed:
GELCO CORPORATION
By /s/
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