AGREEMENT AND PLAN OF MERGER
AMONG
XX XXXXX ACQUISITION CORP.,
GS CAPITAL PARTNERS 2000, L.P.,
GS CAPITAL PARTNERS 2000 OFFSHORE, L.P.,
GS CAPITAL PARTNERS 2000 GMBH & CO. BETEILIGUNGS KG,
BRIDGE STREET SPECIAL OPPORTUNITIES FUND 2000, L.P.,
GS CAPITAL PARTNERS 2000 EMPLOYEE FUND, L.P.,
STONE STREET FUND 2000, L.P.,
BPC HOLDING CORPORATION,
XXXXX PLASTICS CORPORATION,
THE SELLERS' REPRESENTATIVES NAMED HEREIN,
and
THE SELLERS NAMED HEREIN
May 25, 2002
LIBNY/1108422.10
TABLE OF CONTENTS
PAGE
ARTICLE I GENERAL.......................................................... 2
1.1 THE MERGER........................................................ 2
1.2 EFFECTIVE TIME OF THE MERGER...................................... 2
1.3 EFFECT OF THE MERGER.............................................. 2
1.4 CHARTER; BY-LAWS; OFFICERS AND DIRECTORS OF SURVIVING CORPORATION. 2
1.5 TAKING OF NECESSARY ACTION........................................ 3
ARTICLE II THE CLOSING.................................................... 3
ARTICLE III PAYMENT OF PURCHASE PRICE; EFFECT OF MERGER ON CAPITAL
STOCK OF CONSTITUENT CORPORATIONS............................ 3
3.1 CERTAIN DEFINED TERMS............................................. 3
3.2 EFFECT ON CAPITAL STOCK........................................... 6
3.3 ACTIONS AT CLOSING PRIOR TO THE EFFECTIVE TIME.................... 7
3.4 DEBT TENDER OFFERS................................................ 7
3.5 DELIVERY OF FUNDS; SURRENDER OF CERTIFICATES...................... 9
3.6 NO FURTHER OWNERSHIP RIGHTS IN PREFERRED STOCK, COMMON STOCK OR
WARRANTS.......................................................... 10
3.7 WORKING CAPITAL ADJUSTMENT........................................ 10
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF HOLDING AND THE
CORPORATION.................................................. 12
4.1 ORGANIZATION, STANDING, QUALIFICATION AND POWER................... 12
4.2 AUTHORITY; EXECUTION AND DELIVERY; ENFORCEABILITY................. 12
4.3 NO CONFLICTS; CONSENTS............................................ 13
4.4 CAPITALIZATION.................................................... 13
4.5 FINANCIAL STATEMENTS.............................................. 15
4.6 SEC DOCUMENTS..................................................... 15
4.7 ASSETS OTHER THAN REAL PROPERTY INTERESTS......................... 15
4.8 REAL PROPERTY..................................................... 16
4.9 INTELLECTUAL PROPERTY............................................. 16
4.10 CONTRACTS......................................................... 17
4.11 PERMITS........................................................... 19
4.12 TAXES............................................................. 19
4.13 PROCEEDINGS....................................................... 20
4.14 BENEFIT PLANS..................................................... 20
4.15 ABSENCE OF CHANGES OR EVENTS...................................... 22
4.16 COMPLIANCE WITH APPLICABLE LAWS................................... 24
4.17 ENVIRONMENTAL MATTERS............................................. 24
4.18 EMPLOYEE AND LABOR MATTERS........................................ 25
4.19 RELATED TRANSACTIONS...............................................26
4.20 INSURANCE......................................................... 26
4.21 HOLDING COMPANY................................................... 26
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4.22 BROKERS OR FINDERS................................................ 26
4.23 NO ADDITIONAL REPRESENTATIONS..................................... 26
ARTICLE V SEVERAL REPRESENTATIONS AND WARRANTIES OF THE SELLERS........... 27
5.1 AUTHORITY, ENFORCEABILITY, NO VIOLATION, ETC...................... 27
5.2 NO CONFLICTS; CONSENTS............................................ 27
5.3 OWNERSHIP......................................................... 28
5.4 BROKERS OR FINDERS................................................ 28
5.5 NO ADDITIONAL REPRESENTATIONS..................................... 28
ARTICLE VI REPRESENTATIONS AND WARRANTIES OF BUYER AND THE GS FUNDS....... 28
6.1 ORGANIZATION, STANDING, QUALIFICATION AND POWER................... 28
6.2 AUTHORITY; EXECUTION AND DELIVERY; AND ENFORCEABILITY............. 29
6.3 NO CONFLICTS; CONSENT............................................. 29
6.4 PROCEEDINGS....................................................... 30
6.5 INVESTMENT INTENT................................................. 30
6.6 AVAILABILITY OF FUNDS............................................. 30
6.7 BROKERS OR FINDERS................................................ 30
6.8 NO ADDITIONAL REPRESENTATIONS..................................... 31
ARTICLE VII COVENANTS..................................................... 31
7.1 CONDUCT OF BUSINESS............................................... 31
7.2 ACCESS TO INFORMATION............................................. 33
7.3 CONFIDENTIALITY................................................... 33
7.4 REQUIRED EFFORTS TO CONSUMMATE.................................... 34
7.5 [INTENTIONALLY OMITTED]........................................... 35
7.6 EXCLUSIVITY....................................................... 35
7.7 NOTICE OF PROSPECTIVE BREACH; RIGHT TO TERMINATE OR WAIVER OF SUCH
RIGHT............................................................. 35
7.8 EXPENSES; TRANSFER TAXES.......................................... 36
7.9 POST-CLOSING COOPERATION.......................................... 36
7.10 PUBLICITY......................................................... 37
7.11 APPOINTMENT OF SELLERS' REPRESENTATIVES........................... 37
7.12 TERMINATION OF CERTAIN AGREEMENTS................................. 39
7.13 CERTAIN EMPLOYEE MATTERS.......................................... 39
7.14 ASSISTANCE WITH FINANCING......................................... 39
7.15 OBLIGATIONS OF GS FUNDS........................................... 39
7.16 FIRPTA CERTIFICATE................................................ 39
7.17 STOCKHOLDER APPROVAL.............................................. 39
7.18 280G APPROVAL............................................ 40
ARTICLE VIII CONDITIONS PRECEDENT......................................... 40
8.1 CONDITIONS TO EACH PARTY'S OBLIGATION............................. 40
8.2 CONDITIONS TO OBLIGATION OF BUYERS................................ 40
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8.3 CONDITIONS TO THE OBLIGATION OF THE SELLERS....................... 42
8.4 FRUSTRATION OF CLOSING CONDITIONS................................. 43
8.5 EFFECT OF CERTAIN WAIVERS OF CLOSING CONDITIONS................... 43
ARTICLE IX TERMINATION.................................................... 43
9.1 TERMINATION....................................................... 43
9.2 EFFECT OF TERMINATION............................................. 44
ARTICLE X INDEMNIFICATION................................................. 45
10.1 INDEMNIFICATION BY THE SELLERS.................................... 45
10.2 ENVIRONMENTAL INDEMNIFICATION..................................... 49
10.3 INDEMNIFICATION BY BUYERS......................................... 51
10.4 CALCULATION AND MITIGATION OF LOSSES.............................. 52
10.5 TERMINATION OF INDEMNIFICATION.................................... 52
10.6 PROCEDURES........................................................ 53
10.7 SURVIVAL OF REPRESENTATIONS....................................... 55
10.8 NO ADDITIONAL REPRESENTATIONS..................................... 55
10.9 [INTENTIONALLY OMITTED]........................................... 55
10.10 ADJUSTMENT OF COMMON EQUITY PURCHASE PRICE....................... 55
10.11 NO RELIANCE ON SELLERS' REPRESENTATIVES BY SELLERS............... 55
ARTICLE XI GENERAL PROVISIONS............................................. 56
11.1 ASSIGNMENT........................................................ 56
11.2 NO THIRD-PARTY BENEFICIARIES...................................... 56
11.3 NOTICES........................................................... 56
11.4 INTERPRETATION; EXHIBITS AND SCHEDULES............................ 57
11.5 SEVERAL OBLIGATIONS............................................... 58
11.6 COUNTERPARTS...................................................... 58
11.7 ENTIRE AGREEMENT.................................................. 58
11.8 AMENDMENTS AND WAIVERS............................................ 59
11.9 SEVERABILITY...................................................... 59
11.10 NO CONSEQUENTIAL DAMAGES......................................... 59
11.11 CONSENT TO JURISDICTION.......................................... 59
11.12 GOVERNING LAW; WAIVER OF JURY TRIAL.............................. 60
11.13 CONSTRUCTION..................................................... 60
FORM OF JOINDER AGREEMENT................................................. 13
Exhibit A - Form of Escrow Agreement
Exhibit B - Commitment Letters
Exhibit C - Opinion of Counsel to Holding and the Corporation
Exhibit D - Form of Joinder
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LIBNY/1108422.10
AGREEMENT AND PLAN OF MERGER, dated as of May 25, 2002, among XX XXXXX
ACQUISITION CORP., a Delaware corporation ("BUYER"), GS CAPITAL PARTNERS
2000, L.P., GS CAPITAL PARTNERS 2000 OFFSHORE, L.P., GS CAPITAL PARTNERS
2000 GMBH & CO. BETEILIGUNGS KG, BRIDGE STREET SPECIAL OPPORTUNITIES FUND
2000, L.P., GS CAPITAL PARTNERS 2000 EMPLOYEE FUND, L.P. and STONE STREET
FUND 2000, L.P. (collectively the "GS FUNDS" and together with the Buyer,
the "BUYERS"), BPC HOLDING CORPORATION, a Delaware corporation ("HOLDING"),
XXXXX PLASTICS CORPORATION, a Delaware corporation (the "CORPORATION"), the
Stockholders of Holding listed on SCHEDULE I attached hereto (each, a
"SELLER" and collectively, the "SELLERS"), Atlantic Equity Partners
International II, L.P. ("ATLANTIC EQUITY"), X.X. Xxxxxx Partners (SBIC),
LLC ("JPMP"), BPC Equity, LLC ("BPC EQUITY") and Xxx X. Boots, an
individual ("MR. BOOTS" and together with Atlantic Equity, JPMP and BPC
Equity, the "SELLERS' REPRESENTATIVES").
WHEREAS, Holding has (a) issued and outstanding shares of (i) the
Class A Common Stock, par value $.01 per share (the "CLASS A COMMON
STOCK"), (ii) the Class B Common Stock, par value $.01 per share (the
"CLASS B COMMON STOCK"), (iii) the Class C Common Stock, par value $.01 per
share (the "CLASS C COMMON STOCK", and together with the Class A Common
Stock and the Class B Common Stock, the "COMMON STOCK"), (iv) Series A
Preferred Stock, par value $.01 per share (the "SERIES A PREFERRED STOCK"),
(v) Series A-1 Preferred Stock, par value $.01 per share (the "SERIES A-1
PREFERRED STOCK"), (vi) Series B Preferred Stock, par value $.01 per share
(the "SERIES B PREFERRED STOCK"), (vii) Series C-1 Preferred Stock, par
value $.01 per share (the "SERIES C-1 PREFERRED STOCK"), (viii) Series C-2
Preferred Stock, par value $.01 per share (the "SERIES C-2 PREFERRED
STOCK"), (ix) Series C-3 Preferred Stock, par value $.01 per share (the
"SERIES C-3 PREFERRED STOCK"), (x) Series C-4 Preferred Stock, par value
$.01 per share (the "SERIES C-4 PREFERRED STOCK"), (xi) Series C-5
Preferred Stock, par value $.01 per share (the "SERIES C-5 PREFERRED
STOCK", and (b) authorized shares (none of which are outstanding) of Series
D Preferred Stock, par value $.01 per share (the "SERIES D PREFERRED
STOCK", and together with the Series A Preferred Stock, the Series A-1
Preferred Stock, the Series B Preferred Stock, the Series C-1 Preferred
Stock, the Series C-2 Preferred Stock, the Series C-3 Preferred Stock, the
Series C-4 Preferred Stock and the Series C-5 Preferred Stock, the
"PREFERRED STOCK"), (c) warrants (the "WARRANTS") to purchase shares of
Common Stock, in each case as is set forth on SCHEDULE 4.4, and (d) stock
options (the "OPTIONS," and collectively with the Warrants, the
"CONVERTIBLE SECURITIES") to purchase shares of Common Stock, in each case
as is set forth on SCHEDULE 4.4. The (i) shares of the Common Stock and
the Preferred Stock and (ii) Convertible Securities are collectively
referred to in this Agreement as the "SECURITIES." Holding holds all of
the issued and outstanding capital stock of the Corporation.
WHEREAS, the respective Boards of Directors of each of Buyer,
Holding and the Corporation have duly approved and adopted this Agreement
and Plan of Merger (this "AGREEMENT"), and the proposed merger (the
"MERGER") of the Buyer with and into Holding in accordance with, and
subject to, the terms and conditions of this Agreement and the Delaware
General Corporation Law (the "DELAWARE STATUTE").
WHEREAS, capitalized terms used but not defined in this Agreement
have the meanings set forth in ANNEX I hereto.
NOW, THEREFORE, in consideration of the premises and the mutual
representations hereinafter set forth, the parties hereto hereby agree as
follows:
ARTICLE I
GENERAL
1.1 THE MERGER.
In accordance with, and subject to, the provisions of this Agreement,
the Certificate of Merger and the Delaware Statute, Buyer shall be merged
with and into Holding, which, at and after the Effective Time, shall be and
is hereinafter sometimes referred to as the "SURVIVING CORPORATION." Buyer
and Holding are hereinafter sometimes collectively referred to as the
"CONSTITUENT CORPORATIONS."
1.2 EFFECTIVE TIME OF THE MERGER.
The Merger shall become effective on the Closing Date upon the filing
by the Surviving Corporation of the Certificate of Merger with the
Secretary of State of the State of Delaware. The Certificate of Merger
shall be executed and delivered in the manner provided under the Delaware
Statute. The time when the Merger shall become effective is referred to in
this Agreement as the "EFFECTIVE TIME."
1.3 EFFECT OF THE MERGER.
Except as specifically set forth in this Agreement or in the
Certificate of Merger, at the Effective Time, the identity, existence,
corporate organization, purposes, powers, objects, franchises, privileges,
rights, immunities, restrictions, debts, liabilities and duties
(collectively, the "CORPORATE RIGHTS") of Holding shall continue in effect
and be unimpaired by the Merger, and the Corporate Rights of Buyer shall be
merged with and into Holding, which shall, as the Surviving Corporation, be
fully vested therewith. At the Effective Time, the separate existence and
corporate organization of Buyer shall cease, and Buyer shall be merged with
and into the Surviving Corporation.
1.4 CHARTER; BY-LAWS; OFFICERS AND DIRECTORS OF SURVIVING CORPORATION.
From and after the Effective Time, (a) the certificate of
incorporation of Buyer shall be the certificate of incorporation of the
Surviving Corporation until altered, amended or repealed as provided in the
Delaware Statute, (b) the By-laws of Buyer shall become the By-laws of the
Surviving Corporation, unless and until altered, amended or repealed as
provided in the Delaware Statute, the Surviving Corporation's certificate
of incorporation or such By-laws; and (c) the officers and directors of
Buyer shall become the officers and directors of the Surviving Corporation,
respectively, unless and until removed or until their respective terms of
office shall have expired in accordance with the Delaware Statute or the
Surviving Corporation's Certificate of Incorporation or By-laws, as
applicable.
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1.5 TAKING OF NECESSARY ACTION.
Prior to the Effective Time, and subject to the terms and conditions
contained in this Agreement, the parties hereto shall take or cause to be
taken all such actions as may be necessary or appropriate in order to
effectuate, as expeditiously as reasonably practicable, the Merger.
ARTICLE II
THE CLOSING
The closing (the "CLOSING") of the transactions contemplated by this
Agreement shall take place at the offices of Fried, Frank, Harris, Xxxxxxx
& Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000 on a date (the "CLOSING DATE") to be
mutually agreed upon by Buyer and the Sellers' Representatives, which date
shall be no later than the third Business Day after all of the conditions
set forth in Article VIII have been satisfied or waived (other than those
conditions which by their terms are intended to be satisfied at the
Closing).
ARTICLE III
PAYMENT OF PURCHASE PRICE; EFFECT OF MERGER ON CAPITAL STOCK OF CONSTITUENT
CORPORATIONS
3.1 CERTAIN DEFINED TERMS.
The following terms shall have the respective meanings assigned to such
terms below:
"ADJUSTMENT FACTOR" means the quotient obtained by dividing the
Adjusted Share Number by the Share Number, rounded to the nearest 0.0001.
"ADJUSTED SHARE NUMBER" means the total number of (i) Paid-Out
Shares, and (ii) shares of Common Stock issuable upon the exercise of
Warrants.
"ADJUSTED OWNERSHIP PERCENTAGE" with respect to any Seller shall
mean, expressed as a percentage, the quotient of (A) the number of shares
of Common Stock held by such Seller immediately prior to the Effective Time
(including the number of shares of Common Stock issuable upon the exercise
of any Warrants held by such Seller, less the number of Rolled-Over Shares
held by such Seller and (B) the Adjusted Share Number, rounded to the
nearest 0.0001.
"CAPITAL LEASE" means a lease of property by a Corporation Entity
which, in conformity with GAAP, is required to be accounted for as a
capital lease.
"CAPITAL LEASE AMOUNT" shall mean the aggregate amount required
to be accounted for as Capital Leases in accordance with GAAP on the
Closing Date.
"CASH HOLDBACK AMOUNT" means the sum of the Working Capital
Holdback Amount and the Cash Indemnification Holdback Amount, which shall
be deposited into an escrow account (the "ESCROW ACCOUNT") to be
established by Buyer and the Seller's Representative with SunTrust Bank,
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Atlanta (the "ESCROW AGENT") pursuant to the terms of an escrow agreement
in the form attached hereto as Exhibit A (the "ESCROW AGREEMENT").
"CASH INDEMNIFICATION HOLDBACK AMOUNT" means 5% of the Paid-Out
Common Equity Purchase Price, which will be used to fund indemnification
payments by the Sellers, if any, made pursuant to Section 10.1(a), 10.1(b),
10.1(f), 10.1(g) and 10.2 of this Agreement and in accordance with the
Escrow Agreement.
"COMMON EQUITY PURCHASE PRICE" shall mean the difference between
(i) the sum of (x) the Enterprise Purchase Price and (y) the aggregate
amount of exercise price proceeds payable to Holding in respect of all
Convertible Securities other than Out-of-the Money Options (assuming all
such Convertible Securities were exercised and Holding collected such
exercise price proceeds) minus (ii) the sum of (x) Funded Obligations and
(y) Transaction Costs, without duplication.
"ENTERPRISE PURCHASE PRICE" shall mean $837,500,000.
"FUNDED INDEBTEDNESS" means, without duplication, the aggregate
amount (including the current portions thereof) of all (i) indebtedness for
money borrowed by any Corporation Entity from other Persons (i.e.,
excluding intercompany loans); (ii) all interest expense accrued but unpaid
on or relating to any of such indebtedness; and (iii) all other amounts
paid or payable to the holders of Funded Indebtedness and furnished by the
Buyers in connection with the repayment, repurchase or redemption thereof,
including, without limitation, all premiums or penalties related to the
payment thereof and all payments, including consent payments, actually made
to holders of the Public Bonds in connection with the Debt Tender Offers;
provided, however that in no event shall "Funded Indebtedness" include
amounts related to the Remaining Notes Amount, the Capital Lease Amount,
the Nevada Bonds Amount or the Tri-Plas Note. As of the date hereof,
Funded Indebtedness is as set forth on Schedule 3.1(a) (which schedule will
be updated on the Closing Date).
"FUNDED OBLIGATIONS" means the sum of the Preferred Stock
Redemption Amount, the Funded Indebtedness, the Remaining Notes Amount, the
Capital Lease Amount, the Nevada Bonds Amount and the Tri-Plas Note Amount.
"NEVADA BONDS AMOUNT" means the aggregate principal amount of
the Nevada Bonds together with all accrued and unpaid interest thereon as
of the Closing Date.
"NEVADA BONDS" means the Nevada Public Improvement Trust Variable
Demand Refinancing Bonds issued pursuant to an indenture dated April 1,
1991.
"OUT-OF-THE-MONEY OPTIONS" means all Options the exercise price
of which is equal to or greater than the Per Share Amount.
"PAID-OUT COMMON EQUITY PURCHASE PRICE" means the product of (x)
the Per Share Amount and (y) the Adjusted Share Number.
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"PAID-OUT SHARES" means the shares of Common Stock (other than
the Rolled-Over Shares) that are issued and outstanding immediately prior
to the Effective Time that are beneficially owned by any Person other than
Holding.
"PER SHARE AMOUNT" means an amount equal to the quotient obtained
by dividing (i) the Common Equity Purchase Price by (ii) the Share Number,
rounded to the nearest 0.0001
"PER SHARE CASH HOLDBACK AMOUNT" means an amount equal to the
quotient obtained by dividing (i) the Cash Holdback Amount by (ii) the
Adjusted Share Number, rounded to the nearest 0.0001.
"PREFERRED STOCK REDEMPTION AMOUNT" means the aggregate amount
necessary to redeem all the Preferred Stock in accordance with the Holding
Certificate of Incorporation.
"PUBLIC BONDS" means, collectively, the 11% Notes, the 12.25%
Notes and the 12.5% Notes.
"REMAINING NOTES" means collectively the 11% Notes, the 12.25%
Notes and the 12.5% Notes not purchased in the Debt Tender Offers on or
prior to the Closing Date (the "REMAINING 11% NOTES", the "REMAINING 12.25%
NOTES" and the "REMAINING 12.5% NOTES," respectively).
"REMAINING 11% NOTES AMOUNT" means the sum of (x) the product of
the aggregate principal amount of the Remaining 11% Notes and the factor
set forth on Schedule 3.1(b) per dollar of aggregate principal amount, plus
(y) accrued and unpaid interest on the Remaining 11% Notes as of the
Closing Date.
"REMAINING 12.25% NOTES AMOUNT" means the sum of (x) the product
of the aggregate principal amount of the Remaining 12.25% Notes and the
factor set forth on Schedule 3.1(b) per dollar of aggregate principal
amount, plus (y) accrued and unpaid interest on the Remaining 12.25% Notes
as of the Closing Date.
"REMAINING 12.5% NOTES AMOUNT" means the sum of (x) the product
of the aggregate principal amount of the Remaining 12.5% Notes and the
factor set forth on Schedule 3.1(b) per dollar of aggregate principal
amount, plus (y) accrued and unpaid interest on the Remaining 12.5% Notes
as of the Closing Date.
"REMAINING NOTES AMOUNT" means the sum of the Remaining 11% Notes
Amount, the Remaining 12.25% Notes Amount and the Remaining 12.5% Notes
Amount.
"ROLLED-OVER SHARES" means all shares of Common Stock that are
contributed to Buyer immediately prior to the Merger by employees of
Holding or the Corporation.
"SHARE NUMBER" means the sum of the number of (i) Paid-Out
Shares, (ii) the Rolled-Over Shares, and (iii) the shares of Common Stock
issuable upon the exercise of the Convertible Securities (other than Out-
of-the-Money Options).
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"TRANSACTION COSTS" means all the out-of-pocket costs and
expenses of the Sellers and any Corporation Entity relating to the merger
and the transactions contemplated hereby that are paid or payable on the
Closing Date, which categories of items are set forth on Schedule 3.1(c)
hereto (which schedule will be updated on the Closing Date), payable by any
Corporation Entity but specifically excluding any costs and expenses
included in the definition of "Funded Obligations" provided that any item
set forth on such schedule shall not be included on the Closing Working
Capital Statement.
"TRI-PLAS NOTE" means the Junior Subordinated Promissory Note
issued by Xxxxx Tri-Plas Corporation to TP Plastics Consulting with an
original principal amount of $720,000.
"TRI-PLAS NOTE AMOUNT" means the aggregate principal amount of
the Tri-Plas Note together with all accrued and unpaid interest thereon as
of the Closing Date.
"WORKING CAPITAL HOLDBACK AMOUNT" means the product of (x)
$7,500,000 and (y) the Adjustment Factor, which will be used to fund
payments made by the Sellers, if any, pursuant to the Working Capital
adjustment set forth in Section 3.7 and the Escrow Agreement.
"11% NOTES" means the 11% Senior Subordinated Notes due 2007
issued by the Corporation.
"12.25% NOTES" means the 12.25% Senior Subordinated Notes due
2004 issued by the Corporation.
"12.5% NOTES" means the 12.5% Senior Secured Notes due 2006
issued by Holding.
3.2 EFFECT ON CAPITAL STOCK.
The manner and basis of converting, exchanging or canceling the shares
of capital stock of each of the Constituent Corporations into cash or for
capital stock of the Surviving Corporation, shall be as follows:
(a) each share of common stock, $.01 par value, of Buyer ("Buyer Common Stock")
issued and outstanding immediately prior to the Effective Time shall be
converted into one share of common stock, $.01 par value, of the Surviving
Corporation;
(b) each share of Common Stock issued and outstanding immediately prior to the
Effective Time and owned directly or indirectly by Holding (whether as
treasury stock or otherwise) shall, by virtue of the Merger and without any
action on the part of the holder thereof, be canceled and no consideration
shall be delivered in exchange therefor;
(c) each Paid-Out Share shall, by virtue of the Merger and without any action
on the part of the holder thereof, cease to be outstanding and be converted
into the right to receive, at the Effective Time, an amount in cash equal
to the Per Share Amount less the Per Share Cash Holdback Amount;
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(d) each Warrant shall, by virtue of the Merger and without any action on the
part of the holder thereof, be converted into the right to receive, at the
Effective Time, an amount in cash equal to (1) the Per Share Amount less
the Per Share Cash Holdback Amount, per share of Common Stock issuable upon
the exercise of such Warrant and LESS (2) the exercise price for each such
share (the "WARRANT AMOUNT");
(e) any shares of Preferred Stock outstanding immediately prior to the
Effective Time and following the redemption of the Preferred Stock as set
forth in Section 3.3(a) shall be canceled;
(f) each authorized but unissued share of Common Stock and Preferred Stock
shall be canceled;
(g) all Options that are outstanding and have not been exercised as of the
Closing, other than Out-of-the Money Options, shall remain outstanding as
adjusted in accordance with their terms; and
(h) all Out-of-the-Money Options that are outstanding and have not been
exercised as of the Closing, shall be canceled.
3.3 ACTIONS AT CLOSING PRIOR TO THE EFFECTIVE TIME.
(a) At the Closing, immediately prior to the Effective Time, Holding will
redeem the Preferred Stock in accordance with the terms of the Holding
Certificate of Incorporation for an aggregate amount equal to the Preferred
Stock Redemption Amount, which amount will be provided to Holding by the
Buyers at the Closing.
(b) At the Closing, the appropriate Corporation Entities shall deliver to the
holders of the Funded Indebtedness an amount sufficient to repay all such
Funded Indebtedness, with the result that immediately following the Closing
there will be no further monetary obligations of any Corporation Entity
with respect to any Funded Indebtedness outstanding immediately prior to
the Closing other than the Remaining Notes, the Capital Leases, the Nevada
Bonds and the Tri-Plas Note. On or prior to the Closing Date, the
appropriate Corporation Entities, will provide Buyer with customary pay-off
letters from all holders of such Funded Indebtedness, and make arrangements
reasonably satisfactory to Buyer for such holders to provide to Buyer
recordable form mortgage and lien releases, canceled notes and other
documents reasonably requested by Buyer prior to the Closing. If the
Closing occurs, Buyers shall provide such Corporation Entities with
sufficient funds to repay the Funded Indebtedness at the Closing.
3.4 DEBT TENDER OFFERS.
(a) Promptly following the date hereof Holding and the Corporation shall
commence debt tender offers and consent solicitations (the "DEBT TENDER
OFFERS") for all of the Corporation's outstanding 11% Notes and 12.25%
Notes and all of Holding's outstanding 12.5% Notes on the terms and
conditions set forth on Schedule 3.4(a), pursuant to which Holding will
seek to purchase, at the Closing, not less than a majority of the aggregate
principal amount of the 12.5% Notes outstanding as of the Closing Date and
the Corporation will seek to purchase, at the Closing, not less than a
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majority of the aggregate principal amount of each of the 11% Notes and the
12.25% Notes outstanding as of the Closing Date. Holding and the
Corporation will use their commercially reasonable best efforts to
consummate the Debt Tender Offers, cause the amendments of the related
indentures described on Schedule 3.4(a) (the "INDENTURE AMENDMENTS") to be
effective, and effectuate the other provisions set forth on Schedule
3.4(a); PROVIDED that Holding and the Corporation shall not be required to
increase the consideration initially offered to the holders of the Public
Bonds. The Debt Tender Offers will be subject only to the conditions set
forth on Schedule 3.4(a). Neither Holding nor the Corporation will,
without Buyer's prior written consent, waive any conditions to any Debt
Tender Offer, waive any of the Indenture Amendments required by Schedule
3.4(a) or make any other changes to the terms and conditions of any Debt
Tender Offer that under the terms of Schedule 3.4(a) cannot be changed
without Buyer's consent.
(b) Holding and the Corporation shall, as promptly as practicable following the
date hereof, prepare, subject to advice and comments of Buyer, offers to
purchase the Public Bonds and forms of the related letters of transmittal
and summary advertisements, as well as all other information and exhibits
that may be necessary or advisable in connection with the Debt Tender
Offers (collectively, the "OFFER DOCUMENTS") in accordance with the terms
of the Debt Tender Offers. The Offer Documents shall not contain any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances in which they were made, not
misleading. All mailings to the holders of the Public Bonds in connection
with the Debt Tender Offers shall be subject to the prior review, comment
and reasonable approval of Buyer; PROVIDED, HOWEVER that Buyer shall be
deemed to have consented to any amendment or mailing of the Offer Documents
otherwise permitted under this Section 3.4 to the extent that Buyer shall
have failed to complete its review, comment or approval process (i) to the
extent that such Offer Documents have been received prior to 8:00 p.m. on
any business day, by 4:00 p.m. the following business day, and (ii) to the
extent that such Offer Documents have been received after 8:00 p.m. on any
business day, within 24 hours. Holding and the Corporation will cause the
Offer Documents to be mailed to the holders of the Public Bonds as promptly
as practicable following the date hereof. Holding and the Corporation
agree to promptly correct any information in the Offer Documents that shall
be or have become false or misleading in any material respect.
(c) Holding and the Corporation covenant and agree that, subject to the terms
and conditions of Schedule 3.4(a) and the remainder of this Agreement,
including but not limited to the conditions of the Debt Tender Offers, it
will, subject to the receipt of sufficient funds from the Buyers at the
Closing, accept for payment and pay for the Public Bonds and effect the
Indenture Amendments as soon as such conditions, including that the Closing
hereunder shall occur simultaneously therewith, to the Debt Tender Offers
are satisfied. If the Closing occurs, the Buyers shall provide Holding and
the Corporation with sufficient funds to consummate the Debt Tender Offers.
Buyers agree to cooperate with Holding and the Corporation, to the extent
that such cooperation is reasonably requested and would require no out-of-
pocket expenditures by Buyers.
(d) At least 15, but not more than 30 days prior to the anticipated Closing
Date, upon the written request of Buyer, Holding shall provide notice to
the trustee with respect to the 12.5% Notes of its intent to redeem the
Remaining 12.5% Notes pursuant to the indenture relating to the 12.5%
Notes.
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3.5 DELIVERY OF FUNDS; SURRENDER OF CERTIFICATES.
(a) At the Effective Time, upon surrender by each Seller to the Surviving
Corporation of the Convertible Securities or evidence thereof, the
certificate(s) that, immediately prior to the Effective Time, represented
Paid-Out Shares, and any other documentation reasonably requested by the
Surviving Corporation (including a duly executed and completed joinder to
this Agreement in the form of Exhibit D hereto), the Surviving Corporation
shall pay to each such holder in exchange therefor an amount in immediately
available U.S. funds equal to (i) the product of (A) the Per Share Amount
(less the Per Share Cash Holdback Amount) and (B) the number of shares of
Common Stock (other than Rolled-Over Shares) owned of record by such
Seller, in the case of Paid-Out Shares, or (ii) the Warrant Amount with
respect to all Warrants held by such holder, in the case of Warrants, in
accordance with Section 3.2, such amount to be paid promptly by wire
transfer (or by certified check) to accounts designated by the Sellers'
Representatives to Holding not later than two Business Days prior to the
Closing; PROVIDED that the Sellers' Representatives may direct Buyer to
deliver a portion of the Common Equity Purchase Price to certain third
parties for fees, expenses, costs or other obligations arising out of or in
connection with the transactions contemplated by this Agreement. Until
surrendered as contemplated by this Section 3.5 and the Certificate of
Merger, each certificate representing Paid-Out Shares and each Warrant
shall be deemed, at and after the Effective Time, to represent only the
right to receive upon such surrender the amount to which the owner is
entitled to receive pursuant to Section 3.2, subject, with respect to the
Per Share Cash Holdback Amount, to the terms of the Escrow Agreement, as
contemplated by this Article III, the Certificate of Merger and the
Delaware Statute.
(b) At the Effective Time, the Buyers will cause the Cash Holdback Amount to be
deposited into the Escrow Account.
(c) At the Effective Time, each Seller who held Rolled-Over Shares prior to the
Effective Time shall deposit 5% of the shares of Buyer Common Stock
received in respect of their Rolled-Over Shares (the "ROLLOVER
INDEMNIFICATION HOLDBACK") into the Escrow Account. All claims for
indemnification by the Surviving Corporation and the GS Funds made pursuant
to Section 10.1(a), 10.1(b), 10.1(f), 10.1(g) or 10.2 of this Agreement and
in accordance with the Escrow Agreement shall be paid PRO RATA from the
Rollover Indemnification Holdback and the Cash Indemnification Holdback in
accordance with the terms of Article X and the procedures set forth in the
Escrow Agreement.
(d) The adoption of this Agreement and the approval of the Merger by the
stockholders of Holding shall constitute approval of the Escrow Agreement
and all of the arrangements relating thereto, including without limitation
the placement of the Cash Holdback Amount and the Rollover Indemnification
Holdback into escrow.
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3.6 NO FURTHER OWNERSHIP RIGHTS IN PREFERRED STOCK, COMMON STOCK OR WARRANTS.
The Preferred Stock Redemption Amount paid in respect of the Preferred
Stock, the Per Share Amount (less the Per Share Cash Holdback Amount) paid
in respect of the Paid-Out Shares and the Warrant Amount paid in respect of
the Warrants in accordance with the provisions of this Article III and the
Certificate of Merger, subject to such additional rights to receive payment
as are set forth in Section 3.7 and the Escrow Agreement, shall be deemed
to have been paid in full satisfaction of all rights pertaining to such
Preferred Stock, Paid-Out Shares and Warrants. At and after the Effective
Time, the stock transfer books of the Surviving Corporation shall be closed
with respect to the capital stock of Holding, and there shall be no further
registration of transfers of the capital stock of Holding thereafter on the
records of the Surviving Corporation. If, after the Effective Time,
Warrants or certificates representing shares of Preferred Stock or Common
Stock are presented to the Surviving Corporation for any reason, they shall
be canceled and exchanged as provided in this Article III and the
Certificate of Merger.
3.7 WORKING CAPITAL ADJUSTMENT.
(a) As soon as practicable, but in no event later than 30 days following
Closing, the Surviving Corporation shall prepare a calculation of Closing
Working Capital of the Corporation Entities as of the Closing Date (the
"CLOSING WORKING CAPITAL STATEMENT"), which statement will be reviewed by
the Surviving Corporation's auditors. The Closing Working Capital
Statement shall be prepared using the same accounting principles,
methodologies, procedures and classifications (the "WORKING CAPITAL
METHODOLOGY") as the statement of Working Capital for the month of April
2002, a copy of which is set forth on SCHEDULE 3.7(A) (the "APRIL
STATEMENT").
(b) The Surviving Corporation shall deliver a copy of the Closing Working
Capital Statement to Sellers' Representatives promptly after it has been
prepared. After receipt of the Closing Working Capital Statement, Sellers'
Representatives shall have 30 days to review the Closing Working Capital
Statement, together with the work papers used in the preparation thereof.
The Surviving Corporation shall (i) provide Sellers' Representatives 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 their review of the Closing Working
Capital Statement, and (ii) cooperate with Sellers' Representatives and
their Representatives reasonable requests with respect to the review of the
Closing Working Capital Statement, including by providing on a timely basis
all information necessary or useful in reviewing the Closing Working
Capital Statement. Unless Sellers' Representatives deliver written notice
to the Surviving Corporation on or prior to the 30{th} day after Sellers'
Representatives' receipt of the Closing Working Capital Statement
specifying in reasonable detail the amount, nature and basis of all
disputed items, Sellers' Representatives shall be deemed to have accepted
and agreed to the calculation of the Closing Working Capital. If Sellers'
Representatives notifies the Surviving Corporation of its objection to the
calculation of the Closing Working Capital, Sellers' Representatives and
the Surviving Corporation shall, within 20 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).
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(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 Deloitte & Touche LLP (the "NEUTRAL AUDITORS"). Each party
agrees to execute, if requested by the Neutral Auditors, a reasonable
engagement letter, including customary indemnities. The Neutral Auditors
shall act as an arbitrator to determine, based solely on the provisions of
this Section 3.7 and the presentations by Sellers' Representatives and the
Surviving Corporation, and not by independent review, only those issues
still in dispute. 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 Sellers' Representatives 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 3.7(c)
shall be the only recourse and remedy of the parties against one another
with respect to, any disputes arising out of or relating to the adjustments
pursuant to this Section 3.7(c). The fees, costs and expenses of the
Neutral Auditors shall be borne by the Corporation, on the one hand, and by
the Sellers severally (PRO RATA based on their Ownership Percentages), on
the other, based upon the percentage which the portion of the contested
amount not awarded to each party bears to the amount actually contested by
such party. For example, if the Sellers claim that Closing Working Capital
is $1,000 greater than the amount determined by the Surviving Corporation,
and the Surviving Corporation contests only $500 of the amount claimed by
Sellers, and if the Neutral Auditors ultimately resolves the dispute by
awarding the Sellers $300 of the $500 contested, then the costs and
expenses of the Neutral Auditor will be allocated 60% (i.e., 300
500) to the Surviving Corporation and 40% (i.e., 200 500) to the
Sellers. The term "FINAL CLOSING WORKING CAPITAL" shall mean the
definitive Closing Working Capital agreed to (or deemed to be agreed to) by
the Surviving Corporation and Sellers' Representatives in accordance with
Section 3.7(b) hereof or resulting from the determinations made by the
Neutral Auditors in accordance with this Section 3.7(c) (in addition to
those items theretofore agreed to by Sellers' Representatives and the
Surviving Corporation). Any determination of Sellers' Representatives
under this Section 3.7 shall be binding on the Sellers, including, without
limitation, any determination to accept, reject or settle any amounts due
or owing under this Section 3.7.
(d) In the event the Final Closing Working Capital exceeds the Target Working
Capital, the Corporation shall pay the product of (x) the excess and (y)
the Adjustment Factor to the Sellers PRO RATA based upon each Seller's
Adjusted Ownership Percentage and the Escrow Agent shall pay the Working
Capital Holdback Amount out of the Escrow Account to the Sellers of Paid-
Out Shares PRO RATA based upon each Seller's Adjusted Ownership Percentage.
In the event the Final Closing Working Capital is less than the Target
Working Capital (the product of (x) the difference between the Target
Working Capital and the Final Closing Working Capital and (y) the
Adjustment Factor, the "WORKING CAPITAL SHORTFALL") and the Working Capital
Shortfall is less than or equal to the Working Capital Holdback Amount, the
Working Capital Shortfall shall be paid to the Corporation by the Escrow
Agent out of the Escrow Account and the remaining amount of the Working
Capital Holdback Amount, if any, shall be paid to the Sellers of Paid-Out
Shares pro rata based on each Seller's Adjusted Ownership Percentage by the
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Escrow Agent out of the Escrow Account. In the event the Final Closing
Working Capital is less than the Target Working Capital and the Working
Capital Shortfall is greater than the Working Capital Holdback Amount, the
Working Capital Holdback Amount shall be paid to the Corporation by the
Escrow Agent out of the Escrow Account and the Sellers of Paid-Out Shares
shall pay the difference between the Working Capital Shortfall and the
Working Capital Holdback Amount to the Corporation pro rata based upon each
Seller's Adjusted Ownership Percentage.
(e) All payments made pursuant to this Section 3.7(e) shall be made by wire
transfer of immediately available funds within five (5) days of the
determination of the Final Closing Working Capital to accounts previously
designated in writing by the Surviving Corporation and the Sellers'
Representatives, and shall include interest at the rate announced by
Citibank, N.A. from time to time as its prime rate (the "PRIME RATE")
calculated from the Closing Date until the date of payment. The term
"TARGET WORKING CAPITAL" means $60,420,000. The term "WORKING CAPITAL"
means the consolidated Working Capital of the Corporation Entities in
accordance with the Working Capital Methodology reflected in the April
Statement, but excluding Funded Obligations and Transaction Costs.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF HOLDING AND THE CORPORATION
Holding and the Corporation hereby represent and warrant to Buyer as
follows:
4.1 ORGANIZATION, STANDING, QUALIFICATION AND POWER.
Each of Holding and the Corporation is duly organized, validly
existing and in good standing under the laws of the State of Delaware and
has the corporate power and authority to own, lease and operate its
properties and to conduct its business as it is presently being conducted.
Each of the Subsidiaries of the Corporation is a corporation or limited
liability company, as the case may be, duly organized, validly existing and
in good standing under the laws of the jurisdiction in which it is
organized. Except as set forth on SCHEDULE 4.4, each Corporation Entity is
duly qualified and in good standing to do business in each jurisdiction in
which such qualification is necessary because of the nature of the business
conducted by it EXCEPT WHERE THE FAILURE TO BE SO QUALIFIED WOULD NOT
REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT ON THE CORPORATION
ENTITIES, TAKEN AS A WHOLE. SCHEDULE 4.1 sets forth a correct and complete
list of each Subsidiary of the Corporation, its jurisdiction of
incorporation or formation, and the percentage ownership by each record
holder thereof.
4.2 AUTHORITY; EXECUTION AND DELIVERY; ENFORCEABILITY.
Each of Holding and the Corporation has all the corporate power and
authority to execute and deliver this Agreement and the Related Documents
to which it is, or is specified to be, a party and to consummate the
transactions contemplated hereby and thereby. The execution and delivery
by each of Holding and the Corporation of this Agreement and the
consummation of the transactions contemplated hereby have been duly and
validly authorized by all necessary corporate action, and the execution and
delivery by each of Holding and the Corporation of the Related Documents to
which it is, or is specified to be, a party and the consummation by each of
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Holding and the Corporation of the transactions contemplated thereby will
be duly and validly authorized by all necessary corporate action on the
part of each of Holding and the Corporation prior to the Closing. Each of
Holding and the Corporation has duly and validly executed and delivered
this Agreement and, prior to the Closing, will have duly and validly
executed and delivered each Related Document to which it is, or is
specified to be, a party, and this Agreement constitutes, and each Related
Document to which it is, or is specified to be, a party will after the
Closing constitute, a legal, valid and binding obligation of Holding or the
Corporation, as applicable, enforceable against Holding or the Corporation,
as applicable, in accordance with its terms, except as may be limited by
bankruptcy, insolvency, reorganization, fraudulent conveyance or other
similar laws affecting the enforcement of creditors' rights generally and
general equitable principles.
4.3 NO CONFLICTS; CONSENTS.
The execution and delivery by each of Holding and the Corporation of
this Agreement does not, the execution and delivery by each of Holding and
the Corporation of each Related Document to which it is, or is specified to
be, a party will not, and the consummation of the transactions contemplated
hereby and thereby and compliance by each of Holding and the Corporation
with the terms hereof and thereof will not, directly or indirectly,
conflict with, or result in any violation or other breach of or default
under, or give rise to a right of termination, cancellation or acceleration
of any obligation or a loss of a material benefit under, any provision,
term or condition of (a) the certificate of incorporation or by-laws of
Holding or the Corporation, (b) except as set forth on SCHEDULE 4.3, any
Contract required to be listed on Schedule 4.10 or (c) any judgment, order,
decree of any Governmental Entity ("JUDGMENT") or any federal, state, local
or foreign statute, law, ordinance, rule or regulation ("APPLICABLE LAW")
applicable to any Corporation Entity or their respective properties or
assets, other than, in the case of clauses (b) and (c) above, any such
conflicts, violations, defaults, or rights that, individually or in the
aggregate, would not reasonably be expected to have a Material Adverse
Effect on the Corporation Entities taken as a whole. No Permit of, or
registration, declaration or filing with, any Governmental Entity is
required to be obtained or made by or with respect to any Corporation
Entity in connection with the execution, delivery and performance by any
Corporation Entity of this Agreement or any Related Document to which they
are, or are specified to be, a party, or the consummation of the
transactions contemplated hereby and thereby, other than (i) compliance
with and filings under the HSR Act, (ii) those Permits set forth on
SCHEDULE 4.3, (iii) compliance with and filings and notifications under
applicable Environmental Laws and (iv) those the failure of which to obtain
or make, individually or in the aggregate, would not reasonably be expected
to have a Material Adverse Effect on the Corporation Entities taken as a
whole, and (v) those that may be required solely by reason of Buyer's (as
opposed to any other third party's) participation in the transactions
contemplated hereby and by the Related Documents.
4.4 CAPITALIZATION.
(a) As of the date hereof, the authorized capital stock of Holding consists of
(i) 2,314,000 shares of preferred stock, of which (A) 600,000 shares are
designated as Series A Preferred Stock, all of which are issued and
outstanding, fully paid and nonassessable, (B) 200,000 shares are
designated as Series B Preferred Stock, all of which are issued and
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outstanding, fully paid and nonassessable, (C) 1,400,000 shares are
designated as Series A-1 Preferred Stock, 1,000,000 of which are issued and
outstanding, fully paid and nonassessable, (D) 3,063 shares are designated
as Series C-1 Preferred Stock, all of which are issued and outstanding,
fully paid and nonassessable, (E) 1,910 shares are designated as Series C-2
Preferred Stock, all of which are issued and outstanding, fully paid and
nonassessable, (F) 2,135 shares are designated as Series C-3 Preferred
Stock, all of which are issued and outstanding, fully paid and
nonassessable, (G) 3,033 shares are designated as Series C-4 Preferred
Stock, all of which are issued and outstanding, fully paid and
nonassessable, (H) 3,027 shares are designated as Series C-5 Preferred
Stock, all of which are issued and outstanding, fully paid and
nonassessable, (I) 100,000 shares are designated as Series D Preferred
Stock, none of which are issued and outstanding, and (ii) 2,500,000 shares
of common stock, of which (A) 500,000 shares are designated as voting Class
A Common Stock, 91,000 of which are issued and outstanding, fully paid and
nonassessable, (B) 500,000 shares are designated as non-voting Class A
Common Stock, 259,000 of which are issued and outstanding, fully paid and
nonassessable, (C) 500,000 shares are designated as voting Class B Common
Stock, 145,058 of which are issued and 144,546 of which are outstanding,
fully paid and nonassessable, (D) 500,000 shares are designated as non-
voting Class B Common Stock, 58,612 of which are issued and 59,222 of which
are outstanding, fully paid and nonassessable, (E) 500,000 shares are
designated as non-voting Class C Common Stock, 17,000 of which are issued
and 16,833 of which are outstanding, fully paid and nonassessable. THE
issued and outstanding shares of Holding are held of record by the Sellers
listed on SCHEDULE 4.4. Schedule 4.4 lists all Convertible Securities, the
names of persons entitled to receive shares of Common Stock upon the
exercise or conversion of such Convertible Securities and the price per
share of Common Stock, if any, payable with respect to the issuance of
shares of Common Stock thereunder. Except for the Convertible Securities
set forth on SCHEDULE 4.4, there are no outstanding securities, options,
warrants, rights, calls, agreements, convertible securities or other
commitments or understandings of any nature whatsoever, fixed or
contingent, to which any Corporation Entity is a party that directly or
indirectly: (a) calls for the issuance, sale, pledge or other disposition
to the stock or other securities of any Corporation Entity or securities
which are convertible into, or have other rights to acquire, any of the
stock or other securities of any Corporation Entity; (b) obligates any
Corporation Entity to grant, offer or enter into any of the foregoing; or
(c) otherwise relates to the voting, sale, disposition or holding of any
security of any Corporation Entity. Except as set forth on SCHEDULE 4.4,
there are no Contracts required to be listed on SCHEDULE 4.10 to which any
Corporation Entity or any Seller is a party that relate to the Securities.
(b) Holding, either directly or indirectly, owns 100% of all issued and
outstanding shares of capital stock or limited liability company interests
of each of its Subsidiaries, and owns no capital stock, other securities,
or rights or obligations to acquire the same, of any other Person.
(c) The Preferred Stock Redemption Amount represents the total amount of all
payments required to be made by Holding in order to redeem all the
Preferred Stock. SCHEDULE 4.4(C) lists, for each series of Preferred
Stock, the amount of payments to be made by Holding to redeem all the
shares of such series.
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4.5 FINANCIAL STATEMENTS.
(a) Schedule 4.5(a) contains (i) the audited consolidated balance sheets of
Holding as of December 30, 2000 and December 29, 2001 (the audited balance
sheet as of December 29, 2001 being referred to in this Agreement as the
"AUDITED BALANCE SHEET"), and the related audited statements of operations,
shareholders' equity and cash flows for the fiscal years then ended
(together with the Audited Balance Sheet, the "AUDITED FINANCIAL
STATEMENTS") and (ii) the unaudited consolidated balance sheet of the
Corporation as of March 31, 2002 (the "LATEST BALANCE SHEET") and the
related unaudited statement of operations and cash flow for the thirteen
weeks then ended (the "UNAUDITED FINANCIAL STATEMENTS," and together with
the Audited Financial Statements, the "FINANCIAL STATEMENTS"). The
Financial Statements have been prepared from and in accordance with the
books and records of Holding in accordance with GAAP consistently applied
during the periods covered thereby (except as indicated in the notes
thereto). Except as set forth on SCHEDULE 4.5(A), the Financial Statements
fairly present the financial condition and results of operations of Holding
and its Subsidiaries as of the dates and for the periods indicated (subject
in the case of the Unaudited Financial Statements to (i) the absence of any
footnotes that may be required and (ii) normal year-end adjustments
consistent with the past practices of Holding).
(b) Immediately prior to the repayment of the Funded Indebtedness at Closing,
except as set forth on Schedule 4.5(b), no Corporation Entity will have any
indebtedness other than the Funded Indebtedness, the Remaining Notes, the
Capital Leases, the Nevada Bonds and Tri-Plas Note.
4.6 SEC DOCUMENTS.
Holding and the Corporation have filed with the Securities and
Exchange Commission ("SEC") all forms, reports, schedules, statements and
other documents required to be filed with the SEC by Holding since January
1, 1999 (together with all information incorporated therein by reference,
the "SEC DOCUMENTS"). No subsidiary of Holding, other than the
Corporation, is required to file any form, report, schedule, statement or
other document with the SEC. As of their respective dates, the SEC
Documents complied in all material respects with the requirements of the
Securities Act or the Exchange Act, as the case may be, and the rules and
regulations of the SEC promulgated thereunder applicable to such SEC
Documents, and none of the SEC Documents at the time they were filed
contained 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.
4.7 ASSETS OTHER THAN REAL PROPERTY INTERESTS.
Except as set forth on SCHEDULE 4.7, each Corporation Entity owns all
of the assets and properties reflected on the Latest Balance Sheet or
acquired subsequent thereto (except for assets and properties sold,
consumed or otherwise disposed of in the ordinary course of business since
the date of the Latest Balance Sheet), free and clear of all Liens, except
Permitted Liens. This Section 4.7 does not relate to real property or
interests in real property, such items being the subject of Section 4.8,
nor does it relate to Intellectual Property or interests in Intellectual
Property, such items being the subject of Section 4.9.
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4.8 REAL PROPERTY.
(a) Schedule 4.8(a) contains a complete and correct list of all of the Leased
Real Property. With respect to each Leased Real Property, a Corporation
Entity owns a leasehold estate in such Leased Real Property, free and clear
of all encumbrances except Permitted Liens. Except as set forth on
SCHEDULE 4.8(A), (A) no default by any Corporation Entity, or to the
Corporation's knowledge, the applicable landlord exists under any Lease and
(B) each such Lease is legal, valid, binding and enforceable and in full
force and effect other than, in the case of (A) and (B), as would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on the Corporation Entities taken as whole.
(b) SCHEDULE 4.8(B) contains a complete and correct list of all Owned Real
Property. With respect to each Owned Real Property, (i) a Corporation
Entity 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, other than, in the case of (ii) or (iii) as would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on the Corporation Entities taken as a whole.
4.9 INTELLECTUAL PROPERTY.
(a) Schedule 4.9(a)(i) sets forth a list of all Corporation Intellectual
Property (other than rights of the Corporation or any of its Subsidiaries
as licensee, which are set forth on SCHEDULE 4.9(A)(II)) owned by any
Corporation Entity 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, describing each in reasonable detail. To the extent
indicated on SCHEDULE 4.9(A), such Corporation 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.
(b) Except as set forth on SCHEDULE 4.9(B), to the knowledge of Holding or the
Corporation:
(i) each Corporation Entity possesses all right, title and interest in and to
the Corporation 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 on SCHEDULE 4.9(A)(I) are
valid and subsisting and in full force and effect;
(ii) the Corporation Intellectual Property and the Business as conducted on the
date hereof do not infringe upon any Intellectual Property rights of third
parties, and since June 1, 1999, no Corporation Entity has received any
written notice from any other Person challenging its use or ownership of
any Corporation Intellectual Property or the validity or enforceability
thereof;
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(iii) no Corporation Entity has granted any licenses or other rights, nor does
any Corporation Entity have any obligation to grant licenses or other
rights, to any Corporation Intellectual Property to any other Person;
(iv) to the knowledge of the Corporation Entities, no third party has infringed
upon, misappropriated or violated any rights of the Corporation Entities
with respect to any Corporation Intellectual Property, except as would not
have a Material Adverse Effect on the Corporation Entities taken as a
whole;
(v) all licenses, agreements or permissions by which the Corporation Entity
receives the right to use any Corporation Intellectual Property which is
owned by third parties are accurately identified in reasonable detail in
SCHEDULE 4.9(A)(II), valid and enforceable and in full force and effect,
and no Corporation Entity that is party to any such licenses, agreements or
permissions is in default of any material provision thereof giving rise to
the right of the other party to terminate such license, agreement or
permission;
(vi) each Corporation Entity has taken all reasonable action to maintain and
preserve the Corporation 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 Corporation Intellectual Property,
and making all filings and all payments of all maintenance and similar fees
for any Corporation Intellectual Property listed in SCHEDULE 4.9(A)(I);
(vii) since June 1, 1997, each Corporation Entity has obtained valid and
effective assignments and confidentiality/non-disclosure agreements from
all of their employees, and independent contractors (collectively, the
"INVENTORS") of all such Inventors' rights in any Corporation Intellectual
Property (A) developed by such Inventors while employed by or under
contract with the Corporation Entity or (B) developed by such Inventors
while not employed by the Corporation Entity, which the Corporation Entity
needs in order to conduct any material portion of the Business and to
preserve its rights in the Corporation Intellectual Property; and
(viii) the consummation of the transactions contemplated hereby shall not
materially impair or materially alter any of the Corporation Entity's
rights in any Corporation Intellectual Property.
4.10 CONTRACTS.
(a) Except as set forth on SCHEDULE 4.10(A), no Corporation Entity is a party
to or bound by any Contract that is used or held for use in, or that arises
out of, the operation or conduct of its business and that is:
(i) an employment agreement that has an annual salary in excess of $100,000;
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(ii) a covenant not to compete (other than pursuant to any radius restriction
contained in any lease, reciprocal easement or development, construction,
operating or similar agreement);
(iii) a Contract (other than employment agreements) with any shareholder,
director, officer or Affiliate of any Corporation Entity;
(iv) a lease or similar Contract under which:
(A) Any Corporation Entity is lessee of, or holds or uses, any machinery,
equipment, vehicle or other tangible personal property owned by any third
party involving payment by such Corporation Entity of more than $300,000 on
an annual basis (unless terminable without payment or penalty upon no more
than 60 days' notice); or
(B) Any Corporation Entity is a lessor or sublessor of, or makes available for
use by any third party, any tangible personal property owned or leased by
any Corporation Entity in any such case that has an aggregate future
liability or receivable, as the case may be, in excess of $500,000;
(v) a Contract under which any Corporation Entity has directly or indirectly
guaranteed indebtedness, liabilities or obligations of any other Person
(other than endorsements for the purpose of collection in the ordinary
course of business) that, individually, is in excess of $300,000;
(vi)a Contract granting a Lien (other than a Permitted Lien) upon any of the
material assets of any Corporation Entity;
(vii) a power of attorney (other than a power of attorney given in the ordinary
course of the business with respect to routine Tax matters);
(viii) a Contract (excluding a purchase order) involving payments by any
Corporation Entity of more than $1,000,000 in the aggregate during the term
of such contract;
(ix) a written Contract involving the obligation of any Corporation Entity to
deliver products or services for payment of more than $3,000,000 (unless
terminable without payment or penalty upon no more than 60 days' notice),
other than such Contracts entered into in the ordinary course of business;
(x) a Contract involving any joint venture or partnership involving a potential
commitment or payment by any Corporation Entity in excess of $1,000,000
(unless terminable without payment or penalty upon no more than 60 days'
notice);
(xi) the principal Contract (and no ancillary or other related agreements) used
to effectuate a material acquisition, divestiture, merger or similar
transaction that has not been consummated or that has been consummated
since January 1, 1999, but contains representations, covenants, indemnities
or other obligations that are still in effect; or
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(xii) any other Contract that is material to the Corporation Entities taken as
a whole.
(b) Except as set forth on SCHEDULE 4.10(B), no Corporation Entity is (with or
without the lapse of time) in breach or default of or under any Contract
that is listed on SCHEDULE 4.10(B) and, to the knowledge of Holding or the
Corporation, no other party to any such 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 which in the aggregate would
not reasonably be expected to have a Material Adverse Effect on the
Corporation Entities taken as a whole. No Corporation Entity has, except
as disclosed on SCHEDULE 4.10(b), received any written notice of the
intention of any Person to terminate any Contract listed on such SCHEDULE
4.10(B). Complete and correct copies of all Contracts listed on SCHEDULE
4.10(B) have been made available to Buyer.
4.11 PERMITS.
Except as set forth on, SCHEDULE 4.11, (a) each Corporation Entity
holds and is in compliance with all permits and authorizations ("PERMITS")
required under Applicable Law for the conduct of the Business as presently
conducted, other than any such Permit the absence of which or noncompliance
with which would not reasonably be expected to have a Material Adverse
Effect on the Corporation Entities taken as whole; and (b) during the past
two years, no Corporation Entity has received written notice of the
revocation or modification of any such Permits, including notice of any
Proceeding. This Section 4.11 does not relate to Permits required by any
Environmental Law, which are the subject of Section 4.17.
4.12 TAXES.
Except as set forth on SCHEDULE 4.12, (a) each Corporation Entity has
filed all material Returns required to be filed by it prior to the Closing
Date; (b) except as would not reasonably be expected to have a Material
Adverse Effect on the Corporation Entities taken as a whole, such returns
were true and correct; (c) each Corporation Entity has paid all Taxes shown
to be due on such Returns and has paid all other Taxes with respect to
which Returns are not required to be filed; (d) each Corporation Entity has
not waived or been requested to waive any statute of limitations affecting
any Tax liability or agreed to any extension of time during which a Tax
assessment or deficiency assessment may be made, which waiver, extension or
request is still outstanding; (e) there are no ongoing or pending Tax
audits of any Corporation Entity and no Corporation Entity has received
written notice of any unresolved questions or claims concerning its Tax
liability; (f) each Corporation Entity has complied in all material
respects with all Applicable Laws relating to the payment and withholding
of Taxes, including with respect to payments made to employees or other
third parties; (g) each Corporation Entity is not nor has been a party to
any Tax sharing agreement; (h) each Corporation Entity has paid any
material deficiencies or assessments asserted by any Tax authority; (i)
each Corporation Entity has never been a member of an affiliated, combined,
consolidated or unitary Tax group (other than a group of which Holding was
the common parent); (j) no Tax authority in a jurisdiction where any
Corporation Entity does not file a Return has made a claim, assertion or
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threat that Holding or any of its Subsidiaries is or may be subject to Tax
in such jurisdiction; (k) Holding is not, nor has it ever been a United
States real property holding company within the meaning of Section
897(c)(2) of the Code; (l) each Corporation Entity will not be required as
a result of any adjustment under Section 481 of the Code, or any "closing
agreement" as described in Section 7121 of the Code (or any similar
provision of state, local or foreign law) to include any item of income or
exclude any item of deduction from any Tax period ending on or after the
Closing Date; (m) each Corporation Entity has not made any consent under
Section 341 of the Code; (n) no closing agreements, private letter rulings
or similar agreements have been entered into or issued by any Taxing
authority with respect to any Corporation Entity; (o) Holding has made
available to Buyer copies of all federal income tax Returns filed by each
Corporation Entity in the past three years; and (p) no deduction taken for
Tax purposes by any Corporation Entity is subject to disallowance (as
opposed to deferral) by reason of Section 163(e)(5) of the Code or any
analogous provision of state, local or foreign law. Subject to Section
10.1(g), Buyer acknowledges that, anything contained herein to the contrary
notwithstanding, no Corporation Entity is making, or intends to make, any
express or implied representation or warranty relating to the existence or
amount of any net operating loss or net operating loss carryover of any
member of the Affiliated Group except for that contained in the preceding
sentence, with the result, inter alia, that any adjustment to the items of
income, gain, loss or deduction of a Corporation Entity by the Internal
Revenue Service shall not constitute or result in a breach of
representation or warranty unless and to the extent that the consequence of
such adjustment is a reduction in the amount of the Total NOL below $37.7
million. This Section 4.12 does not relate to Tax matters involving
Corporation Benefit Plans, which are the subject of Section 4.14.
4.13 PROCEEDINGS.
Except as set forth in SCHEDULE 4.13, there is no Proceeding or claim
by or against (or, to the knowledge of the Corporation, threatened against)
any Corporation Entity (i) that relates to or involves more than $250,000;
(ii) seeking material injunctive relief; or (iii) that would, if adversely
determined, be reasonably likely to have a Material Adverse Effect on the
Corporation Entities taken as a whole. No Corporation Entity is a party or
subject to or in default under any material Judgment applicable to the
conduct of the present business of such Corporation Entity or any of its
respective assets other than those Judgments set forth on SCHEDULE 4.13.
4.14 BENEFIT PLANS.
(a) Schedule. SCHEDULE 4.14(A) contains a true and complete list of each
material Corporation Benefit Plan and each Employee Agreement. No
Corporation Entity has agreed to establish any new material Corporation
Benefit Plan, to enter into any Employee Agreement or to modify or to
terminate any material Corporation Benefit Plan or Employee Agreement, nor
has any intention to do any of the foregoing been communicated to
Employees.
(b) DOCUMENTS. Holding or the Corporation has made available to Buyer
(i) current, accurate and complete copies of all documents embodying or
relating to each material Corporation Benefit Plan and each Employee
Agreement.
(c) COMPLIANCE. With respect to each material Corporation Benefit Plan and
Employee Agreement, as applicable, except as would not, individually or in
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the aggregate, be reasonably expected to have a Material Adverse Effect on
the Corporation Entities taken as a whole: (i) each Corporation Entity has
performed all obligations required to be performed by such entity
thereunder and no Corporation Entity is in default under or in violations
thereof; (ii) each Corporation Benefit Plan and Employee Agreement has been
established, maintained or performed, as the case may be, in compliance
with all applicable laws, statutes, orders, rules and regulations;
(iii) each Corporation Benefit Plan intended to qualify under Section 401
of the Code is, and since its inception has been, so qualified; (iv) no
"prohibited transaction," within the meaning of Section 4975 of the Code or
Section 406 of ERISA, has occurred with respect to any Corporation Benefit
Plan; (v) there are no actions, proceedings, arbitrations, suits or claims
pending, or to the knowledge of any Corporation Entity threatened or
anticipated (other than routine claims for benefits) with respect to any
Corporation Benefit Plan or Employee Agreement; (vi) each Corporation
Benefit Plan can be amended, terminated or otherwise discontinued without
liability to any Corporation Entity; and (vii) no Corporation Benefit Plan
is under audit or investigation by the IRS, the DOL or the PBGC, and to the
knowledge of any Corporation Entity, no such audit or investigation is
pending or threatened.
(d) PENSION PLANS. Except as would not reasonably be expected to have a
Material Adverse Effect on the Corporation Entities taken as a whole, none
of the Corporation Entities are reasonably likely to incur any liability
under Title IV of ERISA.
(e) MULTI-EMPLOYER PLANS. At no time has any Corporation Entity 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) NO POST-EMPLOYMENT OBLIGATIONS. No Corporation Entity (i) maintains or
contributes to any material Corporation Benefit Plan which provides, or has
any liability to provide, life insurance, medical, severance 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; or (ii) has ever represented, promised or contracted (whether in
oral or written form) to any Employee or to Employees as a group that such
Employee(s) would be provided with life insurance, medical or other
employee welfare benefits upon their retirement or termination of
employment, except to the extent required by Section 4980B of the Code.
(g) EFFECT OF TRANSACTION. Except as set forth on Schedule 4.14(g), the
execution of, and performance of the transactions contemplated in, this
Agreement will not (either alone or upon the occurrence of any additional
or subsequent events) (i) 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, or (ii) result in the triggering or
imposition of any material restrictions or limitations on the right of any
Corporation Entity or the Buyer to amend or terminate any Corporation
Benefit Plan. Except as set forth on Schedule 4.14(g), no payment or
benefit which will or may be made by any Corporation Entity, the Buyer or
any of their respective affiliates with respect to any Employee will be
characterized as an "excess parachute payment," within the meaning of
Section 280G(b)(1) of the Code.
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(h) WELFARE PLAN FUNDING. Except as set forth on Schedule 4.14(h), with
respect to each Welfare Plan, all claims incurred (including claims
incurred but not reported) by Employees are (i) insured pursuant to a
contract of insurance whereby the insurance company bears any risk of loss
with respect to such claims; (ii) covered under a contract with a health
maintenance organization (an "HMO") pursuant to which the HMO bears the
liability for such claims, or (iii) properly reflected as a liability or
accrued for on the Corporation's financial statements. No Corporation
Benefit Plan or Employee Agreement is funded by a trust described in
Section 501(c)(9) of the Code.
(i) ERISA AFFILIATES. Except as set forth on Schedule 4.14(i), no Corporation
Entity has, or has ever had, any ERISA Affiliates (other than a Corporation
Entity).
(j) In relation to Xxxxx Plastics UK Ltd ("XXXXX U.K."):
(i) MONEY PURCHASE SCHEMES. Other than lump sum death in service benefits, the
schemes referred to in paragraphs 27, 28 and 29 of Schedule 4.14(a) to the
Agreement (the "Disclosed Schemes") provide only money purchase benefits
(as defined in section 181 of the Pension Schemes Act 1993).
(ii) EX GRATIA PAYMENTS. There has been no proposal to make nor has any
payment been made of any voluntary or ex gratia payment of any relevant
benefits within the meaning of section 612 of the Income and Corporation
Taxes Act 1988 (ignoring the exception contained in that section) (the
"RELEVANT BENEFITS") to or in respect of any person, nor will such a
payment be made or proposed before the Closing.
(iii) UNDERTAKINGS. No undertaking or assurance (whether legally binding
or not) has been given or will before Closing be given to any person as to the
introduction, continuation, increase or improvement of any Relevant
Benefits.
(iv) INSURED DEATH BENEFITS. All death benefits which may be payable (other
than a refund of members' contributions with interest where appropriate)
are fully insured with an insurance company authorized to carry on long-
term insurance business under the Financial Services and Markets Xxx 0000.
All policies and contracts under which such benefits are insured are
enforceable and there is no ground on which the insurance company concerned
might avoid liability under such policy or contract.
(v) WINDING-UP, TERMINATION OR CLOSURE OF THE DISCLOSED SCHEMES. No event has
occurred and no action has been taken which would or could result in the
winding-up, termination or closure of the Disclosed Schemes in whole or in
part and no such event will, as a result of Closing, occur.
4.15 ABSENCE OF CHANGES OR EVENTS.
Except as set forth on SCHEDULE 4.15, since the date of the Latest
Balance Sheet, there has not been any Material Adverse Effect on the
Corporation Entities taken as a whole. Buyer acknowledges that there may
have been disruption to the Corporation's business as a result of the
announcement by the Corporation of its intention to sell such business (and
there may be disruption to the Corporation's business as a result of the
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execution of this Agreement and the consummation of the transactions
contemplated hereby), and Buyer acknowledges that such disruptions do not
and shall not constitute a breach of this SECTION 4.15. Except as set
forth on SCHEDULE 4.15, from the date of the Audited Balance Sheet to the
date hereof, each Corporation Entity has caused its respective businesses
to be conducted in the ordinary course consistent with past practices and
there has not been:
(a) any (i) amendment to the certificate of incorporation, by-laws or other
organizational documents of any Corporation Entity, (ii) subdivision in any
way or reclassification of any shares of capital stock of any Corporation
Entity, or (iii) change or agreement to change in any manner the rights of
the outstanding capital stock of any Corporation Entity;
(b) any waiver of any right of any Corporation Entity with a value in excess of
$300,000, the cancellation of any right of any Corporation Entity with a
value in excess of $300,000, or the cancellation of any debt or claim held
by any Corporation Entity with a value in excess of $300,000, in each case
other than any action taken in the ordinary course of business consistent
with past practice;
(c) any payment or declaration of dividends on, or other distribution with
respect to, or any direct or indirect redemption or acquisition of, any
securities of any Corporation Entity (other than the repurchase of stock
options and capital stock from employees in connection with their
termination);
(d) any sale, assignment or transfer of any tangible or intangible assets of
any Corporation Entity, except (i) in the ordinary course of business
consistent with past practice, and (ii) assets for which the book value
does not exceed $300,000 and which would not, in either case, be reasonably
expected to have, individually or in the aggregate, a Material Adverse
Effect on the Corporation Entities taken as a whole;
(e) any loan by any Corporation Entity to any officer, director, employee,
consultant or shareholder of any Corporation Entity (other than advances to
such persons in the ordinary course of business consistent with past
practice or in connection with salary, wages, travel and travel related
expenses or other customary expenses);
(f) any damage, destruction or loss (whether or not covered by insurance) which
is reasonably expected to exceed $300,000 to remedy;
(g) any increase, direct or indirect, in the compensation paid or payable to
any officer, director or key employee of any Corporation Entity, other than
in the ordinary course of business;
(h) any change in the accounting or Tax methods, practices or policies or in
any Tax election of any Corporation Entity, except for changes that, in the
aggregate, would not reasonably be expected to have a Material Adverse
Effect on the Corporation Entities taken as a whole;
(i) any material capital expenditure or commitment for any material capital
expenditure by any Corporation Entity, other than as set forth in the 2002
Fiscal Budget;
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(j) any material change in amount of insurance coverage;
(k) any material change to, or increase in the amounts of, or acceleration of
the payment or vesting of, any benefits under the Corporation Benefit
Plans, and there has not been any Corporate Benefit Plan adopted or
established by any Corporation Entity;
(l) any grants or increases in severance or termination pay to employees,
other than severance payments made in the ordinary course of business;
(m) any settlement of any litigation in which the amount in controversy
exceeds $300,000;
(n) any grant or award of options or warrants to purchase the capital stock of
any Corporation Entity, other than those grants required to be made by a
Corporation Benefit Plan; or
(o) any agreement or commitment (contingent or otherwise) to do any of the
foregoing.
4.16 COMPLIANCE WITH APPLICABLE LAWS.
Except as set forth on SCHEDULE 4.16, each Corporation Entity is in
compliance with all Applicable Laws which apply to such Corporation Entity,
except for instances of noncompliance that, individually or in the
aggregate, would not reasonably be expected to have a Material Adverse
Effect on the Corporation Entities taken as a whole. Except as set forth
on SCHEDULE 4.16, no Corporation Entity has received any communication
during the past two years from a Governmental Entity that alleges that such
Corporation Entity is not in compliance with any Applicable Laws, except as
would not reasonably be expected to have a Material Adverse Effect on the
Corporation Entities taken as a whole. This Section 4.16 does not relate
to matters with respect to Permits, which are the subject of Section 4.11,
Taxes, which are the subject of Section 4.12, Corporation Benefit Plans,
which are the subject of Section 4.14, environmental matters, which are the
subject of Section 4.17, or employee and labor matters, which are the
subject of Section 4.18.
4.17 ENVIRONMENTAL MATTERS.
Except as set forth on Schedule 4.17 and except for those matters
that, individually or in the aggregate would not reasonably be expected to
have a Material Adverse Effect on Holding or the Corporation, to the
knowledge of Holding or Corporation,
(a) each Corporation Entity is in compliance with all applicable Environmental
Laws;
(b) each Corporation Entity has obtained, and is in compliance with, all
permits, licenses, authorizations, registrations, and other governmental
consents required by applicable Environmental Laws ("ENVIRONMENTAL
PERMITS");
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(c) each of the Facilities is free of any Hazardous Substances and is free of
any contamination relating to or resulting from any such Hazardous
Substances, and there has been no release at any time of any Hazardous
Substances at, on, or about, under or within any Facilities or any real
property formerly owned, leased, operated or controlled by any Corporation
Entity or any of their predecessors, in each of the foregoing cases which
could reasonably be expected to give rise to any liabilities pursuant to
Environmental Laws;
(d) there are no claims, notices (including, without limitation, notices that
any Corporation Entity is or may be a potentially responsible person or
otherwise liable in connection with any waste disposal or other site
containing Hazardous Substances), civil, criminal or administrative
actions, suits, hearings, investigations, inquiries or proceedings pending
or threatened that are based on or related to any Environmental Matter;
(e) no Corporation Entity, nor any of their predecessors has used any waste
disposal site, or otherwise disposed of, transported, or arranged for the
transportation 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; and
(f) the representations and warranties contained in this Section 4.17 are the
sole and exclusive representations and warranties of Holding and the
Corporation with respect to any Environmental Matters, including any
matters arising under Environmental Laws.
4.18 EMPLOYEE AND LABOR MATTERS.
(a) Employment Matters. Except as would not be reasonably expected to have a
Material Adverse Effect on the Corporation Entities taken as a whole, each
Corporation Entity is 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) LABOR. No work stoppage or labor strike against Holding, the Corporation
or any of its or their Subsidiaries by Employees is pending or threatened,
except for work stoppages and labor strikes that would not, individually or
in the aggregate, be reasonably expected to have a Material Adverse Effect
on the Corporation Entities taken as a whole. Except as set forth on
SCHEDULE 4.18, no Corporation Entity (i) is involved in or 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, be reasonably expected to
have a Material Adverse Effect on the Corporation Entities taken as a
whole; (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 Seller or any of its
affiliates. Except as set forth on Schedule 4.18, 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 threatened or ongoing.
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(c) CLASSIFICATION. Each individual who performs or performed services for any
Corporation Entity and is a common law employee of such entity is properly
classified as such for all purposes including, but not limited to,
participation in the Corporation Benefit Plans, except to the extent any
such failure would not be reasonably likely to have a Material Adverse
Effect on the Corporation Entities taken as a whole.
4.19 RELATED TRANSACTIONS.
Except as set forth on SCHEDULE 4.19, no current or former
stockholder, director, officer or employee of any Corporation Entity, or
any current or former Affiliate of any of the foregoing persons or any
Corporation Entity is presently, or since the latest of (i) Xxxxx 00, 0000,
(xx) the organization of such Corporation Entity or (iii) the acquisition
of such Corporation Entity by Holding or one of its Subsidiaries, has been,
directly or indirectly through such person's or entity's affiliation with
any other person or entity, a party to any agreement or transaction with
any Corporation Entity, other than, in the case of such person, agreements
in connection with any such person's duties as a director, officer or
employee of such Corporation Entity.
4.20 INSURANCE.
The physical properties, assets, business, operations, employees,
officers and directors of each Corporation Entity are insured to the extent
disclosed in SCHEDULE 4.20. As of the date hereof, all premiums due 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 by any
Corporation Entity with respect to any insurance policy currently in
effect, and which is presently owned or held by any Corporation Entity,
insuring the products, physical properties, assets, business, operations,
employees, officers and directors of such Corporation Entity and their
respective potential liabilities to third parties, in each case, except
where such failure, cancellation or termination would not reasonably be
expected to have a Material Adverse Effect on the Corporation Entities
taken as a whole. No Corporation Entity is in material default under any
such insurance policies.
4.21 HOLDING COMPANY.
Except as set forth on SCHEDULE 4.21, Holding has not conducted any
business operations or incurred, to its knowledge, any liabilities or
obligations or entered into any Contracts, and does not hold any assets,
other than certain cash balances.
4.22 BROKERS OR FINDERS.
Except as set forth in SCHEDULE 4.22, which fees shall be paid by the
Sellers, no Corporation Entity has incurred any obligation, contingent or
otherwise, for brokerage or finder's fees or agent commissions or other
similar payments in connection with this Agreement or the transactions
contemplated by this Agreement.
4.23 NO ADDITIONAL REPRESENTATIONS.
NEITHER HOLDING NOR THE CORPORATION IS MAKING ANY REPRESENTATION OR
WARRANTY, EXPRESS OR IMPLIED, OF ANY NATURE WHATSOEVER WITH RESPECT TO
HOLDING, THE CORPORATION AND ITS SUBSIDIARIES, INCLUDING ANY OF THE ASSETS
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OF HOLDING, THE CORPORATION OR ANY SUBSIDIARY, EXCEPT FOR THE
REPRESENTATIONS AND WARRANTIES EXPRESSLY SET FORTH IN THIS AGREEMENT, and
except as set forth expressly herein, the condition of the assets of
holding, the corporation and its subsidiaries shall be "as is" and "where
is."
ARTICLE V
SEVERAL REPRESENTATIONS AND WARRANTIES OF THE SELLERS
Each of the Sellers severally (as to such Seller only and not
jointly) represents and warrants to Buyer as follows:
5.1 AUTHORITY, ENFORCEABILITY, NO VIOLATION, ETC.
Such Seller has all requisite corporate power and authority or, with
respect to individuals, the capacity, to execute and deliver this Agreement
and each of the Related Documents to which such Seller is, or is specified
to be, a party and to consummate the transactions contemplated hereby and
thereby. The execution and delivery by such Seller of this Agreement and
the consummation of the transactions contemplated hereby have been duly and
validly authorized by all necessary action (corporate or otherwise) on the
part of such Seller, and the execution and delivery by such Seller of each
of the Related Documents to which such Seller is, or is specified to be, a
party, and the consummation by such Seller of the transactions contemplated
thereby, will be duly and validly authorized by all necessary action
(corporate or otherwise) on the part of such Seller prior to the Closing.
Such Seller has duly and validly executed and delivered this Agreement and,
prior to the Closing, will have duly and validly executed and delivered
each Related Document to which it is, or is specified to be, a party, and
this Agreement constitutes, and each Related Document to which it is, or is
specified to be, a party will after the Closing constitute, a legal, valid
and binding obligation of such Seller, enforceable against such Seller in
accordance with its terms, except as may be limited by bankruptcy,
insolvency, reorganization, fraudulent conveyance or other similar laws
affecting the enforcement of creditors' rights generally and general
equitable principles.
5.2 NO CONFLICTS; CONSENTS.
Neither the execution and delivery by such Seller of this Agreement or
any of the Related Documents to which such Seller is, or is specified to
be, a party, nor the consummation of the transactions contemplated hereby
and thereby, nor compliance by such Seller with any of the provisions
hereof and thereof, conflicts or will conflict with or result in any
violation or breach of or default (with or without notice or lapse of time,
or both) under, or give rise to a right of, or result in, termination,
cancellation or acceleration of any obligation or loss of a material
benefit under, or give rise to any increased, additional, accelerated or
guaranteed right or entitlements under (a) any provision of such Seller's
organizational documents or certificate of incorporation or bylaws, if
applicable, (b) any Judgment or Applicable Law applicable to such Seller or
the Securities owned by such Seller, or (c) any Contract to which such
Seller is a party or by which any of its assets or property are bound,
other than any such conflicts, violations, defaults or rights that, with
respect to (b) and (c) individually or in the aggregate, would not
reasonably be expected to prevent the consummation of the transactions
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contemplated by this Agreement or any of the Related Documents to which
such Seller is, or is specified to be, a party. Except as set forth on
SCHEDULE 5.2 or as otherwise contemplated by this Agreement, no material
Permit of or registration, declaration or filing with, any Governmental
Entity is required to be obtained or made for the consummation by such
Seller of the transactions contemplated by this Agreement and the Related
Documents to which such Seller is, or is specified to be, a party.
5.3 OWNERSHIP.
Except as set forth on SCHEDULE 5.3, such Seller is the record and
beneficial owner of the Securities listed opposite such Seller's name on
SCHEDULE I and has good and marketable title to such Securities, free and
clear of any and all Liens.
5.4 BROKERS OR FINDERS.
Except as set forth on SCHEDULE 4.22, the Sellers have incurred no
obligation, contingent or otherwise, for brokerage or finder's fees or
agent commissions or other similar payments in connection with this
Agreement or the transactions contemplated by this Agreement.
5.5 NO ADDITIONAL REPRESENTATIONS.
NO SELLER IS MAKING ANY REPRESENTATION OR WARRANTY, EXPRESS OR
IMPLIED, OF ANY NATURE WHATSOEVER WITH RESPECT TO SUCH SELLER OR THE
CORPORATION OR ITS SUBSIDIARIES, INCLUDING ANY OF THE ASSETS OF THE
CORPORATION OR ITS SUBSIDIARIES, EXCEPT FOR THE REPRESENTATIONS AND
WARRANTIES OF SUCH SELLER EXPRESSLY SET FORTH IN THIS AGREEMENT.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF BUYER AND THE GS FUNDS
Buyer and the GS Funds hereby represent and warrant to Holding,
the Corporation and the Sellers as follows:
6.1 ORGANIZATION, STANDING, QUALIFICATION AND POWER.
Each of Buyer and each of the GS Funds is duly organized, validly
existing and in good standing under the laws of the jurisdiction in which
it is organized and has the requisite corporate or limited partnership
power and authority to own, lease and operate its properties and to conduct
its business as it is presently being conducted. Each of Buyer and each GS
Fund is duly qualified and in good standing to do business in each
jurisdiction in which such qualification is necessary because of the nature
of the business conducted by it, except where the failure to be so
qualified would not reasonably be expected to have a Material Adverse
Effect on Buyer or such GS Fund or prevent the consummation of the
transactions contemplated hereby.
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6.2 AUTHORITY; EXECUTION AND DELIVERY; AND ENFORCEABILITY.
Each of Buyer and each GS Fund has the requisite corporate or limited
partnership power and authority to execute and deliver this Agreement and
the Related Documents to which it is, or is specified to be, a party and
any and all instruments necessary or appropriate in order to effectuate
fully the terms and conditions of this Agreement and to consummate the
transactions contemplated hereby and thereby. The execution and delivery
by Buyer and each GS Fund of this Agreement and the consummation of the
transactions contemplated hereby have been duly and validly authorized by
all necessary corporate action, and the execution and delivery by Buyer and
each of the GS Funds of the Related Documents to which they are, or are
specified to be, a party and the consummation by the Buyer of the
transactions contemplated thereby have been duly and validly authorized by
all necessary corporate action on the part of the Buyer and each of the GS
Funds. Each of Buyer and each GS Fund has duly and validly executed and
delivered this Agreement and, prior to the Closing, will have duly and
validly executed and delivered each Related Document to which it is, or is
specified to be, a party, and this Agreement constitutes, and each Related
Document to which it is, or is specified to be, a party will after the
Closing constitute, its legal, valid and binding obligation of each of
Buyer and each GS Fund, as applicable, enforceable against the Buyer and
each GS Fund in accordance with its terms, except as may be limited by
bankruptcy, insolvency, reorganization, fraudulent conveyance or other
similar laws affecting the enforcement of creditors' rights generally and
general equitable principles.
6.3 NO CONFLICTS; CONSENT.
The execution and delivery by Buyer and each GS Fund of this Agreement
does not, the execution and delivery by Buyer and each GS Fund of each
Related Document to which it is, or is specified to be, a party will not,
and the consummation of the transactions contemplated hereby and thereby
and compliance by Buyer and each GS Fund with the terms hereof and thereof
do not and will not, directly or indirectly, contravene with, conflict
with, or result in any violation or breach of or default (with or without
notice or lapse of time, or both) under, or give rise to a right of, or
result in, termination, cancellation or acceleration of any obligation or a
loss of a material benefit under, or result in the creation of any Lien
upon any of the properties or assets owned or used by Buyer, each GS Fund
or any of their respective Subsidiaries under, or give rise to any
increased, additional, accelerated or guaranteed rights or entitlement
under, any provision, term or condition of (a) the organizational documents
or the certificate of incorporation, by-laws , certificate of limited
partnership or partnership agreement of Buyer or any GS Fund or any of its
respective Subsidiaries, (b) any Contract to which Buyer or any GS Fund or
any of their respective Subsidiaries is a party or by which any of their
respective properties or assets is bound or (c) any Judgment or Applicable
Law applicable to the Buyer or any GS Fund or any of their respective
Subsidiaries or their respective properties or assets, other than, in the
case of clause (b) and (c) above, any such conflicts, violations, defaults,
or rights that, individually or in the aggregate, would not reasonably be
expected to have a Material Adverse Effect on Buyer or any GS Fund. No
material Permit of, or registration, declaration or filing with, any
Governmental Entity is required to be obtained or made by or with respect
to the Buyer or any GS Fund or any of their respective Subsidiaries in
connection with the execution, delivery and performance by either Buyer or
any GS Fund or any of their respective Subsidiaries of this Agreement or
any Related Document to which it is, or is specified to be, a party, or the
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consummation of the transactions contemplated hereby and thereby, other
than (i) compliance with and filings under the HSR Act, (ii) those Permits
set forth in SCHEDULE 6.3, (iii) compliance with and filings and
notifications under applicable Environmental Laws, and (iv) those the
failure of which to obtain or make, individually or in the aggregate, would
not reasonably be expected to have a Material Adverse Effect on Buyer or
any GS Fund or materially impair the ability of Buyer or the GS Funds to
perform their respective obligations under this Agreement or the Related
Documents to which they are, or are specified to be, a party.
6.4 PROCEEDINGS.
There are not any (a) outstanding Judgments against Buyer, any GS Fund
or any of their respective Subsidiaries, (b) Proceedings or claims pending
or, to the knowledge of Buyer and the GS Funds, threatened against Buyer,
any GS Fund or any of their respective Subsidiaries or (c) investigations
by any Governmental Entity that are pending or, to the knowledge of Buyer
and the GS Funds, threatened against Buyer, any GS Fund or any of their
respective Subsidiaries that, in any case, individually or in the
aggregate, would reasonably be expected to have a Material Adverse Effect
on Buyer or the GS Funds or give rise to any legal restraint or a
prohibition against the transactions contemplated by this Agreement.
6.5 INVESTMENT INTENT.
Buyer acknowledges that the Securities have not been registered under
the Securities Act and that the Securities may not be resold absent such
registration or unless an exemption therefrom is available. Buyer is
acquiring the Securities for its own account, for investment purposes only
and not with a view toward distribution thereof. Buyer qualifies as an
"accredited investor", as such term is defined in Rule 501(a) promulgated
pursuant to the Securities Act.
6.6 AVAILABILITY OF FUNDS.
The Buyer has received financing commitments that, when funded and
together with equity contributions from the GS Funds, are sufficient to
enable it to consummate the transactions contemplated by this Agreement and
the Related Documents. True and correct copies of such commitments are
attached hereto as EXHIBIT B (the "COMMITMENT LETTERS") (such debt
financing, the "DEBT FINANCING"). The GS Funds shall, through Buyer, pay
at the Closing all amounts required to be paid by Buyer hereunder in
connection with the transactions contemplated hereby, other than the
amounts to be loaned to Buyer (or any of the Corporation Entities) pursuant
to the Commitment Letters. The GS Funds have committed capital from their
partners in amounts sufficient to fund their equity contributions
hereunder. The Commitment Letters are not subject to any conditions other
than as set forth therein, have been duly executed by all parties thereto,
and are in full force and effect on the date hereof. All commitments and
other fees required to be paid under the Commitment Letters prior to the
date hereof have been paid.
6.7 BROKERS OR FINDERS.
Except as set forth on SCHEDULE 6.7, the Buyers have incurred no
obligation, contingent or otherwise, for brokerage or finder's fees or
agent commissions or other similar payments in connection with this
Agreement or the transactions contemplated by this Agreement.
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6.8 NO ADDITIONAL REPRESENTATIONS.
NONE OF BUYER OR ANY OF THE GS FUNDS IS MAKING ANY REPRESENTATION OR
WARRANTY, EXPRESS OR IMPLIED, OF ANY NATURE WHATSOEVER WITH RESPECT TO
BUYER OR ANY GS FUND OR ANY OF THEIR RESPECTIVE SUBSIDIARIES, INCLUDING ANY
OF THE ASSETS OF BUYER OR ANY GS FUND, OR ANY OF THEIR RESPECTIVE
SUBSIDIARIES, EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES OF BUYER AND
THE GS FUNDS EXPRESSLY SET FORTH IN THIS AGREEMENT.
ARTICLE VII
COVENANTS
7.1 CONDUCT OF BUSINESS.
(a) Except either (i) with the prior written consent of Buyer (which consent
shall not be unreasonably withheld or delayed), (ii) as set forth on
SCHEDULE 7.1(A), (iii) as otherwise expressly permitted by the terms of
this Agreement or any Related Document, or (iv) as required by Applicable
Law, from the date hereof to the Closing, each Corporation Entity shall
conduct its business in the ordinary course in substantially the same
manner as presently conducted and shall make all commercially reasonable
efforts consistent with past practices to (A) preserve the existing
relationships of the Corporation and its Subsidiaries with customers,
suppliers and others with whom the Corporation and its Subsidiaries deals,
(B) preserve intact its business organization, goodwill and ongoing
operations, (C) make capital expenditures substantially in compliance with
the 2002 Fiscal Budget, (D) retain the services of its key employees, (E)
perform in all material respects its obligations under the Contracts listed
on Schedule 4.10(a), and (F) maintain and keep in good repair its material
properties and assets.
(b) Except either (i) with the prior written consent of Buyer, (ii) as set
forth on SCHEDULE 7.1(B), (iii) as otherwise expressly permitted by the
terms of this Agreement or any Related Document, or (iv) as required by
Applicable Law, from the date hereof to the Closing, no Corporation Entity
shall enter into any of the transactions, or take any of the following
actions:
(i) file any Tax Return other than in a manner consistent with past practice
or settle any audit, examination or other claim for Taxes.
(ii) amend or propose to amend its articles of incorporation or bylaws (or
comparable governing instruments);
(iii) 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 any Corporation Entity including Convertible
Securities, other than the exercise of Convertible Securities outstanding
on the date of this Agreement that are vested at the time of exercise or as
required by this Agreement;
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(iv) split, combine or reclassify any shares of its capital stock or 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
redeem, purchase or otherwise acquire or offer to acquire any shares of its
capital stock or other securities (other than the repurchase of stock
options and capital stock from employees in connection with their
termination);
(v) (a) create, incur or assume any indebtedness, other than trade payables in
the ordinary course of business consistent with past practice; (b) make any
capital expenditures or make any loans, advances or capital contributions
to, or investments in, any other person; PROVIDED that, any Corporation
Entity shall make capital expenditures that are in the ordinary course of
business consistent with past practice and in accordance with Section
7.1(a)(iv)(C); and PROVIDED FURTHER that any Corporation Entity may make
loans, advances or capital contributions to, or investments in any Person
to the extent required by any Contracts disclosed on Schedule 7.1(v); (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,
(i) any business or any corporation, limited liability company,
partnership, joint venture, association or other business organization or
division thereof, (ii) any assets that individually or in the aggregate
have a purchase price in excess of $1,000,000; or (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 and other than transfers in the ordinary
course of business consistent with past practice;
(vi) increase the compensation of any of its officers or employees or enter
into, establish, amend or terminate any Corporation Benefit Plan or
Employee Agreement other than as required pursuant to the terms of
agreements in effect on the date of this Agreement;
(vii) make or rescind any express or deemed election relating to Taxes, unless
required to do so by Applicable Law;
(viii) settle or compromise any material Tax liability of any Corporation Entity
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;
(ix) file or cause to be filed any amended Tax Return with respect to any
Corporation Entity or file or cause to be filed any claim for refund of
Taxes paid by or on behalf of any Corporation Entity;
(x) prepare or file any Tax Return of the Company 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 materially 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 required by Applicable Law;
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(xi) except in the ordinary course of business and as would not have a Material
Adverse Effect on the Corporation Entities taken as a whole, modify, amend,
terminate or fail to renew (to the extent such contract or agreement can be
unilaterally renewed by any Corporation Entity) any Contract required to be
disclosed on Schedule 4.10, or waive, release or assign any material rights
or claims;
(xii) make any material change to its accounting methods, principles or
practices, except as may be required by GAAP;
(xiii) pay, discharge, or satisfy any material claim, liabilities, or
obligations (absolute, accrued, asserted or unasserted, contingent or
otherwise), other than in the ordinary course of business consistent with
past practice, pay, discharge or satisfy any claim or make any admission
relating to infringement of Intellectual Property, 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;
(xiv) enter into any Contract, other than in the ordinary course and involving
amounts not in excess of $1,000,000 in the aggregate;
(xv) disclose any Confidential Information relating to Intellectual Property,
other than to persons with which any Corporation Entity has entered into a
confidentiality agreement in the ordinary course of business consistent
with past practice; or
(xvi) authorize, or commit or agree to take, any of the foregoing actions.
7.2 ACCESS TO INFORMATION.
Prior to the Closing, except to the extent prohibited by Applicable
Law or by Contracts to which a Corporation Entity is a party that contains
restrictions on disclosure of their terms, Holding and the Corporation
will permit Buyer's Representatives to have access during normal business
hours and upon reasonable notice to all premises, properties, personnel,
books, records, contracts, commitments, Tax Returns, reports of examination
and documents of or pertaining to any Corporation Entity, as may be
necessary to permit Buyer and Buyer's financing sources to, at their sole
expense, make, or cause to be made, such investigations of any Corporation
Entity as Buyer deems necessary or advisable in connection with the
consummation of the transactions contemplated by this Agreement, and
Holding and the Corporation shall reasonably cooperate with any such
investigations, including any Phase I environmental investigations;
PROVIDED, HOWEVER, that such access does not unreasonably disrupt the
normal operations of the Corporation Entities. Buyer or its
Representatives shall not conduct any environmental sampling of the soil,
groundwater and/or other environmental media of the sort commonly referred
to as Phase II environmental assessment work without the prior written
consent of the Sellers.
7.3 CONFIDENTIALITY.
(a) The Buyer and each GS Fund acknowledges that it (and the information being
provided to it in connection with the consummation of the transactions
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contemplated hereby, including pursuant to Section 7.2), is subject to the
terms of a confidentiality and non-solicitation agreement, dated as of
March 20, 2002, between the Corporation and Xxxxxxx, Xxxxx & Co. (the
"CONFIDENTIALITY AGREEMENT"), the terms of which are incorporated herein by
reference.
(b) Each Seller agrees that it will not disclose any Confidential Information
following Closing to any third party. For purposes of this section the
term "CONFIDENTIAL INFORMATION" shall mean any information relating to any
Corporation Entity which is in the possession of Seller on the date hereof,
on the Closing Date or as a result of any inspection pursuant to Section
7.9, other than (i) information that has been independently acquired by
such Seller without violating any of the obligations of such Seller under
this Agreement, (ii) information that is or becomes available to the public
(other than as a result of the disclosure by such Seller of such
information in contravention of the covenants set forth in this Section
7.3(b)), (iii) information required to be disclosed as a result of a
Judgment or an Applicable Law, but only after such Seller gives Buyer
prompt written notice of such request or requirement so that the Buyer may
seek a protective order or other remedy to prevent or limit such
disclosure, and (iv) information which was or becomes available to such
Seller on a non-confidential basis from a source other than the Corporation
Entities, PROVIDED that such source is not bound by a confidentiality
agreement with, or other obligation to the Corporation Entities.
7.4 REQUIRED EFFORTS TO CONSUMMATE.
(a) Subject to the terms and conditions of this Agreement, each party shall use
its respective commercially reasonable best efforts to cause the Closing to
occur, including defending against any Proceedings challenging this
Agreement or the consummation of the transactions contemplated hereby, and
seeking to have any preliminary injunction, temporary restraining order,
stay or other legal restraint or prohibition entered or imposed by any
court or other Governmental Entity that is not yet final and nonappealable,
vacated or reversed; PROVIDED, HOWEVER that Holding and the Corporation
shall not be required to increase the consideration initially offered to
the holders of the Public Bonds.
(b) The Buyers shall use their commercially reasonable best efforts to arrange
the financing contemplated by the Commitment Letters. For purposes of
clarity, nothing contained herein shall be deemed to require Buyers (i) to
obtain any financing for the transactions contemplated hereby other than
pursuant to, and on the terms and conditions of, the Commitment Letters or
(ii) to require Buyers to utilize the "bridge" financing contemplated by
the Commitment Letters prior to August 9, 2002.
(c) Promptly after the date hereof, the Corporation will compile a list of
written Contracts (including sales orders) that require any Corporation
Entity to deliver products or services for payment of more than $1,000,000
(unless terminable without payment or penalty upon no more than 60 days'
notice), other than sales orders entered into in the ordinary course of
business, and that contain provisions that conflict with the terms of this
Agreement or require the consent of or payment to another party in
connection with the transactions contemplated hereby. The Buyer shall
review the list and determine, after reasonable consultation with the
Sellers, which consents or approvals to obtain (the "REQUESTED CONSENTS")
and shall notify the Corporation of the Requested Consents. The
Corporation shall use commercially reasonably best efforts to obtain the
Requested Consents prior to Closing.
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(d) Each of Holding and Buyer shall as promptly as practicable after the
execution and delivery of this Agreement, file with the United States
Federal Trade Commission (the "FTC") and the United States Department of
Justice (the "DOJ") the notification and report form, if any, required for
the transactions contemplated hereby and any supplemental information
requested in connection therewith pursuant to the HSR Act. Any such
notification and report form and supplemental information shall be in
substantial compliance with the requirements of the HSR Act. Each of
Holding and the Buyers shall furnish to the other such necessary
information and reasonable assistance as the other may request in
connection with its preparation of any filing or submission that is
necessary under the HSR Act. Holding and Buyer shall keep each other
apprised of the status of any communications with, and any inquiries or
requests for additional information from, the FTC and the DOJ and shall
comply promptly with any such inquiry or request.
7.5 [INTENTIONALLY OMITTED]
7.6 EXCLUSIVITY.
From the date of this Agreement until the earlier of the Closing or
the termination of this Agreement pursuant to Section 9.1 hereof, Holding,
the Corporation and the Sellers (severally but not jointly) shall not,
directly or indirectly, (a) take any action to solicit or initiate any
Acquisition Proposal (as hereinafter defined), or (b) continue, initiate or
engage in negotiations with, or disclose any non-public information (other
than in the ordinary course of business or otherwise required by law, court
order or similar compulsion), relating to any Corporation Entity, to any
Person in connection with an Acquisition Proposal other than Buyer and its
Affiliates and representatives. The term "ACQUISITION PROPOSAL" as used
herein means any offer, proposal or indication of interest in (i) the
acquisition of Holding or the Corporation, (ii) a merger, consolidation or
other business combination with Holding or the Corporation, (iii) the
acquisition of any of the capital stock of Holding or the Corporation
(other than the acquisition of Common Stock resulting from the exercise of
Convertible Securities) or (iv) the acquisition of any of the assets of any
Corporation Entity, other than sales of assets by any Corporation Entity in
the ordinary course of business consistent with past practice that are not
prohibited by Section 7.1.
7.7 NOTICE OF PROSPECTIVE BREACH; RIGHT TO TERMINATE OR WAIVER OF SUCH RIGHT.
(a) The Buyers, on the one hand, and Holding, the Corporation and the Sellers'
Representatives, on the other hand, shall each promptly notify the other in
writing upon the occurrence, or failure to occur, of any event, which
occurrence or failure to occur would reasonably be expected to cause (i)
any representation or warranty contained in this Agreement to be untrue or
inaccurate in any material respect at any time from the date of this
Agreement to the Closing as if such representation and warranty were made
at such time or (ii) any material failure of any party hereto or any
officer, director, employee or agent thereof, to comply with or satisfy any
covenant, condition or agreement to be complied with or satisfied by it
under this Agreement.
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(b) Notwithstanding anything contained in this Agreement to the contrary, if
the Buyer is notified in writing (the "SECTION 7.7 NOTICE") in accordance
with Section 7.7(a) above by Holding, the Corporation or the Sellers'
Representatives that any of the representations and warranties of Holding,
the Corporation or the Sellers set forth in Article IV or Article V are
untrue or incorrect in a manner which would constitute a failure of the
condition in Section 8.2(a) to Buyer's obligations as set forth in Section
8.2, the Buyers may, at their option, invoke as unsatisfied the conditions
set forth in Section 8.2 hereof and terminate this Agreement pursuant to
Section 9.1 by written notice (specifying the representation or warranty to
which such notice applies) of such election to the Sellers'
Representatives, the Corporation and Holding no more than 10 Business Days
after receipt of the Section 7.7 Notice. If Buyer delivers a timely notice
to the Sellers' Representatives, the Corporation and Holding pursuant to
the preceding sentence, the parties hereto shall have no rights hereunder
other than those that specifically survive pursuant to Section 9.2. If
Buyer fails to deliver a notice to the Sellers' Representatives, the
Corporation and Holding within such 10 Business Day period, the Buyers
shall be deemed to have (i) waived their rights with respect to such breach
and the failure to satisfy such condition and (ii) elected to proceed with
the transactions contemplated hereby, in which event, the Buyers shall not
have any claim (whether for indemnification or otherwise) against Seller,
any Corporation Entity or any Affiliate thereof for such breach.
7.8 EXPENSES; TRANSFER TAXES.
(a) Whether or not the Closing takes place and except as set forth in Section
7.9(c) and Article X, and also subject to payment of Transaction Costs
pursuant to Article III, all costs and expenses incurred in connection with
this Agreement and the Related Documents and the transactions contemplated
hereby and thereby shall be paid by the party incurring such expense,
including all costs and expenses incurred pursuant to Section 7.4(a); it
being understood that the costs and expenses of the Corporation Entities
incurred on behalf of the Sellers in connection with the transactions
contemplated hereby and thereby shall be borne by the Sellers after the
Closing to the extent not included in Transaction Costs.
(b) All transfer, documentary, sales, use, registration, value-added and other
similar Taxes (including all applicable real estate transfer Taxes and real
property transfer gains Taxes and including any filing and recording fees)
and related amounts (including any penalties, interest and additions to
Tax) incurred in connection with this Agreement, the Related Documents, the
Acquisition and the other transactions contemplated hereby and thereby
("TRANSFER TAXES") shall be paid equally by the Buyer Parties and the
Sellers. Each party shall use reasonable efforts to avail itself of any
available exemptions from any such Transfer Taxes, and to cooperate with
the other parties in providing any information and documentation that may
be necessary to obtain such exemptions.
7.9 POST-CLOSING COOPERATION.
After the Closing, upon reasonable written notice, Buyer shall furnish or
cause to be furnished to the Sellers and their Representatives access,
during normal business hours, to such information and assistance relating
to the Surviving Corporation as is reasonably necessary for financial
reporting and accounting matters.
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(b) After the Closing, upon reasonable written notice, the Surviving
Corporation, the GS Funds and the Sellers shall furnish or cause to be
furnished to each other, as promptly as practicable, such information and
assistance (to the extent within the control of such party) relating to the
Surviving Corporation (including access to books and records (in any forum
or medium)) as is reasonably necessary for the filing of all Tax returns,
and making of any election related to Taxes, the preparation for any audit
by any Taxing Authority, and the prosecution or defense of any Proceeding
related to any Tax return. The Sellers, the Surviving Corporation and
Buyer shall cooperate with each other in the conduct of any audit or other
Proceeding relating to Taxes involving the Corporation.
(c) Each party shall reimburse the other for reasonable out-of-pocket costs and
expenses incurred in assisting the other pursuant to this Section 7.9.
Neither party shall be required by this Section 7.9 to take any action that
would unreasonably interfere with the conduct of its business or
unreasonably disrupt its normal operations.
7.10 PUBLICITY.
From the date hereof through the day after the Closing Date, no public
release or announcement concerning the transactions contemplated hereby
shall be issued by Holding, the Corporation or the Sellers, on the one
hand, or the Buyers, on the other hand, without the prior consent of the
Sellers' Representatives or the Buyer, as the case may be (which consent
shall not be unreasonably withheld), except as such release or announcement
may be required by Applicable Law, in which case the party required to make
the release or announcement shall allow the other parties reasonable time
(subject to the requirements of Applicable Law) to comment on such release
or announcement in advance of such issuance.
7.11 APPOINTMENT OF SELLERS' REPRESENTATIVES.
(a) Each of the Sellers hereby irrevocably appoints Atlantic Equity, JPMP, BPC
Equity and Mr. Boots as its true and lawful attorney-in-fact(s), to act as
its representatives (each, a "SELLERS' REPRESENTATIVE") under this
Agreement and, as such, to act, as such Seller's agent (with full power of
substitution), to take such action on such Seller's behalf with respect to
all matters relating to this Agreement and the Related Documents, including
without limitation, to make all determinations, agreements and settlements
relating to Closing Working Capital, to initiate, negotiate, settle and
compromise indemnification claims made pursuant to Article X and the terms
of the Escrow Agreement, to sign receipts, consents and other documents to
effect any of the transactions contemplated by this Agreement or the
Related Documents and to take all actions necessary or appropriate in
connection with the foregoing. All such determinations, agreements,
settlements and compromises made by the Sellers' Representatives shall be
binding on all of the Sellers. Atlantic Equity, JPMP, BPC Equity and Mr.
Boots each accept its appointment to the committee of initial Sellers'
Representatives and the authorization set forth above. The Sellers'
Representatives shall not take any action or authorize any action on behalf
of any Seller or Sellers if it would treat any such Seller or Sellers in a
non-ratable or otherwise discriminatory manner or if it would increase the
liability of an initial signatory to this Agreement. The Sellers'
Representatives shall not have any duties or responsibilities except those
contemplated by this Agreement, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into
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this Agreement or shall otherwise exist against the Sellers'
Representatives. The Sellers' Representatives only have authority to act
on behalf of the Sellers when at least three of the four representatives
agree as to a particular course of action, and each of such three Sellers'
Representatives must sign all documents or other instruments required to be
signed by the Sellers' Representatives for such document or instrument to
be an effective act of the Sellers' Representatives. With respect to all
other actions, the Sellers' Representatives shall only take or authorize
such actions approved orally or in writing by the Sellers holding a
majority of the Common Stock held by all Sellers as of the date hereof.
(b) Buyer and the Escrow Agent shall be entitled to conclusively rely on the
instructions, decisions and acts of the Sellers' Representatives required,
permitted or contemplated to be taken by the Sellers' Representatives
hereunder or under the Escrow Agreement, and the Escrow Agent and Buyer 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 Sellers'
Representatives. Buyer 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 Sellers' Representatives,
and reasonably believed by Buyer or the Escrow Agent to be genuine and to
have been signed and presented by the proper party or parties.
(c) The Sellers' Representatives shall be entitled to rely, and shall be fully
protected in relying, upon any statements furnished to it by any Seller, or
Buyer, or any other evidence deemed by the Sellers' Representatives to be
reliable, and the Sellers' Representatives shall be entitled to act on the
advice of counsel selected by it. The Sellers' Representatives 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
Sellers as it deems appropriate or it shall have been expressly indemnified
to its satisfaction by the Sellers appointing it severally according to
their respective Ownership Percentages against any and all liability and
expense that the Sellers' Representatives may incur by reason of taking or
continuing to take any such action.
(d) The Sellers' Representatives shall be entitled to retain counsel and to
incur such expenses as the Sellers' Representatives deems to be necessary
or appropriate in connection with the performance of their obligations
under this Agreement, and all such fees and expenses (including reasonable
attorneys' fees and expenses) incurred by the Sellers' Representatives
shall be borne by the Sellers PRO RATA according to their respective
Ownership Percentages.
(e) The Sellers hereby agree to indemnify the Sellers' Representatives (in its
capacity as such) ratably according to their respective Ownership
Percentages against, and to hold the Sellers' Representatives (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
Sellers' Representatives in such capacity in any way relating to or arising
out of its action or failures to take action pursuant to this Agreement or
in connection herewith in such capacity. The agreements in this Section
7.11 shall survive termination of this Agreement.
(f) To the extent this Agreement provides that the Sellers shall be jointly and
severally liable to personally pay any cost, expense or other liability,
the Sellers shall share such payment ratably in accordance with their
respective Ownership Percentages, and shall reimburse each other as
necessary to give effect to the intent of this provision.
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7.12 TERMINATION OF CERTAIN AGREEMENTS.
Holding, the Corporation and the Sellers agree that, effective as of
the Closing, each of the documents listed on SCHEDULE 7.12 shall be
terminated without any further liability of Holding, the Corporation or any
Seller thereunder.
7.13 CERTAIN EMPLOYEE MATTERS.
The Buyers shall cause the Corporation to pay a performance bonus to
each employee of the Corporation that was a participant in either of the
Bonus Plans during the fiscal year ending December 28, 2002. The bonuses
to be paid thereunder shall be paid in accordance with the terms of the
applicable Bonus Plan using the same method and at the same time that such
bonuses have been paid historically, subject to the following sentence.
The size of each participant's bonus shall be determined in accordance with
the terms of the applicable Bonus Plan, however the aggregate amount of the
bonuses for all employees under the Bonus Plans, with respect to the fiscal
year ending December 28, 2002 shall not be less than the accrual for such
obligation as of the Closing determined in accordance with Schedule 7.13.
7.14 ASSISTANCE WITH FINANCING.
In order to assist with the financing of the transactions contemplated
hereby, Holding and the Corporation shall provide such assistance and
cooperation as Buyer may reasonably request including, but not limited to,
cooperation in the preparation of any offering memorandum or similar
document, using their commercially reasonable best efforts to obtain
customary "comfort" letters and legal opinions, cooperating with initial
purchasers or placement agents, entering into customary agreements with
underwriters, initial purchasers or placement agents and making senior
management of Holding and the Corporation reasonably available for
customary "roadshow" presentations.
7.15 OBLIGATIONS OF GS FUNDS.
The GS Funds acknowledge and agree that every obligation of Buyer
under this Agreement, regardless of its context, is intended to be an
obligation of the GS Funds, and the Sellers shall not be limited in their
ability to seek recourse from the GS Funds as the result of any failure to
specify the GS Funds as a primary obligor, except to the extent set forth
in Section 10.3.
7.16 FIRPTA CERTIFICATE.
At the Closing, Sellers shall deliver to Buyers, in a form reasonably
satisfactory to Buyers, an affidavit of Holding issued pursuant to and in
compliance with Treasury Regulation 1.897-2(h) and dated the Closing Date,
certifying that an interest in Holding is not a U.S. real property interest
within the meaning of Section 897 of the Code.
7.17 STOCKHOLDER APPROVAL.
Each Seller executing this Agreement hereby irrevocably commits to
vote in favor of the approval and adoption of this Agreement and the Merger
contemplated hereby. Holding shall call and hold a meeting of stockholders
as promptly as reasonably practicable following the date of this Agreement
for the purpose of voting on this Agreement and the Merger contemplated
hereby.
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7.18 280G APPROVAL.
Any approval by the Board of a cash bonus payment which is contingent
on the occurrence of the Closing (as contemplated by Section 280G of the
Code) shall be conditioned on the Corporation obtaining such stockholder
approvals as are necessary so that no such payment constitutes a "parachute
payment" (as defined in Section 280G of the Code). The Corporation shall
obtain any such stockholder approvals prior to the Closing Date.
ARTICLE VIII
CONDITIONS PRECEDENT
8.1 CONDITIONS TO EACH PARTY'S OBLIGATION.
The obligation of the Buyers and the Sellers to consummate the
transactions contemplated by this Agreement is subject to the satisfaction
or waiver on or prior to the Closing of the following conditions:
(a) GOVERNMENTAL APPROVALS. All authorizations, consents, orders or approvals
of, or declarations or filings with or expiration of waiting periods
imposed by, any Person or Applicable Law (including pursuant to any
Antitrust Law or Environmental Laws) necessary for the consummation of the
transactions contemplated hereby shall have been obtained or made or shall
have occurred.
(b) NO INJUNCTIONS OR RESTRAINTS. No Applicable Law or injunction enacted,
entered, promulgated, enforced or issued by any Governmental Entity or
other legal restraint or prohibition preventing the consummation of the
transactions contemplated hereby shall be in effect; PROVIDED, HOWEVER,
that each of the Corporation and the Buyers shall have used their
commercially reasonable best efforts to prevent the entry of any such
injunction or other order and to appeal as promptly as possible any such
injunction or other order that may be entered.
8.2 CONDITIONS TO OBLIGATION OF BUYERS.
The obligation of the Buyers to consummate the transactions
contemplated by this Agreement is subject to the satisfaction (or waiver by
the Buyers) on or prior to the Closing of the following conditions:
(a) REPRESENTATIONS AND WARRANTIES. The representations and warranties of
Holding, the Corporation and the Sellers made in this Agreement shall be
true and correct (after giving effect to any waiver with respect thereto
pursuant to Section 8.5) as of the Closing Date as though made on and as of
the Closing Date (other than any representation or warranty that expressly
relates to a specific date, which representation and warranty shall be
correct in all material respects on the date so specified) except to the
extent that any breach thereof, individually or when aggregated with all
such breaches, has not had and is not reasonably likely to have a Material
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Adverse Effect on the Corporation Entities taken as a whole or prevent
consummation of transactions contemplated hereby. Buyer shall have
received (i) a certificate signed by an authorized officer of Holding
certifying as to fulfillment of the conditions set forth in this Section
8.2(a) with respect to Holding and the Corporation and (ii) a certificate
signed by the Sellers' Representatives certifying as to the fulfillment of
the conditions set forth in this Section 8.2(a) with respect to the
Sellers. For purposes of this Section 8.2(a), the truth or correctness of
any representation or warranty of Holding or the Corporation or the Sellers
made in this Agreement shall be determined without regard to any
materiality or Material Adverse Effect qualifier set forth in such
representation and warranty.
(b) PERFORMANCE OF OBLIGATIONS. Holding, the Corporation and the Sellers shall
have performed or complied in all material respects with all obligations
and covenants required by this Agreement to be performed or complied with
by Holding, the Corporation and the Sellers by the time of the Closing, and
Buyer shall have received (i) a certificate signed by an authorized officer
of Holding, certifying as to fulfillment of the conditions set forth in
this Section 8.2(b) with respect to Holding and the Corporation and (ii) a
certificate signed by the Sellers' Representatives certifying as to the
fulfillment of the conditions set forth in this Section 8.2(b) with respect
to the Sellers.
(c) SECRETARY'S CERTIFICATE. Buyer shall have received a certificate, dated as
of the Closing Date, signed by the Secretary of Holding and certifying as
to (i) its certificate of incorporation and bylaws and the incumbency of
officers executing this Agreement and (ii) the resolutions of the board of
directors of Holding authorizing the execution, delivery and performance by
Holding and the Corporation of this Agreement.
(d) CONSENTS. Holding, the Corporation and the Sellers shall have received all
Consents listed on SCHEDULE 8.2(D).
(e) NO MATERIAL ADVERSE CHANGE. There shall not have occurred a Holding
Material Adverse Change.
(f) REPAYMENT OF FUNDED INDEBTEDNESS; REDEMPTION OF PREFERRED STOCK. All
Funded Indebtedness (other than with respect to the Public Bonds, which are
the subject of Section 8.2(h)) shall have been repaid and all Preferred
Stock shall have been redeemed.
(g) FINANCING. The Corporation and Buyers shall have received the Debt
Financing on terms and conditions no less favorable to the Corporation and
Buyers than those described in the term sheets attached to the Commitment
Letters.
(h) DEBT TENDER OFFERS. Not less than a majority of each series of Public
Bonds shall have been tendered and accepted for payment by Holding or the
Corporation, as applicable, and the Indenture Amendments specified on
Schedule 3.4(a) shall have been approved and have become effective.
(i) OPINION OF COUNSEL. Buyer shall have received an opinion from Xxxxxxx
Procter LLP, counsel to Holding, substantially in the form attached hereto
as Exhibit C.
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8.3 CONDITIONS TO THE OBLIGATION OF THE SELLERS.
The obligation of the Sellers to consummate the transactions
contemplated by this Agreement is subject to the satisfaction (or waiver by
the Sellers) on or prior to the Closing Date of the following conditions:
(a) REPRESENTATIONS AND WARRANTIES OF BUYERS. The representations and
warranties of Buyer and the GS Funds made in this Agreement shall be true
and correct as of the Closing Date as though made on and as of the Closing
Date, and the Sellers shall have received a certificate signed by an
authorized officer of Buyer to such effect, except to the extent that any
breach thereof, individually or when aggregated with all such breaches, has
not had and is not reasonably likely to have a Material Adverse Effect on
Buyer or the GS Funds, or prevent consummation of the transactions
contemplated hereby. For purposes of this Section 8.3(a), the truth or
correctness of any representation or warranty of the Buyer and the GS Funds
made in this Agreement shall be determined without regard to any
materiality or Material Adverse Effect qualifier set forth in such
representation and warranty.
(b) PERFORMANCE OF OBLIGATIONS OF BUYERS. The Buyer and the GS Funds shall
have performed or complied in all material respects with all obligations
and covenants required by this Agreement to be performed or complied with
by Buyer and the GS Funds by the time of the Closing, and the Sellers shall
have received a certificate signed by an authorized officer of Buyer to
such effect.
(c) PAYMENT FOR DEBT AND PREFERRED STOCK. All Funded Indebtedness shall have
been repaid (other than with respect to the Public Bonds, which are the
subject of Section 8.3(g)) and all Preferred Stock shall have been
redeemed.
(d) PAYMENT OF COMMON EQUITY PURCHASE PRICE. The Buyers shall have made
payment with respect to the Paid-Out Common Equity Purchase Price in
accordance with the terms hereof concurrently with the Closing.
(e) SECRETARY'S CERTIFICATES. The Sellers' Representatives shall have received
a certificate, dated as of the Closing Date, signed by the Secretary or
other representative of each of the Buyers certifying, as applicable, as to
(i) such Buyer's certificate of incorporation and bylaws (or other
organizational documents) and the incumbency of its officers executing this
Agreement and each of the Related Documents to which it is a party and (ii)
the resolutions of its board of directors (or general partner or other
requisite Person) authorizing the execution, delivery and performance by it
of this Agreement and each of the Related Documents to which it is a party.
(f) BUYER CONSENTS. The Buyers shall have received all Consents required in
connection with the transactions contemplated by this Agreement and the
Related Documents listed on Schedule 8.3(f).
(g) DEBT TENDER OFFERS. The Debt Tender Offers shall have been consummated.
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8.4 FRUSTRATION OF CLOSING CONDITIONS.
Neither Buyer, any GS Fund, Holding, the Corporation nor any Seller
may rely on the failure of any condition set forth in this Article VIII to
be satisfied if such failure was caused by such party's failure to act in
good faith or such party's failure to use its commercially reasonable best
efforts to cause the Closing to occur, as required by Section 7.4.
8.5 EFFECT OF CERTAIN WAIVERS OF CLOSING CONDITIONS.
If prior to the Closing the Buyers, on the one hand, or the Sellers,
on the other hand (such party, the "WAIVING PARTY") has actual knowledge of
any breach by any other party of any representation, warranty or covenant
contained in this Agreement, the effect of such breach is a failure of any
condition to the waiving party's obligations set forth in this Article VIII
and the waiving party proceeds with the Closing, the waiving party shall be
deemed to have waived such breach and the waiving party and its successors,
assigns and Affiliates shall not be entitled to be indemnified pursuant to
Article X, to xxx for damages or to assert any other right or remedy for
any losses arising from any matters relating to such condition or breach,
notwithstanding anything to the contrary contained in this Agreement or in
any certificate delivered pursuant hereto; PROVIDED, HOWEVER, that if prior
to Closing the waiving party notifies the other party of such breach in
writing (prior to the delivery of a Section 7.7 Notice, if applicable), the
waiving party shall not be deemed to have waived such breach if it proceeds
with the Closing unless the other party agrees in writing prior to the
Closing that such breach has occurred and the effect of such breach is a
failure of any of the conditions to the waiving party's obligations set
forth in this Article VIII. Except as provided above, a party shall not be
deemed to have waived any breach by the other party of any representation,
warranty or covenant contained in this Agreement or of their rights with
respect to indemnification for such breach.
ARTICLE X
TERMINATION
9.1 TERMINATION.
(a) Subject to the provisions of Section 7.7, this Agreement may be terminated
and the transactions contemplated by this Agreement abandoned at any time
prior to the Closing:
(i) by mutual written consent of the Sellers' Representatives and Buyer; or
(ii) by either the Sellers' Representatives or Buyer, if the Closing does not
occur on or prior to August 30, 2002 (or such later date as the Sellers'
Representatives and Buyer may agree in writing); or
(iii) by the Sellers' Representatives or Buyer, if any of the conditions set
forth in Section 8.1 shall have become incapable of fulfillment; or
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(iv) by the Sellers' Representatives, if (A) any of the conditions set forth in
Section 8.3 shall have become incapable of fulfillment, and shall not have
been waived by the Sellers' Representatives or (B) if the Closing does not
occur by August 9, 2002, and the conditions set forth in Section 8.2, other
than Section 8.2(g), have been satisfied or the Corporation Entities and
the Sellers are ready, willing and able to satisfy all conditions in
Section 8.2, other than Section 8.2(g); or
(v) by Buyer, if any of the conditions set forth in Section 8.2 shall have
become incapable of fulfillment, and shall not have been waived by Buyer;
or
(vi) by Buyer within 10 Business Days following Buyer's receipt of a Section 7.7
Notice;
PROVIDED; HOWEVER, that, in the case of clauses (iii), (iv) or (v), no
party shall be entitled to terminate this Agreement if a breach by such
party of any of its representations, warranties, covenants or agreements
contained in this Agreement is causing the failure by the other party to
satisfy a condition set forth in Article VIII.
(b) In the event of termination by the Sellers' Representatives or Buyer
pursuant to this Section 9.1, written notice thereof shall forthwith be
given to the other and the transactions contemplated by this Agreement
shall be terminated, without further action by any party. If the
transactions contemplated by this Agreement are terminated as provided
herein:
(i) the Buyers and their respective Affiliates, advisors and representatives
shall return all documents and other material received from the Corporation
Entities relating to the transactions contemplated hereby, whether so
obtained before or after the execution hereof, to the Corporation; and
(ii) all confidential information received by the Buyers with respect to the
business of the Corporation shall be treated in accordance with the
Confidentiality Agreement, which shall remain in full force and effect
notwithstanding the termination of this Agreement.
9.2 EFFECT OF TERMINATION.
If this Agreement is terminated and the transactions contemplated
hereby are abandoned pursuant to Section 9.1, this Agreement shall become
null and void and of no further force and effect, except for the provisions
of Sections 7.3, 7.8, 7.10, 7.11, Article XI and this Article IX. Nothing
in this Section 9.2 shall be deemed to release any party from any liability
for any breach by such party of the terms and 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.
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ARTICLE X
INDEMNIFICATION
10.1 INDEMNIFICATION BY THE SELLERS.
(a) The Sellers shall, severally (on a PRO RATA basis based on their respective
Ownership Percentage) and not jointly, indemnify Buyer (or, after the
Closing, the Surviving Corporation) for and hold it harmless from, any
loss, liability, claim, damage or expense (including fines and penalties
and reasonable legal and (where applicable) reasonable environmental
consultants' and experts' fees and expenses) ("LOSSES") directly arising
from, relating to or otherwise in respect of:
(i) any breach of any representation or warranty of Holding or the Corporation
that survives the Closing contained in this Agreement;
(ii) any breach of any covenant of Holding or the Corporation contained in this
Agreement;
(iii) the redemption of the Preferred Stock, the repayment of the Funded
Indebtedness or the Debt Tender Offers; PROVIDED, HOWEVER, that the Buyer
(or after the Closing, the Surviving Corporation) shall not be entitled to
indemnification for Losses hereunder to the extent that such Losses arise
from, relate to or are otherwise in respect of (A) the consummation of a
Debt Tender Offer without first obtaining the affirmative vote of a
majority in interest of such series in favor of the Indenture Amendments if
Buyer has consented in writing to the waiver of obtaining such affirmative
vote, and (D) the consummation of a Debt Tender Offer without first
obtaining the consent of the applicable Trustee, if Buyer has consented in
writing to such action; or
(iv) the exercise by any current employee of any Corporation Entity who holds
any Common Stock on the date hereof of appraisal rights pursuant to Section
262 of the Delaware Statute.
(b) Each Seller shall, severally and not jointly, indemnify Buyer against any
Losses directly arising from, relating to or otherwise in respect of:
(i) any breach of any representation or warranty of such Seller that survives
the Closing contained in this Agreement or any Related Document to which
such Seller is a party; or
(ii) any breach of any covenant of such Seller contained in this Agreement or
any Related Document to which such Seller is a party.
(c) The Sellers shall not be required to indemnify any Person, and shall not
have any liability:
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(i) under Section 10.1(a)(i) (other than with respect to any breach of the
ERISA Affiliate Representation), Section 10.1(b)(i) and Section 10.2,
unless the aggregate of all Losses (other than De Minimis Losses and
Environmental Losses that do not exceed the Environmental Deductible
Amount) for which the Sellers would, but for this clause (i), be liable
exceeds on a cumulative basis an amount equal to $6,000,000 (the
"DEDUCTIBLE AMOUNT"), and then only to the extent of any such excess. The
"ENVIRONMENTAL DEDUCTIBLE AMOUNT" shall mean the amount of Environmental
Losses (other than De Minimis Losses) for which Sellers would, but for this
Section 10.1(c)(i), be liable and which, on a cumulative basis, equals up
to $2,000,000 of Environmental Losses (other than De Minimis Losses).
Except as provided pursuant to Section 10.5, for the avoidance of doubt,
all such Environmental Losses count first towards the Environmental
Deductible Amount and any excess thereof counts towards the Deductible
Amount;
(ii) (A) under Section 10.1(a)(i) (other than with respect to any breach of the
ERISA Affiliate Representation), Section 10.1(b)(i) and Section 10.1(f) for
any breach of any representation or warranty for which all reasonably
related Losses, and (B) under Section 10.2 for any individual Environmental
Matter based on a single set of facts or circumstances (or series of
directly related facts or circumstances resulting in Losses, in the case of
each of (A) and (B), which are less than $50,000 in the aggregate (a "De
Minimis Loss"). For the avoidance of doubt, the Parties agree that each of
the Environmental Matters explicitly listed as bullet items under the
headings "Potentially Significant" or "Noteworthy Issues" in the Summary of
Major Conclusions section of the May 2002 ENVIRON International Corporation
Phase I Environmental Assessment reports shall constitute an individual
Environmental Matter based on a single set of facts or circumstances (or
series of directly related facts or circumstances) for purposes of this
Section 10.1(c)(ii);
(iii) under Section 10.1(a)(i) (other than with respect to any breach of the
ERISA Affiliate Representation), Section 10.1(b)(i), Section 10.1(f),
Section 10.1(g) and Section 10.2 in excess of $50,000,000 in the aggregate
(the "INDEMNITY CAP");
(iv) under Section 10.1(a) and Section 10.1(b) to the extent the Losses are
primarily attributable to any action taken or omitted to be taken by Buyers
or any of their Affiliates, directors, employees or representatives; or
(v) under Section 10.1(a)(i), Section 10.1(b)(i), 10.1(f), 10.1(g) or 10.2 for
any breach if Section 7.7 is applicable to such breach.
(d) Notwithstanding anything to the contrary contained in this Agreement, no
Seller shall be required to indemnify any Person pursuant to
Section 10.1(a), Section 10.1(b), Section 10.1(f) and Section 10.2 for
Losses exceeding, in the aggregate, such Seller's Ownership Percentage of
the Indemnity Cap. If Buyer directly or indirectly elects to hold one or
more Sellers responsible for less than their respective Ownership
Percentages of any Losses, as applicable, it must make the same election
(and to the same extent) with respect to all Sellers; PROVIDED, HOWEVER,
that the failure of Buyer to obtain indemnification payments from any
Seller for any Losses after using commercially reasonable efforts to obtain
such payments shall not constitute an election to hold such Seller or
Sellers responsible for less than their respective Ownership Percentages of
such Losses.
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(e) For purposes of this Section 10.1 and Section 10.2, the truth or
correctness of any representation or warranty of Holding, the Corporation
or any Seller that survives the Closing contained in this Agreement shall
be determined without regard to any "Material Adverse Effect"
qualifications (other than those contained in the first sentence of Section
4.15 and in Section 4.17). In addition, for purposes of Section 10.1(a)(i)
and 10.1(b)(i) only (but except for any representation or warranty that by
its terms is expressly made only as of a specified date), any
representation or warranty of Holding, the Corporation or any Seller shall
be deemed to have been breached if such representation or warranty shall be
incorrect as of the date of this Agreement or as of the Closing Date.
(f) The Sellers shall severally, and not jointly, indemnify the Surviving
Corporation for all income Taxes imposed on any Corporation Entity, or for
which any Corporation Entity may otherwise be liable, for any taxable year
or period, or portion thereof, that ends on or before the Closing Date,
including any liability for income Taxes of any member of an affiliated
group with which any Corporation Entity files or has filed a consolidated
or combined Tax Return with respect to any taxable period that ends on or
before the Closing Date or includes the Closing Date by reason of any
Corporation Entity being severally liable for such Tax pursuant to
Regulations Section 1.1502-6 or any analogous provision of state or local
law; PROVIDED, HOWEVER, that the Sellers shall be liable only to the extent
that such income Taxes are in excess of the amount, if any, reserved for
such Taxes (excluding any reserve for deferred Taxes established to reflect
timing differences between book and Tax income) in the calculation of final
Closing Working Capital. In the case of any taxable period that includes
(but does not end on) the Closing Date, the Taxes of any Corporation Entity
for a portion of a period ending on the Closing Date shall be determined
based on an interim closing of the books as of the close of business on the
Closing Date (and for such purpose, the taxable period of any partnership
or other pass-through entity in which any Corporation Entity holds a
beneficial interest shall be deemed to terminate at such time), except that
the amount of any such Taxes that are imposed on a periodic basis and are
not based on or measured by income or receipts shall be determined by
reference to the relative number of days in the portion of such period
ending on the Closing Date and in the portion of such period beginning
after the Closing Date. The Sellers (PRO RATA based on their Ownership
Percentages) shall reimburse the Surviving Corporation for any Taxes of a
Corporation Entity which are the responsibility of the Sellers pursuant to
this Section 10.1(f) within 15 business days after payment of such Taxes by
such Corporation Entity.
(g) Following the Closing, the Surviving Corporation may engage an accounting
firm of national reputation (including its regular accounting firm) to
determine the amount of the Total NOL. If within two years of the Closing
Date, the Surviving Corporation informs the Sellers that the accounting
firm has determined that it is more likely than not that the Total NOL is
less than $37.7 million, then the Surviving Corporation and Sellers shall
jointly submit the matter to a member of a law firm of national reputation,
or some other person that is mutually satisfactory to the Sellers and the
Surviving Corporation (the "ARBITER"), for such person's review. The
Arbiter shall, within 75 days, determine those items that have been
factored into the Total NOL (the "INCLUDED ITEMS") for which in his
judgment there is no reasonable basis within the meaning of Section 6662 of
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the Code (the "No Reasonable Basis Items"), and those Included Items with
respect to which, in his judgment, if litigated, the IRS would more likely
than not be the prevailing party (the "LESS LIKELY THAN NOT ITEMS").
Further, if prior to the later of (i) the determination of the Arbiter and
(ii) two years after the Closing Date, the IRS has made an audit adjustment
which has become final (a "DETERMINATION") which has the effect of reducing
the Total NOL, the Included Items which are effected shall be considered No
Reasonable Basis Items for purposes of this Section 10.1(g). If the
Arbiter determines that the amount of the Total NOL, after eliminating all
No Reasonable Basis Items (the "ADJUSTED TOTAL NOL AMOUNT"), is less than
$37.7 million, Sellers shall pay promptly to the Surviving Corporation 34%
of the excess of $37.7 million over the Adjusted Total NOL Amount. If a
payment is due pursuant to the prior sentence, and if the Arbiter also
determines that there are Less Likely Than Not Items, the Sellers shall
also pay promptly to the Surviving Corporation an amount equal to 34% of
such Less Likely Than Not Items, unless Sellers agree that if within seven
years of the Closing Date any Less Likely Than Not Items are challenged by
the IRS, Sellers shall pay to the Surviving Corporation, at or prior to the
time of any Determination with respect thereto, the sum of (i) 34% of the
amount of any Less Likely Than Not Items following an adverse Determination
with respect to such items, (ii) any penalties which relate to such items,
but only if the Sellers have not paid their obligations hereunder in full
at least one year prior to the date of the relevant Determination, and
(iii) interest on such amounts at the Prime Rate then in effect payable
from the Closing Date to the date of payment. If the Arbiter determines
that (i) the Adjusted Total NOL Amount is not less than $37.7 million, but
(ii) the Adjusted Total NOL Amount reduced by the Less Likely Than Not
Items (the "FORECASTED TOTAL NOL AMOUNT") is less than $37.7 million, then
the Sellers shall pay promptly to the Surviving Corporation an amount equal
to 34% of the excess of $37.7 million over the Forecasted Total NOL Amount,
unless Sellers agree that if within seven years of the Closing Date any No
Reasonable Basis Items or Less Likely Than Not Items are challenged by the
IRS, Sellers shall pay to the Surviving Corporation, at or prior to the
time of any Determination with respect thereto, the sum of (i) 34% of the
excess of $37.7 million over the Total NOL (after reduction for any No
Reasonable Basis Items, and reduction for any Less Likely Than Not Items
with respect to which the IRS has made an adverse Determination), (ii) any
penalties which relate to such items, but only if the Sellers have not paid
their obligations hereunder in full at least one year prior to the date of
the relevant Determination, and (iii) interest on such amounts at the Prime
Rate then in effect payable from the Closing Date to the date of payment.
The indemnity obligations under this Section 10.1(g) shall be several and
not joint.
(h) Buyer acknowledges that, except as set forth in the last sentence of this
Section 10.1(h) its sole and exclusive remedy with respect to the subject
matter of this Agreement and the Related Documents shall be pursuant to the
indemnification provisions set forth in this Article X. In furtherance of
the foregoing, the Buyers hereby waive, from and after the Closing, to the
fullest extent permitted under Applicable Law, any and all rights, claims
and causes of action it may have against Holding, the Corporation, the
Sellers' Representatives or the Sellers arising under or based upon any
Applicable Law (including any relating to environmental matters) or arising
under or based upon common law or otherwise (except pursuant to the
indemnification provisions set forth in this Article X and as set forth in
the last sentence of this Section 10.1(h)). Accordingly, except as
specifically provided in this Article X, no claim, action or remedy shall
be brought or maintained by Buyer or any GS Fund against the Sellers, and
no recourse shall be brought or granted against any of them, by virtue of
or based upon any alleged misstatement or omission respecting an inaccuracy
in or breach of any of the representations, warranties or covenants of
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Holding, the Corporation or the Sellers set forth or contained in this
Agreement or any Related Document, except to the extent the same shall have
been the result of fraud by any such Person (and in the event of fraud or
willful breach, recourse shall only extend to those Persons committing such
fraud or willful breach).
(i) From and after the Closing, no Seller will make any claim against Holding
or the Corporation of any kind or character, whether by way of subrogation,
indemnity, contribution, breach of contract, or any other theory regarding
any claim made by the Buyer, any Corporation Entity or any other person
under this Section 10.1 or otherwise from and after the Closing Date and
the Sellers irrevocably release and discharge any Corporation Entity from
any such claim.
10.2 ENVIRONMENTAL INDEMNIFICATION.
(a) The Sellers shall severally, and not jointly, indemnify Buyer (or after the
Closing, the Surviving Corporation) and each of their respective
affiliates, officers, directors, employees, members, agents, successors,
transferees, and assigns (each of the foregoing a "BUYER INDEMNITEE") for
and hold them harmless from any Losses arising out of or relating to:
(i) the transportation, arranging for disposal and/or disposal of Hazardous
Substances on or prior to the Closing to or at any off-site location (other
than the Facilities), in each case, by the Corporation or any of its
Subsidiaries or any of their predecessors in connection with the Business
or the Facilities;
(ii) any real property (other than the Facilities) which, as of the Closing, was
formerly owned, leased, operated or controlled by the Corporation or any of
its Subsidiaries or any of their predecessors (collectively, the "FORMER
FACILITIES") (including, without limitation, the presence of Hazardous
Substances at, on, beneath, or migrating to or from the Former Facilities);
and
(iii) other than any matter indemnified pursuant to Sections 10.2(a)(i) and
10.2(a)(ii), any conditions, events, facts, actions or omissions occurring
or existing on or prior to the Closing at or with respect to the Business,
the Facilities, the Corporation or any of its Subsidiaries, in each case
which constitute a violation of, or give rise to liability under,
Environmental Laws (such Losses in the case of (i), (ii) and (iii)
collectively referred to as "ENVIRONMENTAL LOSSES").
(b) Sellers' indemnification obligations under Section 10.2(a)(iii) shall be
reduced to the extent that Environmental Losses otherwise subject to
indemnification thereunder, or the facts, events or conditions resulting in
such Environmental Losses, are exacerbated by the negligence or willful
misconduct of the Surviving Corporation or any Corporation Entity or any of
their Representatives after the Closing Date.
(c) Sellers shall have no indemnification obligations under Section
10.2(a)(iii) and no Environmental Losses otherwise indemnified pursuant to
Section 10.2(a)(iii) may be applied against the Environmental Deductible
Amount or the Deductible Amount, except to the extent that Environmental
Losses are (i) required by Environmental Laws, (ii) necessary to comply
with a written order or directive of any Governmental Entity having
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jurisdiction over the relevant matter, or (iii) necessary to respond to a
condition at, on, beneath, or migrating to or from, any of the Facilities
which, if unaddressed, in the reasonable judgment of the Buyer or its
Representatives, would reasonably be expected to result in a third-party
claim under Environmental Laws.
(d) Environmental Procedures. The following procedures shall exclusively
govern claims against the Sellers for indemnification pursuant to this
Section 10.2 ("INDEMNIFIED ENVIRONMENTAL MATTERS").
(i) If a Buyer Indemnitee seeking indemnification (A) receives notice of any
order, directive, decree, demand, notice of potential liability, or
complaint by any governmental authority or other third party, or the
commencement of any action, proceeding or investigation by any governmental
authority or other third party, or (B) becomes aware of any other claim for
indemnification other than a third-party claim, in each case that may
result in Environmental Losses (each of the foregoing, an "ENVIRONMENTAL
CLAIM"), Buyer Indemnitee shall give reasonably prompt notice thereof
("ENVIRONMENTAL CLAIM NOTICE") to the Sellers. Except as provided pursuant
to Section 10.5, failure of such Buyer Indemnitee to give reasonably prompt
notice pursuant to this Section 10.2(b)(i) shall not relieve the Sellers of
their obligations, except to the extent that the Sellers are actually
prejudiced by such failure to give notice.
(ii) With respect to Environmental Claims pursuant to Section 10.2(a)(i) or
10.2(a)(ii), until such time as (A) Environmental Losses (other than De
Minimis Losses) exceed, individually or in the aggregate, the Environmental
Deductible Amount and (B) it is reasonably probable that the Deductible
Amount will be satisfied, the Buyer Indemnitee shall undertake the defense
or control of such Environmental Claim with counsel and environmental
consultants chosen by the Buyer Indemnitee and reasonably satisfactory to
the Sellers. The Buyer Indemnitee shall not compromise or settle any such
Environmental Claim without the Sellers' prior written consent (which
consent shall not be unreasonably withheld). After such time as (A)
Environmental Losses (other than De Minimis Losses) exceed, individually or
in the aggregate, the Environmental Deductible Amount and (B) it is
reasonably probable that the Deductible Amount will be satisfied, Sellers
shall have the right, but not the obligation, upon reasonable written
notice to the Buyer Indemnitee, to assume the defense or control of any
Environmental Claim with respect to any matter indemnified pursuant to
Section 10.2(a)(i) or 10.2(a)(ii). If Sellers assume the defense or
control of any such Environmental Claim, Sellers shall undertake the
defense or control of such Environmental Claims with counsel and
environmental consultants chosen by the Sellers and reasonably satisfactory
to the Buyer Indemnitees. The Sellers shall not compromise or settle any
such Environmental Claim without the Buyer Indemnitees' prior written
consent (which consent shall not be unreasonably withheld).
(iii) With respect to Environmental Claims pursuant to Section 10.2(a)(iii),
the Buyer Indemnitee shall undertake the defense or control of such
Environmental Claims with counsel and environmental consultants chosen by
the Buyer Indemnitee and reasonably satisfactory to the Sellers. The Buyer
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Indemnitee shall not compromise or settle any such Environmental Claim
without Seller's prior written consent (which consent shall not be
unreasonably withheld).
(iv) With respect to any Environmental Claim, the Buyer Indemnitee and Sellers
agree to cooperate with and render to each other such assistance as may be
reasonably requested in order to insure the proper and adequate defense or
control of any Environmental Claim.
(v) With respect to any matter defended or controlled by any Buyer Indemnitee,
Sellers shall have the right (at its sole cost) to (A) participate in any
meetings or material negotiations with any third party (excluding counsel,
consultants or other experts retained by any Buyer Indemnitee) with respect
to any Environmental Claim and shall be provided with reasonable advance
notice of the same; (B) review in advance and provide comments on any
documents proposed to be submitted to Governmental Entities or other third
parties and have such comments reasonably considered by Buyer Indemnitee
prior to submittal; and (C) after the Environmental Deductible Amount has
been exceeded and the Deductible Amount has been exceeded (1) participate
in any material decisions relating to the scope, nature and timing of the
defense or control of any such Indemnified Environmental Matter (subject to
the ultimate approval by Buyer Indemnitees not to be unreasonably
withheld); and (2) solely with respect to any Remedial Action indemnified
pursuant to Section 10.2(a)(iii), approve (with approval not unreasonably
withheld) decisions relating to the scope, nature and timing of such
Remedial Action which, individual or in the aggregate, involve expenditures
in excess of $1 million (it being agreed that (x) the standard for such
approval is the "Commercially Reasonable Manner" standard set forth in
Section 10.2(d)(vi), and (Y) ANY DECISION BY SELLERS TO DENY SUCH APPROVAL
SHALL BE WITHOUT PREJUDICE TO (AA) BUYER INDEMNITEES' RIGHT TO PROCEED WITH
THE CONTROL OR DEFENSE OF SUCH REMEDIAL ACTION AND (BB) THE ALLOCATION, IF
ANY, OF ENVIRONMENTAL LOSSES ASSOCIATED WITH SUCH REMEDIAL ACTION PURSUANT
TO THE TERMS OF THIS SECTION 10).
(vi) In connection with any Environmental Claim the Buyer Indemnitees or the
Sellers, as the case may be, shall act in a "Commercially Reasonable
Manner," which shall mean the most reasonable cost methods for
investigation, remediation, removal, corrective action, containment,
monitoring, other response or compliance action permitted by applicable
Environmental Laws (including Environmental Laws setting forth so-called
"risk-based" remediation standards, where applicable) determined based upon
continued use of the Facilities in the same manner as of the Closing and
from the perspective of a reasonable business person acting (without regard
to the availability of indemnification hereunder) to achieve compliance
with Environmental Laws.
10.3 INDEMNIFICATION BY BUYERS.
(i) Buyer (or, after the Closing, the Surviving Corporation) and the GS Funds
and their respective successors and assigns shall indemnify the Sellers,
the Corporation Entities and their respective Affiliates, officers,
directors, employees, stockholders, agents and representatives against, and
hold them harmless from, any Losses directly arising from, relating to or
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otherwise in respect of (a) any breach of any representation or warranty of
Buyer or the GS Funds contained in this Agreement or any Related Document
to which it is a party, (b) any breach of any covenant of Buyer or the GS
Funds contained in this Agreement or in any Related Document to which Buyer
or the GS Funds are a party, (c) the consummation of a Debt Tender Offer
without first obtaining the affirmative vote of a majority in interest of
such series in favor of the Indenture Amendments if Buyer has consented in
writing to the waiver of obtaining such affirmative vote, (d) the
consummation of a Debt Tender Offer without first obtaining the consent of
the applicable Trustee if Buyer has consented in writing to such action, or
(e) the operation of the business of any Corporation Entity after the
Closing; PROVIDED, HOWEVER, that neither Buyer nor the GS Funds shall be
required to indemnify any Person or shall have any liability under clause
(a) of this Section 10.3 (i) unless the aggregate of all Losses for which
Buyers would, but for this proviso be liable (other than De Minimis Losses)
exceeds on a cumulative basis an amount equal to the Deductible Amount and
only to the extent of such excess, (ii) for De Minimis Losses or (iii) in
excess of the Indemnity Cap. For purposes of this Section 10.3, the truth
or correctness of any representation or warranty of Buyer or the GS Funds
that survives the Closing contained in this Agreement shall be determined
without regard to any Material Adverse Effect qualification set forth in
such representation and warranty. Notwithstanding anything to the contrary
contained in this Agreement, no GS Fund shall be required to indemnify any
Person pursuant to this Section 10.3, or shall otherwise be liable under
this Agreement, for Losses exceeding, in the aggregate, such GS Fund's
Contribution Percentage (as set forth on Schedule 10.3, which Schedule
shall be amended from time to time to reflect any sales of the equity of
Buyer prior to the Closing as permitted under Section 11.1) of the Common
Equity Purchase Price.
10.4 CALCULATION AND MITIGATION OF LOSSES.
The amount of any Loss for which indemnification is provided under
this Article X shall be net of any amounts recovered by the indemnified
party under insurance policies with third parties (I.E., actual insurance
policies and not self insurance or retention programs) with respect to such
Loss (subject to offset for any increase in premiums or other costs
attributable to such Losses or other expenses incurred in connection with
the collection of such amounts) and shall be (a) increased to take account
of any net Tax cost incurred by the indemnified party arising from the
receipt of indemnity payments hereunder (grossed up for such increase) and
(b) reduced to take account of any net Tax benefit actually realized in
cash by the indemnified party that would not have been received but for
such Loss. The Buyers agree to use commercially reasonable efforts to seek
recovery for any Losses for which indemnification is provided under this
Article X that are covered by insurance policies with third parties or
indemnification agreements with third parties (other than the Sellers);
provided that the indemnified party shall not be obligated to commence
legal proceedings against its insurers or other third parties. Each Party
shall take all reasonable steps to mitigate any Losses.
10.5 TERMINATION OF INDEMNIFICATION.
The obligations to indemnify and hold harmless any party, (a) pursuant
to Section 10.1(a)(i), 10.1(b)(i) or 10.3(a), shall terminate when the
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representations or warranties terminate pursuant to Section 10.7; (b)
pursuant to Section 10.2, shall terminate two years following the Closing
Date; (c) pursuant to Section 10.1(g) shall terminate as contemplated by
the time periods established in such Section 10.1(g); and (d) pursuant to
Section 10.1(f) and the other clauses of Sections 10.1 and 10.3, shall not
terminate until the expiration of the applicable statute of limitations;
provided, however, that such obligations to indemnify and hold harmless
shall not terminate with respect to any item as to which the Person to be
indemnified shall have, before the expiration of the applicable period,
previously made a claim by delivering a notice of such claim (stating in
reasonable detail the basis of such claim), pursuant to Section 10.6 to the
party to be providing the indemnification, or with respect to any
Indemnified Environmental Matters, an Environmental Claim Notice.
10.6 PROCEDURES.
The following procedures shall govern claims for indemnification made
pursuant to Sections 10.1 and 10.3.
(a) In order for a party (the "INDEMNIFIED PARTY") to be entitled to any
indemnification provided for under this Agreement pursuant to Sections 10.1
or 10.3 in respect of, arising out of or involving a claim made by any
Person (other than the indemnifying party) against the indemnified party (a
"THIRD PARTY CLAIM"), such indemnified party must notify the indemnifying
party in writing (and in reasonable detail) of the Third Party Claim within
10 Business Days after receipt by such indemnified party of written notice
of the Third Party Claim; PROVIDED, HOWEVER, that failure to give such
notification shall not affect the indemnification provided hereunder except
to the extent the indemnifying party shall have been prejudiced as a result
of such failure (except that the indemnifying party shall not be liable for
any expenses incurred during the period in which the indemnified party
failed to give such notice). Thereafter, the indemnified party shall
deliver to the indemnifying party, promptly following the indemnified
party's receipt thereof, copies of all notices and documents (including
court papers) received by the indemnified party relating to the Third Party
Claim.
(b) If a Third Party Claim is made, the indemnifying party shall be entitled to
participate in the defense thereof and, if it so chooses (by written notice
within 30 days after it receives notice from the indemnified party or at
any time thereafter if a diligent and good faith defense is not being or
ceases to be conducted and such conduct is not remedied within 30 days
after notice in writing by the indemnifying party), to assume the defense
thereof with counsel selected by the indemnifying party unless (a) the
indemnifying party shall not have taken any action to defend such Third
Party Claim within 30 days after assuming the defense, or (b) the
indemnified party shall have reasonably concluded that there is a conflict
of interest between the indemnified party and the indemnifying party in the
conduct of the defense of such Third Party Claim, in which case and
notwithstanding any other provision of this Section 10.6, the indemnified
party shall be entitled to conduct and control the defense thereof and the
reasonable fees and disbursements of such indemnified party's counsel shall
be at the expense of the indemnifying party. Should the indemnifying party
elect to assume the defense of a Third Party Claim, the indemnifying party
shall not be liable to the indemnified party for any legal expenses
subsequently incurred by the indemnified party in connection with the
defense thereof; PROVIDED, HOWEVER, the indemnified party shall have the
right to participate in the defense thereof and to employ counsel, at its
own expense, separate from the counsel employed by the indemnifying party,
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it being understood that the indemnifying party shall control such defense,
and if the Third Party Claim is one that by its nature cannot be defended
solely by the indemnifying party, the indemnified and indemnifying party
shall coordinate with respect to the defense of such matter. The
indemnifying party shall be liable for any fees and expenses of counsel
employed by the indemnified party for any period during which the
indemnifying party has not assumed the defense thereof (other than during
any period in which the indemnified party shall have failed to give notice
of the Third Party Claim as provided above). If the indemnifying party
chooses to defend or prosecute a Third Party Claim, all the indemnified
parties shall cooperate in the defense or prosecution thereof. Such
cooperation shall include the retention and (upon the indemnifying party's
request) the provision to the indemnifying party of records and information
that are reasonably relevant to such Third Party Claim, and making
employees available on a mutually convenient basis to provide additional
information and explanation of any material provided hereunder. Whether or
not the indemnifying party assumes the defense of a Third Party Claim, the
indemnified party shall not admit any liability with respect to, or settle,
compromise or discharge, such Third Party Claim without the indemnifying
party's prior written consent (which consent shall not be unreasonably
withheld). The indemnifying party, if it has assumed the defense of any
Third Party Claim as provided in this Section 10.6, shall not consent to a
settlement of, or the entry of any judgment arising from, any such Third
Party Claim without the indemnified party's prior written consent (which
consent shall not be unreasonably withheld) unless such settlement or
judgment (a) relates solely to monetary damages for which the indemnifying
party shall be responsible, (b) includes as an unconditional term thereof
the release of the indemnified party from all liability with respect to
such Third Party Claim and, (c) will not otherwise have a material effect
on the indemnified party.
(c) OTHER CLAIMS. In the event any indemnified party should have a claim
against any indemnifying party under Sections 10.1 or 10.3 that does not
involve a Third Party Claim being asserted against or sought to be
collected from such indemnified party, the indemnified party shall deliver
notice of such claim with reasonable promptness to the indemnifying party.
The failure by any indemnified party to so notify the indemnifying party
shall not relieve the indemnifying party from any liability that it may
have to such indemnified party under Sections 10.1 or 10.3, except to the
extent that the indemnifying party demonstrates that it has been materially
prejudiced by such failure. If the indemnifying party does not notify the
indemnified party within 30 calendar days following its receipt of such
notice that the indemnifying party disputes its liability to the
indemnified party under Sections 10.1 or 10.3, such claim specified by the
indemnified party in such notice shall be conclusively deemed a liability
of the indemnifying party under Sections 10.1 or 10.3 and the indemnifying
party shall pay the amount of such liability to the indemnified party on
demand or, in the case of any notice in which the amount of the claim (or
any portion thereof) is estimated, on such later date when the amount of
such claim (or such portion thereof) becomes finally determined. If the
indemnifying party has timely disputed its liability with respect to such
claim, as provided above, the indemnifying party and the indemnified party
shall proceed in good faith to negotiate a resolution of such dispute and,
if not resolved through negotiations, such dispute shall, subject to
Sections 11.9, 11.10, and 11.11, be resolved by litigation in an
appropriate court of competent jurisdiction.
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10.7 SURVIVAL OF REPRESENTATIONS.
The representations and warranties contained in this Agreement and in
any document delivered in connection herewith (other than the SEC Documents
Representation and the Environmental Representation, which shall not
survive the Closing) shall survive the Closing solely for purposes of this
Article X and shall terminate upon September 15, 2003, other than the ERISA
Affiliate Representation and those representations and warranties set forth
in Sections 4.1 and 4.2, which shall survive indefinitely and 4.12, which
shall survive until the expiration of the applicable statute of
limitations.
10.8 NO ADDITIONAL REPRESENTATIONS.
Buyers acknowledge that none of the Sellers, the Sellers'
Representatives, any Corporation Entity or any other Person has made any
representation or warranty, expressed or implied, as to the accuracy or
completeness of any information regarding Holding, the Corporation and its
Subsidiaries furnished or made available to Buyer and its Representatives,
except as expressly set forth in this Agreement, the Related Documents or
the Schedules, and none of the Sellers, the Sellers' Representatives,
Holding, any Corporation Entity or any other Person shall have or be
subject to any liability (other than with respect to fraud or willful
misconduct) to Buyer or any other Person resulting from the distribution to
any of the Buyers or Buyers' use of, any such information, including the
Descriptive Memorandum prepared by X.X. Xxxxxx Securities Inc. and any
information, documents or material made available to the Buyers in any
"data rooms", management presentations or in any other form in expectation
of the transactions contemplated hereby.
10.9 [INTENTIONALLY OMITTED]
10.10 ADJUSTMENT OF COMMON EQUITY PURCHASE PRICE.
To the extent permitted by Applicable Law, any payment for
indemnification hereunder shall be treated as an adjustment to the Common
Equity Purchase Price or as a capital contribution, as appropriate.
10.11 NO RELIANCE ON SELLERS' REPRESENTATIVES BY SELLERS.
The decision of each Seller to sell Securities pursuant to this
Agreement has been made by such Seller independently of any other Seller
and independently of any information, materials, statements or opinions as
to the terms and conditions of this Agreement and the Related Documents
that may have been made or given by the Sellers' Representatives, any other
Seller or by any agent, employee or other representative of the Sellers'
Representatives, or any other Seller, and neither the Sellers'
Representatives nor any Seller or any of their respective agents, employees
or other representatives shall have any liability to any other Seller (or
any Person) relating to or arising from any such information, materials,
statements or opinions, except as expressly provided in a written
agreement, if any, between or among the Sellers.
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ARTICLE XI
GENERAL PROVISIONS
11.1 ASSIGNMENT.
This Agreement and the rights and obligations hereunder are not
assignable or transferable by Buyers, Holding, the Corporation or the
Sellers (including by operation of law in connection with a merger or
consolidation of Buyer, Holding, the Corporation or any Seller) without the
prior written consent of the Sellers' Representatives, the Corporation and
Buyer; PROVIDED, HOWEVER, that the Buyers may assign this Agreement,
without the consent of the Sellers, to any Affiliate to a financial or
lending institution providing financing to Buyers in connection with the
transactions contemplated hereby or in connection with a sale of the
Business by Buyer following the Closing; PROVIDED FURTHER, that no such
assignment shall release Buyer from its obligations hereunder. Any
attempted assignment in violation of this Section 11.1 shall be void AB
INITIO. Notwithstanding the terms of any other agreements to which any
Seller may be a party, each of the Sellers hereby agrees that any sale of
equity in Buyer prior to the Closing to any party or parties, as may be
selected by Buyer in its sole discretion, shall be specifically permitted
so long as the GS Funds shall hold a majority of the equity in Buyer at the
Closing.
11.2 NO THIRD-PARTY BENEFICIARIES.
This Agreement is for the sole benefit of the parties hereto and their
permitted assigns and nothing in this Agreement expressed or implied shall
give or be construed to give to any Person, other than the parties hereto
and such assigns, any legal or equitable rights under this Agreement.
11.3 NOTICES.
All notices, consents, waivers or other communications required or
permitted to be given hereunder shall be in writing and shall be delivered
by hand or sent by facsimile or sent, postage prepaid, by registered,
certified or internationally-recognized overnight courier service and shall
be deemed duly given when so delivered by hand or facsimile, or if mailed,
five Business Days after mailing (one Business Day in the case of overnight
courier service), as follows:
(i) if to Buyer or the GS Funds, or after the Closing, the Surviving
Corporation, to
GS Capital Partners 2000, L.P.
c/o Goldman, Sachs & Co.
00 Xxxxx Xxxxxx, 00{xx} Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
Attention: Xxxxxx Xxxxxxxxx
Xxx Xxxxx
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with a copy to:
Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx
Xxx Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
Attention: Xxxx X. Xxxxxxxxx;
(ii) if, prior to the Closing, to Holding or the Corporation, to
c/o Berry Plastics Corporation
000 Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxx
Telephone: 000-000-0000
Telecopier: (000) 000-0000
Attention: Xxx X. Boots;
with copies to:
Xxxxxxx Procter LLP
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
Attention: Xxxxxxx X. X'Xxxxx; and
(iii) if to the Sellers' Representatives, to each Seller Representative at the
address set forth on SCHEDULE I opposite the name of such Seller
Representative, with a copy to any party designated by such Seller
Representative as set forth on SCHEDULE I; and
(iv) if to any Seller, to such Seller at the address set forth on SCHEDULE I
opposite the name of such Seller, with a copy to any party designated by
such Seller as set forth on SCHEDULE I;
or to such other address as any party to whom notice is to be given
has furnished to the other parties in accordance herewith.
11.4 INTERPRETATION; EXHIBITS AND SCHEDULES.
The headings contained in this Agreement, in any Exhibit or Schedule
hereto and in the table of contents to this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation
of this Agreement. Any matter set forth on any Schedule shall be deemed
set forth on all other Schedules to the extent that such matter is, on its
face, responsive to such other Schedule. The inclusion of any information
in any Schedule shall not be deemed to be an admission or acknowledgment by
Holding, the Corporation or the Sellers that such information is required
to be listed on such Schedule or is material to or outside the ordinary
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course of the business of any Corporation Entity, as applicable. Any cost
estimates, projections or other forward-looking statements contained or
referred to in this Agreement or in the Annexes, Schedules and Exhibits
hereto or in any materials that have been provided to Buyer by Holding, the
Corporation or the Sellers are not and shall not be deemed to be
representations or warranties of Holding, the Corporation or the Sellers.
EXCEPT WHEN THE CONTEXT REQUIRES OTHERWISE, ANY REFERENCE IN THIS AGREEMENT
TO ANY ARTICLE, SECTION, CLAUSE, ANNEX, SCHEDULE OR EXHIBIT SHALL BE TO THE
ARTICLES, SECTIONS AND CLAUSES OF, AND ANNEXES, SCHEDULES AND EXHIBITS TO,
THIS AGREEMENT. THE WORDS "INCLUDE," "INCLUDES" AND "INCLUDING" ARE DEEMED
TO BE FOLLOWED BY THE PHRASE "WITHOUT LIMITATION." ANY REFERENCE TO THE
MASCULINE, FEMININE OR NEUTER GENDER SHALL INCLUDE SUCH OTHER GENDERS AND
ANY REFERENCE TO THE SINGULAR OR PLURAL SHALL INCLUDE THE OTHER, IN EACH
CASE UNLESS THE CONTEXT OTHERWISE REQUIRES. All Annexes, Schedules and
Exhibits are hereby incorporated in and made a part of this Agreement as if
set forth in full herein. When a reference is made in this Agreement to an
Article, Section, clause, Annex, Schedule or Exhibit, such reference shall
be to an Article, Section or clause of, or Annex, Schedule or Exhibit to,
this Agreement unless otherwise indicated. The use in this Agreement of
the word "or" shall not be exclusive. Wherever used in this Agreement,
"knowledge" of Holding or the Corporation shall mean the actual knowledge,
after due inquiry, of Xxx Boots, Xxxxx Xxxxxx, Xxxx Xxxxxxxx, Xxxxx Xxxx,
Xxx Xxxxxxxxxx, Xxxxx Xxxxxx, Xxxx Xxxxxxx, Xxxx Xxxxxx, Xxxxxx Xxxxxx,
Xxxxx Xxxxx, Xxxx Xxxxx and Xxxx Xxxxx.
11.5 SEVERAL OBLIGATIONS
Notwithstanding anything to the contrary in this Agreement, (a) each
of the representations, warranties, covenants, undertakings and obligations
of the Sellers under this Agreement constitute several (not joint)
obligations of the Sellers, and (b) each of the representations,
warranties, covenants, undertakings and obligations of the GS Funds under
this Agreement constitute several (not joint) obligations of the GS Funds.
11.6 COUNTERPARTS.
This Agreement may be executed in one or more counterparts, all of
which shall be considered one and the same agreement, and shall become
effective when one or more such counterparts have been signed by each of
the parties and delivered to the other party. This Agreement may be
executed and delivered in counterpart signatures delivered via facsimile
transmission and any such counterpart so delivered via facsimile
transmission shall be deemed an original for all intents and purposes.
11.7 ENTIRE AGREEMENT.
This Agreement, the Related Documents and the Confidentiality
Agreement contain the entire agreement and understanding between the
parties hereto with respect to the subject matter hereof and supersede all
prior agreements and understandings relating to such subject matter.
Neither party shall be liable or bound to any other party in any manner by
any representations, warranties or covenants relating to such subject
matter except as specifically set forth in this Agreement or in the Related
Documents or the Confidentiality Agreement.
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11.8 AMENDMENTS AND WAIVERS.
This Agreement may not be amended except by an instrument in writing
signed on behalf of the Sellers' Representatives, the Corporation and
Buyer. No amendments to this agreement shall treat any Seller in a non-
ratable or otherwise discriminatory manner, and no amendment shall increase
the liability of an initial signatory to this Agreement without the written
consent of such initial signatory. Buyer, the Sellers' Representatives,
the Corporation, or a particular Seller, as the case may be, may waive
solely in its own behalf compliance by any other party with any term or
provision of this Agreement that such other party was or is obligated to
such waiving party to comply with or perform.
11.9 SEVERABILITY.
It is the desire and intent of the parties hereto that the provisions
of this Agreement be enforced to the fullest extent permissible under the
laws and public policies applied in each jurisdiction in which enforcement
is sought. Accordingly, if any particular provision of this Agreement
shall be adjudicated by a court of competent jurisdiction to be invalid,
prohibited or unenforceable for any reason, such provision, as to such
jurisdiction, shall be ineffective, without invalidating the remaining
provisions of this Agreement or affecting the validity or enforceability of
this Agreement or affecting the validity or enforceability of such
provision in any other jurisdiction. Notwithstanding the foregoing, if
such provision could be more narrowly drawn so as not to be invalid,
prohibited or unenforceable in such jurisdiction, it shall, as to such
jurisdiction, be so narrowly drawn, without invalidating the remaining
provisions of this Agreement or affecting the validity or enforceability of
such provision in any other jurisdiction.
11.10 NO CONSEQUENTIAL DAMAGES.
Notwithstanding any provision of this Agreement, no party shall be
liable, for any consequential special or punitive damages, including loss
of revenue or income, diminution in value of securities or loss of business
reputation or opportunity relating to the breach of this Agreement, except
to the extent that such damages are paid or payable to a third party by
such other party.
11.11 CONSENT TO JURISDICTION.
Each of the PARTIES HERETO irrevocably submits to the non-exclusive
jurisdiction of (a) the Supreme Court of the State of New York, New York
County, and (b) the United States District Court for the Southern District
of New York, for the purposes of any suit, action or other proceeding
arising out of this Agreement, any Related Document or any transaction
contemplated hereby or thereby. EACH OF THE PARTIES HERETO further agrees
that service of any process, summons, notice or document by U.S. registered
mail to such party's respective address set forth above shall be effective
service of process for any action, suit or proceeding in New York with
respect to any matters to which it has submitted to jurisdiction in this
Section 11.10. EACH OF THE PARTIES HERETO irrevocably and unconditionally
-59-
waives any objection to the laying of venue of any action, suit or
proceeding arising out of this Agreement, any Related Document or the
transactions contemplated hereby and thereby in (i) the Supreme Court of
the State of New York, New York County, or (ii) the United States District
Court for the Southern District of New York, and hereby and thereby further
irrevocably and unconditionally waiveS and agreeS not to plead or claim in
any such court that any such action, suit or proceeding brought in any such
court has been brought in an inconvenient forum.
11.12 GOVERNING LAW; WAIVER OF JURY TRIAL.
This Agreement shall be governed by and construed in accordance with
the internal laws of the State of New York applicable to agreements made
and to be performed entirely within such State, without regard to the
conflicts of law principles of such State.
EACH PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO
THE FULLEST EXTENT IT MAY LEGALLY AND EFFECTIVELY DO SO, TRIAL BY JURY IN
ANY SUIT, ACTION OR PROCEEDING ARISING HEREUNDER.
11.13 CONSTRUCTION.
The provisions of this Agreement shall be construed according to their
fair meaning and neither for nor against any party hereto irrespective of
which party caused such provisions to be drafted. Each of the parties
acknowledge that it has been represented by an attorney in connection with
the preparation and execution of this Agreement.
* * * *
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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
and Plan of Merger as of the date first written above.
BUYERS:
XX XXXXX ACQUISITION CORP.
By: /S/ XXXXXXX X. XXXXXX
-------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
GS FUNDS:
GS CAPITAL PARTNERS 2000, L.P.
By: GS Advisors 2000, L.L.C., its general
partner
By: /S/ XXXX X. XXXXXX
-------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
GS CAPITAL PARTNERS 2000, OFFSHORE, L.P.
By: GS Advisors 2000, L.L.C., its
general partner
By: /S/ XXXX X. XXXXXX
-------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
GS CAPITAL PARTNERS 2000, GMBH & CO.
BETEILIGUNGS KG
By: Xxxxxxx Xxxxx Management GPGmbH, its
general partner
By: /S/ XXXX X. XXXXXX
-------------------------
Name: Xxxx X. Xxxxxx
Title: Managing Director
BRIDGE STREET SPECIAL OPPORTUNITIES FUND
2000, L.P.
By: Bridge Street Special Opportunities
2000, L.L.C., its general partner
By: /S/ XXXX X. XXXXXX
-------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
GS CAPITAL PARTNERS 2000 EMPLOYEE FUND,
L.P.
By: GS Employee Funds 2000, L.L.C., its
general partner
By: /S/ XXXX X. XXXXXX
-------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
XXXXX XXXXXX XXXX 0000, X.X.
By: Stone Street 2000, L.L.C., its general
partner
By: /S/ XXXX X. XXXXXX
-------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
BPC HOLDING CORPORATION
By: /S/ XXXXX X. XXXXXXXXXX
-------------------------
Name: Xxxxx X. Xxxxxxxxxx
Title: Executive Vice President,
Treasurer, Secretary &
Chief Financial Officer
XXXXX PLASTICS CORPORATION
By: /S/ XXXXX X. XXXXXXXXXX
-------------------------
Name: Xxxxx X. Xxxxxxxxxx
Title: Executive Vice President,
Treasurer, Secretary &
Chief Financial Officer
SELLERS:
By:/S/ XXX X. BOOTS
-------------------------
Xxx X. Boots
By: /S/ XXXXX X. XXXXXXXXXX
-------------------------
Xxxxx X. Xxxxxxxxxx
THE XXXXX X. XXXXXXXXXX CHARITABLE
REMAINDER UNITRUST
By: /S/ XXXXX X. XXXXXXXXXX
-------------------------
Xxxxx X. Xxxxxxxxxx, as Trustee
ATLANTIC EQUITY PARTNERS
INTERNATIONAL II, L.P.
By: Atlantic Equity Associates
International II, L.P., its General
Partner
By: Buaron Holdings Ltd., its Managing
General Partner
By: /S/ XXXXXXX XXXXXX
-------------------------
Name: Xxxxxxx Xxxxxx
Title: President
BPC EQUITY, LLC
By: Aetna Life Insurance Company, its Member
By: /S/ XXXXX X. XXXXXX
-------------------------
Name: Xxxxx X. Xxxxxx
Title: Investment Manager
X.X. XXXXXX PARTNERS (SBIC), LLC
By: /S/ XXXXXX X. XXXXXXX, XX.
-------------------------
Name: Xxxxxx X. Xxxxxxx, Xx.
Title: Partner
THE NORTHWESTERN MUTUAL LIFE INSURANCE
COMPANY
By: /S/ XXXXX X. XXXXXX
-------------------------
Name: Xxxxx X. Xxxxxx
Title: Its Authorized Representative
Solely as a guarantor of the payment and
performance of all obligations of its
affiliates hereunder:
AETNA LIFE INSURANCE COMPANY
By: /S/ XXXXX X. XXXXXX
-------------------------
Name: Xxxxx X. Xxxxxx
Title: Investment Manager
A-1
LIBNY/1108422.10
ANNEX I
DEFINITIONS
Capitalized terms used but not defined in the Merger Agreement
have the respective meanings assigned to such terms below.
"ACQUISITION PROPOSAL" has the meaning set forth in Section 7.6.
"ADJUSTED OWNERSHIP PERCENTAGE" has the meaning set forth in
Section 3.1.
"ADJUSTMENT FACTOR" has the meaning set forth in Section 3.1.
"ADJUSTED SHARE NUMBER" has the meaning set forth in Section 3.1.
"AFFILIATE" of any Person means another Person that directly or
indirectly, through one or more intermediaries, controls, is controlled by,
or is under common control with, such first Person.
"AFFILIATED GROUP" has the meaning set forth in Section 4.12.
"AGREEMENT" has the meaning set forth in the preamble.
"APPLICABLE LAW" has the meaning set forth in Section 4.3.
"ATLANTIC EQUITY" has the meaning set forth in the caption.
"AUDITED BALANCE SHEET" has the meaning set forth in Section 4.5.
"AUDITED FINANCIAL STATEMENTS" has the meaning set forth in
Section 4.5.
"BONUS PLAN" means the Xxxxx Plastics Corporation Bonus Plan for
Executives and the Xxxxx Plastics Corporation Bonus Plan for Managers and
Directors, each of which has previously been provided to Buyer.
"BPC EQUITY" has the meaning set forth in the caption.
"BUSINESS" means the business presently conducted or proposed to
be conducted by Holding, the Corporation and its Subsidiaries during the
next twelve months.
"BUSINESS DAY" means any day that is not a Saturday, Sunday or
other day on which banking institutions in New York, New York are not
required to be open.
"BUYER" has the meaning set forth in the caption.
"BUYER COMMON STOCK" has the meaning set forth in Section 3.2(a).
"BUYERS" means the Buyer and the GS Funds, collectively.
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"BUYER INDEMNITEE" shall have the meaning set forth in Section
10.2(a).
"CAPITAL LEASE" has the meaning set forth in Section 3.1.
"CAPITAL LEASE AMOUNT" has the meaning set forth in Section 3.1.
"CASH HOLDBACK AMOUNT" has the meaning set forth in Section 3.1.
"CASH INDEMNIFICATION HOLDBACK AMOUNT" has the meaning set forth
in Section 3.1.
"CERTIFICATE OF MERGER" means a certificate of merger meeting the
requirements of the Delaware Statute.
"CLASS A COMMON STOCK" has the meaning set forth in the preamble.
"CLASS B COMMON STOCK" has the meaning set forth in the preamble.
"CLASS C COMMON STOCK" has the meaning set forth in the preamble.
"CLOSING" has the meaning set forth in Article II.
"CLOSING WORKING CAPITAL" has the meaning set forth in Section
3.7(a).
"CLOSING WORKING CAPITAL STATEMENT" has the meaning set forth in
Section 3.7(a).
"CLOSING DATE" has the meaning set forth in Article II.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COMMITMENT LETTERS" has the meaning set forth in Section 6.6.
"COMMON EQUITY PURCHASE PRICE" has the meaning set forth in
Section 3.1.
"COMMON STOCK" has the meaning set forth in the preamble.
"CONFIDENTIALITY AGREEMENT" has the meaning set forth in Section
7.3.
"CONFIDENTIAL INFORMATION" has the meaning set forth in Section
7.3(b).
"CONSTITUENT CORPORATIONS" has the meaning set forth in Section
1.1.
"CONTRACT" means any loan or credit agreement, note, bond,
mortgage, indenture, lease, sublease, purchase order or other written or
oral agreement, commitment or license.
"CONVERTIBLE SECURITIES" has the meaning set forth in the
preamble.
"CORPORATE RIGHTS" has the meaning set forth in Section 1.3.
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"CORPORATION BENEFIT PLAN" means each plan, program, policy,
contract, agreement or other arrangement providing for compensation,
retirement benefits, severance, termination pay, performance awards, stock
or equity-related awards, fringe benefits or other employee benefits of any
kind, whether formal or informal, funded or unfunded, written or oral,
including, without limitation, each "employee benefit plan," within the
meaning of Section 3(3) of ERISA (other than an Employee Agreement) 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 incurred
by any Corporation Entity for the benefit of any Employee, and pursuant to
which any Corporation Entity has or may have any liability, contingent or
otherwise.
"CORPORATION INTELLECTUAL PROPERTY" means all Intellectual
Property which is used or has been used in connection with the Business,
including, without limitation, the polypropylene thermoforming process and
technology, and the products relating to such process and technology.
"CORPORATION" has the meaning set forth in the caption.
"CORPORATION ENTITY" means each of Holding, the Corporation and
each of the Corporation's Subsidiaries.
"DEBT FINANCING" has the meaning set forth in Section 6.6.
"DEBT TENDER OFFERS" has the meaning set forth in Section 3.4(a).
"DEDUCTIBLE AMOUNT" has the meaning set forth in Section 10.1(c).
"DELAWARE STATUTE" has the meaning set forth in the preamble.
"DE MINIMIS LOSS" has the meaning set forth in Section
10.1(c)(ii).
"DOJ" has the meaning set forth in Section 7.4(b).
"DOL" means the U.S. Department of Labor.
"EFFECTIVE TIME" has the meaning set forth in Section 1.2.
"11% NOTES" has the meaning set forth in Section 3.1.
"EMPLOYEE" means each current, former, or retired employee,
director, officer, consultant, independent contractor or other service
provider of any Corporation Entity.
"EMPLOYEE AGREEMENT" means each management, employment,
severance, consulting, non-compete, confidentiality, or similar agreement
or contract between any Corporation Entity and any Employee pursuant to
which any Corporation Entity has or may have any liability contingent or
otherwise.
"ENTERPRISE PURCHASE PRICE" has the meaning set forth in Section
3.1.
A-3
"ENVIRONMENTAL CLAIM" has the meaning set forth in section
10.2(d)(i).
"ENVIRONMENTAL CLAIM NOTICE" has the meaning set forth in Section
10.2(d)(i).
"ENVIRONMENTAL DEDUCTIBLE AMOUNT" has the meaning set forth in
Section 10.1(c)(i).
"ENVIRONMENTAL LAW" means any foreign, federal, state or local
law, statute, ordinance, rule, regulation, or legally binding directive or
guidance, including any common law cause of action providing any right or
remedy relating to Environmental Matters, and all applicable judicial and
administrative decisions, orders, and decrees relating to Environmental
Matters, as the foregoing are enacted and in effect on or prior to the
Closing Date.
"ENVIRONMENTAL LOSSES" has the meaning set forth in Section
10.2(a)(iii)
"ENVIRONMENTAL MATTER" means any matter arising out of, relating
to, or resulting from pollution, contamination, protection of the
environment, health or safety, and any matters relating to emissions,
discharges, disseminations, releases or threatened releases, of Hazardous
Substances into the air (indoor and outdoor), surface water, groundwater,
soil, land surface or subsurface, buildings, facilities, real or personal
property or fixtures 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
4.17(b).
"ENVIRONMENTAL REPRESENTATION" shall mean the representations and
warranties set forth in Section 4.17.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
"ERISA AFFILIATE" with respect to a Person means each business or
entity which is a member of a "controlled group of corporations" under
"common control" or a member of an "affiliated service group" with such
Person within the meaning of Sections 414(b), (c) or (m) of the Code, or
required to be aggregated with such Person under Section 414(o) of the
Code, or is under "common control" with such Person, within the meaning of
Section 4001(a)(14) of ERISA.
"ERISA AFFILIATE REPRESENTATION" shall mean the representation
and warranty set forth in Section 4.14(i).
"ESCROW ACCOUNT" has the meaning set forth in Section 3.1.
"ESCROW AGENT" has the meaning set forth in Section 3.1.
"ESCROW AGREEMENT" has the meaning set forth in Section 3.1.
A-4
"EXCHANGE ACT" means The Exchange Act of 1934, as amended, and as
the same may be further amended, modified or supplemented from time to
time, or any successor statute, and the rules and regulations thereunder,
as the same are from time to time in effect.
"FACILITIES" means all real property owned, leased, operated or
controlled by the Corporation or any of its Subsidiaries and any buildings,
facilities, machinery, equipment, furniture, leasehold and other
improvements, fixtures, vehicles, structures, any related capital items and
other tangible property located on, in, under, or above the real property
of the Corporation or any of its Subsidiaries.
"FINAL CLOSING WORKING CAPITAL" has the meaning set forth in
Section 3.7(c).
"FINANCIAL STATEMENTS" has the meaning set forth in Section 4.5.
"FTC" has the meaning set forth in Section 7.4(b).
"FUNDED INDEBTEDNESS" has the meaning set forth in Section 3.1.
"FUNDED OBLIGATIONS" has the meaning set forth in Section 3.1.
"GAAP" means United States generally accepted accounting
principles.
"GOVERNMENTAL ENTITY" means any Federal, state, local or foreign
government or any court of competent jurisdiction, administrative agency or
commission or other governmental authority or instrumentality, domestic or
foreign.
"GS FUNDS" has the meaning set forth in the caption.
"GUARANTEE" by any Person means all obligations (other than
endorsements in the ordinary course of business of negotiable instruments
for deposits or collection) of any Person guaranteeing, or in effect
guaranteeing, any indebtedness, dividend or other obligation of any other
Person (the "PRIMARY OBLIGOR") in any manner, whether directly or
indirectly, including, without limitation, all obligations incurred through
an agreement, contingent or otherwise, by such Person: (i) to purchase
such indebtedness or obligation or any property or assets constituting
security therefor, (ii) to advance or supply funds (x) for the purchase or
payment of such indebtedness or obligation or (y) to maintain working
capital or other balance sheet condition or otherwise to advance or make
available funds for the purchase or payment of such indebtedness or
obligation, (iii) to lease property or to purchase securities or other
property or services primarily for the purpose of assuring the owner of
such indebtedness or obligation of the ability of the Primary Obligor to
make payment to such indebtedness or obligation, or (iv) to otherwise pay
any holder of indebtedness or Contract of any Person with respect to any
losses in respect thereof (e.g., "make-wholes").
"HAZARDOUS SUBSTANCES" means any pollutants, contaminants, toxic
or hazardous or extremely hazardous substances, materials, wastes,
constituents, compounds, chemicals, natural or man-made elements
(including, without limitation, petroleum or any by-products or fractions
thereof, any form of natural gas, Xxxxxx Amendment materials, lead,
asbestos and asbestos-containing materials ("ACM"), building construction
A-5
materials and debris, polychlorinated biphenyls ("PCBS") and PCB-containing
equipment, radon and other radioactive elements, infectious, carcinogenic,
mutagenic, or etiologic agents, pesticides, defoliants, explosives,
flammables, corrosives and urea formaldehyde foam insulation) that are
regulated by, or may form the basis of liability under, any Environmental
Laws.
"HMO" has the meaning set forth in Section 4.14(h).
"HOLDING" has the meaning set forth in the caption.
"HOLDING CERTIFICATE OF INCORPORATION" means the certificate of
incorporation of Holding, together with all the certificates of designation
relating to the Preferred Stock.
"HOLDING MATERIAL ADVERSE CHANGE" means a change, individually or
in the aggregate, that has had or would reasonably be expected to have a
Material Adverse Effect on the Corporation Entities taken as a whole.
"HSR ACT" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act
of 1976, as amended.
"INDEBTEDNESS" means, with respect to any Person, (i) all
obligations of such Person for borrowed money, or with respect to deposits
or advances received by such Person of any kind, (ii) all obligations of
such Person evidenced by bonds, debentures, notes or similar instruments,
(iii) all obligations of such Person issued or assumed as the deferred
purchase price of property or services (other than accounts payable to
suppliers and similar accrued liabilities incurred in the ordinary course
of business and paid in a manner consistent with past practice), (iv) all
indebtedness of others secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured
by) any lien or security interest on property owned or acquired by such
Person whether or not the obligations secured thereby have been assumed,
(v) all guarantees of such Person, (vi) all obligations (including, but not
limited to reimbursement obligations) relating to the issuance of letters
of credit for the account of such Person, (vii) all obligations arising out
of foreign exchange contracts, and (viii) all obligations arising out of
interest rate and currency swap agreements, cap, floor and collar
agreements, interest rate insurance, currency spot and forward contracts
and other agreements or arrangements designed to provide protection against
fluctuations in interest or currency exchange rates.
"INDEMNIFIED ENVIRONMENTAL MATTERS" has the meaning set forth in
Section 10.2(d).
"INDEMNIFICATION HOLDBACK AMOUNT" has the meaning set forth in
Section 3.1.
"INDEMNIFIED PARTY" has the meaning set forth in Section 10.6(a).
"INDEMNITY CAP" has the meaning set forth in Section 10.1(c).
"INDENTURE AMENDMENTS" has the meaning set forth in Section
3.4(a).
A-6
"INTELLECTUAL PROPERTY" means all intellectual property rights,
including, without limitation, all: patents, patent applications, together
with all patent disclosures, reissuances, continuations, continuations-in-
part, divisions, revisions, extensions and reexaminations thereof,
trademarks, tradenames, service marks, trade dress, logos, domain names and
designs, and all goodwill associated therewith, and all applications,
registrations and renewals in connection therewith, copyrights and
copyright applications and all registrations and renewals in connection
therewith; all inventions (whether patentable or unpatentable and whether
or not reduced to practice) and all improvements thereon; all trade secrets
and confidential business information (including ideas, research and
development, know-how, formulas, compositions, manufacturing 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); all computer software (including data and related
documentation); all other proprietary rights; and all licenses,
sublicenses, agreements, or permissions related to any of the foregoing.
"INVENTORS" has the meaning set forth in Section 4.9(b)(vii).
"IRS" means the Internal Revenue Service.
"JPMP" has the meaning set forth in the caption.
"JUDGMENT" has the meaning set forth in Section 4.3.
"LATEST BALANCE SHEET" has the meaning set forth in Section 4.5.
"LEASES" means all Contracts for Leased Real Property.
"LEASED REAL PROPERTY" means all real property and interests in
real property leased by the Corporation and its Subsidiaries and used or
held for use in the operation or conduct of the business of the Corporation
and such Subsidiaries, but excluding warehouse space leased by the
Corporation or its Subsidiaries for the purpose of storing equipment,
inventory or other assets.
"LIENS" means mortgages, liens, security interests, pledges,
easements, rights of first refusal, options, restrictions or encumbrances
of any kind.
"LOSSES" has the meaning set forth in Section 10.1(a).
"MATERIAL ADVERSE EFFECT" on any Person means (x) a material
adverse effect on the business, assets, liabilities, financial condition or
results of operation of such Person and its Subsidiaries, taken as a whole
or (y) the occurrence of any change, event or effect that results in, or is
reasonably foreseeable to result in, a material adverse and sustained
effect on the current or future EBITDA or equity value of such Person and
its Subsidiaries taken as a whole; in each case, other than as a result of
(a) changes in general domestic or foreign economic, political or
regulatory conditions or (b) changes affecting generally the industries in
which the Person operates; PROVIDED that with respect to each of clauses
(a) and (b) that such effect is not materially more adverse with respect to
such Person than the effect on comparable businesses generally.
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"MERGER" has the meaning set forth in the preamble.
"MR. BOOTS" has the meaning set forth in the caption.
"NEUTRAL AUDITORS" has the meaning set forth in Section 3.7(c).
"NEVADA BONDS AMOUNT" has the meaning set forth in Section 3.1
"NEVADA BONDS" has the meaning set forth in Section 3.1
"OFFER DOCUMENTS" has the meaning set forth in Section 3.4(b).
"OPTIONS" has the meaning set forth in the preamble.
"OWNED REAL PROPERTY" means the real property owned by the
Corporation or its Subsidiaries, together with all buildings and other
structures, facilities or improvements currently or hereafter located
thereon and all easements, licenses, rights and appurtenances relating to
the foregoing.
"OWNERSHIP PERCENTAGE" of any Seller, shall mean, as of any date,
the percentage set forth opposite such Seller's name on SCHEDULE I as of
such date (which Schedule will be updated, as necessary, on the Closing
Date and on each date thereafter on which a joinder is delivered to this
Agreement). The aggregate Ownership Percentage of the Sellers party to
this Agreement shall equal 100% at all times.
"PAID-OUT COMMON EQUITY PURCHASE PRICE" has the meaning set forth
in Section 3.1.
"PAID-OUT SHARES" has the meaning set forth in Section 3.1.
"PBGC" means the Pension Benefit Guaranty Corporation.
"PER SHARE AMOUNT" has the meaning set forth in Section 3.1.
"PENSION PLAN" means each Corporation Benefit Plan which is an
"employee pension benefit plan" within the meaning of Section 3(2) of
ERISA.
"PERMITS" has the meaning set forth in Section 4.12.
"PERMITTED LIENS" means (i) those Liens set forth on SCHEDULE 4.7
or in the Financial Statements or securing debt reflected as a liability on
the Latest Balance Sheet, (ii) mechanics', carriers', workmen's,
repairmen's or other like Liens arising or incurred in the ordinary course
of business, Liens arising under original purchase price conditional sales
contracts and equipment leases with third parties entered into in the
ordinary course of business and liens for Taxes that are not due and
payable or that may thereafter be paid without penalty or that are being
contested in good faith by appropriate proceedings, (iii) other
imperfections of title or encumbrances, if any, that do not, individually
or in the aggregate, materially impair the continued use and operation of
the any of the Corporation's Owned Property in the conduct of its business
A-8
as presently conducted, (iv) easements, covenants, rights-of-way and other
similar restrictions of record, which do not individually or in the
aggregate, materially impair the continued use and operation of the Owned
Property in the conduct of the Business as presently conducted, (v) any
conditions that are shown by a survey of any Owned Property which has been
furnished to Buyer prior to the date of this Agreement and (vi) (A) zoning,
building and other similar restrictions, (B) Liens that have been placed by
any developer, landlord or other third party on property over which the
Corporation has easement rights and (C) unrecorded easements, covenants,
rights-of-way and other similar restrictions, none of which items set forth
on clause (vi) above, individually or in the aggregate, materially impair
the continued use and operation of the Owned Property in the conduct of the
business of the Corporation as presently conducted.
"PER SHARE AMOUNT" has the meaning set forth in Section 3.1.
"PER SHARE CASH HOLDBACK AMOUNT" has the meaning set forth in
Section 3.1.
"PERSON" means and includes an individual, a partnership, a
corporation, a limited liability company, an association, a joint stock
company, a trust, a joint venture, an unincorporated organization or a
Governmental Entity (or any department, agency or political subdivision
thereof).
"PREFERRED STOCK" has the meaning set forth in the preamble.
"PREFERRED STOCK REDEMPTION AMOUNT" has the meaning set forth in
Section 3.1.
"PROCEEDING" means any action, suit, investigation or proceeding
before any Governmental Entity or arbitrator.
"PUBLIC BONDS" has the meaning set forth in Section 3.1.
"REAL PROPERTY" means, collectively, the Leased Real Property and
the Owned Real Property.
"RELATED DOCUMENTS" means the Escrow Agreement.
"REMAINING 11% NOTES" has the meaning set forth in Section 3.1.
"REMAINING 12.25% NOTES" has the meaning set forth in Section
3.1.
"REMAINING 12.5% NOTES" has the meaning set forth in Section 3.1.
"REMAINING NOTES" has the meaning set forth in Section 3.1.
"REMAINING 11% NOTES AMOUNT" has the meaning set forth in Section
3.1.
"REMAINING 12.25% NOTES AMOUNT" has the meaning set forth in
Section 3.1.
"REMAINING 12.5% NOTES AMOUNT" has the meaning set forth in
Section 3.1.
"REMAINING NOTES AMOUNT" has the meaning set forth in Section
3.1.
A-9
"REMEDIAL ACTION" means any environmental investigatory, remedial
or corrective action with respect to contamination or potential
contamination of the soil and/or groundwater at, on, beneath or migrating
to or from the Facilities.
"REPRESENTATIVES" means, as to a Person, such Person's
affiliates, partners, officers, directors, employees, agents, advisors
(legal, accounting and financial), consultants' financing sources and
financing sources' advisors.
"RESOLUTION PERIOD" shall have the meaning set forth in Section
3.7(b).
"RETURNS" means, collectively, returns, declarations of estimated
tax, tax reports, information returns and statements relating to any Taxes.
"ROLLED-OVER SHARES" has the meaning set forth in Section 3.1.
"ROLLOVER INDEMNIFICATION HOLDBACK" has the meaning set forth in
Section 3.5(c).
"SEC" has the meaning set forth in Section 4.6.
"SEC DOCUMENTS" has the meaning set forth in Section 4.6.
"SEC DOCUMENTS REPRESENTATION" means the representations and
warranties set forth in Section 4.6.
"SECTION 7.7 NOTICE" has the meaning set forth in Section 7.7(b).
"SECURITIES ACT" means the Securities Act of 1933, as amended,
and as the same may be further amended, modified or supplemented from time
to time, or any successor statute, and the rules and regulations
thereunder, as the same are from time to time in effect.
"SECURITIES" has the meaning set forth in the preamble.
"SELLER" and "SELLERS" have the meanings set forth in the
caption.
"SELLERS' REPRESENTATIVES" has the meaning set forth in Section
7.11(a).
"SERIES A PREFERRED STOCK" has the meaning set forth in the
preamble.
"SERIES A-1 PREFERRED STOCK" has the meaning set forth in the
preamble.
"SERIES B PREFERRED STOCK" has the meaning set forth in the
preamble.
"SERIES C-1 PREFERRED STOCK" has the meaning set forth in the
preamble.
"SERIES C-2 PREFERRED STOCK" has the meaning set forth in the
preamble.
"SERIES C-3 PREFERRED STOCK" has the meaning set forth in the
preamble.
"SERIES C-4 PREFERRED STOCK" has the meaning set forth in the
preamble.
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"SERIES C-5 PREFERRED STOCK" has the meaning set forth in the
preamble.
"SERIES D PREFERRED STOCK" has the meaning set forth in the
preamble.
"SHARE NUMBER" has the meaning set forth in Section 3.1.
"SUBSIDIARY" of any Person means another Person, an amount of the
voting securities, other voting ownership or voting partnership interests
of which, is sufficient to elect at least a majority of its board of
directors or other governing body or, if there are no such voting
interests, 50% or more of the equity interests of which is owned directly
or indirectly by such first Person. For purposes of this Agreement, the
Subsidiaries of the Corporation shall mean each of the Subsidiaries listed
in Schedule 4.1.
"SURVIVING CORPORATION" has the meaning set forth in Section 1.1.
"TARGET WORKING CAPITAL" has the meaning set forth in Section
3.7(d).
"TAX" or "TAXES" means, with respect to any Person, any Federal,
State, local or foreign income (including any tax on or based upon net
income, gross income, or income as specially defined, or earnings, profits,
or selected items of income, earnings or profits) gross receipts, sales,
use, estimated, ad valorem, transfer, franchise, license, withholding,
payroll, employment, windfall profits, alternative, add-in minimum tax,
customs duties or other taxes of any kind whatsoever, together with any
interest and any penalties, additions to tax or additional amounts imposed
by any taxing authority on such Person.
"THIRD PARTY CLAIM" has the meaning set forth in Section 10.6(a).
"TOTAL NOL" means the sum of (i) the amount as of January 1, 2002
of the aggregate federal net operating loss carryovers of the members of
the affiliated group of which Holding is the common parent company (the
"AFFILIATED GROUP") and (ii) the amount of the current deductions available
to the members of the Affiliated Group for federal income tax purposes for
items incurred by such members in connection with the acquisition of
Holding pursuant to the Merger Agreement and any associated transactions
(including, but not limited to, any bonuses payable to employees in
connection with the acquisition, any repurchase premium and write-offs of
unamortized debt issuance expenses on the retirement of outstanding debt,
any payment of previously accrued interest or original issue discount on
debt the deduction of which was deferred until paid under Section 163(e)(5)
of the Code, and any exercise or cash out of options).
"TRANSACTION COSTS" has the meaning set forth in Section 3.1.
"TRANSFER TAXES" has the meaning set forth in Section 7.8(b).
"TRI-PLAS NOTE" has the meaning set forth in Section 3.1.
"TRI-PLAS NOTE AMOUNT" has the meaning set forth in Section 3.1.
"12.25% NOTES" has the meaning set forth in Section 3.1.
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"12.5% NOTES" has the meaning set forth in Section 3.1.
"UNAUDITED FINANCIAL STATEMENTS" has the meaning set forth in
Section 4.5.
"WAIVING PARTY" has the meaning set forth in Section 8.5.
"WARRANT AMOUNT" has the meaning set forth in Section 3.2(d).
"WARRANTS" has the meaning set forth in the preamble.
"WELFARE PLAN" means each Corporation Benefit Plan which is an
"employee welfare benefit plan" within the meaning of Section 3(1) of
ERISA.
"WORKING CAPITAL SHORTFALL" has the meaning set forth in Section
3.7(d).
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LIBNY/1108422.10
EXHIBIT D
FORM OF JOINDER AGREEMENT
The undersigned hereby agrees, effective as of the date hereof,
to become a party to that certain Agreement and Plan of Merger (the
"Agreement") dated as of May 25, 2002 by and among
_________________________________ and the parties named therein and for all
purposes of the Agreement, the undersigned shall be included within the
term "Seller" (as defined in the Agreement). The address and facsimile
number to which notices may be sent to the undersigned is as follows:
________________________________________________________________________
Facsimile No.____________________.
[NAME OF UNDERSIGNED]
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LIBNY/1108422.10
