AGREEMENT AND PLAN OF MERGER by and among BPC HOLDING CORPORATION, BPC HOLDING ACQUISITION CORP. and BPC ACQUISITION CORP. Dated as of June 28, 2006
Exhibit
2.1
EXECUTION
VERSION
by
and
among
BPC
HOLDING CORPORATION,
BPC
HOLDING ACQUISITION CORP.
and
BPC
ACQUISITION CORP.
Dated
as
of June 28, 2006
ffny03\goldfmu\658041.8
TABLE
OF
CONTENTS
|
PAGE
|
||
|
ARTICLE
I
|
DEFINITIONS
|
1
|
|
Section
1.1
|
Defined
Terms
|
1
|
|
Section
1.2
|
Interpretation
|
11
|
|
ARTICLE
II
|
THE
MERGER
|
11
|
|
Section
2.1
|
The
Merger
|
11
|
|
Section
2.2
|
Closing
|
11
|
|
Section
2.3
|
Effective
Time
|
12
|
|
Section
2.4
|
Certificate
of Incorporation
|
12
|
|
Section
2.5
|
Bylaws
|
12
|
|
Section
2.6
|
Directors
of the Surviving Corporation
|
12
|
|
Section
2.7
|
Officers
of the Surviving Corporation
|
12
|
|
Section
2.8
|
Effect
of Merger on Capital Stock and Vested Options
|
12
|
|
Section
2.9
|
Exchange
of Certificates
|
14
|
|
Section
2.10
|
Payments
at Closing.
|
15
|
|
Section
2.11
|
Post-Closing
Adjustments.
|
16
|
|
Section
2.12
|
Stockholder
Loans
|
18
|
|
Section
2.13
|
Appraisal
Rights
|
18
|
|
Section
2.14
|
Transfer
Taxes
|
18
|
|
ARTICLE
III
|
REPRESENTATIONS
AND WARRANTIES OF THE COMPANY
|
19
|
|
Section
3.1
|
Organization
and Qualification
|
19
|
|
Section
3.2
|
Capitalization
|
19
|
|
Section
3.3
|
Authorization
and Validity of Agreement
|
20
|
|
Section
3.4
|
Consents
and Approvals
|
21
|
|
Section
3.5
|
No
Violations
|
21
|
|
Section
3.6
|
No
Undisclosed Liabilities
|
22
|
|
Section
3.7
|
SEC
Documents; Financial Statements.
|
22
|
|
Section
3.8
|
Compliance
with Law
|
23
|
|
Section
3.9
|
Litigation
|
24
|
|
Section
3.10
|
Employee
Benefit Matters.
|
24
|
|
Section
3.11
|
Taxes
|
26
|
|
Section
3.12
|
Intellectual
Property.
|
27
|
|
Section
3.13
|
Material
Contracts.
|
29
|
|
Section
3.14
|
Brokers
and Finders; Transaction Expenses
|
31
|
|
Section
3.15
|
Absence
of Certain Changes
|
31
|
|
Section
3.16
|
Environmental
Matters
|
31
|
|
Section
3.17
|
Labor
and Employee Matters.
|
32
|
|
Section
3.18
|
Related
Party Transactions
|
32
|
|
Section
3.19
|
Real
Property; Title to Assets
|
33
|
|
Section
3.20
|
Insurance
|
33
|
|
Section
3.21
|
Customers
and Suppliers
|
34
|
|
Section
3.22
|
Food
and Drug Safety Matters
|
34
|
|
Section
3.23
|
Letters
of Credit
|
35
|
|
Section
3.24
|
No
Other Representations
|
35
|
|
ARTICLE
IV
|
REPRESENTATIONS
AND WARRANTIES OF PURCHASER and MERGER SUB
|
35
|
|
Section
4.1
|
Organization
and Qualification
|
35
|
|
Section
4.2
|
Authorization
and Validity of Agreement
|
35
|
|
Section
4.3
|
Consents
and Approvals
|
36
|
|
Section
4.4
|
No
Violation
|
36
|
|
Section
4.5
|
Funding
and Capitalization
|
37
|
|
Section
4.6
|
Brokers
and Finders
|
37
|
|
Section
4.7
|
No
Other Representations
|
37
|
|
ARTICLE
V
|
COVENANTS
OF THE COMPANY
|
37
|
|
Section
5.1
|
Conduct
of the Company.
|
37
|
|
Section
5.2
|
Interest
Rate Swap Agreements
|
41
|
|
ARTICLE
VI
|
COVENANTS
OF PURCHASER
|
41
|
|
Section
6.1
|
Compensation
and Benefits
|
41
|
|
Section
6.2
|
Insurance;
Indemnity
|
42
|
|
ARTICLE
VII
|
COVENANTS
OF PURCHASER AND THE COMPANY
|
44
|
|
Section
7.1
|
Access
to Information
|
44
|
|
Section
7.2
|
Required
Actions
|
44
|
|
Section
7.3
|
Certain
Filings
|
45
|
|
Section
7.4
|
Public
Announcements
|
46
|
|
Section
7.5
|
Notices
of Certain Events
|
46
|
|
Section
7.6
|
Survival
of Representations and Warranties
|
46
|
|
Section
7.7
|
Exclusive
Dealing
|
46
|
|
Section
7.8
|
Financing
|
47
|
|
ARTICLE
VIII
|
CONDITIONS
TO THE MERGER
|
48
|
|
Section
8.1
|
Conditions
to Obligations of Each Party
|
48
|
|
Section
8.2
|
Conditions
Precedent to the Obligations of the Company
|
49
|
|
Section
8.3
|
Conditions
Precedent to the Obligations of Purchaser
|
50
|
|
ARTICLE
IX
|
TERMINATION
|
51
|
|
Section
9.1
|
Termination
|
51
|
|
Section
9.2
|
Effect
of Termination
|
52
|
|
ARTICLE
X
|
REPRESENTATIVE
|
53
|
|
Section
10.1
|
Appointment
of Representative.
|
53
|
|
ARTICLE
XI
|
MISCELLANEOUS
|
54
|
|
Section
11.1
|
Notices
|
54
|
|
Section
11.2
|
Entire
Agreement
|
55
|
|
Section
11.3
|
Assignment;
Binding Effect
|
55
|
|
Section
11.4
|
Specific
Performance
|
56
|
|
Section
11.5
|
Fees
and Expenses
|
56
|
|
Section
11.6
|
Amendments
|
56
|
|
Section
11.7
|
Waivers
|
56
|
|
Section
11.8
|
Severability
|
56
|
|
Section
11.9
|
Captions
|
57
|
|
Section
11.10
|
Counterparts
|
57
|
|
Section
11.11
|
Governing
Law
|
57
|
|
Section
11.12
|
Jurisdiction;
Venue; Services of Process
|
57
|
|
Section
11.13
|
WAIVER
OF JURY TRIAL
|
57
|
|
Section
11.14
|
Certain
Fees and Expenses.
|
58
|
|
EXHIBITS
|
||
|
Exhibit
A
|
Environmental
Reports
|
|
|
Exhibit
B
|
Net
Working Capital
|
|
|
Exhibit
C
|
Stockholder
Loans
|
|
|
Exhibit
D
|
Letter
of Transmittal
|
|
|
Exhibit
E
|
Escrow
Agreement
|
|
|
Exhibit
F
|
Commitment
Letters
|
|
ffny03\goldfmu\658041.8
This
AGREEMENT AND PLAN OF MERGER (this “Agreement”)
is
made and entered into this 28th
day of
June, 2006, by and among BPC HOLDING CORPORATION, a Delaware corporation
(the
“Company”),
BPC
HOLDING ACQUISITION CORP., a Delaware corporation (“Purchaser”),
and
BPC ACQUISITION CORP., a Delaware corporation wholly owned by Purchaser
(“Merger
Sub”).
RECITALS
WHEREAS,
the respective Boards of Directors of the Company and Merger Sub have determined
that the merger of Merger Sub with and into the Company (the “Merger”),
upon
the terms and subject to the conditions set forth in this Agreement, would
be
advisable and in the best interests of the current stockholders of the Company
and the stockholders of Merger Sub, respectively;
WHEREAS,
concurrently
with the execution of this Agreement, the holders of in excess of a majority
of
the Company Stock have executed written consents approving the Merger and
the
other transactions contemplated hereby;
and
WHEREAS,
Purchaser, Merger Sub and the Company desire to make, and have relied upon,
certain representations, warranties, covenants and agreements in connection
with
the transactions contemplated hereby.
NOW,
THEREFORE, in consideration of the foregoing, and of the representations,
warranties, covenants and agreements contained herein, the parties hereto
agree
as follows:
ARTICLE
I
DEFINITIONS
Section
1.1 Defined
Terms.
When
used in this Agreement, the following terms shall have the meanings set forth
below:
“Affiliate”
means,
with respect to any specified Person, a Person that directly, or indirectly
through one or more intermediaries, controls, is controlled by or is under
common control with, such specified Person, including, without limitation,
each
Subsidiary of such specified Person. For the purposes of this definition,
“control”, when used with respect to any specified Person, means the power to
direct or cause the direction of the management and policies of such Person,
directly or indirectly, whether through ownership of voting securities or
by
contract, credit arrangement or otherwise; and the terms “controlling” and
“controlled” have meanings correlative to the foregoing.
-
-
ffny03\goldfmu\658041.8
-1-
“Aggregate
Exercise Price”
means
the aggregate amount that would be paid to the Company in respect of all
Vested
Options outstanding immediately prior to the Effective Time if the holders
thereof exercised such Vested Options immediately prior to the Effective
Time.
“Aggregate
Stockholder Loan Value”
means
the aggregate amount outstanding with respect to all Stockholder Loans
immediately prior to the Effective Time.
“Agreement”
has
the
meaning set forth in the Preamble.
“CIC
Payments”
has
the
meaning set forth in Section 6.1(c).
“Closing”
has
the
meaning set forth in Section 2.2.
“Closing
Cash”
means
(i) the aggregate amount of the Company’s and each of its Subsidiaries’ cash and
cash equivalents on hand or in bank accounts as of the Closing; provided
that any
cash and cash equivalents will be valued for purposes of calculating Closing
Cash net of any fees, costs, and withholding or other Taxes incurred or that
would reasonably be expected to be incurred (including as a result of any
reduction in any Tax attributes) in connection with causing such cash and
cash
equivalents to be unrestricted cash held directly by the Company prior to
the
Effective Time (it being understood that such cash and cash equivalents of
the
Company's Subsidiaries need not be held directly by the Company prior to
the
Effective Time), plus
(ii) the
Aggregate Stockholder Loan Value.
“Closing
Date”
has
the
meaning set forth in Section 2.2.
“Closing
Indebtedness”
means
the total amount of Indebtedness of the Company and its Subsidiaries outstanding
as of the Effective Time. “Closing Indebtedness” shall not include any
Prepayment Expenses or any
amounts taken into account in Net Working Capital or in Transaction
Expenses.
“Closing
Statement”
has
the
meaning set forth in Section 2.11(a).
“Code”
means
the United States Internal Revenue Code of 1986, as amended.
“Commitment
Letters”
has
the
meaning set forth in Section 4.5.
“Company”
has
the
meaning set forth in the Preamble.
“Company
Disclosure Schedule”
means
the Disclosure Schedule delivered by the Company to Purchaser simultaneously
with the execution and delivery of this Agreement.
“Company
Intellectual Property”
means
all Intellectual Property which is owned by or used in connection with the
business of the Company and any of its Subsidiaries.
“Company
Material Adverse Effect”
means
any change, event or effect that, individually or when taken together with
all
other such changes, events or effects, is or would reasonably be expected
to
have a material adverse effect on the assets, liabilities, business,
results
-
-
ffny03\goldfmu\658041.8
-2-
of
operations or financial condition of the Company and its Subsidiaries, taken
as
a whole, other than changes, events or effects caused by any state of facts,
circumstance, change, development, condition or occurrence to the extent
resulting from or attributable to (except, in the case of clauses (a), (b),
(c),
(e) or (f) to the extent disproportionately affecting the Company and its
Subsidiaries relative to other companies in the industry): (a) general economic
conditions, (b) the financial, banking or securities markets (including any
disruption thereof and any decline in the price of any security or any market
index), (c) the industries or markets in which the Company or its Subsidiaries
generally operate, (d) the entry into and announcement of this Agreement
and the
consummation of the transactions contemplated hereby, (e) changes in Law
or GAAP
or (f) acts of war, terrorism or the escalation of either of the
forgoing.
“Company
Options”
has
the
meaning set forth in Section 2.8(d).
“Company
Stock”
has
the
meaning set forth in Section 2.8(b).
“Company’s
Organizational Documents”
has
the
meaning set forth in Section 3.1.
“Contract”
means
any note, bond, mortgage, indenture, lease, contract, agreement, conveyance
to
secure debt, deed of trust or other instrument, obligation, commitment or
other
binding arrangement, whether written or oral.
“Controlled
Group Liability”
means
any and all liabilities (i) under Title IV of ERISA, (ii) under Section 302
of
ERISA, (iii) under Sections 412 and 4971 of the Code, and (iv) as a result
of a failure to comply with the continuation coverage requirements of Section
601 et seq. of ERISA and Section 4980B of the Code.
“DGCL”
has
the
meaning set forth in Section 2.1.
“Debt
Financing”
has
the
meaning set forth in Section 4.5.
“Debt
Receipt Failure”
has
the
meaning set forth in Section 9.2(b).
“Dissenting
Stockholders”
has
the
meaning set forth in Section 2.13.
“Effective
Time”
has
the
meaning set forth in Section 2.3.
“Employee”
means
each current, former, or retired employee, director or officer of the Company
or
any of its Subsidiaries.
“Employment
Agreement”
means
each management, employment or severance agreement or contract between the
Company or any of its Subsidiaries and any Employee pursuant to which the
Company or any of its Subsidiaries has or may have any liability contingent
or
otherwise.
“Environmental
Law”
means
any foreign, federal, state or local law, statute, ordinance, rule or
regulation, any common law cause of action providing any right or remedy
relating to Environmental Matters, or any legally binding judicial or
administrative decision,
-
-
ffny03\goldfmu\658041.8
-3-
order,
or
decree, in each case relating to Environmental Matters, as the foregoing
are
enacted and in effect on or prior to the Closing Date.
“Environmental
Matter”
means
any matter arising out of, relating to, or resulting from pollution,
contamination, protection of the environment, protection of natural resources,
or protection of human health or safety from environmental hazards, including
any matters relating to emissions, discharges, releases or threatened releases,
of Hazardous Substances into the air, surface water, groundwater, soil, land
surface or subsurface or otherwise arising out of, relating to, or resulting
from the manufacture, processing, distribution, use, treatment, storage,
disposal, transport, handling, release or threatened release of Hazardous
Substances.
“Environmental
Permits”
has
the
meaning set forth in Section 3.16(b).
“Environmental
Reports”
means
those certain sections of the ENVIRON International Corporation reports
identified on Exhibit A
attached
hereto.
“ERISA”
means
the Employee Retirement Income Security Act of 1974, as amended.
“ERISA
Affiliate”
means,
with respect to any entity, trade or business, any other entity, trade or
business that is, or was at the relevant time, a member of a group described
in
Section 414(b), (c), (m) or (o) of the Code or Section 4001(b)(1) of ERISA
that
includes or included the first entity, trade or business, or that is, or
was at
the relevant time, a member of the same “controlled group” as the first entity,
trade or business pursuant to Section 4001(a)(14) of ERISA.
“Escrow
Account”
has
the
meaning set forth in Section 2.10(b)(iii).
“Escrow
Agent”
has
the
meaning set forth in Section 2.10(b)(iii).
“Escrow
Agreement”
has
the
meaning set forth in Section 2.10(b)(iii).
“Estimated
Merger Consideration”
means
a
good faith estimate of the Merger Consideration, as determined by the Company,
in accordance with this Agreement.
“Estimated
Option Payment”
means,
with respect to each share of Company Stock subject to a Vested Option,
(a)(i) the Estimated Merger Consideration plus the Aggregate Exercise Price
divided by (ii) the number of shares of Company Stock outstanding
immediately prior to the Effective Time (assuming the exercise of all Vested
Options outstanding immediately prior to the Effective Time), minus (b) the
per share exercise price of such Vested Option.
“Exchange
Act”
means
the Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder.
“Final
Closing Amount”
means
the Merger Consideration as set forth on the Final Closing
Statement.
-
-
ffny03\goldfmu\658041.8
-4-
“Final
Closing Statement”
has
the
meaning set forth in Section 2.11(c).
“Food
and Drug Safety Laws”
has
the
meaning set forth in Section 3.22(a).
“Foreign
Plan”
means
each Plan (as hereinafter defined) that is subject to or governed by the
Law of
any jurisdiction other than the United States and pursuant to which the Company
or any of its Subsidiaries has or may have any liability, contingent or
otherwise.
“GAAP”
means
United States generally accepted accounting principles and practices as in
effect from time to time and applied consistently throughout the periods
involved.
“Governmental
Entity”
means
any government or any court, arbitrator, tribunal, administrative agency
or
commission or other governmental, public or other regulatory authority,
instrumentality, department, ministry, board or agency, federal, state, local,
tribal, provincial, regional, municipal, supranational or foreign.
“Hazardous
Substance”
means
any material, substance or waste with respect to which liability or standards
of
conduct may be imposed pursuant to any Environmental Laws.
“HSR
Act”
has
the
meaning set forth in Section 3.4.
“Indebted
Stockholders”
means
the Stockholders of the Company that have outstanding obligations with respect
to Stockholder Loans.
“Indebtedness”
means,
without duplication, (a) the principal of and premium (if any) in respect
of all
indebtedness for borrowed money, including accrued interest and any cost
associated with prepaying any such debt, (b) the principal of and premium
in
respect of obligations evidenced by bonds, debentures, notes or other similar
instruments, including accrued interest, (c) the principal component of all
obligations to pay the deferred and unpaid purchase price of property and
equipment which have been delivered to the Company or any of its Subsidiaries,
(d) capital leases of the Company or any of its Subsidiaries classified as
such
on the Latest Balance Sheet and similar capital leases of the Company or
any of
its Subsidiaries entered into since the date of the Latest Balance
Sheet and
(e)
all
Indebtedness of another person referred to in clauses (a) through (d) above
guaranteed directly or indirectly, jointly or severally, in any manner by
the
Company or any of its Subsidiaries
(other
than with respect to Indebtedness otherwise included in clauses (a) through
(d)
above).
“Indemnified
Person”
has
the
meaning set forth in Section 6.2.
“Intellectual
Property”
means
all United States or foreign: patents, patent applications, patentable
inventions, design patents and industrial designs, and improvements thereto;
registered and material unregistered trademarks, trade names, service marks,
trade dress, slogans, logos, domain names, and designs, and all goodwill
associated therewith, and all applications, registrations, and renewals in
connection therewith; registered and material unregistered copyrights and
copyright applications, and all registrations and renewals in connection
therewith; trade secrets and proprietary and confidential business information
(including ideas, research and development, know-how, formulas, compositions,
manufacturing
-
-
ffny03\goldfmu\658041.8
-5-
and
production processes and techniques, methods, schematics, technology, technical
data, designs, drawings, flowcharts, block diagrams, specifications, customer
and supplier lists, pricing and cost information and business and marketing
plans and proposals); and licenses, sublicenses, or agreements related to
any of
the foregoing.
“IRS”
means
the Internal Revenue Service.
“ISRA”
has
the
meaning set forth in Section 7.3(c).
“Key
Employees”
has
the
meaning set forth in Section 2.8(e).
“knowledge
of the Company”
means
the knowledge, in each case after reasonable inquiry, of Xxx X. Boots-
President, CEO, Xxxxx X. Xxxxxxxxxx- EVP and CFO, Xxxxxxx X. Xxxxxxxx, VP
and
General Counsel, Xxxxx Xxxxx Xxxxxx, COO, Xxxxx Xxxxxx, President, Rigid
Closed
Top, Xxxx Xxxxxxx, President, Rigid Open Top, Xxxxx Xxxxx, EVP - Corporate
Development, Xxxx Xxxxxxx, EVP, Engineering Technology, Xxxxxx Xxxxxx, EVP
-
Human Resources, Xxxx Xxxxx, EVP and Controller, or Xxxx Xxxxx, Corporate
Manager Safety, Health & Environmental.
“knowledge
of Purchaser”
or
“knowledge
of Merger Sub”
means
the knowledge, in each case after reasonable inquiry, of Xxxxxx Xxxxxxxx,
Xxxxxxx Xxxxxx or Xxxxxxx Jupiter.
“Latest
Audited Balance Sheet”
has
the
meaning set forth in Section 3.6.
“Latest
Balance Sheet”
has
the
meaning set forth in the definition of “Latest Financial
Statements”.
“Latest
Financial Statements”
means
the unaudited consolidated balance sheet of the Company as of April 1, 2006
(the “Latest
Balance Sheet”)
and
the related unaudited statement of operations and cash flow for the three
months
then ended, including the related notes and schedules thereto, each as set
forth
in the Company’s Form 10-Q for the period ended April 1, 2006 filed with the
SEC.
“Law”
means
any applicable federal, state, local or foreign law, statute, common law,
rule,
ordinance, regulation, code, licensing requirement, judgment, injunction,
order,
writ, decree, license, guideline or interpretation having the force of law,
permit, bylaw or other restriction, in each case, of any Governmental
Entity.
“Leased
Real Property”
means
the real property leased by the Company or any of its Subsidiaries, as tenant,
together with, to the extent leased by the Company or any of its Subsidiaries,
all buildings and other structures, facilities or improvements currently
located
thereon, all fixtures, systems and equipment attached or appurtenant
thereto.
“Lien”
means
any material adverse claim, restriction on voting or transfer or pledge,
mortgage, lien (including, without limitation, environmental and Tax liens),
charge, encumbrance, restriction or security interest of any kind.
-
-
ffny03\goldfmu\658041.8
-6-
“Material
Contracts”
has
the
meaning set forth in Section 3.13(a).
“Material
Permits”
has
the
meaning set forth in Section 3.8.
“Material
Software”
has
the
meaning set forth in Section 3.12(c).
“Merger”
has
the
meaning set forth in the Recitals.
“Merger
Consideration”
means
an amount equal to (i) $2,250,000,000, plus
(ii)
Closing Cash, less
(iii)
Closing Indebtedness, less
(iv)
Transaction Expenses, plus
(v) the
Net Working Capital Adjustment (which may be a negative number).
“Merger
Sub”
has
the
meaning set forth in the Preamble.
“Neutral
Auditors”
has
the
meaning set forth in Section 2.11(c).
“Net
Working Capital”
means
the consolidated net working capital of the Company and its Subsidiaries
as of
the Closing, calculated in accordance with GAAP consistently applied with
the
application thereof in the Latest Audited Balance Sheet, subject to accounting
principles, methodologies, procedures and classifications as are set forth
in
Exhibit B
attached
hereto.
“Net
Working Capital Adjustment”
means
the amount by which (a) the Net Working Capital as of the Closing exceeds
the Target Net Working Capital or (b) the Net Working Capital as of the
Closing is less than the Target Net Working Capital; provided
that any
amount which is calculated pursuant to this clause (b) shall be deemed to
be a
negative number.
“Other
Filings”
means
any filings required to be filed by the Company or Purchaser with any
Governmental Entity under the Securities Act, the Exchange Act, any stock
exchange rule or any other federal, state, local or foreign laws in connection
with the transactions contemplated hereby.
“Owned
Real Property”
means
the real property owned by the Company or any of its Subsidiaries, together
with
all buildings and other structures, facilities or improvements currently
located
thereon, all fixtures, systems and equipment of the Company or any of its
Subsidiaries attached or appurtenant thereto and all easements, licenses,
rights
and appurtenances relating to the foregoing.
“Per
Share Escrow Amount”
means
(a) the Representative Escrow Amount
divided
by (b) the number of shares of Company Stock outstanding immediately prior
to the Effective Time (assuming the exercise of all Vested Options outstanding
immediately prior to the Effective Time).
“Per
Share Estimated Merger Consideration”
means
(a) the Estimated Merger Consideration plus the Aggregate Exercise Price
divided by (b) the number of shares of Company Stock outstanding
immediately prior to the Effective Time (assuming the exercise of all Vested
Options outstanding immediately prior to the Effective Time).
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“Per
Share Merger Consideration”
means
(a) the Merger Consideration plus the Aggregate Exercise Price divided by
(b) the
number of shares of Company Stock outstanding immediately prior to the Effective
Time
(assuming the exercise of all Vested Options outstanding immediately prior
to
the Effective Time).
“Permitted
Liens”
means
(a) Liens for Taxes, assessments and governmental charges or levies not yet
delinquent or for which adequate reserves are maintained on the financial
statements of the Company and its Subsidiaries as of the Closing Date; (b)
Liens
imposed by law, such as materialmen’s, mechanics’, carriers’, workmen’s and
repairmen’s liens and other similar liens arising in the ordinary course of
business securing obligations that are not overdue for a period of more than
30
days or which are being contested in good faith by appropriate proceedings
(and,
in each case, for which adequate reserves are maintained on the financial
statements of the Company and its Subsidiaries as of the Closing Date in
conformity with GAAP); (c) ordinary course pledges or deposits to secure
obligations under workers’ compensation Laws or similar legislation or to secure
public or statutory obligations; (d) deposits to secure the performance of
bids, trade contracts (other than for borrowed money), leases, statutory
obligations, surety and appeal bonds, performance bonds and other obligations
of
a like nature incurred in the ordinary course of business consistent with
past
practice that,
individually or in the aggregate, are not material in amount; (e) with respect
to real estate, all matters of record, including, without limitation, survey
exceptions, reciprocal easement agreements and other encumbrances on title
to
real property, provided that such matters, individually or in the aggregate,
do
not materially impair the current use, utility or value of the underlying
real
property; (f) all applicable zoning, entitlement, conservation restrictions
and
other land use and environmental regulations imposed (in each case) by a
Governmental Entity, which do not materially impair the current use of the
underlying asset; (g) all exceptions, restrictions, easements, charges,
rights-of-way and other Liens set forth in any Environmental Permits, any
deed
restrictions, groundwater or land use limitations or other institutional
controls utilized in connection with any required environmental remedial
actions, or other state, local or municipal Environmental Laws applicable
to the
Company or any of its Subsidiaries or any of their respective properties,
provided that such matters, individually or in the aggregate, do not materially
impair the current use, utility or value of the underlying real property;
(h)
Liens securing the obligations of the Company or any of its Subsidiaries
under
secured Indebtedness of the Company or any of its Subsidiaries and (i) Liens
referred to in the Company Disclosure Schedule.
“Person”
means
an individual, a corporation, a limited liability company, a partnership,
an
association, a trust or any other entity or organization, including a
Governmental Entity.
“Plan”
has
the
meaning set forth in the definition of “U.S. Benefit Plan”.
“Prepayment
Expenses”
means
any make-whole amount, premium over face amount, termination fees, prepayment
penalties, expenses, breakage costs or other fees, costs or expenses incurred
in
connection with the prepayment, repurchase, tender/consent solicitation or
defeasance of any Indebtedness of the Company or any of its Subsidiaries
or
resulting from the execution and delivery of this
Agreement or the consummation of the transactions contemplated
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hereby.
For the avoidance of doubt, Prepayment Expenses shall not include any amount
included in Net Working Capital.
“Proceeding”
means
any writ, injunction, decree, order, judgment, lawsuit, claim, action, suit,
arbitration (formal or informational), proceeding, notice of violation,
investigation, demand letter or summons.
“Purchaser”
has
the
meaning set forth in the Preamble.
“Purchaser
Closing Payment”
has
the
meaning set forth in Section 2.11(e)(i).
“Purchaser
Termination Fee”
has
the
meaning set forth in Section 9.2(b).
“Q&A-7”
has
the
meaning set forth in Section 6.1(c).
“Representative”
has
the
meaning set forth in Section 10.1(a).
“Representative
Escrow Amount”
means
$50,000,000.
“Representative
Remaining Amount”
has
the
meaning set forth in Section 2.11(e)(i).
“Resolution
Period”
has
the
meaning set forth in Section 2.11(b).
“SEC”
means
the Securities and Exchange Commission.
“SEC
Documents”
means
the forms, proxy statements, registration statements, reports, schedules,
statements and other documents required to be filed with the SEC by the Company
or any of its Subsidiaries since December 31, 2003, together with all
information incorporated therein.
“Securities
Act”
means
the Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder.
“Senior
Indebtedness”
means
the obligations of the Company and Xxxxx Plastics Corporation under the Second
Amended and Restated Credit and Guaranty Agreement, dated as of August 9,
2004,
as amended by the First Amendment to Second Amended and Restated Credit and
Guaranty Agreement dated as of January 1, 2005, the Second Amendment to Second
Amended and Restated Credit and Guaranty Agreement dated as of June 3, 2005
and
the Third Amendment to Second Amended and Restated Credit and Guaranty Agreement
dated as of October 26, 2005, among Xxxxx Plastics Corporation, the Company,
certain subsidiaries of Xxxxx Plastics Corporation as Guarantors, the Lenders
party thereto, Xxxxxxx Xxxxx Credit Partners L.P., JPMorgan Chase Bank, N.A.,
and certain agents.
“Shortfall”
has
the
meaning set forth in Section 2.11(e)(iii).
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“Stockholder
Loans”
means
the loans in favor of the Company or a Subsidiary of the Company entered
into by
certain current employees of the Company or a Subsidiary of the Company,
as set
forth on Exhibit C
hereto.
“Stockholders”
means
all of the stockholders of the Company as listed in Section 3.2(a) of the
Company Disclosure Schedule.
“Subsidiary”
means,
with respect to any Person, any corporation, limited liability company,
partnership, joint venture, or other legal entity of which such Person (either
above or through or together with any other Subsidiary) owns, directly or
indirectly, more than 50% of the stock or other equity interests the holders
of
which are generally entitled to vote for the election of the board of directors
or other governing body of such corporation or other legal entity.
“Surviving
Corporation”
has
the
meaning set forth in Section 2.1.
“Target
Net Working Capital”
means
$163,400,000.
“Tax”
means
any net income, alternative or add-on minimum tax, gross income, gross receipts,
sales, use, ad valorem, value added, transfer, franchise, profits, withholding,
payroll, employment, excise, severance, stamp, capital stock, occupation,
property, environmental or windfall profits tax, or other like assessment
or
charge of any kind whatsoever, together with any interest, penalty, addition
to
tax or additional amount imposed by any tax authority responsible for the
imposition of any such tax (domestic or foreign).
“Tax
Return”
means
any return, declaration or information return relating to Tax, including
any
schedule or attachment thereto, and including any amendment thereto, required
to
be filed with any Tax authority.
“10
¾%
Notes”
means
Xxxxx Plastics Corporation’s 10 ¾% Senior Subordinated Notes due
2012.
“Termination
Date”
has
the
meaning set forth in Section 9.1(c).
“Transaction
Expenses”
means,
to the extent not paid before the Effective Time, (a) the amount of any
fees, costs and expenses (including, without limitation, fees, costs and
expenses of legal counsel, investment bankers, brokers or other representatives
and consultants) incurred by the Company or any of its Subsidiaries, or for
which they are otherwise liable, in connection with this Agreement or the
transactions contemplated hereby, (b) any amounts payable to any officer,
director or employee of the Company or any of its Subsidiaries in the nature
of
a sale bonus as a result of the consummation of the Merger and (c) the
aggregate amount of the payments to be made to Xxxxx X. Xxxxx under the Stock
Appreciation Rights Agreement dated July 21, 2004, in order to satisfy the
Company’s obligations under such agreement. “Transaction Expenses” shall not
include (i) any Prepayment Expenses or (ii) any fees, costs or expenses
incurred by the Company or any of its Subsidiaries pursuant to Section 4.6
or 7.8. Any Prepayment Expenses and fees, costs and expenses referred to
in
clause (ii) of the immediately preceding sentence shall not be included in
Net
Working Capital.
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“Transfer
Taxes”
means
all sales, use, transfer, real property transfer, documentary, recording,
stock
transfer and similar Taxes (but not (a) any Taxes on income or gains, (b)
any
franchise Taxes or (c) any Taxes imposed on a Stockholder (or its Affiliate
(other than the Company or any of its Subsidiaries) or direct or indirect
owner)
by reason of the Stockholder (or such Affiliate or owner) being resident
in or
otherwise having a taxable presence (other than a taxable presence in a Taxing
jurisdiction held by all or substantially all Stockholders by reason of their
ownership of Company Stock) in a Taxing jurisdiction, such Taxes to be paid
and
borne by the applicable Stockholder) and any deficiency, interest or penalty
with respect thereto.
“Unvested
Options”
has
the
meaning set forth in Section 2.8(d).
“U.S.
Benefit Plan”
means
each written material plan, program, policy, contract, agreement or other
arrangement providing for compensation, retirement benefits, severance,
termination pay, performance awards, stock or equity-related awards, insurance,
fringe benefits, health benefits or other employee benefits of any kind,
whether
formal or informal, funded or unfunded, written or oral, other than an
Employment Agreement (each of the preceding hereinafter is referred to
individually as a “Plan”
and
collectively as the “Plans”),
including, without limitation, each “employee benefit plan”, within the meaning
of Section 3(3) of ERISA which is now or previously has been sponsored,
maintained, contributed to, or required to be contributed to, or with respect
to
which any withdrawal liability (within the meaning of Section 4201 of ERISA)
has
been or may be incurred by the Company or any of its Subsidiaries for the
benefit of any U.S. Employee.
“Vested
Options”
has
the
meaning set forth in Section 2.8(d).
Section
1.2 Interpretation.
Meanings specified in this Agreement shall be applicable to both the singular
and plural forms of such terms and to the masculine, feminine and neuter
genders, as the context requires and the words “include”, “includes” or
“including” shall be deemed to be followed by the words “without
limitation”.
ARTICLE
II
THE
MERGER
Section
2.1 The
Merger.
Upon
the terms and subject to the conditions of this Agreement and in accordance
with
the Delaware General Corporation Law (the “DGCL”),
at
the Effective Time, Merger Sub shall be merged with and into the Company
and the
separate corporate existence of Merger Sub shall thereupon cease. The Company
shall be the surviving corporation in the Merger (the Company in its capacity
as
the surviving corporation is sometimes hereinafter referred to as the
“Surviving
Corporation”).
The
Merger shall have the effects specified in the DGCL.
Section
2.2 Closing.
Unless
this Agreement is sooner terminated as provided in Article IX, upon the terms
and subject to the conditions set forth in this Agreement, the
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closing
of the Merger (the “Closing”)
shall
take place at the offices of Wachtell, Lipton, Xxxxx & Xxxx, 00 X. 00xx Xx.,
Xxx Xxxx, Xxx Xxxx 00000, at 9:00 a.m. local time, on
the
later of (a) five business days after the day on which the last to be fulfilled
or waived of the conditions set forth in Article VIII (other than those
conditions that by their nature are to be fulfilled at the Closing, but subject
to the fulfillment of such conditions) shall be fulfilled or waived in
accordance herewith or (b) September 29, 2006,
or at
such other time or date as the parties hereto may agree. The date on which
the
Closing shall occur is hereinafter referred to as the “Closing
Date”.
Section
2.3 Effective
Time.
If all
the conditions to the Merger set forth in Article VIII shall have been fulfilled
or waived in accordance herewith and this Agreement shall not have been
terminated as provided in Article IX, the parties hereto shall cause a
Certificate of Merger meeting the requirements of Section 251 of the DGCL
to be
properly executed and filed in accordance with such Section on the Closing
Date.
The Merger shall become effective at the time of filing of the Certificate
of
Merger with the Secretary of State of the State of Delaware in accordance
with
the DGCL or at such later time which the parties shall have agreed upon and
designated in such filing as the effective time of the Merger (the “Effective
Time”).
Section
2.4 Certificate
of Incorporation.
At the
Effective Time, the certificate of incorporation of Merger Sub as in effect
immediately prior to the Effective Time shall be the certificate of
incorporation of the Surviving Corporation until thereafter amended, except
that
the Surviving Corporation shall have the name “BPC Holding
Corporation”.
Section
2.5 Bylaws.
At the
Effective Time, the bylaws of Merger Sub as in effect immediately prior to
the
Effective Time shall be the bylaws of the Surviving Corporation until thereafter
amended.
Section
2.6 Directors
of the Surviving Corporation.
As of
the Effective Time, the directors of Merger Sub immediately prior to the
Effective Time shall be the directors of the Surviving Corporation until
the
earlier of their resignation or removal or until their respective successors
are
duly elected and qualified, as the case may be.
Section
2.7 Officers
of the Surviving Corporation.
As of
the Effective Time, the officers of the Company immediately prior to the
Effective Time shall be the officers of the Surviving Corporation until the
earlier of their resignation or removal or until their respective successors
are
duly elected and qualified, as the case may be.
Section
2.8 Effect
of Merger on Capital Stock and Vested Options.
As of
the Effective Time, by virtue of the Merger and without any action on the
part
of the holder of any shares of the capital stock of the Company or any shares
of
the capital stock of Merger Sub:
(a) Each
share of common stock, $0.01 par value, of Merger Sub issued and outstanding
immediately prior to the Effective Time shall be converted into one fully
paid
and nonassessable share of voting common stock, $0.01 par value, of the
Surviving Corporation.
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(b) Except
as
otherwise provided herein, each share of common stock of the Company
(“Company
Stock”)
issued
and outstanding immediately prior to the Effective Time shall be converted
into
the right to receive from the Surviving Corporation, upon the consummation
of
the Merger, upon surrender of the certificate or certificates which prior
thereto represented shares of Company Stock, an amount equal to the Per Share
Merger Consideration in accordance with Section 2.9 and Section 2.11.
The Per Share Merger Consideration payable to any Stockholder shall be paid
solely in cash. As of the Effective Time, all shares of Company Stock issued
and
outstanding immediately prior to the Effective Time shall no longer be
outstanding and shall automatically be canceled and retired and shall cease
to
exist, and each holder of a certificate representing any such shares of Company
Stock shall, upon surrender of such certificate in accordance with
Section 2.9, cease to have any rights with respect thereto, except the
right to receive the Per Share Merger Consideration in accordance with
Section 2.9 and Section 2.11. Each share of Company Stock owned by
Purchaser, Merger Sub or any of their respective Subsidiaries immediately
prior
to the Effective Time shall automatically be cancelled without any conversion
thereof and no payment or distribution shall be made with respect thereto.
(c) Notwithstanding
anything in this Agreement to the contrary, shares of Company
Stock issued
and outstanding immediately prior to the Effective Time held by a holder
(if
any) who has the right to demand payment for and an appraisal of such shares
in
accordance with the DGCL shall not be converted into a right to receive the
Per
Share Merger Consideration unless such holder fails to perfect or otherwise
loses such holder’s right to such payment or appraisal, if any.
(d)
All
vested options to purchase shares of Company Stock (including options that
vest
upon the consummation of the Merger) that are outstanding and unexercised
immediately prior to the Effective Time whether under any Company stock option
plan or otherwise (individually, a “Vested
Option”
and
collectively, the “Vested
Options”),
shall
be canceled immediately prior to the Effective Time and each holder of a
Vested
Option will be entitled to receive from the Surviving Corporation as soon
as
practicable following the Effective Time, for each share of Company Stock
subject to a Vested Option, an amount in cash equal to (i)
the
Per Share Merger Consideration minus
(ii) the per share exercise price of such Vested Option. All
unvested options to purchase shares of Company Stock outstanding immediately
prior to the Effective Time whether under any Company stock option
plan or otherwise (“Unvested
Options”
and,
together with the Vested Options, “Company
Options”)
shall
be cancelled without payment or obligation pursuant to the terms of the BPC
Holding Corporation 2002
Stock Option Plan.
All
amounts payable pursuant to this Agreement shall be subject to any required
withholding of Taxes. Any adjustment or conversion of Unvested Options pursuant
to this Section 2.8(d) shall be made in accordance with the requirements
of
Section 409A of the Code and the regulations promulgated
thereunder.
(e) At
or
prior to the Effective Time, the Company, the board of directors of the Company
or the compensation committee of the board of directors of the Company, as
applicable, shall adopt any resolutions and take any reasonable actions which
are necessary to effectuate the provisions of Section 2.8(d). The Company
shall take all reasonable actions necessary to ensure that the actions
contemplated by Section 2.8(d) shall be effectuated.
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Purchaser
desires to amend and extend the terms of employment agreements between the
Company and one or more of its Subsidiaries and certain employees of the
Company
or such Subsidiaries (the “Key
Employees”)
and
enter into certain equity incentive agreements with the Key Employees prior
to
the Closing, in each case effective as of the Closing. From the date hereof
through the Closing, the parties hereto agree to reasonably cooperate with
each
other in order to effectuate such amendments and agreements, including by
agreeing to equitable adjustments to the payment provisions of Section 2.11(d),
(e) and (f) to account for amounts that but for such arrangements would be
payable to such Key Employees. At or prior to the Effective Time, the Company,
the board of directors of the Company or the compensation committee of the
board
of directors of the Company, as applicable, shall adopt any resolutions and
take
any reasonable actions which are necessary to effectuate the provisions of
this
Section 2.8(e) and the agreements contemplated hereby.
Section
2.9 Exchange
of Certificates.
a)
At the
Effective Time, each holder of an outstanding certificate or certificates
which
prior thereto represented shares of Company Stock shall surrender to the
Surviving Corporation the certificate or certificates representing such shares
of Company Stock, together with a duly executed letter of transmittal
substantially in the form of Exhibit D
attached
hereto and, upon acceptance thereof by the Surviving Corporation, be entitled
to
the amount of cash into which such holder’s shares of Company Stock have been
converted pursuant to this Agreement. After the Effective Time, there shall
be
no further transfer on the records of the Company or its transfer agent of
certificates representing shares of Company Stock which have been converted,
in
whole or in part, pursuant to this Agreement into the right to receive cash
and
if such certificates are presented to the Surviving Corporation for transfer,
they shall be canceled against delivery of cash. Until surrendered as
contemplated by this Section 2.9(a), each certificate for shares of Company
Stock shall be deemed at any time after the Effective Time to represent only
the
right to receive upon such surrender the Per Share Merger Consideration with
respect to each share of Company Stock represented by such certificate as
contemplated by Section 2.8(b). No interest will be paid or will accrue on
any
amounts payable as Per Share Merger Consideration.
(b) No
dividends or other distributions with respect to Company Stock with a record
date after the Effective Time shall be paid to the holder of any unsurrendered
certificate for shares of Company Stock with respect to the shares of Company
Stock represented thereby.
(c) Neither
Purchaser nor the Company shall be liable to any Person in respect of any
shares
of retained Company Stock (or dividends or distributions with respect thereto)
or the Merger Consideration required to be delivered to a public official
pursuant to any applicable abandoned property, escheat or similar
law.
(d) If
any
consideration is to be paid to a Person other than the Person in whose name
the
certificate surrendered in exchange therefor is registered, it shall be a
condition to such exchange that the Person requesting such exchange shall
pay to
the Surviving Corporation any Transfer Taxes or other Taxes required by reason
of the payment of such consideration to a Person other than that of the
registered holder of the certificate so surrendered, or such Person shall
establish to the reasonable satisfaction of the Surviving Corporation that
such
Tax has been paid or is not applicable.
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(e) If
any
certificate for shares of Company Stock shall have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the Person claiming
such certificate to be lost, stolen or destroyed and, if requested by the
Surviving Corporation, the posting by such person of a bond in customary
amount
as indemnity against any claim that may be made against it with respect to
such
certificate (and such affidavit of loss shall not be deemed effective without
the posting of such bond if required hereunder), the Surviving Corporation
will
pay, in exchange for such lost, stolen or destroyed certificate, the Per
Share
Merger Consideration to be paid in respect of each share of Company Stock
represented by such certificate in accordance with this Section 2.9 and
Section 2.11.
Section
2.10 Payments
at Closing.
(a) Not
less
than three business days prior to the Closing Date, the Company shall in
good
faith prepare and deliver to Purchaser a statement containing the Estimated
Merger Consideration and the components thereof, together with reasonable
supporting detail. Such statement shall be binding for purposes of the Estimated
Merger Consideration, absent mathematical error or calculation inconsistent
with
the terms of this Agreement, in which case the Estimated Merger Consideration
shall be adjusted to correct such error or inconsistency.
(b) Subject
to the provisions of this Agreement, simultaneously with the Closing, Purchaser
shall:
(i) pay,
or
cause the Surviving Corporation to pay, to the Stockholders (other than
Dissenting Stockholders) with respect to each share of Company Stock outstanding
immediately prior to the Effective Time, an amount equal to the Per Share
Estimated Merger Consideration less
the Per
Share Escrow Amount;
(ii) pay,
or
cause the Surviving Corporation to pay to the holders of Vested Options with
respect to each share of Company Stock subject to a Vested Option, an amount
equal to the Estimated Option Payment less
the Per
Share Escrow Amount; and
(iii) deposit,
or cause to be deposited, the Representative Escrow Amount into an escrow
account (the “Escrow
Account”),
which
shall be established pursuant to an escrow agreement (the “Escrow
Agreement”),
which
Escrow Agreement (A) shall be entered into on the Closing Date by
Purchaser, the Representative and an escrow agent (the “Escrow
Agent”)
to be
mutually agreed upon between Purchaser and the Representative and (B) shall
be substantially in the form of Exhibit E
attached
hereto.
(c) The
Company shall request each Stockholder and each holder of Vested Options
to
submit to the Company, not later than five business days prior to the Closing
Date, instructions for delivery of the payment in respect of such delay to
be
made pursuant to Section 2.10(b)(i) and (ii), together with customary
documentation and tax information for the delivery of shares (or with respect
to
Vested Options), which documentation and tax information shall be reasonably
acceptable to the Company and Purchaser. No later than two business days
prior
to the Closing Date the Company shall deliver to Purchaser a schedule setting
forth how the
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payments
to be made pursuant to Section 2.10(b)(i) and (ii) will be distributed,
including wire instructions in the case of payments to be made at the Closing
by
wire transfer.
Section
2.11 Post-Closing
Adjustments.
(a) As
promptly as practicable after the Closing, but in no event more than 30 days
after the Closing Date, the Surviving Corporation shall in good faith prepare
and deliver to the Representative (on behalf of the Stockholders and holders
of
Vested Options) a statement (the “Closing
Statement”)
indicating the Surviving Corporation’s calculation of the Merger Consideration
and the components thereof, together with reasonable supporting
detail.
(b) After
receipt of the Closing Statement, the Representative shall have 15 days to
review the Closing Statement, together with the work papers used in the
preparation thereof. The Surviving Corporation shall (i) provide the
Representative and its representatives reasonable access during normal business
hours to all relevant work papers, trial balances and other financial
information to the extent necessary or useful to complete the review of the
Closing Statement, and (ii) reasonably cooperate with the Representative
and its
representatives’ reasonable requests with respect to the review of the Closing
Statement, including by providing on a timely basis all information reasonably
necessary or useful in reviewing the Closing Statement. Unless the
Representative delivers written notice to the Surviving Corporation on or
prior
to the 15th
day
after the Representative’s receipt of the Closing Statement specifying in
reasonable detail the amount, nature and basis of all disputed items, the
Representative shall be deemed to have accepted and agreed to the calculation
of
the Merger Consideration set forth on the Closing Statement. If the
Representative notifies the Surviving Corporation of its objection to the
calculation of the Merger Consideration as set forth on the Closing Statement,
the Representative and the Surviving Corporation shall, within 30 days (or
such
longer period as the parties may agree in writing) following such notice
(the
“Resolution
Period”),
attempt to resolve their differences and any resolution by them as to any
disputed amounts shall be final, binding and conclusive (other than as a
result
of manifest error or fraud). Items not objected to by the Representative
shall
be deemed resolved.
(c) If,
at
the conclusion of the Resolution Period, there are any amounts remaining
in
dispute, then such amounts remaining in dispute shall be submitted to KPMG,
LLP,
or such other Person as the Company and Purchaser reasonably agree (the
“Neutral
Auditors”).
The
Neutral Auditors shall act as an arbitrator to determine, based solely on
the
provisions of this Section 2.11 and the presentations by the Representative
and
the Surviving Corporation, and not by independent review, only those issues
still in dispute. The Neutral Auditors’ determination for any disputed amount
shall be within the range implied by the amount indicated for such amount
in the
Purchaser’s Closing Statement and the amount indicated for such amount in the
Representative’s written notice to Purchaser. The Neutral Auditors’
determination shall be made within 30 days of the dispute being submitted
for
their determination, shall be set forth in a written statement delivered
to the
Representative and the Surviving Corporation and shall be final, non-appealable
and binding on the parties hereto, absent manifest error or fraud. A judgment
of
a court of competent jurisdiction may be entered upon the Neutral Auditors’
determination. The Neutral Auditors shall have exclusive jurisdiction over,
and
resort to the Neutral Auditors as provided in this Section 2.11(c) shall be
the only recourse and remedy of the
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parties
against one another with respect to, any disputes arising out of or relating
to
the adjustments pursuant to this Section 2.11. The fees, costs and expenses
of
the Neutral Auditors shall be paid by Purchaser, on the one hand, and the
Representative Escrow Amount, on the other hand, in inverse proportion (based
on
value) as Purchaser and the Representative prevail on any disputed matters,
as
determined by the Neutral Auditors. The term “Final
Closing Statement”
shall
mean the definitive Closing Statement agreed to (or deemed to be agreed to)
by
the Surviving Corporation and the Representative in accordance with Section
2.11(b) or resulting from the determinations made by the Neutral Auditors
in
accordance with this Section 2.11(c) (in addition to those items theretofore
agreed to by the Representative and the Surviving Corporation).
(d) If
the
Final Closing Amount exceeds the Estimated Merger Consideration,
then:
(i) The
Representative (on behalf of the Stockholders and holders of Vested Options)
shall be entitled to receive an amount equal to (A)(x) the Final Closing
Amount
minus (y) the Estimated Merger Consideration, plus
interest
thereon at the annual rate of 5% from the Closing Date to the date of payment,
plus
(B) the
Representative Escrow Amount (the “Representative
Closing Payment”).
(ii) Purchaser
and the Representative shall cause the Escrow Agent to release from the Escrow
Account to the Representative an amount equal to the Representative Closing
Payment.
(e) If
the
Estimated Merger Consideration exceeds the Final Closing Amount,
then:
(i) Purchaser
shall be entitled to receive an amount equal to (x) the Estimated Merger
Consideration minus (y) the Final Closing Amount, plus
interest
thereon at the annual rate of 5% from the Closing Date to the date of payment
(the “Purchaser
Closing Payment”);
and
the Representative shall be entitled to receive an amount equal to the
difference between the Representative Escrow Amount and the Purchaser Closing
Payment if the Purchaser Closing Payment is less than the Representative
Escrow
Amount (the “Representative
Remaining Amount”).
(ii) Purchaser
and the Representative shall cause the Escrow Agent to release from the Escrow
Account (A) to Purchaser an amount equal to the Purchaser Closing Payment
and
(B) to the Representative an amount equal to the Representative Remaining
Amount.
(iii) If
the
Purchaser Closing Payment exceeds the Representative Escrow Amount, then
Purchaser shall be entitled to recover the amount of such excess (the
“Shortfall”)
from
the Stockholders and the holders of Vested Options severally on a pro rata
basis, it being understood that Purchaser may assert such right against any
or
all of the Stockholders and holders of Vested Options in its sole discretion;
provided that if Purchaser elects to recover the relevant pro rata portion
of
the Shortfall from GS Capital Partners 2000,
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L.P.,
X.X. Xxxxxx Partners (BHCA), L.P. or any of their respective affiliated
investment funds that are Stockholders, then Purchaser must concurrently
seek to
recover the relevant pro rata share of the Shortfall from each of GS Capital
Partners 2000, L.P., X.X. Xxxxxx Partners (BHCA), L.P. and their respective
affiliated investment funds that are Stockholders.
(f) If
the
Estimated Merger Consideration equals the Final Closing Amount, then Purchaser
and the Representative shall cause the Escrow Agent to release from the Escrow
Account the Representative Escrow Amount to the Representative.
(g) All
payments made pursuant to this Section 2.11 shall be made by wire transfer
of
immediately available funds within two days of the determination of the Final
Closing Statement to accounts previously designated in writing by Purchaser
and
the Representative.
(h) The
Escrow Account exists solely to secure the obligations of the parties pursuant
to this Section 2.11 and shall not be subject to any other provision of this
Agreement.
Section
2.12 Stockholder
Loans.
Notwithstanding anything in this Agreement to the contrary, all amounts paid
to
each Indebted Stockholder with respect to the shares of Company Stock or
Vested
Options held by such Indebted Stockholder immediately prior to the Closing
shall
be reduced by the aggregate amount of the Stockholder Loan owed to the Company
or any of its Subsidiaries by such Indebted Stockholder, in accordance with
the
note or notes representing such Stockholder Loan.
Section
2.13 Appraisal
Rights.
Holders
of shares of Company Stock who have complied with all requirements for demanding
and perfecting appraisal rights as set forth in Section 262 of the DGCL
(“Dissenting
Stockholders”)
are
entitled to their rights under such laws. Each share of Company Stock held
by
Dissenting Stockholders shall not be converted into or represent the right
to
receive the Per Share Merger Consideration. Dissenting Stockholders shall
be
entitled to receive payment of the appraised value of such shares held by
them
in accordance with the provisions of Section 262 of the DGCL. Each share
of
Company Stock held by holders who shall have failed to perfect or who
effectively shall have withdrawn or lost their rights to appraisal of such
shares under Section 262 shall thereupon be deemed to have been converted
into
and to have become exchangeable for, as of the Effective Time, the right
to
receive the Per Share Merger Consideration, without any interest thereon,
upon
surrender, in the manner provided in Section 2.9, of the certificate or
certificates that formerly evidenced such shares. The Company shall give
Purchaser prompt written notice of any assertions of appraisal rights or
withdrawals of assertions of appraisal rights, and any other instrument in
respect thereof received by the Company and the opportunity to direct all
negotiations and proceedings with respect to demands for appraisal under
the
DGCL.
Section
2.14 Transfer
Taxes.
Purchaser, the Company or the Surviving Corporation shall file all Tax Returns
relating to, and assume liability for and pay, all New York State stock transfer
tax imposed as a result of the Merger, including purchasing and affixing
any
stamps as required by law, and the liability therefor shall not be taken
into
account for purposes of calculating Net Working Capital. Except as provided
in
Section 2.9(d), Purchaser, the Company or the Surviving Corporation shall
file
all Tax Returns relating to, and assume liability
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for
and
pay, all other Transfer Taxes imposed as a result of the Merger, and 50%
of the
liability therefore shall be taken into account for purposes of calculating
Net
Working Capital.
For the
avoidance of doubt, the parties hereto agree that no amount of the liability
for
Transfer Taxes shall be included in Transaction Expenses.
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES OF THE COMPANY
Except
as
set forth in the information included in the financial statements (including
any
notes to such statements) and as set forth in any statements of factual
historical occurrences of the Company or any of its Subsidiaries (excluding,
for
the avoidance of doubt, risk factor and similarly precatory
or
forward looking statements; it being understood that such exclusion shall
not be
deemed a qualification of the matters expressly set out in the Company
Disclosure Schedule or the exceptions in the definition of “Company Material
Adverse Effect”),
in each
case disclosed in the periodic reports of the Company on Form 10-K or Form
10-Q,
or any amendment thereof, filed with the SEC prior to the date hereof (but
after
January 1, 2005), the Company represents and warrants to Purchaser and Merger
Sub as follows:
Section
3.1 Organization
and Qualification.
The
Company and each of its Subsidiaries is duly formed, validly existing and
in
good standing under the laws of the jurisdiction of its incorporation or
organization, has the requisite power and authority to own, lease and operate
its properties and to carry on its business as it is now being conducted
and is
in good standing and duly qualified to do business in each jurisdiction in
which
the transaction of its business makes such qualification necessary, except
where
the failure to be so organized, existing, qualified and in good standing
or to
have such power or authority would not have
a
Company Material Adverse Effect.
Except
as set forth in Section 3.1 of the Company Disclosure Schedule, true,
correct and complete copies of the Company’s and each of its Subsidiary’s
certificate of incorporation and by-laws (or if such Subsidiary is not a
corporation, its organizational documents) (collectively, the “Company’s
Organizational Documents”),
each
as amended to date and currently in full force and effect, have been made
available to Purchaser.
Section
3.2 Capitalization.
b)
The
authorized capital stock of the Company consists of 5,000,000 shares of Company
Stock. As of the date of this Agreement, (i) 3,375,611 shares of Company
Stock
are issued and outstanding and 23,196 shares of Company Stock are held in
treasury and (ii) 635,931 shares of Company Stock are reserved or required
to be
reserved for issuance pursuant to outstanding options.
All outstanding shares of Company Stock are validly issued, fully paid and
nonassessable and are not subject to preemptive rights. Section 3.2(a) of
the
Company Disclosure Schedule sets forth a list, as of the date of this Agreement,
of the Stockholders and the number of shares of Company Stock held by each
such
Stockholder. Except as set forth in Schedule 3.2(a) of the Company Disclosure
Schedule, there are no outstanding subscriptions, options, warrants, calls,
rights, puts, convertible securities, exchangeable securities, commitments
or
any other agreements, whether written or oral, to which the Company is a
party
or by which the Company is bound that obligate the Company to (i) issue,
deliver
or sell or cause to be issued, delivered or sold any additional shares of
Company Stock or
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any
other
capital stock of the Company or any other securities convertible into, or
exercisable or exchangeable for, or evidencing the right to subscribe for,
any
such shares of Company Stock or any other capital stock of the Company or
(ii)
purchase, redeem or otherwise acquire any shares of Company Stock or any
other
capital stock of the Company. Except as set forth in Section 3.2(a) of the
Company Disclosure Schedule, there are no stock appreciation, phantom stock
or
other similar rights with respect to the Company or any Subsidiary. Except
as
set forth in Section 3.2(a) of the Company Disclosure Schedule, to the knowledge
of the Company, there are no voting trusts, stockholder agreements, proxies
or
other agreements or understandings in effect with respect to the voting or
transfer of any of the Company Stock. No Subsidiary of the Company owns any
shares of Company Stock. There are no dividends or other distributions with
respect to the Company Stock that have been declared but remain
unpaid.
(b) Except
as
set forth in Section 3.2(b) of the Company Disclosure Schedule, the Company
does
not have any Subsidiaries nor does it presently own, directly or indirectly,
any
capital stock or other proprietary interest, or rights or obligations to
acquire
the same, in any Person. Except as set forth in Section 3.2(b) of the Company
Disclosure Schedule, the Company, either directly or indirectly, owns 100%
of
all of the issued and outstanding shares of capital stock or limited liability
interests of each of its Subsidiaries, which in each case are duly authorized,
validly issued, fully paid and nonassessable, and are not subject to preemptive
rights, and have been issued in compliance with applicable securities laws.
There are no options, warrants, calls, convertible securities, exchangeable
securities, rights, puts, commitments or agreements of any character, written
or
oral, to which the Company or any Subsidiary is a party or by which the Company
or any Subsidiary is bound obligating any Subsidiary to issue, deliver, sell,
repurchase or redeem, or cause to be issued, delivered, sold, repurchased
or
redeemed, any additional shares of capital stock (or other voting securities
or
equity equivalents) of any Subsidiary or obligating the Company or any
Subsidiary to grant, extend or enter into any such option, warrant, call,
convertible security, exchangeable security, right, put, commitment or
agreement. Except as set forth in Section 3.2(b) of the Company Disclosure
Schedule all such interests are owned by the Company or a wholly-owned
Subsidiary of the Company and are held free and clear of all Liens other
than
Permitted Liens. The Company and each entity set forth in Section 3.2(b) of
the Company Disclosure Schedule are the only entities through which the business
of the Company is conducted.
Section
3.3 Authorization
and Validity of Agreement.
The
Board of Directors of the Company has declared the Merger advisable and fair
to
and in the best interest of the Company and the stockholders, unanimously
approved and adopted this Agreement and the transactions contemplated hereby
in
accordance with the DGCL and recommended the approval and adoption of this
Agreement by the Company’s stockholders. The Company has the requisite power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby in accordance with the terms of this Agreement.
The Company has duly authorized the execution, delivery and performance of
this
Agreement. This Agreement has been duly executed and delivered by the Company
and constitutes the legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, except as may
be
limited by any bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance or other similar laws affecting the enforcement of creditors’ rights
generally or by general principles of equity. Concurrently with the execution
of
this Agreement, the holders of
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in
excess
of a majority of the Company Stock have executed written consents approving
the
Merger and the other transactions contemplated hereby, which action by written
consent complies with the provisions of Section 228 of the DGCL, the
Company’s Organizational Documents and any other agreements between the Company
and any holder of Company Stock relating to voting, consent or other approval
rights. The offer to consummate the transactions contemplated by this Agreement
is a “Section 5 Offer” as defined in that certain Stockholders Agreement, dated
as of July 22, 2002, by and among the Company and certain stockholders of
the
Company (listed on Annex A thereto), and the notice of such Section 5 Offer
referred to in Section 5(a) of such Stockholders Agreement and the notice
and
request referred to in Section 5(b) of such Stockholders Agreement will be
delivered in accordance with the procedures set forth therein. No other action,
vote or approval of the Company or the Stockholders is required to authorize
the
execution and delivery by the Company of this Agreement or the consummation
by
it of the Merger.
Section
3.4 Consents
and Approvals.
Neither
the execution and delivery of this Agreement by the Company nor the consummation
by the Company of the transactions contemplated hereby will require on the
part
of the Company or any of its Subsidiaries any action, consent, approval,
order,
authorization or permit of, or filing with, or notification to, any Governmental
Entity, except (a) for any applicable filings required under the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended (the
“HSR
Act”),
(b)
as set forth in Section 3.4 of the Company Disclosure Schedule, (c) as provided
for in Section 2.3 or (d) where the failure to obtain such consent, approval,
authorization or permit, or to make such filing or notification, would not
have
a Company Material Adverse Effect or prevent or materially delay the
consummation of the transactions contemplated hereby.
Section
3.5 No
Violations.
Except
as set forth in Section 3.5 of the Company Disclosure Schedule, neither the
execution, delivery or performance of this Agreement by the Company nor the
consummation by the Company of the transactions contemplated hereby will
(a)
conflict with or violate the Company’s Organizational Documents, (b) result in a
violation or breach of, constitute a default (with or without notice or lapse
of
time, or both) under, give rise to any right of consent, approval,
authorization, termination, recapture, cancellation or acceleration of, or
result in the imposition of any Lien, other than a Permitted Lien, on any
assets, capital stock or property of the Company or any of its Subsidiaries
pursuant to any Contract or other obligation to which the Company or any
of its
Subsidiaries is a party or by which the Company, any of its Subsidiaries
or any
of their assets or properties are bound, except for such violations, breaches
and defaults (or rights of consent, approval, authorization, termination,
cancellation or acceleration or Lien) as to which requisite waivers or consents
have been obtained or which would not have a Company Material Adverse Effect
or
prevent or materially delay the consummation of the transactions contemplated
hereby or (c) assuming the consents, approvals, authorizations or permits
and
filings or notifications referred to in Section 3.4 and this Section 3.5
are
duly and timely obtained or made, violate any order, writ, injunction, decree,
statute, rule or regulation applicable to the Company or any of its Subsidiaries
or any of their respective assets and properties, except for such conflicts,
violations, breaches or defaults which would not have a Company Material
Adverse
Effect or prevent or materially delay the consummation of the transactions
contemplated hereby.
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Section
3.6 No
Undisclosed Liabilities.
Neither
the Company nor any of its Subsidiaries has any liability, whether absolute,
accrued, contingent or otherwise other than (w) liabilities to the extent
disclosed or reflected on the audited consolidated balance sheet of the Company
as of December 31, 2005, including the related notes and schedules thereto
(the
“Latest
Audited Balance Sheet”),
set
forth in the Company’s Form 10-K for the period ended December 31, 2005 filed
with the SEC, (x) liabilities incurred in the ordinary course of business
consistent with past practice since December 31, 2005 and not inconsistent
with
the terms of this Agreement, (y) Transaction Expenses, and (z) other liabilities
which, individually or in the aggregate, are not material in amount and would
not have a Company Material Adverse Effect.
Section
3.7 SEC
Documents; Financial Statements.
(a) The
Company and each Subsidiary of the Company listed in Section 3.7 of the Company
Disclosure Schedule have timely filed or, in the case of filings not due
as of
the date of this Agreement, will timely file with the SEC all SEC Documents,
together with any amendments required to be made with respect thereto. No
Subsidiary of the Company, other than the Subsidiaries listed in Section
3.7 of
the Company Disclosure Schedule, is required to file any form, report, schedule,
statement or other document with the SEC. As of their respective dates, the
SEC
Documents complied, or in the case of filings not yet due as of the date
of this
Agreement, will comply in all material respects with the accounting requirements
and in all material respects with the requirements of the Securities Act,
the
Exchange Act and the Xxxxxxxx-Xxxxx Act of 2002, and the rules and regulations
of the SEC promulgated thereunder, in each case applicable to such SEC
Documents, and none of the SEC Documents at the time they were or will be
filed
contained or will contain any untrue statement of a material fact or omitted
to
state a material fact required to be stated therein or necessary in order
to
make the statements therein, in the light of the circumstances under which
they
were made, not misleading.
(b) The
records, systems, controls, data and information of the Company and its
Subsidiaries are recorded, stored, maintained and operated under means that
are
under the exclusive ownership and direct control of the Company or its
Subsidiaries or accountants, except for any non-exclusive ownership and
non-direct control that would not reasonably be expected to have a material
adverse effect on the system of internal accounting controls described in
the
following sentence. The Company and its Subsidiaries have devised and maintain
a
system of internal accounting controls sufficient to provide reasonable
assurances regarding the reliability of financial reporting and the preparation
of financial statements for external purposes in accordance with GAAP, including
that: (i) transactions are executed only in accordance with management’s
authorization; (ii) transactions are recorded as necessary to permit preparation
of the financial statements of the Company and its Subsidiaries and to maintain
accountability for the assets of the Company and its Subsidiaries; (iii)
access
to such assets is permitted only in accordance with management’s authorization;
and (iv) the reporting of such assets is compared with existing assets at
regular intervals. Each of the Company and its Subsidiaries (A) has designed
disclosure controls and procedures (within the meaning of Rules 13a-15(e)
and
15d-15(e) of the Exchange Act) to ensure that material information relating
to
such entity and its Subsidiaries is made known to the management of such
entity
(or its general partner) by others within those entities as appropriate to
allow
timely decisions regarding required disclosure and to make the certifications
required by the Exchange Act with respect to the SEC Documents, and
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(B)
has
disclosed, based on its most recent evaluation prior to the date of this
Agreement, to its auditors and the audit committee of its board of directors
(1)
any significant deficiencies in the design or operation of internal controls
which could adversely affect in any material respect its ability to record,
process, summarize and report financial data and have disclosed to its auditors
any material weaknesses in internal controls and (2) any fraud, whether or
not
material, that involves management or other employees who have a significant
role in its internal controls.
(c) Since
December 31, 2003, to the knowledge of the Company, (i) none of the Company
or
any of its Subsidiaries or any director, officer, employee, auditor, accountant
or representative of the Company or any of its Subsidiaries has received
or
otherwise had or obtained knowledge of any material complaint, allegation,
assertion or claim, whether written or oral, regarding the accounting or
auditing practices, procedures, methodologies or methods of the Company or
any
of its Subsidiaries or their respective internal accounting controls, including
any material complaint, allegation, assertion or claim that the Company or
any
of its Subsidiaries has engaged in questionable accounting or auditing practices
and (ii) no attorney representing the Company or any of its Subsidiaries,
whether or not employed by the Company or any of its Subsidiaries, has reported
evidence of a material violation of securities laws, breach of fiduciary
duty or
similar violation by the Company, any Subsidiary of the Company, or any of
their
respective officers, directors, employees or agents to the board of directors
of
the Company or any of its Subsidiaries or any committee thereof or to the
General Counsel or Chief Executive Officer of the Company or any of its
Subsidiaries.
(d) Each
of
the balance sheets contained in or incorporated by reference into the SEC
Documents (including
the related notes and schedules thereto)
fairly
presents the financial position of the entity or entities to which it relates
as
of its date, and each of the statements of income, changes in stockholders’
equity and cash flows in the SEC Documents (including any related notes and
schedules thereto) fairly presents the results of operations, changes in
stockholders’ equity and changes in cash flows, as the case may be, of the
entity or entities to which it relates for the periods to which it relates,
in
each case in accordance with GAAP consistently applied during the periods
involved, except, in each case, as may be noted therein, subject to normal
year-end audit adjustments in the case of unaudited statements.
Section
3.8 Compliance
with Law.
Except
as set forth in Section 3.8 of the Company Disclosure Schedule, each of the
Company and its Subsidiaries is in compliance with all Laws which apply to
such
entity, except for instances of noncompliance that would not have a Company
Material Adverse Effect or prevent or materially delay the consummation of
the
transactions contemplated hereby. Except as set forth in Section 3.8 of the
Company Disclosure Schedule, none of the Company or any of its Subsidiaries
has
received any written communication during the past two years from a Governmental
Entity that alleges that such Person is not in compliance in all material
respects with any Law. This Section 3.8 does not relate to matters with respect
to Employee Benefit Matters, which are the subject of Section 3.10, Taxes,
which
are the subject of Section 3.11, Environmental Matters, which are the subject
of
Section 3.16, or Labor and Employee Matters, which are the subject of Section
3.17. Each of the Company and its Subsidiaries owns, holds or possesses all
material permits, licenses, franchises, privileges, immunities, orders,
consents, approvals and other authorizations from Governmental
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ffny03\goldfmu\658041.8
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Entities
and other Persons that are necessary to entitle it to own or lease, operate
and
use its assets and to carry on and conduct its business (collectively, the
“Material
Permits”).
Each
Material Permit is in full force and effect and none of them is subject to
any
restriction or condition that would limit in any material respect the ownership
or operation of the business of the Company or any of its Subsidiaries as
presently owned or conducted.
Section
3.9 Litigation.
(a)
Except as disclosed in Section 3.9 of the Company Disclosure Schedule, there
are
no Proceedings pending or, to the knowledge of the Company, threatened against
the Company or any of its Subsidiaries, except for Proceedings which would
not
have a Company Material Adverse Effect or prevent or materially delay the
consummation of the transactions contemplated hereby. The Company and its
Subsidiaries are not subject to any outstanding and unsatisfied order, writ,
judgment, injunction or decree or settlement or consent agreement by or with
a
Governmental Entity which would have a Company Material Adverse Effect or
prevent or materially delay the consummation of the transactions contemplated
hereby.
(b)
Except as set forth in Section 3.9 of the Company Disclosure Schedule, since
December 31, 2004, neither the Company nor any of its Subsidiaries has received
any written notice relating to, nor does the Company have any knowledge of
any
facts or circumstances which are reasonably expected to give rise to, any
claim
involving any service provided or any product designed, manufactured, serviced,
produced, modified, distributed or sold by or on behalf of the Company or
any of
its Subsidiaries resulting from an alleged defect in design, manufacture,
materials or workmanship, performance, or any alleged failure to warn, or
from
any alleged breach of implied warranties or representations, or any alleged
noncompliance with any applicable laws, requirements, specifications, rules
and
regulations, other than immaterial notices or claims that have been settled
or
resolved by the Company or its Subsidiaries prior to the date of this Agreement
or those that would not have a Company Material Adverse Effect.
Section
3.10 Employee
Benefit Matters.
(a) Section
3.10(a) of the Company Disclosure Schedule contains a true and complete list
of
each U.S. Benefit Plan and each Employment Agreement.
(b) The
Company has made available to Purchaser true and complete copies of the
following documents, as they have been amended to the date of this Agreement,
relating to each U.S. Benefit Plan: (i) all plan documents; (ii) the current
summary plan description for each U.S. Benefit Plan; (iii) the Form 5500
for
each U.S. Benefit Plan for the three most recent plan years; (iii) all insurance
contracts related to any U.S. Benefit Plan; (iv) the most recent determination
letter from the IRS, if any, and any correspondence to or from the IRS regarding
tax qualification of any U.S. Benefit Plan; and (v) all financial records
pertaining to each U.S. Benefit Plan.
(c) Except
as
set forth in Section 3.10(c) of the Company Disclosure Schedule, with respect
to
each U.S. Benefit Plan and Employment Agreement, as applicable, except as
would
not, individually or in the aggregate, have a Company Material Adverse Effect:
(i) the Company and its Subsidiaries have performed all obligations required
to
be performed by
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such
entity thereunder and none of the Company or any of its Subsidiaries is in
default under or in violation thereof; (ii) each U.S. Benefit Plan and
Employment Agreement has been established, maintained or performed, as the
case
may be, in compliance with all applicable Laws, statutes, orders, rules and
regulations; (iii) no “prohibited transaction”, within the meaning of Section
4975 of the Code or Section 406 of ERISA, has occurred with respect to any
U.S.
Benefit Plan; (iv) there are no actions, proceedings, arbitrations, suits
or
claims pending, or to the knowledge of the Company threatened or anticipated
(other than routine claims for benefits) with respect to any U.S. Benefit
Plan
or Employment Agreement; and (v) no U.S. Benefit Plan is under audit or
investigation by the IRS, the Department of Labor or the Pension Benefit
Guarantee Corporation, and to the knowledge of the Company, no such audit
or
investigation is pending or threatened.
(d) Except
as
set forth in Section 3.10(d) of the Company Disclosure Schedule or as would
not have a Company Material Adverse Effect, the present value of all accrued
benefits (whether or not vested) under each U.S. Benefit Plan subject to
Title
IV of ERISA did not exceed, as of the most recent plan valuation date, and
will
not exceed, as of the Closing Date, the then current fair market value of
the
assets of such U.S. Benefit Plan (for purposes of determining the present
value
of accrued benefits, the actuarial assumptions and methods used under each
U.S.
Benefit Plan for the most recent plan valuation date shall be used). Except
as
set forth in Section 3.10(d) of the Company Disclosure Schedule or as would
not
have a Company Material Adverse Effect, (i) no reportable event within the
meaning of Section 4043(c) of ERISA for which the 30-day notice requirement
has
not been waived has occurred, and the consummation of the transactions
contemplated by this agreement will not result in the occurrence of any such
reportable event; (ii) all premiums to the Pension Benefit Guaranty Corporation
have been timely paid in full; (iii) no liability (other than for premiums
to
the PBGC) under Title IV of ERISA has been or is expected to be incurred
by the
Company or any of its subsidiaries; and (iv) the PBGC has not instituted
proceedings to terminate any such U.S. Benefit Plan and, to the Company’s
knowledge, no condition exists that presents a risk that such proceedings
will
be instituted or which would constitute grounds under Section 4042 of ERISA
for
the termination of, or the appointment of a trustee to administer, any such
U.S.
Benefit Plan.
(e) At
no
time in the past six years has the Company or any of its Subsidiaries
contributed to or been required to contribute to, or incurred any withdrawal
liability (within the meaning of Section 4201 of ERISA) to any “multi-employer
plan” within the meaning of Sections 3(37) or 4001(a)(3) of ERISA.
(f) Except
as
set forth in Section 3.10(f) of the Company Disclosure Schedule, none of
the
Company or any of its Subsidiaries maintains or contributes to any U.S. Benefit
Plan which provides, or has any liability to provide, life insurance, medical
or
other employee welfare benefits to any Employee upon his retirement or
termination of employment, except as may be required by Section 4980B of
the
Code. The Company or its Subsidiaries may amend or terminate any such plan
at
any time without incurring any liability thereunder other than in respect
of
claims incurred prior to such amendment or termination.
(g) Except
as
set forth in Section 3.10(g) of the Company Disclosure Schedule, the execution
of, and performance of the transactions contemplated in, this
Agreement,
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whether
alone or in conjunction with any other event, will not result in any material
payment (whether of severance pay or otherwise), acceleration, forgiveness
of
Indebtedness, vesting, distribution, increase in benefits or obligation to
fund
benefits with respect to any Employee. No payment or benefit which will or
may
be made by the Company or any of its Subsidiaries with respect to any Employee
will be characterized as an “excess parachute payment”, within the meaning of
Section 280G(b)(1) of the Code.
(h) Section
3.10(h) of the Company Disclosure Schedule contains a true and complete list
of
each Foreign Plan. Each Foreign Plan complies with its terms and all applicable
Laws in all material respects. All contributions, insurance premiums, social
security payments, taxes, expenses and levies required to have been made
to all
Foreign Plans have been made and all liabilities required have been accrued
in
accordance with generally accepted accounting principles and tax laws applicable
to the Company and the Subsidiaries. There are no claims, actions, suits,
proceedings, investigations or governmental audits pending or, to the knowledge
of the Company, threatened with respect to the Foreign Plans (other than
routine
claims for benefits).
(i) There
does not now exist, nor do any circumstances exist that could result in,
any
material Controlled Group Liability that could be a liability of the Company
or
any of its Subsidiaries following the Closing. Without limiting the generality
of the foregoing, neither the Company nor any of its Subsidiaries, nor any
of
their respective ERISA Affiliates, has engaged in any transaction described
in
Section 4069 or Section 4204 or 4212 of ERISA. Section 3.10(i) of the Company
Disclosure Schedule contains a true, correct, and complete list of any Benefit
Plan subject to Title IV of ERISA that is sponsored or contributed to by
any
ERISA Affiliate of the Company or any of its Subsidiaries.
Section
3.11 Taxes.
Except
as set forth in Section 3.11 of the Company Disclosure Schedule, (a) the
Company
and each of its Subsidiaries has filed all material Tax Returns required
to be
filed by or
with
respect to it
prior
to the Closing Date; (b) such Tax Returns were true, correct and complete
in all
material respects; (c) the Company and each of its Subsidiaries has paid
all
Taxes due with respect to such Tax Returns and has paid all other material
Taxes
with respect to which Tax Returns are not required to be filed; (d) none
of the
Company or any of its Subsidiaries has waived or has been requested to waive
any
statute of limitations affecting any material Tax liability or agreed to
any
extension of time during which a material Tax assessment or deficiency
assessment may be made, which waiver, extension or request is still outstanding;
(e) there are no ongoing or pending material Tax audits of the Company or
any of
its Subsidiaries and no such Person has received written notice of any material
Tax audit; (f) the Company and its Subsidiaries have complied in all material
respects with all Laws relating to the payment and withholding of Taxes,
including with respect to payments made to employees or other third parties;
(g)
none of the Company or any of its Subsidiaries is or has been a party to
any Tax
sharing agreement that includes any party other than the Company and its
Subsidiaries; (h) the Company and its Subsidiaries have paid any material
deficiencies or assessments asserted by any Tax authority; (i) the Company
and
each of its Subsidiaries have never been a member of an affiliated, combined,
consolidated or unitary Tax group (other than a group of which the Company
or
one of its Subsidiaries was the common parent); (j) the Company is not, nor
has
it ever been, a United States real property holding
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corporation
within the meaning of Section 897(c)(2) of the Code; (k) none of the Company
or
any of its Subsidiaries will be required (as a result of any adjustment under
Section 481 of the Code (or any similar provision of state, local or foreign
Law), any “closing agreement” as described in Section 7121 of the Code (or any
similar provision of state, local or foreign Law), any installment sale or
any
disposition reported as an open transaction or intercompany transaction (under
Treasury Regulation Section 1.1502-13 or otherwise) made on or prior to the
Closing Date, or any prepaid amount received on or prior to the Closing Date)
to
include any material item of income or exclude any material item of deduction
from any Tax period ending on or after the Closing Date; (l) no closing
agreements, private letter rulings or similar agreements have been entered
into
or issued by any Taxing authority with respect to the Company or any of its
Subsidiaries; (m) the Company has made available to Purchaser copies of all
U.S.
federal income Tax Returns filed by the Company and its Subsidiaries in the
past
three years; (n) within the past two years, neither the Company nor any of
its
Subsidiaries has been a “distributing corporation” or a “controlled corporation”
in a distribution intended to qualify under Section 355(a) of the Code; (o)
neither the Company nor any of its Subsidiaries has participated in any “listed
transaction” within the meaning of Treasury Regulations Section 1.6011-4; (p) no
claim has been made in writing by any Tax authority that the Company or any
Subsidiary of the Company is or may be subject to taxation by a jurisdiction
in
which it does not file Tax Returns; (q) all persons classified by the Company
or
any of its Subsidiaries as independent contractors are correctly classified
for
purposes of taxation and tax reporting; and (r) neither
the Company nor any Subsidiary of the Company has any material present or
contingent liabilities for Taxes (calculated without regard to any deduction
arising from the transactions contemplated hereby), other than Taxes that
either
(i) have been reflected as a liability on the most recent balance sheet
included in the SEC Documents or (ii) with respect to taxable periods or
portions of taxable periods following the date of the most recent balance
sheet
included in the SEC Documents, are in amounts consistent with prior
years.
Section
3.12 Intellectual
Property.
(a) Section
3.12(a) of the Company Disclosure Schedule sets forth a list of all Company
Intellectual Property owned by the Company or any of its Subsidiaries which
has
been registered or issued, or for which applications to register or obtain
issuance have been filed and are pending anywhere in the world, an indication
of
the jurisdictions in which such filings have been made and the status thereof.
To the extent indicated in Section 3.12(a) of the Company Disclosure Schedule,
such Company Intellectual Property has been duly registered in, filed in
or
issued by the United States Copyright Office, the United States Patent and
Trademark Office or any similar national or local foreign intellectual property
authority. To the knowledge of the Company, since July 31, 2002, no application
or registration for any Company Intellectual Property that is owned by the
Company which is material to the business of the Company as presently conducted
has been finally rejected on the merits of such filing without right to further
appeal.
(b) Except
as
set forth in Section 3.12(b) of the Company Disclosure Schedule:
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(i) each
of
the Company and its Subsidiaries possesses all right, title and interest
in and
to the Company Intellectual Property which it owns, free and clear of any
Lien
or license other than Permitted Liens, and all registered patents, trademarks,
service marks and copyrights listed in Section 3.12(a) of the Company Disclosure
Schedule are valid and subsisting, in full force and effect, and have not
been
canceled, expired or abandoned;
(ii) except
as
would not, individually or in the aggregate, have a Company Material Adverse
Effect, to the knowledge of the Company, all employees, agents, consultants
or
contractors who have contributed to the creation or development of any
Intellectual Property on behalf of the Company or any of its Subsidiaries,
as
applicable, either: (i) created such materials in the scope of his or her
employment as an employee of the Company or any of its Subsidiaries, as
applicable, at the time of creation of such materials; (ii) is a party to
a
“work-for-hire” agreement under which the Company or any of its Subsidiaries, as
applicable, is deemed to be the original owner/author of all rights, title
and
interest therein; or (iii) has executed an assignment in favor of the Company
or
any of its Subsidiaries, as applicable, of all right, title and interest
in such
material;
(iii) except
as
would not, individually or in the aggregate, have a Company Material Adverse
Effect, the Company Intellectual Property and the business of the Company
and
its Subsidiaries as conducted on the date of this Agreement do not infringe
upon
any Intellectual Property rights of third parties; there is no pending or
threatened opposition, interference or cancellation proceeding before any
court,
patent office or registration authority in any jurisdiction against the Company
Intellectual Property; and since December 31, 2003, none of the Company or
any
of its Subsidiaries has received any written notice (or, to the knowledge
of the
Company, any oral or other notice) from any other Person challenging its
use or
ownership of any Company Intellectual Property or the validity or enforceability
thereof;
(iv) to
the
knowledge of the Company, no third party has infringed upon, misappropriated,
diluted or violated any rights of the Company or any of its Subsidiaries
with
respect to any Company Intellectual Property, except as would not have a
Company
Material Adverse Effect;
(v) the
Company and its Subsidiaries have taken all commercially reasonable action
to
maintain and preserve material Company Intellectual Property, including without
limitation entering into valid and effective confidentiality/non-disclosure
agreements with all third parties to whom it discloses any confidential
information or trade secrets which are Company Intellectual Property, and
making
all filings and all payments of all maintenance and similar fees for any
Company
Intellectual Property listed in Section 3.12(a) of the Company Disclosure
Schedule;
(vi) the
consummation of the transactions contemplated by this Agreement will not
materially impair or materially alter any of the Company’s and its Subsidiaries’
rights in any Company Intellectual Property; and
(vii) except
as
would not, individually or in the aggregate, have a Company Material Adverse
Effect, since July 31, 2002, there have been no settlements,
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forbearances
to xxx, consents, judgments or orders that do or may (A) restrict the rights
of
the Company or any of its Subsidiaries to use any Company Intellectual Property,
(B) restrict the conduct of the business of the Company or any of its
Subsidiaries in order to accommodate a third party’s Intellectual Property or
(C) permit third parties to use any Company Intellectual Property.
(c) Section
3.12(c) of the Company Disclosure Schedule contains a list and description
of
all material computer software programs and software systems, and all
proprietary rights thereto, including all databases, compilations, tool sets,
compilers, higher level or “proprietary” languages, related documentation and
materials, whether in source code, object code or human readable form (the
“Material
Software”),
owned
by, licensed to or used by the Company or any Subsidiary in the conduct of
its
business, in each case specifying whether such Software is owned or licensed;
provided
that
Section 3.12(c) of the Company Disclosure Schedule does not list mass market
Software licensed to the Company or any Subsidiary that is commercially
available and subject to “shrink-wrap” or “click-through” license
agreements.
Section
3.13 Material
Contracts.
c) Section
3.13(a) of the Company Disclosure Schedule sets forth a true, correct and
complete list of all the Material Contracts of the Company and its Subsidiaries
that are outstanding or in effect on the date of this Agreement. As used
herein,
“Material
Contracts”
means
all of the following:
(i) any
Contract restricting the ability of the Company or any of its Subsidiaries
to
enter into or engage in any line of business or compete with any Person (other
than pursuant to any radius restriction contained in any lease, reciprocal
easement or development, construction, operating or similar
agreement);
(ii) any
lease
or similar Contract under which:
(A)
the
Company
or any of its Subsidiaries is
lessee
of, or holds or uses, any machinery, equipment, vehicle or other tangible
personal property owned by any third party involving payment by the Company
or
any of its Subsidiaries of more than $1,000,000 on an annual basis (unless
terminable without payment or penalty upon no more than 60 days’ notice); or
(B)
the
Company or any of its Subsidiaries is a lessor or sublessor of, or makes
available for use by any third party, any tangible personal property owned
or
leased by the Company or any of it Subsidiaries in any such case that has
a
liability or receivable, as the case may be, in excess of $500,000 per annum;
(iii) any
Contract under which the Company or any of its Subsidiaries has incurred
Indebtedness or directly or indirectly guaranteed Indebtedness, liabilities
or
obligations of any other Person (other than (A) endorsements for the
purpose of collection in the ordinary course of business, (B) Indebtedness
owed by the Company or one of its Subsidiaries to the Company or one of its
Subsidiaries and (C) where the Company or any of its Subsidiaries has
guaranteed Indebtedness of a Subsidiary of the Company to a third party)
that,
individually, is in excess of $1,000,000;
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(iv) any
Contract granting a Lien (other than a Permitted Lien) upon any of the material
assets of the Company or any of its Subsidiaries;
(v) any
Contract (excluding a purchase order) involving annual payments by the Company
or any of its Subsidiaries of more than $2,500,000;
(vi) any
Contract (excluding a purchase order) involving the obligation of the Company
or
any of its Subsidiaries to deliver products or services for annual payments
of
more than $5,000,000;
(vii) any
Contract relating to the establishment of a joint venture or
partnership;
(viii) any
Contract used to effectuate a material acquisition, divestiture, merger or
similar transaction that has not been consummated or that has been consummated
since July 31, 2002, but contains representations, covenants, indemnities
or
other obligations that are still in effect;
(ix) any
Contract for the purchase or sale of material real property entered into
since
July 31, 2002;
(x) any
material Contract that grants exclusivity rights to a sales representative,
distributor, broker or similar person;
(xi) any
Contract relating to capital expenditures and involving future payments in
excess of $1,500,000;
(xii) any
material license agreement pursuant to which the Company or any of its
Subsidiaries licenses in or out Company Intellectual Property; and
(xiii) any
other
Contract to which the Company or any of its Subsidiaries is a party, not
otherwise covered by clauses (i) through (xii) above, the loss of which would
result in a Company Material Adverse Effect.
(b) Except
as
disclosed in Section 3.13(b) of the Company Disclosure Schedule, none of
the
Company or any of its Subsidiaries is (with or without the lapse of time
or the
giving of notice, or both) in breach or default of or under any Material
Contract and, to the knowledge of the Company, no other party to any such
Material Contract is (with or without the lapse of time or the giving of
notice,
or both) in breach or default thereunder, except for breaches and defaults
that
would not result in a Company Material Adverse Effect. None of the Company
or
any of its Subsidiaries has, except as disclosed in Section 3.13(b) of the
Company Disclosure Schedule, received any written notice (or, to the knowledge
of the Company, any oral or other notice) of the intention of any Person
to
terminate, nor has there been any termination of, any Material Contract,
except
for such notices and terminations as would not have a Company Material Adverse
Effect. Complete and correct copies of all Material Contracts have been made
available to Purchaser.
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Section
3.14 Brokers
and Finders; Transaction Expenses.
In
connection with this Agreement and the transactions contemplated hereby,
no
broker, finder or investment bank has acted directly or indirectly for the
Company or any of its Subsidiaries, and none of the Company or any of its
Subsidiaries has incurred, nor will any of them incur, directly or indirectly,
any obligation to pay any brokerage, finder’s or other fee or commission to any
Person, other than to the Persons disclosed in Section 3.14 of the Company
Disclosure Schedule. Such fees or commissions shall have either been paid
prior
to Closing or shall be taken into account in the definition of Transaction
Expenses.
Section
3.15 Absence
of Certain Changes.
Except
as disclosed in Section 3.15 of the Company Disclosure Schedule or as otherwise
contemplated by this Agreement, since December 31, 2005: the business of
the
Company and each of its Subsidiaries has been conducted only in the ordinary
course consistent with past practice; there have not been any events, changes
or
developments that have had or would have a Company Material Adverse Effect
or
prevent or materially delay the consummation of the transactions contemplated
hereby.
Section
3.16 Environmental
Matters.
Except
as set forth in the Environmental Reports or in Section 3.16 of the Company
Disclosure Schedule, and except for those matters that, individually or in
the
aggregate would not have a Company Material Adverse Effect, to the knowledge
of
the Company:
(a) the
Company and its Subsidiaries have for the past three years been, and are,
in
compliance with all applicable Environmental Laws;
(b) the
Company and its Subsidiaries have obtained, and are in compliance with, all
permits, licenses, authorizations, registrations, and other governmental
consents required by applicable Environmental Laws (“Environmental
Permits”);
(c) there
has
been no release at any time of any Hazardous Substances at, on, or about,
under
or within any of the Owned Real Property or the Leased Real Property or any
real
property formerly owned, leased, operated or controlled by the Company or
any of
its Subsidiaries or any of their predecessors, in each of the foregoing cases
which would reasonably be expected to give rise to any liabilities of the
Company or its Subsidiaries pursuant to Environmental Laws;
(d) the
Company and its Subsidiaries have, within the past five years, received no
written claims or notices (including, without limitation, notices that the
Company or any of its Subsidiaries is a potentially responsible person or
otherwise liable in connection with any waste disposal or other site containing
Hazardous Substances), and there are no civil, criminal or administrative
actions, suits, hearings, investigations, inquiries or proceedings pending
or
threatened against the Company or any of its Subsidiaries, that are based
on or
allege liabilities pursuant to Environmental Laws;
(e) none
of
the Company or any of its Subsidiaries, or any of their predecessors has
used
any waste disposal site, or otherwise disposed of, transported, or
arranged
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-
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for
the
disposal of, any Hazardous Substances to any place or location (A) in violation
of any Environmental Laws or (B) listed on the National Priorities List or
any
comparable list of state sites, where the association with any such location
would reasonably be expected to give rise to any liabilities of the Company
or
its Subsidiaries pursuant to Environmental Laws;
(f) the
representations and warranties contained in this Section 3.16 are the sole
and
exclusive representations and warranties of the Company with respect to any
Environmental Matters, including without limitation any matters arising under
Environmental Laws; and
(g) all
material environmental audits, assessments, investigations, studies or other
analyses in the Company’s possession or under its reasonable control and which
relate to the Owned Real Property or the Leased Real Property have been made
available to Purchaser.
Section
3.17 Labor
and Employee Matters.
(a) Except
as
would not have a Company Material Adverse Effect, the Company and its
Subsidiaries are in compliance with all applicable federal, state and local
Laws, rules and regulations (domestic and foreign) respecting employment,
including, but not limited to, the Worker Adjustment and Retraining Notification
Act.
(b) No
work
stoppage or labor strike against the Company or any of its Subsidiaries by
Employees is pending or to the knowledge of the Company threatened, except
for
work stoppages and labor strikes that would not, individually or in the
aggregate, have a Company Material Adverse Effect. Except as set forth in
Section 3.17(b) of the Company Disclosure Schedule, none of the Company or
any
of its Subsidiaries (i) is involved in or to the knowledge of the Company
threatened with any labor dispute, grievance, or litigation relating to labor
matters involving any Employees except for such disputes, grievances or
litigation that would not, individually or in the aggregate, have a Company
Material Adverse Effect; (ii) has engaged in any unfair labor practices within
the meaning of the National Labor Relations Act or the Railway Labor Act;
or
(iii) is presently, nor has been since the later of December 24, 1990 and
the
date of its formation a party to, or bound by, any collective bargaining
agreement or union contract with respect to Employees and no such agreement
or
contract is currently being negotiated by the Company or any of its
Subsidiaries. Except as set forth in Section 3.17(b) of the Company Disclosure
Schedule, no Employees are currently represented by any labor union for purposes
of collective bargaining and no activities the purpose of which is to achieve
such representation of all or some of such Employees are to the knowledge
of the
Company threatened or ongoing.
Section
3.18 Related
Party Transactions.
Except
as disclosed in Section 3.18 of the Company Disclosure Schedule, no current
or
former stockholder, director, officer or employee of the Company or any of
its
Subsidiaries, or any current or former Affiliate of any of the foregoing
Persons
or of the Company or any of its Subsidiaries is presently, or since the latest
of (i) December 31, 2003, (ii) the organization of such Subsidiary of
the Company or (iii) the acquisition of such Subsidiary by the Company or
one of its Subsidiaries, has been, directly or
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indirectly
through such Person’s affiliation with any other Person, a party to any
agreement (whether oral or written) or transaction with the Company or any
of
its Subsidiaries, other than, in the case of such Person, ordinary course
employment and benefit agreements entered into in connection with any such
Person’s duties as a director, officer or employee of the Company or any of its
Subsidiaries.
Section
3.19 Real
Property; Title to Assets.
d)
Section
3.19(a) of the Company Disclosure Schedule contains a complete and correct
list
of all of the Leased Real Property. With respect to each Leased Real Property,
the Company or a Subsidiary of the Company owns a leasehold estate in each
Leased Real Property, free and clear of all Liens except Permitted Liens.
Except
as set forth in Section 3.19(a) of the Company Disclosure Schedule, (i) no
default by the Company or any of its Subsidiaries, or to the knowledge of
the
Company, the applicable landlord or subtenant exists under any lease or sublease
with respect to the Leased Real Property and (ii) each lease and sublease
with
respect to the Leased Real Property is legal, valid, binding and enforceable
and
in full force and effect other than, in the case of clauses (i) and (ii)
above
as would not, individually or in the aggregate, have a Company Material Adverse
Effect.
(b) Section
3.19(b) of the Company Disclosure Schedule sets forth a complete and correct
list of all Owned Real Property. With respect to each Owned Real Property,
(i)
either the Company or a Subsidiary of the Company owns title in fee simple
to
such Owned Real Property, free and clear of all Liens except for Permitted
Liens, (ii) there are no outstanding options or rights of first refusal in
favor
of any other party to purchase such Owned Real Property or any portion thereof
or interest therein and (iii) there are no leases, subleases, licenses, options,
rights, concessions or other agreements affecting any portion of such Owned
Real
Property, except as may be set forth in Section 3.19(a) of the Company
Disclosure Schedule, other than, in the case of clauses (ii) or (iii) above
as
would not, individually or in the aggregate, have a Company Material Adverse
Effect.
(c) Except
as
set forth in Section 3.19(c) of the Company Disclosure Schedule, the Company
or
one of its Subsidiaries has good title to all of the material assets (other
than
Owned Real Property) reflected on the Latest Balance Sheet as being owned
and
all of the material assets thereafter acquired by the Company or any Subsidiary
(except to the extent that such assets have been disposed of after the date
of
the Latest Balance Sheet in the ordinary course of business consistent with
past
practice), free and clear of all Liens other than Permitted Liens, and all
other
material assets used in their respective businesses are leased or licensed
by
the Company or one of its Subsidiaries.
Section
3.20 Insurance.
Section
3.20 of the Company Disclosure Schedule sets forth a correct and complete
list
of each material insurance policy that is currently in effect which is presently
owned or held by the Company or any of its Subsidiaries, insuring the products,
physical properties, assets, business, operations, employees, or officers
and
directors of the Company or any of its Subsidiaries. All premiums due on
such
policies have been paid and no notice of cancellation or termination or intent
to cancel, in each case which has not been rescinded, has been received in
writing by the Company or any of its Subsidiaries with respect to any such
insurance policy, in each case, except where such failure, cancellation or
termination
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-
ffny03\goldfmu\658041.8
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would
not
have a Company Material Adverse Effect. Neither the Company nor any of its
Subsidiaries has been refused any insurance with respect to any of its assets
or
operations, nor has its coverage been limited, by any insurance carrier to
which
it has applied for any such insurance or with which it has carried insurance.
None of the Company or any of its Subsidiaries is, and after giving effect
to
the Merger and the other transactions contemplated hereby will not be, in
material default under any such insurance policies.
Section
3.21 Customers
and Suppliers.
Section
3.21(i) of the Company Disclosure Schedule contains a list of the top 20
customers of the Company and its Subsidiaries (determined on the basis of
revenues) and the amount of revenues generated for the fiscal year ended
December 31, 2005. Section 3.21(ii) of the Company Disclosure Schedule contains
a list of the top five resin suppliers of the Company and its Subsidiaries
and
the top 10 non-resin suppliers of the Company and its Subsidiaries (in each
case
determined on the basis of cost of items purchased) and the approximate total
purchases for the fiscal year ended December 31, 2005. Except as set forth
on
Section 3.21(iii) of the Company Disclosure Schedule, since the date that
is 90
days prior to the date of this Agreement (a) no such customer or supplier
has
ceased to do business with the Company and its Subsidiaries and (b) to the
knowledge of the Company, no such customer or supplier has threatened to
terminate its relationship with the Company or any of its Subsidiaries, which
threat could reasonably be expected to result in such a termination.
Section
3.22 Food
and Drug Safety Matters.
Except
as set forth in Section 3.22 of the Company Disclosure Schedule or as would
not have
a
Company Material Adverse Effect:
(a) the
Company and its Subsidiaries have for the past three years been, and are,
in
compliance with all applicable Laws relating to food and drug safety, including
without limitation the Food, Drug and Cosmetics Act, the Consumer Product
Safety
Act, the Poison Prevention Packaging Act, statutes, rules and regulations
promulgated or administered by the Food and Drug Administration and the Consumer
Product Safety Commission, the Good Manufacturing Practices of the Food and
Drug
Administration and any similar federal, state, local or foreign laws
(“Food
and Drug Safety Laws”);
(b) the
Company and its Subsidiaries have obtained and are in compliance with all
approvals and authorizations of the Food and Drug Administration, Consumer
Product Safety Commission, and other Governmental Entities required under
applicable Food and Drug Safety Laws necessary for the continued operation,
consistent with past practice, of the business of the Company and its
Subsidiaries; and
(c) none
of
the Company or its Subsidiaries, or any of such entities’ officers, employees or
agents (during the term of such Person’s employment or agency relationship with
the Company or its Subsidiaries, or, to the knowledge of the Company, prior
to
such term) has made any untrue statement of material fact or fraudulent
statement, or failed to disclose a material fact required to be disclosed
to the
Food and Drug Administration or any similar federal, state, local or foreign
Governmental Entity, or otherwise committed an act, made a statement, or failed
to make a statement that could reasonably be expected to provide a basis
for the
Food and
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Drug
Administration or similar Governmental Entity to invoke its policy respecting
“Fraud, Untrue Statements of Material Facts, Bribery, and Illegal Gratuities” or
similar governmental policy, rule, regulation or law.
Section
3.23 Letters
of Credit.
Except
as set forth in Section 3.23 of the Company Disclosure Schedule, any outstanding
reimbursement obligations of the Company or any of its Subsidiaries with
respect
to letters of credit, bankers’ acceptance, surety bonds or similar facilities
issued for the account of the Company or any of its Subsidiaries, including
with
respect to pledges
or deposits to secure obligations under workers’ compensation Laws or similar
legislation or to secure public or statutory obligations, are immaterial
and
were
incurred in the ordinary
course of business.
Section
3.24 No
Other Representations.
Except
as expressly provided in this Article III and the closing certificates to
be
provided, the Company has not made and is not making any representation or
warranty whatsoever to Purchaser as to the Company, any of its Subsidiaries
or
their respective businesses and shall not be liable in respect of the accuracy
or completeness of any information provided to Purchaser in connection with
this
Agreement, and except as set forth expressly in this Agreement, the condition
of
the assets of the Company and its Subsidiaries shall be “as is” and “where
is”.
ARTICLE
IV
REPRESENTATIONS
AND WARRANTIES
OF
PURCHASER AND MERGER SUB
Purchaser
and Merger Sub hereby jointly and severally represent and warrant to the
Company
as follows:
Section
4.1 Organization
and Qualification.
e)
Purchaser is duly incorporated or organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation or organization
and has the requisite power and authority to own, lease and operate its
properties and to carry on its business as it is now being
conducted.
(b) Merger
Sub is duly incorporated, validly existing and in good standing under the
laws
of the jurisdiction of its incorporation and has the requisite corporate
power
and authority to own, lease and operate its properties and to carry on its
business as it is now being conducted.
Section
4.2 Authorization
and Validity of Agreement.
f)
The
Board of Directors of Purchaser has declared the Merger advisable and fair
to
and in the best interest of Purchaser and its stockholders, unanimously approved
and adopted this Agreement and the transactions contemplated hereby in
accordance with the DGCL. Purchaser has the requisite power and authority
to
execute and deliver this Agreement and to consummate the transactions
contemplated hereby in accordance with the terms of this Agreement. Purchaser
has duly authorized the execution, delivery and performance of this Agreement
by
Purchaser and no other
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proceedings
on the part of Purchaser are necessary to authorize this Agreement or the
transactions contemplated hereby. This Agreement has been duly executed and
delivered by Purchaser and constitutes the legal, valid and binding obligation
of Purchaser, enforceable against Purchaser in accordance with its terms,
except
as may be limited by any bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance or other similar Laws affecting the enforcement of
creditors’ rights generally or by general principles of equity.
(b) The
Board
of Directors of Merger Sub has declared the Merger advisable and fair to
and in
the best interest of Merger Sub and its sole stockholder, unanimously approved
and adopted this Agreement and the transactions contemplated hereby in
accordance with the DGCL and recommended the approval and adoption of this
Agreement by the sole stockholder of Merger Sub. Merger Sub has the requisite
corporate power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby in accordance with the terms
of
this Agreement. Merger Sub has duly authorized the execution, delivery and
performance of this Agreement by Merger Sub and no other corporate proceedings
on the part of Merger Sub are necessary to authorize this Agreement or the
transactions contemplated hereby. This Agreement has been duly executed and
delivered by Merger Sub and constitutes the legal, valid and binding obligation
of Merger Sub, enforceable against Merger Sub in accordance with its terms,
except as may be limited by any bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance or other similar Laws affecting the
enforcement of creditors’ rights generally or by general principles of
equity.
Section
4.3 Consents
and Approvals.
Neither
the execution, delivery or performance of this Agreement by Purchaser and
Merger
Sub nor the consummation by Purchaser and Merger Sub of the transactions
contemplated hereby will require on the part of Purchaser or Merger Sub or
any
of their respective Subsidiaries any consent, approval, order, authorization
or
permit of, or filing with or notification to, any Governmental Entity or
any
landlord or other third party, except (a) for any applicable filings required
under the HSR Act, (b) as provided for in Section 2.3 or (c) where the failure
to obtain such consent, approval, authorization or permit, or to make such
filing or notification, would not prevent or materially delay the consummation
of the transactions contemplated hereby.
Section
4.4 No
Violation.
Neither
the execution and delivery of this Agreement by Purchaser or Merger Sub nor
the
consummation by Purchaser or Merger Sub of the transactions contemplated
hereby
will (a) conflict with or violate their or any of their respective Subsidiaries’
organizational documents (b) result in a violation or breach of, constitute
a
default (with or without notice or lapse of time, or both) under, give rise
to
any right of termination, cancellation or acceleration of, or result in the
imposition of any Lien on any assets or property of Purchaser or Merger Sub
or
any of their respective Subsidiaries pursuant to any Contract or other
instrument or obligation to which Purchaser or Merger Sub or any of their
respective Subsidiaries is a party or by which Purchaser or Merger Sub or
any of
their respective Subsidiaries or any of their respective assets or properties
are bound, except for such violations, breaches and defaults (or rights of
termination, recapture, cancellation or acceleration or Lien) as to which
requisite waivers or consents have been obtained or which would not prevent
or
materially delay the consummation of the transactions contemplated hereby
or (c)
assuming the consents, approvals, authorizations or permits and filings or
notifications referred to in Section
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4.3
and
this Section 4.4 are duly and timely obtained or made, violate any order,
writ,
injunction, decree, statute, rule or regulation applicable to Purchaser or
Merger Sub or any of their respective Subsidiaries or their respective assets
or
properties, except for such conflicts, violations, breaches or defaults which
would not in the aggregate prevent or materially delay the consummation of
the
transactions contemplated hereby.
Section
4.5 Funding
and Capitalization.
Purchaser has received financing commitments that, when funded and together
with
funds provided by Purchaser, are sufficient to enable it to consummate the
transactions contemplated by this Agreement and pay all related fees and
expenses for which Purchaser will be responsible. True, correct and complete
copies of such commitment letters and the related term sheets and conditions
precedent and fee letters are attached hereto as Exhibit F
(except
for such fee letters, which the terms thereof (other than the fee provisions)
have been made available to the Company) (all such documents, the “Commitment
Letters”)
(such
financing, the “Debt
Financing”).
The
Commitment Letters have been duly executed by all parties thereto, and are
in
full force and effect. All commitment fees required to be paid thereunder
have
been paid in full or will be duly paid in full when due. As of the date of
this
Agreement, the Commitment Letters have not been amended or terminated except
for
amendments not adverse to the Company or permitted by Section 7.8, and there
is
no breach existing thereunder. As of the date of this Agreement, to the
knowledge of Purchaser, there is no existing fact, occurrence or condition
that
would cause the commitments provided in such Commitment Letters to be terminated
or ineffective, any of the conditions contained therein not to be met or
the
financing contemplated by the Commitment Letters not to be consummated. Except
for the conditions described in the Commitment Letters, there are no other
conditions precedent to the Debt Financing. Purchaser will, from time to
time,
provide assurances and information to the Company as reasonably requested
by the
Company that it will have such financial capability on the Closing
Date.
Section
4.6 Brokers
and Finders.
In
connection with the transactions contemplated hereby, no broker, finder or
investment bank has acted directly or indirectly for Purchaser or Merger
Sub,
and neither Purchaser nor Merger Sub has incurred any obligation to pay any
brokerage, finder’s or other fee or commission to any Person for which the
Company or any of its Subsidiaries would be liable at any time prior to the
Effective Time.
Section
4.7 No
Other Representations.
Except
as expressly provided in this Article IV, neither Purchaser nor Merger Sub
has
made or is making any representation or warranty whatsoever to the Company
and
shall not be liable in respect of the accuracy or completeness of any
information provided to the Company in connection with this
Agreement.
ARTICLE
V
COVENANTS
OF THE COMPANY
Section
5.1 Conduct
of the Company.
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(a) Except
either (i) with the prior written consent of Purchaser, (ii) as set forth
in
Section 5.1(a) of the Company Disclosure Schedule or (iii) as otherwise
expressly permitted by the terms of this Agreement, from the date of this
Agreement to the Closing, the Company shall, and shall cause its Subsidiaries
to, conduct its business in the ordinary course consistent with past practice
and use its commercially reasonable efforts to (A) preserve the existing
relationships of the Company and its Subsidiaries with customers and suppliers,
(B) preserve intact its business organization, goodwill and ongoing operations,
(C) retain the services of its employees, (D) perform in all material respects
its obligations under the Material Contracts and (E) maintain and keep in
good
repair (ordinary wear and tear excepted) its material properties and
assets.
(b) Except
either (w) with the prior written consent of Purchaser, (x) as set forth
in
Section 5.1(b) of the Company Disclosure Schedule or (y) as otherwise expressly
permitted by the terms of this Agreement, from the date of this Agreement
to the
Closing, the Company shall not, and shall cause each of its Subsidiaries
not to
(it being understood that the dollar thresholds contained herein shall be
aggregate thresholds for the Company and its Subsidiaries taken as a whole):
(i) amend
or
modify the Company’s or any Company Subsidiary’s Organizational Documents;
(ii) authorize
for issuance, issue, grant, sell, pledge, dispose of or propose to issue,
grant,
sell, pledge or dispose of any shares of the capital stock or other securities
of the Company or any of its Subsidiaries, including any security or obligation
convertible into or exchangeable for shares of the capital stock of the Company
or any of its Subsidiaries, other than the exercise of options outstanding
on
the date of this Agreement that are vested at the time of exercise or as
required by this Agreement;
(iii) split,
combine or reclassify any shares of its capital stock;
(iv) except
for transactions with respect to direct or indirect wholly-owned Subsidiaries
of
the Company in the ordinary course of business consistent with past practice,
(A) declare, pay or set aside any dividend or other distribution (whether
in
cash, stock or property or any combination thereof), in respect of its capital
stock or (B) redeem, purchase or otherwise acquire or offer to acquire any
shares of its capital stock or other securities, including any security or
obligation convertible into or exchangeable for shares of the capital stock
of
the Company or any of its Subsidiaries (other than the repurchase of options
and
capital stock from employees in connection with their termination);
(v) except
for transactions in the ordinary course consistent with past practice between
the Company or any direct or indirect wholly-owned Subsidiary of the Company
on
the one hand, and any direct or indirect wholly-owned Subsidiary of the Company
on the other hand, (A) create, incur or assume any Indebtedness or assume,
guarantee, endorse or otherwise become responsible or liable for the obligations
of any other Person, other than (x) trade payables in the ordinary course
of
business consistent with past practice or (y) borrowings pursuant to the
Company’s or any of its Subsidiaries’ existing credit facilities in the
ordinary
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course
of
business consistent with past practice; (B) except as contemplated by Section
5.1(a) or as required by the terms of any Material Contract, make any loans,
advances or capital contributions to, or investments in, any other Person;
(C)
acquire or agree to acquire by merging or consolidating with, or by purchasing
a
substantial portion of the assets of, or by any other manner, any business
or
any corporation, limited liability company, partnership, joint venture,
association or other business organization or division thereof or any assets
for
a purchase price in excess of $15,000,000 individually and in the aggregate;
(D) sell, transfer, mortgage, pledge or otherwise dispose of, or encumber,
or agree to sell, transfer, mortgage, pledge or otherwise dispose of, or
encumber any material assets or properties other than Permitted Liens and
transfers in the ordinary course of business consistent with past practice
(provided such assets or properties are not, individually or in the aggregate,
material to the operation of the business of the Company or its Subsidiaries);
or (E) merge or consolidate with any other Person, other than mergers or
consolidations consummated to effect an acquisition pursuant to clause (C)
above;
(vi) create
any subsidiaries, other than as permitted pursuant to clause (C) of Section
5.1(b)(v), or alter through merger, liquidation, reorganization, restructuring
or in any other fashion the corporate structure or ownership of the Company
or
any of its Subsidiaries;
(vii) (A)
increase (in the case of officers) or (in the case of non-officer Employees)
increase in an amount more than 10% for any such non-officer Employee or
more
than 4% in the aggregate for all such non-officer Employees the compensation
or
benefits of any of its officers or Employees or enter into, establish, amend
or
terminate any U.S. Benefit Plan, Foreign Plan, Employment Agreement, other
than
as required pursuant to the terms of agreements in effect on the date of
this
Agreement, (B) grant or provide any severance or termination payments or
benefits to any director, officer, employee or consultant of the Company
or any
of its Subsidiaries, other than as required by existing arrangements and
policies listed on Section 3.10(a) of the Company Disclosure Schedule and
other
than termination payments to non-officer employees and consultants not exceeding
$200,000 in the aggregate, (C) make any new equity awards to any director,
officer, employee or consultant of the Company or any of its Subsidiaries,
(D)
take any action to accelerate the vesting or payment, or fund or in any other
way secure the payment, of compensation or benefits under any U.S. Benefit
Plan,
Foreign Plan or Employment Agreement to the extent not already provided in
any
such U.S. Benefit Plan, Foreign Plan or Employment Agreement, other than
such
amounts that are included in Transaction Expenses; provided
that the
treatment of any transaction bonuses of any Key Employee in excess of the
amounts contemplated and disclosed to Purchaser as of the date of this Agreement
shall be consistent with the proposed arrangements between Purchaser and
such
Key Employee with respect to transaction bonuses contemplated as of the date
of
this Agreement, or (E) change any actuarial or other assumptions used to
calculate funding obligations with respect to any U.S. Benefit Plan, Foreign
Plan or Employment Agreement or to change the manner in which contributions
to
such plans are made or the basis on which such contributions are determined,
except as may be required by GAAP;
(viii) enter
into or amend any collective bargaining agreements or agreements with employee
representatives or amend any analogous workforce commitments under applicable
Law;
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(ix) make
or
rescind any election relating to Taxes, except in the ordinary course consistent
with past practice;
(x) settle
or
compromise any material Tax liability of the Company or any of its Subsidiaries
or any audit, examination or other claim for Taxes or agree to an extension
of a
statute of limitations with respect to the assessment or determination of
Taxes;
(xi)
permit
any insurance policy naming it as a beneficiary or a loss payable payee to
be
canceled or terminated prior to the Closing Date without notice to Purchaser,
except policies which are replaced without material diminution of or gaps
in
coverage;
(xii) except
as
otherwise permitted under this Section 5.1, make any loan to, or enter into,
amend or modify any Contract with, any officer, director, consultant, employee
or stockholder of the Company or any of its Subsidiaries, or any Affiliate
of
any such Person (other than advances to such officers, directors, consultants
and employees in the ordinary course of business in connection with salary,
wages, travel and travel-related expenses or other customary
expenses);
(xiii) file
or
cause to be filed any amended Tax Return or file or cause to be filed any
claim
for refund of Taxes paid by or on behalf of the Company or any of its
Subsidiaries;
(xiv) prepare
or file any Tax Return of the Company or any of its Subsidiaries inconsistent
with past practice in preparing or filing similar Tax Returns in prior periods
or, on any such Tax Return, take any position, make any election, or adopt
any
method that is inconsistent with positions taken, elections made or methods
used
in preparing or filing similar Tax Returns in prior periods, in each case,
except to the extent that such inconsistency is (I) required by a change
in
applicable Tax Law and (II) described in reasonable detail by the Company
in a
notice to Purchaser reasonably in advance of Closing and, in the case of
federal
income taxes, reasonably in advance of filing the Tax Return, taking the
position, making the election or adopting the method, as applicable;
(xv) (i)
except in the ordinary course of business and as would not have a Company
Material Adverse Effect, modify, amend, terminate or fail to renew (to the
extent such Contract can be unilaterally renewed by the Company or any of
its
Subsidiaries) or enter into any Material Contract, or (ii) waive, release
or
assign any material rights or claims, or settle or compromise any material
Proceedings;
(xvi) make
any
material change to its accounting methods, principles or practices, except
as
may be required by Law or by GAAP;
(xvii) manage
payables, receivables or working capital, other than in the ordinary course
of
business consistent with past practice;
(xviii) incur
or
commit to any capital expenditures other than in accordance with the 2006
capital plan/budget, a copy of which has been provided to Purchaser
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prior
to
the date of this Agreement, or fail to incur such expenditures in the ordinary
course of business;
(xix) pay,
discharge, or satisfy any material claims, liabilities, or obligations
(absolute, accrued, asserted or unasserted, contingent or otherwise), other
than
in the ordinary course of business consistent with past practice, or fail
to pay
or otherwise satisfy (except if being contested in good faith) any material
accounts payable, liabilities, or obligations when due and payable;
(xx) except
as
otherwise expressly permitted by the terms of this Agreement, enter into
any
Contract, other than in the ordinary course of business;
(xxi) disclose
any confidential information relating to Company Intellectual Property, other
than to Persons with which the Company or any of its Subsidiaries has entered
into a confidentiality agreement;
(xxii) enter
into, modify, amend, terminate (other than due to expiration) or renew any
hedge, collar, options, forward purchasing or similar agreement for the purpose
of maintaining or controlling the cost of the Company’s raw materials (including
for the avoidance of doubt with respect to resin); provided
that
this clause shall not restrict the Company and its Subsidiaries from making
actual purchases of raw materials in the ordinary course of business;
or
(xxiii) authorize,
or commit or agree to take, any of the foregoing actions.
Section
5.2 Interest
Rate Swap Agreements.
The
Company shall fully unwind, rescind or otherwise terminate no later than
immediately prior to Closing the financial interest rate swaps set forth
on
Section 5.2 of the Company Disclosure Schedule and, as of the Closing, no such
other arrangements shall be in place. The value of such Interest Rate Swap
Agreements shall be taken into account in either the Net Working Capital
(including the estimate thereof) or in Closing Cash.
ARTICLE
VI
COVENANTS
OF PURCHASER
Section
6.1 Compensation
and Benefits.
g)
In the
event that any Employee is at any time after the Closing Date transferred
to
Purchaser or any Affiliate of Purchaser or becomes a participant in an employee
benefit plan, program or arrangement maintained by or contributed by Purchaser
or its Affiliates, Purchaser shall cause such plan, program or arrangement
to
treat the prior service of such Employee with the Company or any of its
Subsidiaries, to the extent such prior service is recognized under the
comparable plan, program or arrangement of the Company or any of its
Subsidiaries, as service rendered to Purchaser or its Affiliates, as the
case
may be; provided,
however, that
in
administering such plans, programs or arrangements of Purchaser or its
Affiliates, Purchaser may cause a reduction of benefits under any such plans,
programs or arrangements to the extent necessary to avoid duplication of
benefits with respect to the same covered matter or years of service, and
no
such service credit shall be
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granted
for purposes of determining benefits accruals or levels of benefits under
any
defined benefit pension plan or if past service credit is not provided for
other
participants in any applicable plan, program or arrangement.
(b) Purchaser
will cause its medical, dental and other welfare plans in which Employees
or
their dependants commence to participate after the Effective Time to (i)
waive
any preexisting condition limitations and (ii) honor any deductible and
out-of-pocket expenses incurred by such Employees and dependants under similar
plans of the Company or any of its Subsidiaries for the plan year in which
such
participation begins to the extent waived or incurred and paid, respectively,
under corresponding medical, dental and other welfare plans of the Company
and
its Subsidiaries prior to the Effective Time. Purchaser
will cause to be waived any medical certification for such Employees up to
the
amount of coverage such Employees had under any life insurance plan of the
Company or any of its Subsidiaries.
(c) The
Company shall use its reasonable best efforts to obtain the approval of the
Stockholders for any payments or benefits to be made or provided to the Key
Employees (and such other individuals as Purchaser reasonably believes could
be
entitled to “parachute payments” (as defined in Section 280G of the Code) as a
result of the transactions contemplated by this Agreement (whether alone
or in
conjunction with any other event) (“CIC
Payments”))
in a
vote and manner that satisfies Q&A-7 of the Treasury Regulations pursuant to
Section 280G of the Code (“Q&A-7”)
prior
to the Closing to the extent that no such payment or benefit will fail to
be
deductible under Section 280G. The Company shall provide Purchaser with a
reasonable opportunity to review the proposed disclosure to Stockholders
which
is to be distributed by the Company to such Stockholders in conformity with
Q&A-7 and any accompanying analysis of CIC Payments under Section 280G to
determine, prior to such distribution to Stockholders, whether any individuals
other than the Key Employees are potentially subject to Section
280G.
(d) No
provision of this Section 6.1 shall create any third party beneficiary rights
in
any current or former employee (including any beneficiary or dependent thereof)
of the Company or any of its Subsidiaries. Nothing contained herein shall
prevent Acquirer from terminating the employment of any employee of the Company
or any of its Subsidiaries or amending the terms of or terminating any US
Benefit Plan, Foreign Plan or Employment Agreement to the extent permitted
by
the terms of such plan or agreement.
Section
6.2 Insurance;
Indemnity.
h)
Purchaser agrees that for a period of six years after the Effective Time
it
shall, and shall cause the Surviving Corporation and its Subsidiaries to,
indemnify, defend and hold harmless, to the same extent that they are entitled
to be indemnified under the existing certificate of incorporation or bylaws
of
the Company or any of its Subsidiaries, each Person who is now or has been
an
officer or director of the Company or any of its Subsidiaries and each of
their
successors and assigns (individually, an “Indemnified
Person”
and
collectively, the “Indemnified
Persons”),
against all losses, claims, damages, liabilities, costs or expenses (including
reasonable attorneys’ fees), judgments, fines, penalties and amounts paid in
settlement actually incurred by the Indemnified Person in connection with
any
Proceeding arising out of or pertaining to acts or omissions (other than
illegal
acts or acts of fraud), or alleged acts or omissions (other than illegal
acts or
acts of fraud), by them in their capacities as such relating to any facts
or
events occurring on or prior to the Effective Time,
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whether
commenced, asserted or claimed before or after the Effective Time; provided,
however,
that no
indemnification shall be made to any Indemnified Person to the extent it
is
finally determined by a court of competent jurisdiction (after all rights
to
appeal shall have expired) that such Indemnified Person did not, with respect
to
the matter subject to indemnification hereunder, act in good faith and in
a
manner which he or she reasonably believed to be in or not opposed to the
best
interests of the Company or any of its Subsidiaries. In the event of any
such
Proceeding, (i) Purchaser shall pay the reasonable fees and expenses of counsel
selected by the Indemnified Person, which counsel shall be reasonably acceptable
to Purchaser, in advance of the final disposition of any such Proceeding
to the
full extent and under all circumstances permitted by the DGCL as in effect
on
the date of this Agreement, upon receipt of any undertaking required by
applicable Law, (ii) the Indemnified Persons shall cooperate and reasonably
assist Purchaser in the defense of such Proceeding and (iii) Purchaser will
direct the defense of any such matter; provided further,
however,
that
Purchaser shall not be obligated pursuant to this Section 6.2(a) to pay the
fees
and disbursements of more than one counsel for all Indemnified Persons in
any
single Proceeding, except to the extent that, in the opinion of counsel for
the
Indemnified Persons, two or more of such Indemnified Persons have conflicting
interests in the outcome of such action.
(b) Prior
to
the Closing Date, the Company shall purchase (and pay all related premiums
and
other associated costs) tail insurance for a minimum period of six years
following the Effective Time covering each Indemnified Person with respect
to
claims arising from facts or events that occurred on or prior to the Effective
Time, on coverage terms that are reasonably acceptable to Purchaser, and
providing coverage at least as extensive as the current policies in place
as of
the date hereof.
(c) During
the period of six years after the Effective Time, neither Purchaser nor the
Surviving Corporation shall, nor shall either permit any of the Subsidiaries
of
the Surviving Corporation to, take any action directly or indirectly to
disaffirm or adversely affect the provisions of the certificate of incorporation
or bylaws (or equivalent organizational documents) or any other written
agreements of the Company or any of its Subsidiaries that provide
indemnification of and expense reimbursement to any Indemnified Person.
(d) The
rights of each Indemnified Person under this Section 6.2 shall be in addition
to
any other rights such Indemnified Person may have under the certificate or
certificate of incorporation or bylaws (or equivalent organizational documents)
of the Surviving Company or any of its Subsidiaries, under the DGCL, other
applicable Law or otherwise. These rights shall survive consummation of the
Merger and are intended to benefit, and shall be enforceable by, each
Indemnified Party.
(e) In
the
event Purchaser or the Surviving Corporation or any of their respective
successors or assigns (i) consolidates with or merges into any other Person
and
shall not be the continuing or surviving corporation or entity of such
consolidation or merger or (ii) transfers or conveys all or substantially
all of
its properties and assets to any Person, then, and in each such case, proper
provision shall be made so that the successors and assigns of Purchaser or
the
Surviving Corporation, as the case may be, assume the obligations set forth
in
this Section 6.2.
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ARTICLE
VII
COVENANTS
OF PURCHASER AND THE COMPANY
The
parties hereto agree that:
Section
7.1 Access
to Information.
From
the date of this Agreement until the Closing Date, the Company (a) will
give Purchaser, its counsel, financial advisors, auditors and other authorized
representatives reasonable access during normal business hours and on reasonable
notice to the officers, properties, books and records of and relating to
the
Company and its Subsidiaries, (b) will furnish to Purchaser, its counsel,
financial advisors, auditors and other authorized representatives such financial
and operating data and other information with respect to the Company and
its
Subsidiaries, as such Persons may reasonably request and (c) will instruct
the employees, counsel and financial advisors of the Company and its
Subsidiaries to cooperate reasonably with Purchaser in its investigation
of the
Company and its Subsidiaries. Any information provided, or caused to be
provided, by the Company or its Subsidiaries pursuant to this Section 7.1
shall
be subject to the terms of the Confidentiality Agreement dated as of April
13,
2006 between the Company and Apollo Management VI, L.P. and the Confidentiality
Agreement dated as of April 12, 2006 between the Company and Xxxxxx Partners,
Inc.
Section
7.2 Required
Actions.
i)
Subject
to the terms and conditions of this Agreement and applicable Law, each of
the
parties hereto shall act in good faith and take, or cause to be taken, all
actions, and to do, or cause to be done, all things necessary, proper or
advisable to consummate and make effective the transactions contemplated
hereby
as soon as practicable, including such actions or things as the other party
may
reasonably request in order to cause any of the conditions to such other
party’s
obligation to consummate the transactions contemplated by this Agreement
to be
fully satisfied. Without limiting the foregoing, the parties shall consult
and
fully cooperate with and provide assistance to each other in obtaining all
necessary consents, approvals, waivers, licenses, permits, authorizations,
registrations, qualifications or other permission or action by, and giving
all
necessary notices to and making all necessary filings with and applications
and
submissions to, any Governmental Entity or other Person as soon as reasonably
practicable after filing. Prior to making any application or material written
communication to or filing with any Governmental Entity or other Person in
connection with this Agreement, each party shall provide the other party
with
drafts thereof and afford the other party a reasonable opportunity to comment
on
such drafts.
(b) Without
limiting the generality of the undertakings in Section 7.2(a) and Section
7.3,
the Company and Purchaser agree to (i) provide as promptly as practicable,
information and documents requested by any Governmental Entity necessary,
proper
or advisable to permit consummation of the transactions contemplated by this
Agreement, (ii) take all actions that are necessary or reasonably advisable
or as may be required by any Governmental Entity to consummate the transactions
contemplated by this Agreement, including, without limitation, (A) selling
or
otherwise disposing of, or holding separate and agreeing to sell or otherwise
dispose of, any entities, assets or facilities of the Company or its
Subsidiaries or any entity, facility or asset of Purchaser or its Affiliates,
(B) terminating, amending or assigning existing relationships and contractual
rights and obligations (other than terminations that would result in a breach
of
a
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contractual
obligation to a third party) and (C) amending, assigning or terminating existing
licenses or other agreements (other than terminations that would result in
a
breach of a license or such other agreement with a third party) and entering
into such new licenses or other agreements (and, in each case, entering into
agreements with the relevant Governmental Entity giving effect thereto);
provided
that any
such action contemplated by this clause (ii) shall not be required to be
effective prior to the Closing, (iii) defend any lawsuits or other Proceedings,
whether judicial or administrative, challenging consummation of the transaction
contemplated hereby, including seeking to avoid the entry of, or have reversed,
terminated or vacated, any stay or other injunctive relief which could prevent
or materially delay the consummation of the transaction contemplated hereby
and
(iv) take promptly, in the event that any permanent or preliminary injunction
or
other order is entered or becomes reasonably foreseeable to be entered in
any
Proceeding that would make consummation of the transactions contemplated
by this
Agreement in accordance with the terms of this Agreement unlawful or that
would
prevent or materially delay consummation of any such transaction, any and
all
steps (including the appeal thereof, the posting of a bond or the taking
of the
steps contemplated by clause (ii) of this Section 7.2(b)) necessary to vacate,
modify or suspend such injunction or order so as to permit such consummation
on
a schedule as close as possible to that contemplated by this Agreement. The
Company and Purchaser agree to offer the other party, if possible, a reasonable
opportunity to participate in all telephonic conferences and all meetings
with a
Governmental Entity.
Section
7.3 Certain
Filings.
j)
As soon
as practicable, and in any event no later than five business days after the
date
of this Agreement, each of the parties hereto shall file any Notification
and
Report Forms and related material required to be filed by it with the Federal
Trade Commission and the Antitrust Division of the United States Department
of
Justice under the HSR Act with respect to transactions contemplated hereby
and
shall promptly make any further filings pursuant thereto that may be necessary,
proper or advisable. Each of Purchaser and the Company shall furnish to the
other such information and assistance as the other shall reasonably request
in
connection with the preparation of any submissions to, or agency proceedings
by,
any Governmental Entity under the HSR Act or any comparable Laws of foreign
jurisdictions, and each of Purchaser and the Company shall keep the other
promptly apprised of any communications with, and inquiries or requests for
information from, such Governmental Entities.
(b) Each
of
the Company and Purchaser shall prepare and file any Other Filings required
to
be filed by them. The Company and Purchaser shall cooperate with each other
and
provide to each other all information necessary in order to prepare the Other
Filings. The information provided by the Company and Purchaser for use in
the
Other Filings shall at all times prior to the Closing Date be true and correct
in all material respects and shall not omit to state any material fact required
to be stated therein or necessary in order to make such information not false
or
misleading. Each such filing shall, when filed, comply in all material respects
with applicable Law.
(c) The
Company shall take such actions and exercise reasonable diligence to obtain
such
governmental approvals, if any, required to be taken or obtained prior to
consummation of the Merger pursuant to the New Jersey Industrial Site Recovery
Act (“ISRA”).
Purchaser shall reasonably cooperate with the Company with respect to
pre-Closing ISRA-related
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tasks,
including the execution of such documents and forms as may be required to
achieve compliance with ISRA. The Company shall continue to be responsible
for
continued compliance with ISRA, and all actions, if any, required thereunder,
after the consummation of the Merger.
Section
7.4 Public
Announcements.
Prior
to the Effective Time, Purchaser and the Company will consult with each other
before issuing any press release or making any public statement with respect
to
the transactions contemplated hereby and, except as may be required by
applicable Law or any listing agreement with any securities exchange, will
not
issue any such press release or make any such public statement unless the
text
of such statement shall first have been agreed to by the parties
hereto.
Section
7.5 Notices
of Certain Events.
During
the period from the date of this Agreement through the Closing Date or the
termination of this Agreement pursuant to Section 9.1, each of Purchaser
and the
Company shall promptly notify the other: (a) following the receipt of any
notice
or other communication from any Governmental Entity in connection with the
transactions contemplated hereby or of any Proceeding commenced or, to its
knowledge threatened, against it which relates to or seeks to prohibit the
consummation of the transactions contemplated hereby; and (b) of the occurrence
or nonoccurrence of any event, the occurrence or non occurrence of which
is
likely to result in any material failure of such party to comply with or
satisfy
any covenant, condition or agreement to be complied with or satisfied by
it
hereunder; provided,
however,
that
the delivery of any notice pursuant to this Section 7.5 shall not limit or
otherwise affect the remedies available hereunder to any of the parties
receiving such notice.
Section
7.6 Survival
of Representations and Warranties.
The
representations and warranties in this Agreement shall not survive the
Closing.
Section
7.7 Exclusive
Dealing.
During
the period from the date of this Agreement through the Closing Date or the
termination of this Agreement pursuant to Section 9.1, the Company will not,
and
will cause its Affiliates, officers, directors, employees, agents and other
representatives not to, directly or indirectly, take any action to solicit,
encourage, initiate or engage in discussions or negotiations with, or provide
any information to or enter into any agreement with any Person (other than
Purchaser, its Affiliates and their respective representatives) concerning
(a)
the acquisition or recapitalization of the Company or any of its Subsidiaries,
(b) a merger, consolidation or other business combination involving the
Company or any of its Subsidiaries, (c) the acquisition of all or a
substantial portion of the assets or equity securities of the Company or
any of
its Subsidiaries or (d) similar transactions involving the Company or any
of its
Subsidiaries. The Company shall, and shall cause its Affiliates, officers,
directors, employees, agents and other representatives to, immediately cease
and
cause to be terminated all existing discussions, conversations, negotiations
and
other communications with any Persons conducted heretofore with respect to
any
of the foregoing. The Company shall use reasonable best efforts to enforce
any
confidentiality or similar provisions in agreements with other potential
acquirors of the Company, including seeking to have any confidential information
provided to another party either destroyed or promptly returned to the Company,
in accordance with such agreements.
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Section
7.8 Financing.
(a)
From the date of this Agreement until the Closing, at the cost and expense
of
Purchaser (such costs and expenses to be reasonable), the Company shall,
shall
cause its Subsidiaries and employees to, and shall use its reasonable best
efforts to cause its Affiliates, advisors, accountants and attorneys to,
timely
provide all cooperation reasonably requested by Purchaser in connection with
the
arrangement of the Debt Financing or any alternative to all or any portion
thereof, including (A) causing appropriate officers, management and employees
timely to (x) be available, on reasonable advance notice, to meet with
prospective lenders, rating agencies and investors in meetings, drafting
sessions, presentations, road shows and due diligence sessions, (y) provide
management and legal representations to auditors and (z) assist with the
preparation of business projections, financial statements, pro forma statements
and other financial data of the type required by Regulation S-X and Regulation
S-K under the Securities Act of the type and form consistently included in
offering memoranda, private placement memoranda, prospectuses and similar
documents, and similar materials, (B) otherwise timely cooperating with the
marketing efforts of Purchaser and its financing sources for any of the Debt
Financing or any alternative to all or any portion thereof, (C) timely
furnishing Purchaser with financial and other pertinent information regarding
the Company as shall exist (or if not existing, timely preparing such financial
or other pertinent information) and as may be requested by Purchaser, (D)
using
reasonable best efforts to provide title insurance lien waivers, estoppels,
affidavits, non-disturbance agreements, memoranda of leases, legal opinions,
surveys or other documents or deliveries, (E) assisting Purchaser (including
by
participating in drafting sessions) in the timely preparation of offering,
information or syndication documents for any of the Debt Financing or any
alternative to all or any portion thereof (“Offering
Documents”),
(F)
using reasonable best efforts to facilitate the pledging of collateral and
obtaining surveys and title insurance as reasonably requested by Purchaser,
(G)
using reasonable best efforts to obtain customary comfort letters from the
auditors of the Company and consent from such auditors for use of any of
their
audit reports (including but not limited to by including such reports in
any
offering documents) and SAS 100 reviews, (H) timely providing and executing
customary documents as may reasonably be requested by Purchaser or its financing
sources, and (I) using reasonable best efforts to obtain customary legal
opinions or other certificates or documents as may reasonably be requested
by
Purchaser; provided
that
none of the opinions, documents and certificates referenced in clause (I)
above
shall be executed and delivered except in connection with the Closing (and
the
effectiveness thereof shall be conditioned upon the occurrence of the Closing).
The Company shall provide Purchaser and its financing sources as promptly
as
practicable (but in no event later than the time periods, if any, specified
in
Exhibit D to the Commitment Letters) the audited, unaudited and pro forma
and
other financial information or data set forth in such Exhibit D required
to be
furnished by the Company. At the request of Purchaser, the Company shall
promptly commence an offer to purchase and related consent solicitation with
respect to all of the outstanding aggregate principal amount of its
10 ¾%
Notes
on terms and conditions customary for similar debt tenders and consent
solicitations such other terms and conditions as are reasonably acceptable
to
Purchaser and the Company (including the related consent solicitation,
collectively, the “Debt
Tender Offer”)
and
Purchaser shall assist the Company in connection therewith. Promptly following
the expiration date of the consent solicitation, assuming the requisite consents
are received, the Company shall execute a supplemental indenture to that
certain
indenture, dated as of July 22, 2002, among the Company, Xxxxx Plastics
Corporation, the other guarantors listed on the
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signature
pages thereof, and U.S. Bank Trust National Association, as trustee, as modified
by that certain Supplemental Indenture, dated as of August 6, 2002, among
the
Company, Xxxxx Plastics Corporation, the other guarantors listed on the
signature pages thereof, and U.S. Bank Trust National Association, as trustee
and that certain Second Supplemental Indenture, dated as of November 20,
2003,
among the Company, Xxxxx Plastics Corporation, the other guarantors listed
on
the signature pages thereof, and U.S. Bank Trust National Association, as
trustee (as otherwise amended or supplemented from time to time, the
“Indenture”),
amending the terms and provisions of the Indenture in a form customary for
similar consent solicitations, including to permit the consummation of the
Merger and the other transactions contemplated hereby, which supplemental
indenture shall become operative immediately prior to the Effective Time,
and
shall use all reasonable efforts to cause the trustee under the Indenture
to
enter into such supplemental indenture prior to or substantially simultaneously
with the Closing. The closing of the Debt Tender Offer shall be conditioned
on
the occurrence of the Closing, and the parties shall use all reasonable best
efforts to cause the Debt Tender Offer to close on the Closing Date. Concurrent
with the Effective Time, and in accordance with the terms of the Debt Tender
Offer, the Company shall accept for purchase and purchase the 10 ¾% Notes
properly tendered and not properly withdrawn in the Debt Tender Offer. Purchaser
shall indemnify and hold the Company harmless with respect to the foregoing
matters, other than in the case of fraud or intentional misrepresentation
by the
Company.
(b) From
the
date of this Agreement until the Closing, each of Purchaser and Merger Sub
will
use its reasonable best efforts to comply with their respective obligations
under the Commitment Letters and will use its reasonable best efforts to
arrange
the Debt Financing on the terms and conditions described in the Commitment
Letters, including using reasonable best efforts to (i) negotiate definitive
agreements with respect thereto on terms and conditions contained therein
and
(ii) satisfy all conditions applicable to Purchaser and Merger Sub in such
definitive agreements that are within its control. In the event any portion
of
the Debt Financing becomes unavailable on the terms and conditions contemplated
in the Commitment Letters, Purchaser will use its reasonable best efforts
to
arrange to obtain any such portion from alternative sources on substantially
comparable or more favorable terms (provided that any economic terms shall
be no
less favorable than the economic terms of the Debt Financing) to Purchaser
(as
determined in the reasonable judgment of Purchaser) as promptly as practicable
following the occurrence of such event.
ARTICLE
VIII
CONDITIONS
TO THE MERGER
Section
8.1 Conditions
to Obligations of Each Party.
The
respective obligations of each party hereto to consummate the transactions
contemplated hereby shall be subject to the satisfaction at or prior to the
Closing Date of the following conditions, any or all of which may be waived
in
writing by the Company or Purchaser in whole or in part, to the extent permitted
by applicable Law:
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(a) No
Injunction.
No
Governmental Entity of competent jurisdiction shall have enacted, issued,
promulgated or enforced any statute, rule, regulation, executive order, decree,
judgment, preliminary or permanent injunction or other order which is in
effect
and which prohibits, enjoins or otherwise restrains the consummation of the
transactions contemplated hereby, and there shall be no proceeding pending
by a
Governmental Entity seeking such relief; provided,
that
the parties shall use their commercially reasonable efforts to cause any
such
decree, judgment, injunction or order to be vacated or lifted, and provided further
that
nothing in this Section 8.1(a) is intended to limit the obligations of
Purchaser and Merger Sub under Sections 7.2 and 7.3, in each case solely
with respect to regulatory approvals; and
(b) HSR
Act Waiting Period.
Any
applicable waiting period under the HSR Act relating to the transaction
contemplated hereby shall have expired or terminated.
Section
8.2 Conditions
Precedent to the Obligations of the Company.
The
obligation of the Company to effect the transactions contemplated hereby
is also
subject to the satisfaction at or prior to the Closing Date of each of the
following additional conditions, unless waived in writing by the
Company:
(a) Accuracy
of Representations and Warranties.
All
representations and warranties made by Purchaser and Merger Sub herein shall
be
true and correct in all respects (i) as of the date of this Agreement and
(ii)
as of the Closing Date with the same force and effect as though such
representations and warranties had been made on and as of the Closing Date,
except for changes permitted or contemplated by this Agreement and except
for
representations and warranties that are made as of a specific date or time,
which shall be true and correct in all respects only as of such specific
date or
time; except for the purposes of clause (ii) of this condition for such failures
of such representations and warranties to be true and correct (without giving
effect to any limitation or qualification as to “materiality” (including the
word “material”)) as would not, individually or in the aggregate, have a
material adverse effect on the ability of Purchaser and Merger Sub to perform
their obligations hereunder and consummate the Merger on the Closing
Date;
(b) Compliance
with Covenants.
Purchaser and Merger Sub shall have performed in all material respects all
obligations and agreements, and complied in all material respects with all
covenants, contained in this Agreement to be performed or complied with by
it
prior to or at the Closing Date;
(c) Certified
Resolutions.
The
Company shall have received a true and complete copy, certified by the Secretary
or an Assistant Secretary of Merger Sub, of the resolutions duly and validly
adopted by the board of directors of Merger Sub and by Purchaser as the sole
stockholder of Merger Sub, evidencing their authorization of the execution
and
delivery of this Agreement and the consummation of the transactions contemplated
hereby; and
(d) Officer’s
Certificates.
The
Company shall have received such certificates of Purchaser and Merger Sub,
dated
the Closing Date and signed by an executive officer of Purchaser, to evidence
satisfaction of the conditions set forth in Section 8.2(a) and
Section 8.2(b)
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(insofar
as each relates to Purchaser and Merger Sub) as may be reasonably requested
by
the Company.
Section
8.3 Conditions
Precedent to the Obligations of Purchaser.
The
obligation of Purchaser to effect the transactions contemplated hereby is
also
subject to the satisfaction at or prior to the Closing Date of each of the
following additional conditions, unless waived in writing by
Purchaser:
(a) Accuracy
of Representations and Warranties.
All
representations and warranties made by the Company herein shall be true and
correct in all respects (i) as of the date of this Agreement and (ii) as
of the
Closing Date, with the same force and effect as though such representations
and
warranties had been made on and as of the Closing Date, except for changes
permitted or contemplated by this Agreement and except for representations
and
warranties that are made as of a specific date or time, which shall be true
and
correct in all respects only as of such specific date or time; except for
the
purposes of clause (ii) of this condition for changes permitted or contemplated
by this Agreement and except for representations and warranties that are
made as
of a specific date or time, which shall be true and correct in all respects
only
as of such specific date or time; except for such failures of such
representations and warranties to be true and correct (without giving effect
to
any limitation or qualification as to “materiality” (including the word
“material”) or “Company Material Adverse Effect” set forth herein) as would not,
individually or in the aggregate, have a Company Material Adverse
Effect;
(b) Compliance
with Covenants.
The
Company shall have performed in all material respects all obligations and
agreements, and complied in all material respects with all covenants, contained
in this Agreement to be performed or complied with by it prior to or on the
Closing Date;
(c) Material
Adverse Effect.
Since
the date of this Agreement, there has not been any event, change or development
which would have a Company Material Adverse Effect;
(d) Certified
Resolutions.
Purchaser and Merger Sub shall have received a true and complete copy, certified
by the Secretary or an Assistant Secretary of the Company, of the resolutions
duly and validly adopted by the board of directors and the Stockholders,
evidencing its authorization of the execution and delivery of this Agreement
and
the consummation of the transactions contemplated hereby; and
(e) Officer’s
Certificates.
Purchaser shall have received (i) such certificate of the Company, dated
the
Closing Date, signed by an executive officer of the Company to evidence
satisfaction of the conditions set forth in Section 8.3(a),
Section 8.3(b) and Section 8.3(c) as may be reasonably requested by
Purchaser; and (ii) a certificate satisfying the requirements of Treasury
Regulation Section 1.1445-2(c)(3), in form and substance reasonably satisfactory
to Purchaser, confirming that the Company is not and was not within the past
five years a U.S. real property holding corporation within the meaning of
Section 897 of the Code.
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ARTICLE
IX
TERMINATION
Section
9.1 Termination.
This
Agreement may be terminated and the transactions contemplated hereby may
be
abandoned at any time prior to the Closing Date:
(a) by
mutual
written consent of the Company and Purchaser;
(b) by
either
the Company or Purchaser if (i) any Governmental Entity shall have issued
any
judgment, injunction, order or decree prohibiting, enjoining or otherwise
restraining the transactions contemplated by this Agreement and such judgment,
injunction, order or decree shall have become final and nonappealable or
(ii)
any statute, rule, regulation or executive order promulgated or enacted by
any
Governmental Entity after the date of this Agreement which prohibits the
consummation of the transactions contemplated hereby shall be in effect;
provided,
that
the right to terminate this Agreement pursuant to this Section 9.1(b) shall
not be available to any party whose failure to fulfill any obligation under
this
Agreement (including such party’s obligations set forth in Section 7.2 and
Section 7.3) has been the primary cause of, or resulted in, such
action;
(c) by
either
the Company or Purchaser if the Effective Time shall not have occurred on
or
before the six-month anniversary of the date of this Agreement (the
“Termination
Date”);
provided,
however,
that
the right to terminate this Agreement pursuant to this Section 9.1(c) shall
not
be available to any party whose failure to fulfill any obligation under this
Agreement (including such party’s obligations set forth in Section 7.2 and
Section 7.3) has been the primary cause of, or resulted in, the failure of
the Effective Time to occur on or before the Termination Date;
(d) by
the
Company if there has been a breach of any representation, warranty, obligation,
agreement or covenant made by Purchaser or Merger Sub in this Agreement,
such
that the conditions in Section 8.2(a) and Section 8.2(b) are not
capable of being satisfied and which shall not have been cured by Purchaser
or
Merger Sub within 30 days after receipt of written notice from the Company
requesting such breach to be cured; provided
that the
right to terminate this Agreement pursuant to this Section 9.1(d) shall not
be
available to the Company if the failure of the Company to fulfill any obligation
under this Agreement (including the Company’s obligations set forth in
Section 7.2 and Section 7.3) has been the primary cause of, or
resulted in, such breach; or
(e) by
Purchaser if there has been a breach of any representation, warranty,
obligation, agreement or covenant made by the Company in this Agreement,
such
that the conditions in Section 8.3(a) and Section 8.3(b) are not
capable of being satisfied and which shall not have been cured by the Company
within 30 days after receipt of written notice from Purchaser requesting
such
breach to be cured; provided
that the
right to terminate this Agreement pursuant to this Section 9.1(e) shall not
be
available to Purchaser if the failure of Purchaser to fulfill any obligation
under this Agreement (including Purchaser’s obligations set forth in
Section 7.2 and Section 7.3) has been the primary cause of, or
resulted in, such breach.
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Section
9.2 Effect
of Termination.
(a) In
the
event of any termination of this Agreement pursuant to Section 9.1, this
Agreement forthwith shall become void and of no further force or effect,
and no
party hereto (or any of its Affiliates, stockholders directors, officers,
agents
or representatives) shall have any liability or obligation hereunder, except
in
accordance with this Section 9.2 (including the Purchaser Termination Fee
provisions of Section 9.2(b)), Section 10.1, Article XI and the
confidentiality provisions of Section 7.1, in each case which shall survive
any such termination. Nothing in this Section 9.2(a) shall be deemed to release
any party from any liability for any prior breach of any terms or provisions
of
this Agreement or to impair the right of any party to compel specific
performance by any other party of its obligations under this Agreement pursuant
to Section 11.4 or the rights of any party in the case of fraud or
intentional misrepresentation.
(b) Notwithstanding
anything in this Agreement to the contrary (including, for the avoidance
of
doubt, the last sentence of Section 9.2(a)), in the event the conditions
to
Closing set forth in Section 8.1 and 8.3 are satisfied or waived (other than
those conditions which by their nature cannot be satisfied until the Closing,
but which conditions at the time of termination shall be capable of being
satisfied), Purchaser or Merger Sub breaches its obligation to effect the
Closing at such time as contemplated by Section 2.2 or such later time as
agreed to by the Company because of a failure to receive the proceeds from
the
Debt Financing or the failure to have received the proceeds of any alternative
financing to the extent contemplated by Section 7.8 (a “Debt
Receipt Failure”),
and
this Agreement is terminated pursuant to Section 9.1, then Purchaser shall pay
or cause to be paid to the Company $60,000,000 (the “Purchaser
Termination Fee”)
in
immediately available funds within two business days following such termination,
provided
that if
the Closing does not occur by reason of a failure of the Company to comply
with
its obligations under Section 7.8(a) or a failure of the conditions set forth
in
Section 8.1 or Section 8.3, no Purchaser Termination Fee shall be
payable and Section 9.1(a) shall otherwise be applicable. Other than with
respect to a willful or intentional breach by Purchaser or Merger Sub of
a
representation, warranty, covenant or agreement contained in this Agreement
or
in any related schedule, exhibit, letter, agreement or instrument, in which
case
Section 9.2(c) shall exclusively apply, (i) the right of the Company to receive
payment of the Purchaser Termination Fee in accordance herewith shall be
the
sole and exclusive remedy of the Company and its Stockholders and their
respective Affiliates against Purchaser, Merger Sub and any of their respective
Affiliates for any loss or damage suffered as a result of a Debt Receipt
Failure
and (ii) in no event will the Company or any of its Stockholders or any of
their
respective Affiliates seek to recover any other money damages or seek any
other
remedy from Purchaser or Merger Sub (or their respective Affiliates) with
respect to a Debt Receipt Failure, regardless of whether such monetary damages
or other remedies are based on a claim in law or equity, and all such claims
are
hereby waived.
(c) Notwithstanding
anything in this Agreement to the contrary, but subject to Section 9.2(b),
in no event will Purchaser, Merger Sub and their respective Affiliates,
stockholders, partners, members, directors, officers or agents be subjected
to
liability in excess of $100,000,000 in the aggregate (inclusive of any Purchaser
Termination Fee but exclusive of any amount payable pursuant to
Section 11.14) for losses and damages suffered or incurred by the Company
and its Stockholders arising from or in connection with breaches by Purchaser
or
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Merger
Sub of the representations, warranties, covenants or agreements contained
in
this Agreement.
ARTICLE
X
REPRESENTATIVE
Xxxxxxx
00.0 Xxxxxxxxxxx
xx Xxxxxxxxxxxxxx.
(x) GS
Capital Partners 2000, L.P., a Delaware limited partnership (and any of its
successors or assigns so long as any such assign is an Affiliate of GS Capital
Partners 2000, L.P.) is hereby appointed to act as a representative (the
“Representative”)
under
this Agreement for the Stockholders and holders of Vested Options and, as
such,
to act, as agent (with full power of substitution) of the Stockholders and
holders of Vested Options, to take such action on such Persons’ behalf with
respect to all matters relating to this Agreement and the Escrow Agreement,
including without limitation, to make all determinations, agreements and
settlements relating to the Final Closing Statement, to sign receipts, consents
and other documents to effect any of the transactions contemplated by this
Agreement or the Escrow Agreement and to take all actions necessary or
appropriate in connection with the foregoing. All such determinations,
agreements, settlements and compromises made by the Representative shall
be
binding on all of the Stockholders and holders of Vested Options and their
respective successors and assigns. The Representative shall not take any
action
or authorize any action on behalf of any Stockholders or holders of Vested
Options if it would treat any of the Stockholders or holders of Vested Options
in a non-ratable or otherwise discriminatory manner or if it would increase
the
liability of the Stockholders or holders of Vested Options. The Representative
shall not have any duties or responsibilities except those contemplated by
this
Agreement and the Escrow Agreement, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or shall otherwise exist against the Representative.
(b) Purchaser,
Merger Sub and the Escrow Agent shall be entitled to conclusively rely on
the
instructions, decisions and acts of the Representative required, permitted
or
contemplated to be taken by the Representative hereunder or under the Escrow
Agreement, and Purchaser, Merger Sub and the Escrow Agent are hereby relieved
from any liability to any Person for any acts done by them in accordance
with
any instructions, decisions or acts of the Representative. Purchaser, Merger
Sub
and the Escrow Agent shall be entitled to treat as genuine, and as the document
it purports to be, any letter, paper or other document furnished to it by
or on
behalf of the Representative, and reasonably believed by Purchaser, Merger
Sub
or the Escrow Agent to be genuine and to have been signed and presented by
the
proper party or parties.
(c) The
Representative shall be entitled to rely, and shall be fully protected in
relying, upon any statements furnished to it by any Stockholder, holder of
Vested Options, Purchaser or Merger Sub, or any other evidence deemed by
the
Representative to be reliable, and the Representative shall be entitled to
act
on the advice of counsel selected by it. The Representative shall be fully
justified in failing or refusing to take any action under this Agreement
unless
it shall have received such advice or concurrence of such Stockholders
or
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holders
of Vested Options as it deems appropriate or it shall have been expressly
indemnified to its satisfaction by the Stockholders and holders of Vested
Options appointing it according to their respective ownership interests in
the
Company against any and all liability and expense that the Representative
may
incur by reason of taking or continuing to take any such action.
(d) The
Representative shall be entitled to retain counsel and to incur such expenses
as
the Representative deems to be necessary or appropriate in connection with
the
performance of its obligations under this Agreement and the Escrow Agreement,
and all such fees and expenses (including reasonable attorneys’ fees and
expenses) incurred by the Representative shall be taken out of the
Representative Escrow Amount.
(e) The
Stockholders and holders of Vested Options shall indemnify the Representative
(in its capacity as such) ratably according to their respective ownership
interests in the Company against, and shall hold the Representative (in its
capacity as such) harmless from, any and all losses of whatever kind which
may
at any time be imposed upon, incurred by or asserted against the Representative
in such capacity in any way relating to or arising out of its action or failures
to take action pursuant to this Agreement or the Escrow Agreement or in
connection herewith or therewith in such capacity (other than in the case
of
illegal acts or acts of fraud by the Representative). The agreements in this
Section 10.1 shall survive termination of this Agreement.
ARTICLE
XI
MISCELLANEOUS
Section
11.1 Notices.
All
notices and other communications given or made pursuant hereto shall be in
writing and shall be deemed to have been duly given or made as of the date
delivered, mailed or transmitted, and shall be effective upon receipt, if
delivered personally, mailed by registered or certified mail (postage prepaid,
return receipt requested) or sent by fax (with immediate confirmation) or
nationally recognized overnight courier service, as follows:
(a) if
to
Purchaser or Merger Sub, to:
BPC
Holding Acquisition Corp.
c/o
Apollo Management VI, L.P.
0
Xxxx
00xx Xx.
Xxx
Xxxx,
Xxx Xxxx 00000
Attn:
Xxxxxx X. Xxxxxxxx
Fax:
(000) 000-0000
with
a
copy to:
Xxxxxx
Partners, Inc.
3811
West
Xxxxxxx Xxxx, Building 2, Suite 000
Xxxxxx
Xxxxxx, Xxxxxxxxxxxx 00000
Attn:
Xxxxxxxxxxx X. Xxxxxx
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-
ffny03\goldfmu\658041.8
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Fax:
(000) 000-0000
with
a
copy to:
Wachtell,
Lipton, Xxxxx & Xxxx
00
X.
00xx Xx.
Xxx
Xxxx,
Xxx Xxxx 00000
Attn:
Xxxxxx X. Xxxxxxxx, Esq.
Fax:
(000) 000-0000
(b) if
to the
Company, to:
BPC
Holding Corporation
000
Xxxxxx Xxxxxx
Xxxxxxxxxx,
Xxxxxxx 00000
Attn:
Xxx
X. Boots
Fax:
(000) 000-0000
with
a
copy to:
Fried,
Frank, Harris, Xxxxxxx & Xxxxxxxx LLP
Xxx
Xxx
Xxxx Xxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attn:
Xxxxxx X. xx Xxxx, Esq.
Fax:
(000) 000-0000
or
to
such other Person or address or facsimile number as any party shall specify
by
like written notice to the other parties hereto (any such notice of a change
of
address to be effective only upon actual receipt thereof).
Section
11.2 Entire
Agreement.
This
Agreement (including the Company Disclosure Schedule and the exhibits hereto),
the Escrow Agreement and the Confidentiality Agreements referred to in Section
7.1, constitute the entire agreement between the parties hereto with respect
to
the subject matter hereof and supersedes all prior written or oral and all
contemporaneous oral agreements and understandings between any of the parties
hereto with respect to the subject matter hereof.
Section
11.3 Assignment;
Binding Effect.
Neither
this Agreement nor any of the rights, benefits or obligations hereunder may
be
assigned, in whole or in part, by any party (whether by operation of law
or
otherwise) without the prior written consent of the other parties hereto;
provided,
however,
that
Merger Sub may designate, by written notice to the Company, a Subsidiary
that is
wholly-owned by Merger Sub to be merged with and into the Company in lieu
of
Merger Sub, in which event this Agreement will be amended such that all
references in this Agreement to Merger Sub will be deemed references to such
Subsidiary, and in that case, and pursuant to such amendment, all
representations and warranties made in this Agreement with respect to Merger
Sub
will be deemed representations and warranties made with respect to
such
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Subsidiary
as of the date of such designation. Subject to the preceding sentence, this
Agreement shall be binding upon, inure to the benefit of and be enforceable
by
the parties hereto and their respective successors and assigns. Nothing in
this
Agreement, expressed or implied, is intended to confer on any Person, other
than
the parties hereto or their respective successors and permitted assigns and,
with respect to Section 10.1, the Representative, and with respect to
Section 6.2, the Indemnified Persons, any rights, remedies, obligations or
liabilities under or by reason of this Agreement.
Section
11.4 Specific
Performance.
The
parties hereto agree that irreparable damage would occur in the event any
provision of this Agreement were not performed by the Company, Purchaser
or
Merger Sub in accordance with the terms of this Agreement and that Purchaser,
Merger Sub and the Company shall be entitled to specific performance of the
terms of this Agreement, in addition to any other remedy at law or equity;
provided,
however, that
the
Company shall not be entitled to seek or obtain specific performance in the
event of a Debt Receipt Failure, in which case the Purchaser Termination
Fee as
set forth in Section 9.2(b) shall be the sole and exclusive remedy.
Section
11.5 Fees
and Expenses.
Except
as otherwise expressly provided in this Agreement, all costs and expenses
incurred in connection with this Agreement and the transactions contemplated
hereby (including, without limitation, fees and disbursements of counsel,
financial advisors and accountants) shall be borne by the party which incurs
such cost or expense.
Section
11.6 Amendments.
This
Agreement may be amended by the parties at any time prior to the Closing
Date;
provided,
that
this Agreement may not be amended or modified except by an instrument in
writing
signed on behalf of each of the parties hereto.
Section
11.7 Waivers.
At any
time prior to the Closing Date, the Company, on the one hand, or Purchaser,
on
the other hand, may, to the extent legally allowed, (a) extend the time
specified herein for the performance of any of the obligations or other acts
of
the other, (b) waive any inaccuracies in the representations and warranties
of
the other contained herein or in any document delivered pursuant hereto or
(c)
waive compliance by the other with any of the agreements or covenants of
such
other party or parties (as the case may be) contained herein. Any such extension
or waiver shall be valid only if set forth in a written instrument signed
on
behalf of the party or parties to be bound thereby. No such extension or
waiver
shall constitute a waiver of, or estoppel with respect to, any subsequent
or
other breach or failure to strictly comply with the provisions of this
Agreement. The failure of any party to insist on strict compliance with this
Agreement or to assert any of its rights or remedies hereunder or with respect
hereto shall not constitute a waiver of such rights or remedies.
Section
11.8 Severability.
If any
term or other provision of this Agreement is invalid, illegal or incapable
of
being enforced by any rule of Law or public policy, all other conditions
and
provisions of this Agreement shall nevertheless remain in full force and
effect
so long as the economic or legal substance of the transactions contemplated
thereby is not affected in any manner materially adverse to any party. Upon
such
determination that any term or other provision is invalid, illegal or incapable
of being enforced, the parties hereto shall negotiate in
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ffny03\goldfmu\658041.8
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good
faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible in an acceptable manner to the end that the
transactions contemplated hereby are fulfilled to the fullest extent
possible.
Section
11.9 Captions.
The
table of contents and headings
contained in this Agreement are for reference purposes only and shall not
affect
in any way the meaning or interpretation of this Agreement.
Section
11.10 Counterparts.
This
Agreement may be executed in counterparts (including by means of facsimile),
each of which shall be deemed to be an original, and all of which together
shall
be deemed to be one and the same instrument.
Section
11.11 Governing
Law.
This
Agreement shall be governed by and construed in accordance with the laws
of the
State of Delaware without giving effect to the principles of conflicts of
laws.
Section
11.12 Jurisdiction;
Venue; Services of Process.
Each of
the parties hereto hereby irrevocably and unconditionally consents to submit
to
the exclusive jurisdiction of the Delaware Court of Chancery in and for New
Castle County, or in the event (but only in the event) that such court does
not
have subject matter jurisdiction over such action or Proceeding, the United
States District Court for the District of Delaware, for any Proceeding arising
out of or relating to this Agreement and the transactions contemplated hereby
(and agrees not to commence any Proceeding relating thereto except in such
courts), and further agrees that service of any process, summons, notice
or
document by U.S. registered mail to its respective address set forth in this
Agreement shall be effective service of process for any Proceeding brought
against it in any such court. Each of the parties hereto hereby irrevocably
and
unconditionally waives any objection to the laying of venue of any Proceeding
arising out of this Agreement or the transactions contemplated hereby in
the
Delaware Court of Chancery in and for New Castle County, or in the event
(but
only in the event) that such court does not have subject matter jurisdiction
over such action or Proceeding, the United States District Court for the
District of Delaware, and hereby further irrevocably and unconditionally
waives
and agrees not to plead or claim in any such court that any such Proceeding
brought in any such court has been brought in an inconvenient forum. Each
of the
parties hereto agrees that a final judgment in any such action or Proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on
the
judgment or in any other manner provided by Law.
Section
11.13 WAIVER
OF JURY TRIAL.
EACH
PARTY HERETO ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE
UNDER
THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND
THEREFORE IT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY
HAVE
TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING
OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
EACH PARTY HERETO CERTIFIES AND ACKNOWLEDGES THAT (I) NO REPRESENTATIVE,
AGENT
OR ATTORNEY OF ANY OTHER PARTY HERETO HAS REPRESENTED, EXPRESSLY OR OTHERWISE,
THAT SUCH OTHER PARTY HERETO WOULD NOT, IN THE EVENT
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OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (II) IT UNDERSTANDS AND
HAS
CONSIDERED THE IMPLICATIONS OF SUCH WAIVER, (III) IT MAKES SUCH WAIVER
VOLUNTARILY AND (IV) IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY,
AMONG
OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION
11.13.
Section
11.14 Certain
Fees and Expenses.
If any
Proceeding is brought with respect to or because of an alleged dispute, breach,
default or misrepresentation in connection with any of the provisions of
this
Agreement, the successful or prevailing party shall be entitled to recover
reasonable attorneys’ fees and reasonable other costs and expenses incurred in
connection with such Proceeding, in addition to any other relief to which
it may
be entitled.
ffny03\goldfmu\658041.8
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IN
WITNESS WHEREOF, the parties have executed this Agreement as of the date
first
above written.
BPC
HOLDING CORPORATION
By:____________________________
Name:
Xxx X. Boots
Title:
President and Chief Executive Officer
BPC
HOLDING ACQUISITION CORP.
By:____________________________
Name:
Title:
BPC
ACQUISITION CORP.
By:____________________________
Name:
Title:
