EXHIBIT 1
AGREEMENT AND PLAN OF MERGER
among
LIQUI-BOX CORPORATION,
ENHANCE PACKAGING TECHNOLOGIES INC.
and
EPT NEWCO, INC.
Dated as of March 25, 2002
Table of Contents
Section Page
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ARTICLE I
Definitions
ARTICLE II
The Merger; Closing; Effective Time
2.1 THE MERGER.................................................. 6
2.2 CLOSING..................................................... 6
2.3 EFFECTIVE TIME.............................................. 6
ARTICLE III
Articles of Incorporation and Code of Regulations of the Surviving Corporation
3.1 THE ARTICLES OF INCORPORATION............................... 7
3.2 THE CODE OF REGULATIONS..................................... 7
ARTICLE IV
Officers and Directors of the Surviving Corporation
4.1 DIRECTORS................................................... 7
4.2 OFFICERS.................................................... 7
ARTICLE V
Effect of the Merger on Outstanding Securities; Exchange of Certificates
5.1 EFFECT ON OUTSTANDING SECURITIES............................ 7
5.2 SURRENDER AND PAYMENT....................................... 8
5.3 ADJUSTMENT OF PRICE PER SHARE............................... 10
ARTICLE VI
Representations and Warranties
6.1 REPRESENTATIONS AND WARRANTIES OF THE COMPANY............... 10
6.2 REPRESENTATIONS AND WARRANTIES OF THE PARENT AND THE MERGER
SUBSIDIARY.................................................. 25
ARTICLE VII
Covenants
7.1 COMPANY INTERIM OPERATIONS.................................. 27
7.2 ACQUISITION PROPOSALS....................................... 28
7.3 COMPANY SHAREHOLDER APPROVAL; PROXY STATEMENT............... 30
7.4 APPROVALS AND CONSENTS; COOPERATION......................... 31
7.5 FILINGS; OTHER ACTIONS; NOTIFICATION........................ 32
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7.6 ACCESS...................................................... 32
7.7 DELISTING; DE-REGISTRATION.................................. 33
7.8 PUBLICITY................................................... 33
7.9 BENEFITS.................................................... 33
7.10 EXPENSES.................................................... 34
7.11 INDEMNIFICATION............................................. 34
7.12 ANTITAKEOVER STATUTES....................................... 35
7.13 RELEASE OF COMPANY GUARANTEES............................... 36
7.14 SALE OF CERTAIN ITEMS....................................... 36
7.15 TITLE TO REAL PROPERTY...................................... 36
ARTICLE VIII
Conditions
8.1 CONDITIONS TO THE OBLIGATIONS OF THE PARENT AND THE MERGER
SUBSIDIARY.................................................. 36
8.2 CONDITIONS TO THE OBLIGATIONS OF THE COMPANY................ 37
ARTICLE IX
Termination
9.1 TERMINATION BY MUTUAL CONSENT............................... 37
9.2 TERMINATION BY EITHER THE PARENT OR THE COMPANY............. 37
9.3 TERMINATION BY THE COMPANY.................................. 38
9.4 TERMINATION BY THE PARENT................................... 38
9.5 EFFECT OF TERMINATION AND ABANDONMENT....................... 39
ARTICLE X
Miscellaneous and General
10.1 SURVIVAL.................................................... 40
10.2 MODIFICATION OR AMENDMENT................................... 40
10.3 WAIVER OF CONDITIONS........................................ 40
10.4 COUNTERPARTS................................................ 40
10.5 GOVERNING LAW AND VENUE; WAIVER OF JURY TRIAL............... 40
10.6 NOTICES..................................................... 41
10.7 ENTIRE AGREEMENT............................................ 42
10.8 NO THIRD PARTY BENEFICIARIES................................ 42
10.9 OBLIGATIONS OF THE PARENT AND OF THE COMPANY................ 42
10.10 SEVERABILITY................................................ 43
10.11 SPECIFIC PERFORMANCE........................................ 43
10.12 INTERPRETATION.............................................. 43
10.13 ASSIGNMENT.................................................. 43
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Schedules and Exhibits
Schedule 6.1(a) Organization, Good Standing and Qualification
Schedule 6.1(b) Capital Structure
Schedule 6.1(d) Governmental Filings; No Violations
Schedule 6.1(j) Absence of Certain Changes
Schedule 6.1(k) Company Reports; Financial Statements
Schedule 6.1(l) Litigation and Liabilities
Schedule 6.1(n) Certain Agreements
Schedule 6.1(o) Taxation
Schedule 6.1(p) Employee Benefits
Schedule 6.1(q) Labor Matters
Schedule 6.1(r) Environmental Matters
Schedule 6.1(s) Intellectual Property
Schedule 6.1(t) Certain Regulatory Matters
Schedule 6.1(u) Real and Personal Property
Schedule 6.1(x) Employment and Non-Compete Agreements
Schedule 7.1 Company Interim Operations
Schedule 7.14 Sale of Certain Items
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AGREEMENT AND PLAN OF MERGER
THIS
AGREEMENT AND PLAN OF MERGER, dated as of March 25, 2002, (this
"Agreement"), among Liqui-Box Corporation, an Ohio corporation (the "Company"),
Enhance Packaging Technologies Inc., a Canadian corporation (the "Parent"), and
EPT Newco, Inc., an Ohio corporation and a wholly owned subsidiary of the Parent
(the "Merger Subsidiary").
RECITALS
WHEREAS, the respective boards of directors of the Parent, the Merger
Subsidiary and the Company have each approved the Merger (as defined herein) and
have determined that it is in the best interests of their respective companies
and shareholders for the Parent to acquire the Company upon the terms and
subject to the conditions set forth herein;
WHEREAS, the respective boards of directors of the Parent, the Merger
Subsidiary and the Company have each approved the merger of the Merger
Subsidiary into the Company, with the Company surviving (the "Merger"), upon the
terms and subject to the conditions set forth in this Agreement and in
accordance with the Ohio General Corporation Law (the "OGCL"), whereby each
issued and outstanding common share, without par value, of the Company (the
"Common Stock"), except any shares of Common Stock owned directly or indirectly
by the Parent or the Company or any of their respective Subsidiaries or Parent
Entities (as defined herein) (the "Excluded Shares") and any shares of Common
Stock held by Persons (as defined herein) who object to the Merger and comply
with all of the provisions of Ohio law concerning the rights of shareholders to
dissent from the Merger and require appraisal of their shares of Common Stock
(the "Dissenting Shares"), will be converted into the right to receive a price
per share of U.S. $67.00 in cash (the "Price Per Share") upon the terms and
subject to the conditions set forth in this Agreement;
WHEREAS, the board of directors of the Company has unanimously, with the
exception of Xxxxxx X. Xxxxx and Xxxxxx X. Xxxxx, who abstained, approved this
Agreement and the Merger, has determined that the Merger is fair to and in the
best interests of the Company's shareholders, has declared the Merger advisable
and has resolved to recommend that the Company's shareholders adopt this
Agreement and approve the Merger;
WHEREAS, contemporaneously with the execution and delivery of this
Agreement, certain of the Company's shareholders are entering into an agreement
with the Parent and the Merger Subsidiary (the "Shareholders Agreement"),
pursuant to which such shareholders are agreeing to take certain actions to
support the transactions contemplated by this Agreement; and
WHEREAS, contemporaneously with the execution and delivery of this
Agreement, certain employees of the Company are entering into employment
agreements and/or non-competition agreements with the Company.
NOW, THEREFORE, in consideration of the premises and the representations,
warranties, covenants and agreements contained herein, the parties hereto,
intending to be legally bound hereby, agree as follows:
ARTICLE I
Definitions
"Acquisition Proposal" has the meaning set forth in Section 7.2(b).
"Acquisition Transaction" has the meaning set forth in Section 7.2(a).
"Adjusted Working Capital" means total current assets and short term
borrowings less total current liabilities and cash and cash equivalents.
"Agreement" has the meaning set forth in the Introductory Paragraph.
"Antitakeover Statute" has the meaning set forth in Section 6.1(i).
"Articles" has the meaning set forth in Section 3.1.
"Business Day" has the meaning set forth in Section 2.2.
"Certificate" has the meaning set forth in Section 5.1(a)(ii).
"Certificate of Merger" has the meaning set forth in Section 2.3.
"Closing" has the meaning set forth in Section 2.2.
"Closing Date" has the meaning set forth in Section 2.2.
"COBRA" has the meaning set forth in Section 6.1(p)(i).
"Code" means the Internal Revenue Code of 1986, as amended.
"Common Stock" has the meaning set forth in the Recitals.
"Company" has the meaning set forth in the Introductory Paragraph.
"Company ESOP" has the meaning set forth in Section 7.9(b).
"Company Intellectual Property" has the meaning set forth in
Section 6.1(s)(ii).
"Company Material Adverse Effect" means any change in or effect on the
business of the Company and its Subsidiaries that is materially adverse to the
business, operations, results of operations, assets (including intangible
assets), capitalization, liabilities (contingent or otherwise), condition
(financial or otherwise) or prospects of the Company and its Subsidiaries, taken
as a whole, including, but not limited to, (a) the loss of a significant
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customer, (b) the loss or impairment of the right to use any material Company
Intellectual Property or (c) the threat or commencement of significant or
material litigation against the Company.
"Company Material Contracts" has the meaning set forth in Section 6.1(n).
"Company Option" has the meaning set forth in Section 6.1(b).
"Company Owned IP" has the meaning set forth in Section 6.1(s)(i).
"Company Reports" has the meaning set forth in Section 6.1(k).
"Company Requisite Vote" has the meaning set forth in Section 6.1(c)(i).
"Company Shareholders Meeting" has the meaning set forth in Section 7.3(a).
"Company 401(k)" has the meaning set forth in Section 7.9(b).
"Compensation and Benefit Plans" has the meaning set forth in
Section 6.1(p)(i).
"Contracts" has the meaning set forth in Section 6.1(d)(ii).
"Controlled Group Affiliate" means any trade or business (whether or not
incorporated) that is a member of a "controlled group" of which the Company is a
member or under "common control" with the Company (within the meaning of
Section 414(b), (c), (m) or (o) of the Code).
"Depositary" has the meaning set forth in Section 5.2(a).
"Dissenting Shares" has the meaning set forth in the Recitals.
"Effective Time" has the meaning set forth in Section 2.3.
"Employees" has the meaning set forth in Section 6.1(p)(i).
"Environmental Law" means each federal, state, local and foreign law,
regulation, order, decree, permit, authorization, common law or agency
requirement relating to pollution, protection or preservation of public or
employee health or the environment, including, without limitation, ambient air,
surface water, ground water, land surface or subsurface strata and natural
resources, and including, without limitation, each law, regulation, order,
decree, permit, authorization, common law or agency requirement relating to
emissions, discharges, releases or threatened releases of Hazardous Substances,
or otherwise relating to the generation, storage, treatment, containment
(whether above ground or underground), disposal, transport or handling of
Hazardous Substances, or the preservation of the environment or mitigation of
adverse effects thereon, each law, regulation, order, decree, permit,
authorization, common law or agency requirement relating to noise, odor, indoor
air, employee exposure, wetlands, contamination or any injury or threat of
injury to persons or property relating to any Hazardous Substance and each law,
regulation, order, decree, permit, authorization, common law or agency
requirement
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with regard to record keeping, notification, disclosure and reporting
requirements respecting Hazardous Substances. Environmental Law includes, but
is not limited to, the Clean Air Act, the Clean Water Act, the Resource
Conservation and Recovery Act, the Toxic Substances Control Act, the
Occupational Health and Safety Act, the Safe Drinking Water Act, the Hazardous
Materials Transportation Act and the Emergency Planning and Community Right to
Know Act.
"ERISA" has the meaning set forth in Section 6.1(p)(i).
"Exchange Act" has the meaning set forth in Section 2.2.
"Excluded Shares" has the meaning set forth in the Recitals.
"FDA" has the meaning set forth in Section 6.2(t)(i).
"Foreign Merger Laws" has the meaning set forth in Section 6.1(d)(i).
"GAAP" has the meaning set forth in Section 6.1(k).
"Governmental Entity" has the meaning set forth in Section 6.1(d)(i).
"Hazardous Substance" shall mean pollutants, contaminants, toxic or
hazardous substances, materials and wastes, including, without limitation, any
chemicals, petroleum or petroleum products, asbestos or asbestos-containing
materials, polychlorinated biphenyls, radioactive materials or radon, lead or
lead-based paints, materials or plumbing, dioxins, persistent bioaccumulative
materials, pharmaceutical, biological and/or medical waste or materials or any
other material regulated by or subject to Environmental Laws.
"HSR Act" has the meaning set forth in Section 6.1(d)(i).
"Intellectual Property Rights" has the meaning set forth in
Section 6.1(s)(viii).
"Knowledge" means, (a) with respect to an individual and a particular fact
or other matter, such individual is actually aware of such fact or other matter
after due inquiry; and (b) with respect to a Person other than an individual and
a particular fact or other matter, Xxxxxx X. Xxxxx, Xxxxxx X. Xxxxx, Xxxxxxx
Xxxxxx, Xxxxxx Xxxx, Xxxxx Xxxx, Xxx Xxxxx, Sheffield Sweet or Xxxxxx Xxxxxxxxx
has, or at any time had, "Knowledge" of such fact or matter, as defined in (a).
"Laws" has the meaning set forth in Section 6.1(m).
"Merger" has the meaning set forth in the Recitals.
"Merger Consideration" has the meaning set forth in Section 5.1(a)(ii).
"Merger Subsidiary" has the meaning set forth in the Introductory Paragraph.
"OGCL" has the meaning set forth in the Recitals.
"Order" has the meaning set forth in Section 8.1(f).
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"Parent" has the meaning set forth in the Introductory Paragraph.
"Parent Entity" means any entity which owns or controls directly or
indirectly at least fifty percent (50%) of the securities or ownership interests
having by their terms ordinary voting power to elect fifty percent (50%) of the
board of directors of any Person.
"Payment Fund" has the meaning set forth in Section 5.2(a).
"Pension Plan" has the meaning set forth in Section 6.1(p)(ii).
"Person" has the meaning set forth in Section 5.2(b).
"Plant Managers" means Xxxx Xxxxxxx, Xx., Xxxxx Xxxxxxx, Xxxxx Xxx, Xxx
Xxxxxxx, Xxxxx Xxxxx, Xxx Xxxxxxx, X.X. Xxxxxx, Xxxxx Xxxxxx, Xxxx Xxxxxxx, Xxx
Xxxxxx and Xxxxx Xxxxxxx.
"Preferred Stock" has the meaning set forth in Section 6.1(b).
"Price per Share" has the meaning set forth in the Recitals.
"Proxy Statement" has the meaning set forth in Section 7.3(b).
"Regulations" has the meaning set forth in Section 3.2.
"Regulatory Agency" has the meaning set forth in Section 6.1(t)(i).
"SEC" has the meaning set forth in Section 6.1(g).
"Shareholders Agreement" has the meaning set forth in the Recitals.
"Special Committee" means a special committee of the Board of Directors of
the Company comprised entirely of non-management, independent directors.
"Stock Plans" has the meaning set forth in Section 6.1(b).
"Subsidiary" means, with respect to the Company, the Parent or the Merger
Subsidiary, as the case may be, any entity of which at least fifty percent (50%)
of the securities or ownership interests having by their terms ordinary voting
power to elect fifty percent (50%) of the board of directors or other Persons
performing similar functions is directly or indirectly owned or controlled by
such party or by one or more of its respective Subsidiaries or by such party and
any one or more of its respective Subsidiaries.
"Superior Proposal" has the meaning set forth in Section 7.2(c).
"Surviving Corporation" has the meaning set forth in Section 2.1.
"Taxes" means any taxes of any kind, including but not limited to those on
or measured by or referred to as income, gross receipts, capital, sales, use, ad
valorem, franchise, profits, license, withholding, employment, payroll, premium,
value added, property or windfall
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profits taxes, transfer taxes, customs, duties or similar fees, assessments or
charges of any kind whatsoever, together with any interest and any penalties,
additions to tax or additional amounts imposed by any Governmental Entity.
"Tax Return" means any return, report or statement required to be filed with
any Governmental Entity with respect to Taxes.
"Third Party Licenses" has the meaning set forth in Section 6.1(s)(i).
"Voting Debt" has the meaning set forth in Section 6.1(b).
"Warning Letter" has the meaning set forth in Section 6.1(t)(i).
"1990 Plan" has the meaning set forth in Section 6.1(b).
ARTICLE II
The Merger; Closing; Effective Time
2.1 THE MERGER. Upon the terms and subject to the conditions set forth in
this Agreement, at the Effective Time (as defined herein) the Merger Subsidiary
shall be merged into the Company. The Company shall be the surviving corporation
in the Merger (sometimes hereinafter referred to as the "Surviving Corporation")
and shall continue to be governed by the laws of the State of Ohio. The Merger
shall have the effects specified in the OGCL.
2.2 CLOSING. The closing of the Merger (the "Closing") shall take place
(a) at the offices of Xxxxxxx Xxxxx Xxxxxxx & Xxxxxxxxx, LLP, 0000 Xxxxxx
Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx at 10:00 a.m. on the second (2nd) business
day (as defined in Rule 14d-1(g)(3) under the Securities Exchange Act of 1934,
as amended (the "Exchange Act")) ("Business Day") following the satisfaction or
waiver of all conditions to the obligations of the parties to consummate the
transactions contemplated hereby (other than those conditions that by their
nature are to be satisfied at the Closing, but subject to the satisfaction or
waiver of those conditions), or (b) at such other place and time and/or on such
other date as the Parent and the Company may agree to in writing (the "Closing
Date").
2.3 EFFECTIVE TIME. At the Closing, the Company and the Merger Subsidiary
will cause a Certificate of Merger (the "Certificate of Merger") to be executed,
acknowledged and filed with the Secretary of State of the State of Ohio as
provided in Section 1701.01 of the OGCL. The Merger shall become effective at
the time when the Certificate of Merger has been duly filed with the Secretary
of State of the State of Ohio or, if agreed to by the Parent and the Company,
such later time or date set forth in the Certificate of Merger (the "Effective
Time").
ARTICLE III
Articles of Incorporation and Code of Regulations of the Surviving Corporation
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3.1 THE ARTICLES OF INCORPORATION. The articles of incorporation of the
Company shall be amended as of the Effective Time so that they are identical to
the articles of incorporation of the Merger Subsidiary in effect immediately
prior to the Effective Time, except that Article FIRST of the articles of
incorporation shall provide that the name of the Company shall be the name of
the Surviving Corporation, and such articles of incorporation shall be the
articles of incorporation of the Surviving Corporation (the "Articles").
3.2 THE CODE OF REGULATIONS. The code of regulations of the Company shall
be amended as of the Effective Time so that it is identical to the code of
regulations of the Merger Subsidiary in effect immediately prior to the
Effective Time, and such code of regulations shall be the code of regulations of
the Surviving Corporation (the "Regulations").
ARTICLE IV
Officers and Directors of the Surviving Corporation
4.1 DIRECTORS. The directors of the Merger Subsidiary immediately prior to
the Effective Time shall, from and after the Effective Time, be the directors of
the Surviving Corporation until their successors have been duly elected or
appointed and qualified or until their earlier death, resignation or removal in
accordance with the Articles and the Regulations.
4.2 OFFICERS. The officers of the Merger Subsidiary immediately prior to
the Effective Time shall, from and after the Effective Time, be the officers of
the Surviving Corporation until their successors have been duly elected or
appointed and qualified or until their earlier death, resignation or removal in
accordance with the Articles and the Regulations.
ARTICLE V
Effect of the Merger on Outstanding Securities; Exchange of Certificates
5.1 EFFECT ON OUTSTANDING SECURITIES. At the Effective Time, as a result
of the Merger and without any action on the part of the Company, the Parent, the
Merger Subsidiary or any holder of any capital stock of the Company:
(a) MERGER CONSIDERATION.
(i) Each share of Common Stock issued and outstanding immediately
prior to the Effective Time (other than the Excluded Shares and the Dissenting
Shares) shall be converted into and represent the right to receive the Price
per Share.
(ii) All shares of Common Stock shall no longer be outstanding
and shall be canceled and retired and shall cease to exist, and certificates
formerly representing shares of Common Stock (the "Certificates") (other than
the Excluded Shares and the Dissenting Shares) shall be converted into and
represent the right to receive the Price per Share multiplied by the number of
shares of Common Stock formerly represented by such Certificate (the
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"Merger Consideration").
(iii) Each outstanding Company Option (as defined herein) shall be
canceled or exercised in accordance with Section 7.9(a).
(b) CANCELLATION OF EXCLUDED SHARES. Each Excluded Share issued and
outstanding immediately prior to the Effective Time shall cease to be
outstanding, shall be canceled and retired without payment of any
consideration therefor and shall cease to exist.
(c) TREATMENT OF DISSENTING SHARES. Notwithstanding anything in this
Agreement to the contrary, shares of Common Stock outstanding immediately
prior to the Effective Time and held by a shareholder who has not voted in
favor of the Merger or consented thereto in writing and who is entitled to and
has demanded appraisal for such shares of Common Stock in accordance with the
OGCL shall not be converted into a right to receive the Price per Share,
unless such shareholder fails to perfect or withdraws or otherwise loses its
right to appraisal. If after the Effective Time such shareholder fails to
perfect or withdraws or otherwise loses its right to appraisal, such shares of
Common Stock shall be treated as if they had been converted as of the
Effective Time into a right to receive the Price per Share. The Company shall
give the Parent and the Merger Subsidiary prompt notice of any demands
received by the Company for appraisal of shares of Common Stock, and the
Parent shall have the right to participate in all negotiations and proceedings
with respect to such demands. The Company shall not, except with the prior
written consent of the Parent, make any payment with respect to, or settle or
offer to settle, any such demands, except as otherwise required under
applicable law.
(d) THE MERGER SUBSIDIARY. Each common share, without par value, of
the Merger Subsidiary issued and outstanding immediately prior to the
Effective Time shall be converted into and represent the right to receive one
common share, without par value, of the Surviving Corporation.
5.2 SURRENDER AND PAYMENT.
(a) DEPOSITARY. Prior to the Effective Time, the Parent or the Merger
Subsidiary shall designate a bank or trust company (the "Depositary") to act
as agent for the shareholders in connection with the Merger and to receive and
distribute the Payment Fund (as defined below). Immediately prior to the
Effective Time, the Merger Subsidiary shall deposit with the Depositary cash
in an aggregate amount equal to the product of (i) the number of shares of
Common Stock issued and outstanding immediately prior to the Effective Time
(other than the Excluded Shares), multiplied by (ii) the Price per Share (the
"Payment Fund"). The Depositary shall cause the Payment Fund to be (i) held
for the benefit of the holders of shares of Common Stock and (ii) promptly
applied to making the payments provided for in Section 5.1(a). The Payment
Fund shall not be used for any purpose that is not provided for herein.
(b) EXCHANGE PROCEDURES. As soon as reasonably practicable after the
Effective Time, the Parent or the Surviving Corporation shall cause the
Depositary to mail to each holder of record of outstanding shares of Common
Stock (i) a letter of transmittal (which shall specify that delivery shall be
effected, and risk of loss and title to the Certificates shall pass, only upon
delivery of the Certificates to the Depositary) and (ii) instructions for use
in effecting
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the surrender of the Certificates in exchange for the Merger Consideration.
Upon surrender of a Certificate for cancellation to the Depositary, together
with a letter of transmittal, duly executed, and such other documents as may
reasonably be required by the Depositary, the Depositary shall pay the holder
of such Certificate the Merger Consideration in respect of such Certificate,
less any required withholding taxes, and the Certificate so surrendered shall
forthwith be canceled. If any portion of the Merger Consideration is to be
paid to a person (as defined in the Exchange Act) (a "Person") other than the
registered holder of the shares represented by the Certificate or Certificates
surrendered in exchange therefor, it shall be a condition to such payment that
the Certificate or Certificates so surrendered shall be properly endorsed or
otherwise be in proper form for transfer and that the Person requesting such
payment shall pay to the Depositary any transfer or other taxes required as a
result of such payment to a Person other than the registered holder of such
shares or establish to the satisfaction of the Depositary that such tax has
been paid or is not payable. Until surrendered as contemplated by this Section
5.2(b), each Certificate (other than Certificates representing Excluded Shares
or Dissenting Shares) shall be deemed at any time after the Effective Time to
represent only the right to receive the Merger Consideration upon such
surrender.
(c) NO FURTHER OWNERSHIP RIGHTS IN COMMON STOCK. All Merger
Consideration paid upon the surrender of Certificates in accordance with the
terms of this Article V shall be deemed to have been paid in full satisfaction
of all rights pertaining to the shares of Common Stock theretofor represented
by such Certificates. After the close of business on the Closing Date, there
shall be no further registration of transfers on the stock transfer books of
the Surviving Corporation of the shares of Common Stock which were outstanding
immediately prior to the Effective Time. If, after the Effective Time,
Certificates are presented to the Surviving Corporation or the Depositary for
any reason, they shall be canceled and exchanged as provided in this Article
V, except as otherwise provided by law.
(d) UNCLAIMED FUNDS. Any portion of the Payment Fund made available
to the Depositary pursuant to Section 5.2(a) that remains unclaimed by holders
of the Certificates for six (6) months after the Effective Time shall be
delivered to the Surviving Corporation and any holders of Certificates who
have not theretofor complied with this Article V shall thereafter look only to
the Surviving Corporation for payment of their claim for Merger Consideration.
(e) NO LIABILITY. None of the Parent, the Merger Subsidiary, the
Company or the Depositary shall be liable to any Person in respect of any
Merger Consideration delivered to a public official pursuant to any applicable
abandoned property, escheat or similar law. If any Certificate has not been
surrendered prior to five (5) years after the Effective Time (or immediately
prior to such earlier date on which Merger Consideration in respect of such
Certificate would otherwise escheat to or become the property of any public
official), any shares, cash, dividends or distributions in respect of such
Certificate shall, to the extent permitted by applicable law, become the
property of the Surviving Corporation, free and clear of all claims or
interest of any Person previously entitled thereto.
(f) INVESTMENT OF FUNDS. The Payment Fund shall be invested by the
Depositary in accordance with the instructions of the Parent or the Merger
Subsidiary and all earnings thereon shall inure to the benefit of the Merger
Subsidiary.
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(g) LOST CERTIFICATES. In the event that any Certificate shall have
been lost, stolen or destroyed, upon the making of an affidavit of that fact
by the Person claiming such Certificate to be lost, stolen or destroyed and,
if required by the Merger Subsidiary, the granting of an indemnity reasonably
satisfactory to the Merger Subsidiary against any claim that may be made
against it, the Surviving Corporation or the Depositary with respect to such
Certificate, the Depositary will issue, in exchange for such lost, stolen or
destroyed Certificate, the Merger Consideration with respect to such
Certificate, to which such Person is entitled pursuant hereto.
5.3 ADJUSTMENT OF PRICE PER SHARE. In the event that, subsequent to the
date of this Agreement but prior to the Effective Time, the outstanding shares
of Common Stock shall have been changed into a different number of shares or a
different class as a result of a stock split, reverse stock split, stock
dividend, subdivision, reclassification, split, combination, exchange,
recapitalization or other similar transaction, the Price per Share shall be
appropriately adjusted.
ARTICLE VI
Representations and Warranties
6.1 REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby
represents and warrants to the Parent and the Merger Subsidiary, except as set
forth in the disclosure schedules delivered to the Parent and the Merger
Subsidiary on the date of this Agreement and attached hereto, that, as of the
date hereof (or, if made as of a specified date, as of such date):
(a) ORGANIZATION, GOOD STANDING AND QUALIFICATION. The Company and
each of its Subsidiaries are corporations or partnerships duly incorporated,
validly existing and in good standing under the laws of their respective
jurisdictions of incorporation or organization. The Company and each of its
Subsidiaries are qualified to do business and in good standing as foreign
corporations or partnerships in each jurisdiction where the ownership or
operation of their respective properties and assets or conduct of their
respective businesses requires such qualification, except where the failure to
be so qualified or in such good standing, when taken together with all other
such failures, is not reasonably likely to have a Company Material Adverse
Effect. The Company has made available to the Parent complete and correct
copies of the articles of incorporation and code of regulations (or similar
documents) of the Company and each of its Subsidiaries, each as amended to
date. The articles of incorporation and code of regulations (or similar
documents) of the Company and each of its Subsidiaries so made available are
in full force and effect. The Company and each of its Subsidiaries have all
requisite corporate or partnership power and authority to own and operate
their respective properties and assets and to carry on their respective
businesses as presently conducted.
Schedule 6.1(a) lists each Subsidiary of the Company and its jurisdiction of
incorporation or formation. Except as set forth on Schedule 6.1(a), all of the
outstanding capital stock of, or other ownership interests in, each such
Subsidiary is owned by the Company, directly or indirectly, free and clear of
all pledges, claims, liens, charges, encumbrances and security interests of any
kind or nature whatsoever. Except for the equity or other ownership
10
interests in its Subsidiaries and except as set forth on Schedule 6.1(a), the
Company does not own, directly or indirectly, an ownership interest in any
corporation, partnership, joint venture or other entity.
(b) CAPITAL STRUCTURE. The authorized capital stock of the Company
consists of 20,000,000 shares of Common Stock, of which 4,168,380 shares were
outstanding as of the close of business on March 22, 2002, and 2,000,000
preferred shares, without par value, (the "Preferred Stock"), none of which
were outstanding as of the close of business on March 22, 2002. All of the
outstanding shares of Common Stock have been duly authorized and are validly
issued, fully paid and nonassessable. The Company has no shares of Common
Stock or Preferred Stock subject to issuance, except (i) 500,000 shares of
Common Stock reserved for issuance under the 1990 Liqui-Box Corporation Stock
Option Plan, as amended (the "1990 Plan"), and (ii) 500,000 shares of Common
Stock reserved for issuance under the Liqui-Box Shares Stock Option Plan, as
amended (together with the 1990 Plan, the "Stock Plans"). Options to acquire
796,670 shares of Common Stock were outstanding as of March 22, 2002 (each, a
"Company Option"). Schedule 6.1(b) sets forth a correct and complete list of
each outstanding Company Option as of March 22, 2002, including the holder,
date of grant, exercise price and number of shares of Common Stock subject
thereto. As of March 22, 2002, there are no shares of capital stock of the
Company authorized, issued or outstanding except as set forth above and,
except as set forth above or as set forth on Schedule 6.1(b), there are no
preemptive rights or any outstanding subscriptions, options, warrants, rights
or convertible securities or any agreements or commitments of any character to
which the Company is a party or may be bound relating to the issued or
unissued capital stock or other securities of the Company. The Company does
not have outstanding any bonds, debentures, notes or other obligations, the
holders of which have the right to vote (or which are convertible into or
exercisable for securities having the right to vote) with the shareholders of
the Company on any matter ("Voting Debt"). Except for the Stock Plans, at or
after the Effective Time, neither the Company, the Surviving Corporation, the
Parent nor their respective affiliates will have any obligation to issue,
transfer or sell any shares or securities of the Company, the Surviving
Corporation, the Parent or any of their respective affiliates pursuant to any
Compensation and Benefit Plan (as defined herein). Since January 31, 2002, the
Company has not issued, granted or entered into any agreement relating to any
subscription, option, warrant, right or convertible security or any agreement
or commitment of any character to which the Company is a party or may be bound
relating to the issued or unissued capital stock or other securities of the
Company.
(c) CORPORATE AUTHORITY; APPROVAL.
(i) The Company has all requisite corporate power and authority
and has taken all corporate action necessary in order to execute and deliver
and perform its obligations under this Agreement and, subject only to
obtaining the adoption of this Agreement by a majority of the shares of Common
Stock outstanding as of the record date of the Company's shareholders meeting
(the "Company Requisite Vote"), to consummate the Merger. This Agreement is a
valid and binding agreement of the Company, enforceable against the Company in
accordance with its terms subject to (A) applicable bankruptcy, insolvency,
reorganization, fraudulent transfer, moratorium or similar laws from time to
time in effect affecting creditors' rights generally, and (B) general
principles of equity, whether such principles are considered in a proceeding
at law or in equity.
11
(ii) The Special Committee has, and the board of directors of
the Company has, upon the recommendation of the Special Committee, at a
meeting duly called and held, unanimously, with the exception of Xxxxxx X.
Xxxxx and Xxxxxx X. Xxxxx, who abstained, (A) approved this Agreement, the
Shareholders Agreement and the Merger and the transactions contemplated hereby
and thereby in accordance with the OGCL, including but not limited to
specifically for purposes of Chapter 1704 thereof, (B) determined that the
Merger is fair to and in the best interests of the Company's shareholders and
declared the Merger advisable and (C) recommended that the shareholders of the
Company adopt this Agreement and approve the Merger.
(d) GOVERNMENTAL FILINGS; NO VIOLATIONS.
(i) Other than any filings and/or notices required pursuant to
(A) Section 2.3, (B) the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976,
as amended (the "HSR Act") and the antitrust, competition, foreign investment
or similar laws of any foreign countries or supranational commissions or
boards that require pre-merger notifications or filings with respect to the
Merger (collectively, "Foreign Merger Laws") and (C) the Exchange Act and
state securities or "blue sky" laws, no notices or other filings are required
to be made by the Company with, nor are any consents, registrations,
approvals, permits or authorizations required to be obtained by the Company
from, any U.S. or foreign governmental or regulatory authority, agency,
commission, body or other governmental entity ("Governmental Entity"), in
connection with the execution and delivery of this Agreement by the Company
and the consummation by the Company of the Merger and the other transactions
contemplated hereby.
(ii) Except as set forth on Schedule 6.1(d)(ii), the execution,
delivery and performance of this Agreement by the Company does not and will
not, and the consummation by the Company of the Merger and the other
transactions contemplated hereby in accordance with the terms hereof will not,
constitute or result in (A) a breach or violation of, or a default under, the
articles of incorporation or code of regulations (or similar documents) of the
Company or any of its Subsidiaries, (B) a breach or violation of, a default
under or the acceleration of, any obligations or the creation of a lien,
pledge, security interest or other encumbrance on the assets of the Company or
any of its Subsidiaries (with or without notice, lapse of time or both)
pursuant to, any contract, agreement, license, lease, note, mortgage,
indenture or other obligation (collectively, the "Contracts") binding upon the
Company or any of its Subsidiaries or any Laws (as defined herein) or
governmental or non-governmental permit or license to which the Company or any
of its Subsidiaries is subject or (C) any change in the rights or obligations
of any party under any of the Contracts binding upon the Company or any of its
Subsidiaries, except, in the case of clauses (B) or (C), for such exceptions
as would not, individually or in the aggregate, have or be reasonably likely
to have a Company Material Adverse Effect.
(e) BROKERS AND FINDERS. Neither the Company nor any of its
Subsidiaries, officers, directors or employees has employed any broker or
finder or incurred any liability for any brokerage fees, commissions or
finders' fees in connection with the Merger or the other transactions
contemplated by this Agreement or the Shareholders Agreement, except that the
Special Committee has engaged McDonald Investments Inc. as its financial
advisor, the arrangements with which have been disclosed to the Parent prior
to the date hereof.
12
(f) OPINION OF FINANCIAL ADVISOR. The board of directors of the
Company and/or the Special Committee has received a written opinion of
McDonald Investments Inc. to the effect that, as of the date hereof, the
consideration to be received by the holders of shares of Common Stock pursuant
to the Merger is fair to such holders from a financial point of view.
(g) PROXY STATEMENT. The Proxy Statement (as defined herein) and any
other documents to be filed by the Company with the Securities and Exchange
Commission (the "SEC") in connection with the Merger and the other
transactions contemplated hereby will, when filed with the SEC, comply as to
form in all material respects with the applicable provisions of the Exchange
Act and the rules and regulations thereunder. Neither the Proxy Statement nor
any other documents required to be filed by the Company with the SEC in
connection with the transactions contemplated hereby shall, at the respective
times that the Proxy Statement, any such other filings by the Company or any
amendments or supplements thereto are filed with the SEC or are first
published, sent or given to shareholders of the Company, as the case may be,
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 made therein, in light of the circumstances under which they are
made, not misleading. Notwithstanding the foregoing, the Company makes no
representation or warranty with respect to the statements made in any of the
foregoing documents based on and in conformity with information supplied by or
on behalf of the Parent or the Merger Subsidiary in writing specifically for
inclusion therein.
(h) REQUIRED VOTE OF COMPANY SHAREHOLDERS. The only vote of the
shareholders of the Company required to adopt this Agreement and to approve
the Merger and the transactions contemplated hereby and thereby, is the
Company Requisite Vote.
(i) ANTITAKEOVER STATUTES. The board of directors of the Company has
taken all necessary action to approve the transactions contemplated by this
Agreement and the Shareholders Agreement, including but not limited to,
approval for purposes of Chapter 1704 of the OGCL, of both (i) any "Chapter
1704 transaction" (as defined in Section 1704.01 of the OGCL) and (ii) any
purchase of any shares of Common Stock, such that the restrictions under
Chapter 1704 of the OGCL shall not apply to such transactions, assuming that
neither the Parent nor the Merger Subsidiary nor any of the Parent Entities
constituted an "interested shareholder" (as defined in Section 1704.01 of the
OGCL) prior to the date of such approval. Other than Chapter 1704 of the OGCL
and Section 1707.043 of the Ohio Revised Code, no "fair price," "moratorium,"
"control share acquisition" or other antitakeover statute or regulation (each,
an "Antitakeover Statute") is applicable to the Company, the Parent, the
Merger Subsidiary, this Agreement, the Shareholders Agreement, the Merger or
the other transactions contemplated hereby or thereby.
(j) ABSENCE OF CERTAIN CHANGES. Except as set forth on Schedule
6.1(j), since December 30, 2000, the Company and its Subsidiaries have
conducted their respective businesses in all material respects only in the
ordinary and usual course of such businesses and there has not been (i) any
event or change or combination of events or changes that, individually or in
the aggregate, has had or is reasonably likely to have a Company Material
Adverse Effect; (ii) any damage, destruction or other casualty loss with
respect to any asset or property owned, leased or otherwise used by the
Company or any of its Subsidiaries, that has had
13
or is reasonably likely to have a Company Material Adverse Effect; (iii) any
declaration, setting aside or payment of any dividend or other distribution in
respect of the capital stock of the Company; or (iv) except as disclosed in
the Company Reports (as defined herein), any change by the Company in
accounting principles, practices or methods. Except as set forth on Schedule
6.1(j), since January 31, 2002, there has not been any increase in the
compensation payable or that could become payable by the Company or any of its
Subsidiaries to officers or key employees of the Company or any of its
Subsidiaries, or any amendment to any of the Compensation and Benefit Plans.
(k) COMPANY REPORTS; FINANCIAL STATEMENTS. Except as set forth on
Schedule 6.1(k), the Company and, to the extent applicable, each of its then
or current Subsidiaries has made all filings required to be made by it with
the SEC since the beginning of the period covering the past three (3) full
fiscal years (collectively, including any such reports filed subsequent to the
date hereof, the "Company Reports"). The Company has made available to the
Parent each registration statement, report, proxy statement or information
statement filed with the SEC by it since the beginning of the period covering
the past three (3) full fiscal years, including, without limitation, (i) the
Company's Annual Report on Form 10-K for the fiscal year (fifty two weeks)
ended December 30, 2000, (ii) the Company's Quarterly Reports on Form 10-Q for
the periods ended March 31, 2001, June 30, 2001 and September 29, 2001 and
(iii) the Company's Proxy Statement filed on March 19, 2001, all in the form
(including exhibits, annexes and any amendments thereto) filed with the SEC.
As of their respective dates, the Company Reports complied in all material
respects, or will comply in all material respects, with the requirements of
applicable statutes and regulations and did not, and will not, contain any
untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements made therein, in
light of the circumstances in which they were made, not misleading. Each of
the balance sheets included in the Company Reports (including the related
notes and schedules) presents fairly, or will present fairly, in all material
respects, the financial position of the Company and its consolidated
Subsidiaries as of its date and each of the statements of income and of
changes in financial position included in the Company Reports (including any
related notes and schedules) presents fairly, or will present fairly, in all
material respects, the results of operations, retained earnings and changes in
financial position, as the case may be, of the Company and its Subsidiaries
for the periods set forth therein (except as otherwise noted therein and
subject, in the case of unaudited statements, to notes and normal year-end
audit adjustments that will not be material in amount or effect), in each case
in accordance with United States generally accepted accounting principles
("GAAP") consistently applied during the periods involved, except, in the case
of unaudited financial statements, as permitted by SEC Form 10-Q and SEC Form
8-K, and except as may be noted therein. Other than the Company Reports
specifically recited in clauses (i) through (iii) of the second sentence of
this Section 6.1(k), the Company has not, on or prior to the date hereof,
filed any other definitive reports or statements with the SEC since December
30, 2000.
The Company has made available to the Parent its unaudited financial
statements for the fiscal year ended December 31, 2001. The balance sheet
included in such financial statements presents fairly, in all material respects,
the financial position of the Company and its consolidated Subsidiaries as of
December 31, 2001 and the statements of income and of changes in financial
position included in such financial statements present fairly, in all material
respects, the results of operations, retained earnings and changes in financial
position, as the case may be,
14
of the Company and its Subsidiaries for the fiscal year ended December 31,
2001 (except as otherwise noted therein), in each case in accordance with GAAP
consistently applied during the periods involved, except as may be noted
therein. Since December 31, 2001, there has not been any material change to
the level of working capital reflected in such financial statements, except in
the ordinary course of business.
As of March 21, 2002, based on an analysis of the Company's books and
records, the Company's Adjusted Working Capital and cash and cash equivalents,
net of borrowings, were as set forth on Schedule 6.1(k) and there has not been
any material change in this amount, except in the ordinary of business.
(l) LITIGATION AND LIABILITIES. Except as disclosed on Schedule
6.1(l), there are no and, to the Knowledge of the Company or any of the Plant
Managers, there are no facts which would constitute or give rise to any, (i)
civil, criminal, administrative or regulatory actions, suits, claims,
hearings, investigations or proceedings pending or, to the Knowledge of the
Company or any of the Plant Managers, threatened against the Company or any of
its Subsidiaries or (ii) obligations or liabilities, individually or in the
aggregate, whether or not accrued, contingent or otherwise and whether or not
required to be disclosed, including those relating to matters involving any
Environmental Law, in each case, that have, or would be reasonably likely to
have, a Company Material Adverse Effect.
(m) COMPLIANCE. Neither the Company nor any of its Subsidiaries is in
default or violation of (i) its articles of incorporation or code of
regulations (or similar documents), (ii) any law, ordinance, rule, regulation,
order, judgment, decree, arbitration award, license or permit of any
Governmental Entity (collectively, "Laws") or any non-governmental permit or
license applicable to the Company or any of its Subsidiaries or by which its
or any of their respective properties are bound or (iii) any Contract to which
the Company or any of its Subsidiaries is a party or by which the Company or
any of its Subsidiaries or its or any of their respective properties are bound
or affected, except, in each case, for any defaults or violations that,
individually or in the aggregate, will not have a Company Material Adverse
Effect, or prevent or materially delay the transactions contemplated by this
Agreement.
(n) CERTAIN AGREEMENTS. Schedule 6.1(n) sets forth (i) all amendments
to the agreements listed as exhibits to the Company's Annual Report on Form
10-K for the fiscal year ended December 30, 2000, (ii) any other agreement
within the meaning set forth in item 601(b)(10) of Regulation S-K of Title 17,
Part 229 of the Code of Federal Regulations, (iii) all contracts or
commitments calling for the Company to spend or receive in excess of $250,000
per annum, (iv) all contracts relating to money borrowed in excess of $10,000,
(v) all agreements with respect to settlement of litigation, (vi) all loans or
guarantees of loans to employees and (vii) all contracts not disclosed
pursuant to (i) through (vi) above materially restricting the Company's
business in any way or which would materially restrict the Parent's business
as the parent of the Surviving Corporation (the "Company Material Contracts"),
all of which are valid and in full force and effect, except to the extent that
they have previously expired in accordance with their terms. Neither the
Company nor its Subsidiaries has violated any provision of, or committed or
failed to perform any act which, with or without notice, lapse of time, or
both, is reasonably likely to constitute a default under the provisions of,
any such Company Material Contract, except for any default which has not had,
and is not reasonably likely to have, a
15
Company Material Adverse Effect, and neither the Company nor any of its
Subsidiaries has received notice that any party to any Company Material
Contract intends to cancel, terminate or otherwise materially modify the terms
of any applicable Company Material Contract. To the Knowledge of the Company,
no counterparty to any such Company Material Contract has materially violated
any provision of, or committed or failed to perform any act which, with or
without notice, lapse of time or both, is reasonably likely to constitute a
material default or other breach under the provisions of, such Company
Material Contract.
(o) TAXATION. Except as set forth on Schedule 6.1(o):
(i) Except where the failure to file Tax Returns, to pay Taxes
or to provide adequate reserves, individually or in the aggregate, would not
have a Company Material Adverse Effect: (A) the Company and each of its
Subsidiaries have timely filed all Tax Returns required to be filed by them in
the manner provided by law; (B) all such Tax Returns are true, correct and
complete in all material respects; and (C) the Company and each of its
Subsidiaries have timely paid all Taxes due or required to be withheld from
amounts owing to any employee, creditor or third party or have provided
adequate reserves in their financial statements for any Taxes that have not
been paid, whether or not shown as being due on any Tax Returns.
(ii) No material claim for unpaid Taxes (other than for Taxes
not yet due) has become a lien or encumbrance of any kind against the property
of the Company or any of its Subsidiaries or, to the Knowledge of the Company,
is being asserted against the Company or any of its Subsidiaries.
(iii) No audit, examination, investigation or other proceeding in
respect of Taxes is, to the Knowledge of the Company, pending, being conducted
or threatened by a Tax authority involving the Company or any of its
Subsidiaries.
(iv) No material issues have been raised by the relevant taxing
authority in connection with any examination of the Tax Returns filed by the
Company and its Subsidiaries that have not been resolved.
(v) No extension or waiver of the statute of limitations on the
assessment of any Taxes has been granted by the Company or any of its
Subsidiaries and is currently in effect.
(vi) Neither the Company nor any of its Subsidiaries is a party
to, is bound by or has any obligation under, or potential liability with
regard to, any Tax sharing agreement, Tax indemnification agreement or similar
contract or arrangement.
(vii) To the Knowledge of the Company, no power of attorney has
been granted by or with respect to the Company or any of its Subsidiaries with
respect to any matter relating to Taxes.
(viii) To the Knowledge of the Company, neither the Company nor
any of its Subsidiaries (A) has been a member of an affiliated group filing a
consolidated, combined or unitary Tax Return (other than a group the common
parent of which was the
16
Company) or (B) has any liability for Taxes of any person (other than the
Company or any of its Subsidiaries) under Treasury Regulation Section 1.1502-6
(or any other similar provision of state, local or foreign law), as a
transferee or successor, by contract or otherwise.
(ix) Neither the Company nor any of its Subsidiaries is a party
to any agreement, plan, contract or arrangement that would result, separately
or in the aggregate, in the payment of any "excess parachute payments" within
the meaning of Section 280G of the Code.
(x) To the Knowledge of the Company, neither the Company nor
any of its Subsidiaries has any material intercompany gain or loss arising as
a result of an intercompany transaction within the meaning of Treasury
Regulation Section 1.1502-13 (or similar provision under state, local or
foreign law) that has not been taken into account or any excess loss accounts
within the meaning of Treasury Regulation Section 1.1502-19.
(xi) The Company is not and has not been a United States real
property holding corporation (as defined in Section 897(c)(2) of the Code)
during the applicable period specified in Section 897(c)(1)(ii) of the Code.
(xii) Neither the Company nor any of its Subsidiaries has been
the subject of a material Tax ruling that has continuing effect.
(xiii) Neither the Company nor any of its Subsidiaries has agreed
to include, or, to the Knowledge of the Company, is required to include, in
income any material adjustment under either Section 481(a) or 482 of the Code
(or an analogous provision of state, local or foreign law) by reason of a
change in accounting method or otherwise.
(p) EMPLOYEE BENEFITS.
(i) The Company Reports accurately describe in all material
respects all material incentive, bonus, deferred compensation, pension,
retirement, profit-sharing, thrift, savings, employee stock ownership, stock
bonus, stock purchase, restricted stock, stock option and other stock based
plans, all employment or severance agreements, plans, policies or
arrangements, other employee benefit plans and any applicable "change of
control" or similar provisions in any plan, agreement, policy or arrangement
which covers current or former employees of the Company and its Controlled
Group Affiliates (the "Compensation and Benefit Plans") or with respect to
which the Company or any of its Controlled Group Affiliates may have any
liability. The Compensation and Benefit Plans and all other benefit plans,
agreements, policies or arrangements covering current or former employees or
directors of the Company and its Controlled Group Affiliates (the
"Employees"), including, but not limited to, "employee benefit plans" within
the meaning of Section 3(3) of the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), are listed on Schedule 6.1(p)(i). True and
complete copies of all documents relating to the Compensation and Benefit
Plans or any other plan, agreement, policy or arrangement listed on Schedule
6.1(p)(i), including written interpretations thereof and summary plans
descriptions required under ERISA, and such other benefit plans, agreements,
policies or arrangements, including, but not limited to, any trust instruments
and/or insurance contracts, if any, forming a part of any such plans and
agreements, and all amendments thereto
17
have been provided to the Parent. The following items have also been provided
to the Parent with respect to each Compensation and Benefit Plan as
applicable: (A) the three (3) most recent Form 5500 annual reports (including
all schedules and financial statements); (B) the most recent favorable
determination letter issued by the Internal Revenue Service with respect to
each such plan; (C) any governmental audit report or correction program
memorandum; (D) any governmental opinion, ruling, determination or notice of
action or disposition with regard to any such plan; (E) the results of any
testing relating to any such plan, including testing of coverage,
non-discrimination requirements, 401(k) and 401(m) compliance, benefit
limitations, etc.; and (F) a schedule of all persons who are receiving, or who
are eligible to elect to receive, health care continuation ("COBRA") coverage
with respect to the Company or a Controlled Group Affiliate.
(ii) To the Knowledge of the Company, the Compensation and
Benefit Plans have been administered in compliance with all applicable law
and, except as set forth on Schedule 6.1(p)(ii), with their terms. Each Plan
which is an "employee pension benefit plan" within the meaning of Section 3(2)
of ERISA (a "Pension Plan") and which is intended to be qualified under
Section 401(a) of the Code is so qualified and has received a favorable
determination letter from the Internal Revenue Service, and the Company is not
aware of any circumstances likely to result in revocation of any such
favorable determination letter. There is no pending or, to the Knowledge of
the Company, threatened litigation, governmental audit or investigation
relating to any Compensation and Benefit Plan. Neither the Company nor any of
its Controlled Group Affiliates has engaged in a transaction with respect to
any Compensation and Benefit Plan that, assuming the taxable period of such
transaction expired as of the date hereof, could subject the Company or any of
its Subsidiaries to a tax or penalty imposed by either Section 4975 of the
Code or Section 502(i) of ERISA.
(iii) Except as disclosed on Schedule 6.1(p)(iii), neither the
Company nor any of its Controlled Group Affiliates has or has ever had any
obligation or liability with respect to an employee benefit plan which is
subject to Title IV of ERISA, or which is a "multiemployer plan" within the
meaning of Section 3(37) or 4001(a)(3) of ERISA. There is no entity (other
than the Company or any of its Subsidiaries) which is or was a Controlled
Group Affiliate of the Company. No notice of a "reportable event" within the
meaning of Section 4043 of ERISA for which the 30-day reporting requirement
has not been waived, has been required to be filed for any Compensation and
Benefit Plan within the 12-month period ending on the date hereof.
(iv) All contributions required to be made under the terms of
any Compensation and Benefit Plan have been timely made or accrued on the
Company's financial statements and all insurance premiums required to have
been paid as of the Closing Date will have been paid.
(v) Except as disclosed on Schedule 6.1(p)(v), neither the
Company nor any of its Controlled Group Affiliates has any obligations for
retiree health and life benefits under any Compensation and Benefit Plan. The
Company or its Controlled Group Affiliates may amend or terminate any
Compensation and Benefit Plan at any time without incurring any material
liability thereunder.
18
(vi) Except as disclosed on Schedule 6.1(p)(vi), the
consummation of the transactions contemplated by this Agreement will not (A)
entitle any Employees to severance pay, (B) accelerate the time of payment or
vesting or trigger any material payment or funding (through a grantor trust or
otherwise) of compensation or benefits under, materially increase the amount
payable or trigger any other material obligation pursuant to, any of the
Compensation and Benefit Plans or (C) result in payments under any of the
Compensation and Benefit Plans which may not be deductible under Section
162(m) or Section 280G of the Code.
(vii) There are no actions, suits or claims (other than routine
claims for benefits in the ordinary course) pending or, to the Knowledge of
the Company, threatened with respect to the Compensation and Benefit Plans and
there are no facts which could give rise to any such actions, suits or claims.
(viii) Each of the Company and its Controlled Group Affiliates
has complied in all material respects with the reporting and disclosure
requirements of ERISA.
(ix) To the Knowledge of the Company, each Compensation and
Benefit Plan which is a "group health plan" (as such term is defined in
section 5000(b)(1) of the Code) complies and has complied with the applicable
requirements of Section 4980B of the Code, Sections 601-609 of ERISA (COBRA)
and Sections 701-734 of ERISA (HIPAA), including without limitation, the
certification requirements under Section 701(e) of ERISA.
(q) LABOR MATTERS.
(i) Schedule 6.1(q)(i) sets forth the name, title, current
annual compensation rate (including base, bonus and commissions) of each
present employee of the Company and each of its Subsidiaries whose annual
compensation rate (including base, bonus and commission) for 2001 was more
than $75,000; includes organizational charts of the Company and each of its
Subsidiaries; and lists any collective bargaining, union or other employee
association agreements, employee handbook and any reports and/or plans
prepared or adopted pursuant to the Equal Employment Opportunity Act of 1972,
as amended. As a matter of policy, the Company requires all new employees to
execute a confidentiality agreement protecting proprietary processes and
information. There are no leased employees (within the meaning of Section
414(n) of the Code) who must be taken into account in applying the
requirements of Section 414(n)(3) of the Code and independent contractors
providing services have been properly characterized as such.
(ii) Except as set forth on Schedule 6.1(q)(ii), (A) the
Company and each of its Subsidiaries is in compliance with all applicable laws
and collective bargaining agreements respecting employment and employment
practices, terms and conditions of employment and wages and hours and
occupational safety and health, except where the failure to be in such
compliance has not had, and is not reasonably likely to have, a Company
Material Adverse Effect, (B) to the Knowledge of the Company, neither the
Company nor any of its Subsidiaries is engaged in any unfair labor practice
within the meaning of Section 8 of the National Labor Relations Act and (C)
there is no action, suit or legal, administrative, arbitration, grievance or
other proceeding pending or, to the Knowledge of the Company or any of the
Plant
19
Managers, threatened, or any investigation pending or, to the Knowledge of
the Company or any of the Plant Managers, threatened against the Company or
any Subsidiary relating to any thereof and, to the Knowledge of the Company
or any of the Plant Managers, no basis exists for any such action, suit or
legal, administrative, arbitration, grievance or other proceeding or
investigation.
(iii) There is no labor strike, dispute, slowdown or stoppage
actually pending or, to the Knowledge of the Company or any of the Plant
Managers, threatened against the Company or any of its Subsidiaries.
(iv) Except as set forth on Schedule 6.1(q)(iv), none of the
employees of the Company or any of its Subsidiaries is a member of or
represented by any labor union and, to the Knowledge of the Company or any of
the Plant Managers, there are no attempts of whatever kind and nature being
made to organize any of such employees.
(v) Without limiting the generality of paragraph (iv) above,
no certification or decertification is pending or was filed within the past
three (3) years respecting the employees of the Company or any of its
Subsidiaries and, to the Knowledge of the Company or any of the Plant
Managers, no certification or decertification petition is being or was
circulated among the employees of the Company or any of its Subsidiaries
within the past three (3) years.
(vi) No collective bargaining or similar agreement, arbitration
or court decision, decree or order or governmental order which is binding on
the Company or any of its Subsidiaries in any way materially limits or
restricts the Company or any of its Subsidiaries from relocating or closing
any of its operations.
(vii) Neither the Company nor any of its Subsidiaries has
experienced any organized work stoppage in the last five (5) years.
(viii) Except as disclosed on Schedule 6.1(q)(viii) and Schedule
6.1(l), there are no charges, administrative proceedings or formal complaints
of discrimination (including but not limited to discrimination based upon sex,
age, marital status, race, national origin, sexual orientation, handicap or
veteran status) pending or, to the Knowledge of the Company or any of the
Plant Managers, threatened, or any investigation pending or, to the Knowledge
of the Company or any of the Plant Managers, threatened before the Equal
Employment Opportunity Commission or any federal, state or local agency or
court, except for charges, proceedings or complaints that have not had, and
would not be reasonably likely to have a Company Material Adverse Effect.
(r) ENVIRONMENTAL MATTERS. (i) To the Knowledge of the Company and
the Plant Managers, the Company and its Subsidiaries are, and within the
period of all applicable statutes of limitations have been, in compliance with
all applicable Environmental Laws and have submitted all required reports to
the appropriate Governmental Authority; (ii) except as set forth on Schedule
6.1(r)(ii), the Company has received all air, water and waste permits and
approvals required for the emission and/or disposal of solid, liquid and
gaseous materials from its operations at all sites, including any permits for
construction under the Clean
20
Air Act, or has documentation to establish exemptions from such permits or
approvals, and is operating in conformance with such permits and approvals
required under any Environmental Laws; (iii) to the Knowledge of the Company
or any of the Plant Managers, no property currently or formerly owned or
operated by the Company or any of its Subsidiaries (including soils,
groundwater, surface water, buildings or other structures) has been
contaminated with any Hazardous Substance which would subject the Company to
liability under Environmental Laws or require remediation to meet applicable
standards; (iv) except as set forth on Schedule 6.1(r)(iv), neither the
Company nor any of its Subsidiaries is subject to any liability for Hazardous
Substance disposal or contamination on any third party property; (v) neither
the Company nor any of its Subsidiaries is subject to liability for any
release or, to the Knowledge of the Company or any of the Plant Managers,
threat of release of any Hazardous Substance; (vi) except as set forth on
Schedule 6.1(r)(vi), neither the Company nor any of its Subsidiaries has
received any notice, demand, letter, claim or request for information
indicating that it may be in violation of or subject to liability under any
Environmental Law; (vii) neither the Company nor any of its Subsidiaries is
subject to any order, decree, injunction or other arrangement with any
Governmental Entity or any indemnity or other agreement with any third party
relating to liability under any Environmental Law; (viii) to the Knowledge of
the Company or any of the Plant Managers, except as set forth on Schedule
6.1(r)(viii), none of the properties of the Company or any of its Subsidiaries
contain any underground storage tanks or any Hazardous Substance, except to
the extent that such Hazardous Substances are used in the ordinary course of
business and used and disposed of in accordance with Environmental Laws; (ix)
there are no other circumstances or conditions involving the Company or any of
its Subsidiaries that could reasonably be expected to result in any claims,
liability, investigations, costs or restrictions on the ownership, use, or
transfer of any property in connection with any Environmental Law; and (x) to
the Knowledge of the Company or any of the Plant Managers, Schedule 6.1(r)(x)
sets forth a list of all environmental reports, studies, assessments and
sampling data, all permits and permit applications, all correspondence to and
from Governmental Entities pertaining to or required for compliance with
Environmental Laws, all inspection reports, evaluations and audit reports
concerning compliance with Environmental Laws (whether conducted internally or
by a third party, including any Governmental Entity), all documentation
establishing exemptions from permits or approvals, a representative list of
Hazardous Substances currently used in the Company's operations, and the
entities that currently remove and dispose of regulated waste materials, and
all relevant and material records relating to compliance with Environmental
Laws.
(s) INTELLECTUAL PROPERTY.
(i) Schedule 6.1(s)(i) sets forth a correct and complete list
of each of the following items: (A) all material patents and applications
therefor, registrations of trademarks (including service marks) and
applications therefor, and registrations of copyrights and applications
therefor that are owned by the Company or any of its Subsidiaries
(collectively, the "Company Owned IP"), (B) all material licenses, agreements
and contracts relating to the Company Intellectual Property (as defined
herein) pursuant to which the Company or any of its Subsidiaries are entitled
to use any Company Intellectual Property owned by any third party
(collectively, the "Third Party Licenses") and (C) all material licenses,
agreements and contracts under which the Company or any of its Subsidiaries
has granted any third party the right to use any Company Intellectual Property.
21
(ii) Except as set forth on Schedule 6.1(s)(ii), the Company or one of
its Subsidiaries is the owner of, or is licensed to use, or otherwise possesses
legally enforceable rights in, all material intellectual property, including,
without limitation, all material patents and patent applications, supplementary
protection certificates and patent extensions, trademarks and trademark
applications, service xxxx and service xxxx registrations, logos, commercial
symbols, business name registrations, trade names, copyrights and copyright
registrations, computer software, domain names, mask works and mask work
registration applications, industrial designs and applications for registration
of such industrial designs, including, without limitation, any and all
applications for renewal, extensions, reexaminations and reissues of any of the
foregoing material intellectual property rights where applicable, inventions,
compounds, structures, trade secrets, formulae, know-how, technical
information, research data, research raw data, laboratory notebooks,
procedures, designs, proprietary technology and information held or used in the
business of the Company and its Subsidiaries (collectively, the "Company
Intellectual Property").
(iii) The Company and its Subsidiaries are the sole legal and beneficial
owners of all of the Company Intellectual Property, except for the Company
Intellectual Property that is the subject of the Third Party Licenses or where
failure to own Company Intellectual Property would not have, or be reasonably
likely to have, a Company Material Adverse Effect.
(iv) Except as set forth on Schedule 6.1(s)(iv), the Company has not
entered into any agreements or licenses or created any mortgages, liens,
security interests, leases, pledges, encumbrances, equities, claims, charges,
options, restrictions, rights of first refusal, title retention agreements or
other exceptions to title which materially adversely affect the Company
Intellectual Property or materially restrict the use by the Company or any of
its Subsidiaries of the Company Intellectual Property.
(v) The Company and its Subsidiaries are in compliance with the Third
Party Licenses, except where the failure to be in compliance would not have a
Company Material Adverse Effect.
(vi) The Company and its Subsidiaries have the right to license to
third parties the use of the Company Owned IP.
(vii) All registrations and filings relating to the Company Owned IP are
in good standing, except where the failure to be in good standing would not
have a Company Material Adverse Effect.
(viii) To the Knowledge of the Company, the manufacturing, marketing,
distribution, sale and use of products by the Company or its Subsidiaries,
licensees or sublicensees in the countries where the Company has conducted or
proposes to conduct such activities, does not infringe the patents, patent
applications, trademarks, trademark applications, service marks, service xxxx
applications, copyrights, copyright applications, proprietary trade names,
publication rights, computer programs (including source code and object code),
domain names, inventions, know-how, trade secrets, technology, processes,
confidential information and all other intellectual property rights throughout
the world (collectively, the "Intellectual Property
22
Rights") of any third party, except to the extent that such infringement has
not had, and would not be reasonably likely to have a Company Material Adverse
Effect.
(ix) There are no allegations, claims or proceedings instituted,
pending or, to the Knowledge of the Company, threatened which challenge the
rights possessed by the Company or its Subsidiaries to use the Company
Intellectual Property or the validity or effectiveness of the Company
Intellectual Property, including without limitation any interferences,
oppositions, cancellations or other contested proceedings, except for any
allegations, claims or proceedings that have not had, and are not reasonably
likely to have, a Company Material Adverse Effect.
(x) To the Knowledge of the Company, there is no unauthorized use,
infringement or misappropriation of the Company Owned IP by any third party,
including any employee or former employee of the Company or any of its
Subsidiaries.
(xi) Except as set forth on Schedule 6.1(s)(i), the Company and its
Subsidiaries have not granted any licenses, immunities, options or other rights
to the Company Intellectual Property which could provide a third party with a
defense to patent infringement proceedings, whether domestic or foreign.
(xii) Commercially reasonable measures have been taken to maintain the
confidentiality of the inventions, trade secrets, formulae, know-how, technical
information, research data, research raw data, laboratory notebooks,
procedures, designs, proprietary technology and information of the Company and
its Subsidiaries, and all other information the value of which to the Company
or any of its Subsidiaries is contingent upon maintenance of the
confidentiality thereof.
(t) CERTAIN REGULATORY MATTERS.
(i) Schedule 6.1(t)(i) sets forth a complete and accurate list for the
last five years, of (A) all Warning Letters (as defined below) and letters or
notices issued by the Food and Drug Administration (the "FDA") or any other
Governmental Entity that is concerned with the quality, identity, purity,
safety, marketing or manufacturing of the products sold by the Company or its
Subsidiaries (any such governmental entity, a "Regulatory Agency") to the
Company or any of its Subsidiaries; (B) all product problem reporting program
complaints or reports filed by the Company or any of its Subsidiaries with a
Regulatory Agency; (C) all product recalls conducted by or issued to the
Company or any of its Subsidiaries and any requests from the FDA or any other
Regulatory Agency requesting the Company or any of its Subsidiaries to cease
to market any product; and (D) any civil penalty actions begun by the FDA or
any other Regulatory Agency against the Company or any of its Subsidiaries and
all consent decrees and all documents relating to the negotiation of and
compliance with any such consent decree issued with respect to the Company or
any of its Subsidiaries. The Company has made available to Parent copies of
all documents referred to on Schedule 6.1(t)(i) and any other written
communications between the Company or any of its Subsidiaries on the one hand,
and the FDA or any other Regulatory Agency on the other hand, that describe
matters that could have a Company Material Adverse Effect or discuss material
issues concerning the quality, identity, purity or safety of any such product
or product line as well as copies of all complaints and other
23
information required to be maintained by the Company pursuant to applicable
law. For purposes of this Section 6.1(t)(i), "Warning Letter" means a letter
characterized by the FDA or any other Regulatory Agency as a warning letter, a
notice of adverse finding, observation of noncompliance or a similar letter or
report in which FDA or any other Regulatory Agency expresses the opinion that
violations of law, regulation or guideline have occurred.
(ii) With such exceptions as will not have or be reasonably likely
to have a Company Material Adverse Effect and except as set forth on Schedule
6.l(t)(ii), (A) the Company (or, if applicable, one of its Subsidiaries) has
obtained all consents, approvals, certifications, authorizations and permits
of, and has made all filings with, or notifications to, all Regulatory Agencies
pursuant to applicable requirements of all FDA regulations and consent decrees,
and all applicable state and foreign laws, and regulations applicable to the
Company or any of its Subsidiaries; (B) all representations made by the Company
or any of its Subsidiaries in connection with any such consents, approvals,
certifications, authorizations, permits, filings and notifications were true
and correct in all material respects at the time such representations and
warranties were made, and the Company's products, and the products of its
Subsidiaries, substantially comply with, and perform in accordance with the
specifications described in, such representations; (C) the Company and its
Subsidiaries and their respective products and all of the facilities and
entities which manufacture such products are in substantial compliance with all
applicable FDA or any other Regulatory Agency rules, regulations and consent
decrees, and all applicable state and foreign laws, rules and regulations
(including Good Manufacturing Practices) applicable to the Company's or its
Subsidiaries' business; and (D) none of the consents, approvals,
authorizations, registrations, certifications, permits, filings or
notifications that it or any of its Subsidiaries has received or made to
operate their respective businesses has been or, to the Knowledge of the
Company, are being revoked or challenged.
(u) REAL AND PERSONAL PROPERTY. The Company and its Subsidiaries have
good and marketable title in fee simple to all real property and good and
marketable title to all personal property owned by them which is material to
the business of the Company and its Subsidiaries, taken as a whole, in each
case free and clear of all liens, encumbrances and defects except such as are
described on Schedule 6.1(u). Except as set forth on Schedule 6.1(u), any real
property and facilities held under lease by the Company and its Subsidiaries
are held by them under valid, subsisting and enforceable leases with remaining
terms of at least two (2) years, except as would not have a Company Material
Adverse Effect.
(v) LICENSES AND PERMITS. The Company and each of its Subsidiaries has
obtained all material licenses, registrations, permits, approvals and other
governmental authorizations and non-governmental permits and licenses required
to conduct its business as presently conducted. Such authorizations are in full
force and effect and neither the Company nor any of its Subsidiaries has
received notice of proceedings relating to the revocation or modification of
any such license, registration, permit, approval or other governmental
authorization and non-governmental permits and licenses.
(w) CORRUPT PRACTICES. Neither the Company nor any of its Subsidiaries,
nor, to the Knowledge of the Company, any director, officer or employee of the
Company or any of its Subsidiaries has, directly or indirectly, used any
corporate funds for unlawful contributions, gifts, entertainment or other
unlawful expenses relating to political
24
activity, made any unlawful payment to foreign or domestic government officials
or employees or to foreign or domestic political parties or campaigns from
corporate funds, made any bribe, rebate, payoff, influence payment, kickback or
other unlawful payment or violated any provision of the Foreign Corrupt
Practices Act of 1977, as amended, or the rules and regulations thereunder.
(x) EMPLOYMENT AND NON-COMPETE AGREEMENTS. The employment agreements
and non-compete agreements with the employees of the Company listed on Schedule
6.1(x) attached hereto have been executed by such employees prior to or
contemporaneously with the execution of this Agreement and such agreements
remain in full force and effect and, to the Knowledge of the Company, none of
the employees listed on Schedule 6.1(x) is in breach or violation of his or her
employment agreement or non-compete agreement.
(y) DISCLOSURE. All information relating to or concerning the Company
or any of its Subsidiaries set forth in this Agreement and provided to the
Parent and the Merger Subsidiary pursuant to Section 6.1 hereof and otherwise
in connection with the transactions contemplated hereby is true and correct in
all material respects and the Company has not omitted to state any material
fact necessary in order to make the statements made herein or otherwise, in
light of the circumstances under which they were made, not misleading.
6.2 REPRESENTATIONS AND WARRANTIES OF THE PARENT AND THE MERGER
SUBSIDIARY. The Parent and the Merger Subsidiary each hereby represent and
warrant to the Company, except as set forth in the disclosure schedules
delivered to the Company on the date of this Agreement and attached hereto,
that, as of the date hereof:
(a) ORGANIZATION AND GOOD STANDING. The Parent is a corporation
organized under the laws of Canada and the Merger Subsidiary is a corporation
in good standing under the laws of the State of Ohio and each of them has all
requisite corporate power and authority to own and operate its properties and
assets and to carry on its business as presently conducted. The Merger
Subsidiary has not, and prior to the Effective Time will not have, conducted
any activities other than those required for the Merger and has no, and prior
to the Effective Time will have no, assets, liabilities or obligations, except
as contemplated in connection with its execution, delivery and performance of
this Agreement and the Shareholders Agreement and the transactions contemplated
hereby and thereby.
(b) CORPORATE AUTHORITY. No vote of holders of capital stock of the
Parent is necessary to approve this Agreement, the Merger or the other
transactions contemplated hereby. The Parent and the Merger Subsidiary have all
requisite corporate power and authority and have taken all corporate action
(including approval of the Parent's parent and of the majority shareholder of
the Parent's parent) necessary in order to execute, deliver and perform their
respective obligations under this Agreement and to consummate the Merger. This
Agreement is a valid and binding agreement of the Parent and the Merger
Subsidiary, enforceable against each of the Parent and the Merger Subsidiary in
accordance with its terms subject to (i) applicable bankruptcy, insolvency,
reorganization, fraudulent transfer, moratorium or similar laws from time to
time in effect affecting creditors' rights generally, and (ii) general
principles of equity, whether such principles are considered in a proceeding at
law or in equity.
25
(c) GOVERNMENTAL FILINGS; NO VIOLATIONS.
(i) Other than any filings and/or notices required pursuant to (A)
Section 2.3, (B) the HSR Act and Foreign Merger Laws and (C) the Exchange Act
or state securities or "blue sky" laws and the "takeover" laws of any state, no
notices or other filings are required to be made by the Parent or the Merger
Subsidiary with, nor are any consents, registrations, approvals, permits or
authorizations required to be obtained by the Parent or the Merger Subsidiary
from, any Governmental Entity, in connection with the execution and delivery of
this Agreement by the Parent and the Merger Subsidiary and the consummation by
the Parent and the Merger Subsidiary of the Merger and the other transactions
contemplated hereby, except those that the failure to make or obtain are not,
individually or in the aggregate, reasonably likely to prevent, materially
delay or materially impair the ability of the Parent or the Merger Subsidiary
to consummate the transactions contemplated by this Agreement.
(ii) The execution, delivery and performance of this Agreement by
the Parent and the Merger Subsidiary do not and will not, and the consummation
by the Parent and the Merger Subsidiary of the Merger and the other
transactions contemplated hereby will not, constitute or result in (A) a breach
or violation of, or a default under, the certificate of incorporation or bylaws
(or similar documents) of the Parent or the Merger Subsidiary, (B) a breach or
violation of, a default under or the acceleration of, any obligation or the
creation of a lien, pledge, security interest or other encumbrance on the
assets of the Parent or the Merger Subsidiary (with or without notice, lapse of
time or both) pursuant to, any Contracts binding upon the Parent or the Merger
Subsidiary or any Laws or governmental or non-governmental permit or license to
which the Parent or the Merger Subsidiary is subject or (C) any change in the
rights or obligations of any party under any of the Contracts binding upon the
Parent or the Merger Subsidiary, except, in the case of clause (B) or (C)
above, for breach, violation, default, acceleration, creation or change that,
individually or in the aggregate, is not reasonably likely to prevent,
materially delay or materially impair the ability of the Parent or the Merger
Subsidiary to consummate the transactions contemplated by this Agreement.
(d) BROKERS AND FINDERS. Neither the Parent nor any of its
Subsidiaries, officers, directors or employees has employed any broker or
finder or incurred any liability for any brokerage fees, commissions or
finders' fees in connection with the Merger or the other transactions
contemplated by this Agreement or the Shareholders Agreement, except that
DuPont Canada Inc., the sole shareholder of the Parent, has employed Xxxxxx
Brothers Inc. and CCFL Advisory Services Inc. as its financial advisors.
(e) FINANCING. Prior to the Effective Time, the Parent or the Merger
Subsidiary will have the funds necessary to consummate the Merger and the other
transactions contemplated hereby on the terms contemplated hereby.
26
ARTICLE VII
Covenants
7.1 COMPANY INTERIM OPERATIONS. The Company covenants and agrees as to
itself and its Subsidiaries that, after the date hereof and prior to the
Effective Time, except as expressly contemplated by this Agreement or as set
forth on Schedule 7.1 or except with the prior written consent of Parent, which
consent shall not be unreasonably delayed, conditioned or withheld:
(a) the business of the Company and its Subsidiaries shall be
conducted in the ordinary and usual course and, to the extent consistent
therewith, the Company and its Subsidiaries shall use their respective
commercially reasonable efforts to preserve their respective business
organizations substantially intact and substantially maintain their existing
relations and goodwill with customers, suppliers, distributors, creditors,
lessors, employees and business associates;
(b) the Company shall not (i) issue, sell, pledge, dispose of or
encumber any capital stock owned by it in any of its Subsidiaries; (ii) amend
its articles of incorporation or code of regulations; (iii) split, combine or
reclassify its outstanding shares of capital stock; (iv) declare, set aside or
pay any dividend payable in cash, stock or property in respect of any capital
stock; or (v) repurchase, redeem or otherwise acquire, except in connection
with the Stock Plans or employment arrangements, or permit any of its
Subsidiaries to purchase or otherwise acquire, any shares of its capital stock
or any securities convertible into or exchangeable or exercisable for any
shares of its capital stock;
(c) neither the Company nor any of its Subsidiaries shall (i) issue,
sell, pledge, dispose of or encumber any shares of, or securities convertible
into or exchangeable or exercisable for, or options, warrants, calls,
commitments or rights of any kind to acquire, any shares of its capital stock
of any class or any Voting Debt or any other property or assets (other than the
issuance of shares of Common Stock pursuant to the Company Options); (ii)
transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or
encumber any other property or assets (including capital stock of any of its
Subsidiaries) or incur or modify any material indebtedness or other liability;
or (iii) make any commitments for, make or authorize any capital expenditures
involving amounts in excess of $100,000 in the aggregate or, by any means, make
any commitments for, make or authorize any acquisition of, or investment in,
assets or stock of any other Person.
(d) except as may be required by existing contractual commitments, as
contemplated by this Agreement or as required by applicable law, neither the
Company nor any of its Subsidiaries shall (i) hire any new management
employees; (ii) enter into any new agreements or commitments for any severance
or termination pay to, or enter into any employment or severance agreement
with, any of its directors, officers or employees; (iii) enter into or
guarantee any loans to employees; or (iv) terminate, establish, adopt, enter
into, make any new grants or awards under, amend or otherwise modify, any
Compensation and Benefit Plans or increase or accelerate the salary, wage,
bonus or other compensation of any employees, officers or directors (except for
increases in salaries, wages and cash bonuses of nonexecutive employees
27
made in the ordinary course of business consistent with past practice) or pay
or agree to pay any pension, retirement allowance or other employee benefit not
required by any existing Compensation and Benefit Plan;
(e) neither the Company nor any of its Subsidiaries shall settle or
compromise any claims or litigation or modify, amend or terminate any of the
Company Material Contracts or waive, release or assign any rights or claims;
(f) neither the Company nor any of its Subsidiaries shall make any
material Tax election or permit any insurance policy naming it as a beneficiary
or loss-payable payee to be canceled or terminated, except in the ordinary and
usual course of business;
(g) except as may be required as a result of a change in law or GAAP,
neither the Company nor any of its Subsidiaries shall change any of the
accounting practices or principles used by it;
(h) neither the Company nor any of its Subsidiaries shall adopt a plan
of complete or partial liquidation, dissolution, merger, consolidation,
restructuring, recapitalization or other reorganization of the Company or any
of its Subsidiaries not constituting an inactive Subsidiary;
(i) neither the Company nor any of its Subsidiaries will offer to, or
enter into an agreement to, do any of the foregoing; and
(j) the Company shall not, and shall not permit any of its
Subsidiaries to, take any action that would, or that could reasonably be
expected to, result in any of the representations or warranties of the Company
in Section 6.1 becoming untrue.
7.2 ACQUISITION PROPOSALS.
(a) The Company shall, and shall cause its affiliates and the
officers, directors, employees, representatives and agents of the Company and
its Subsidiaries (including, without limitation, any investment banker,
attorney or accountant retained by the Company or any of its Subsidiaries) to,
immediately cease and terminate any existing activities, discussions or
negotiations, if any, with any parties (other than the Parent and the Merger
Subsidiary, any affiliate or associate of the Parent and the Merger Subsidiary
or any designees of the Parent and the Merger Subsidiary) conducted heretofore
with respect to any acquisition or exchange of all or any material portion of
the assets of, or any equity interest in, the Company or any of its
Subsidiaries (by direct purchase from the Company, tender or exchange offer or
otherwise) or any business combination, merger or similar transaction
(including an exchange of stock or assets) with or involving the Company or any
of its Subsidiaries (an "Acquisition Transaction"), other than the Merger.
(b) Except as set forth in Section 7.2(c), the Company shall not, and
shall not permit its affiliates and the officers, directors, employees,
representatives and agents of the Company and its Subsidiaries (including,
without limitation, any investment banker, attorney or accountant retained by
the Company or any of its Subsidiaries) to, directly or indirectly, encourage,
solicit, initiate or participate in discussions or negotiations with, or
provide any
28
nonpublic information or data to, any Person (other than the Parent and the
Merger Subsidiary, any affiliate or associate of the Parent and the Merger
Subsidiary or any designees of the Parent and the Merger Subsidiary) with
respect to any inquiries or the making of any offer or proposal (including,
without limitation, any offer or proposal to the shareholders of the Company)
concerning an Acquisition Transaction (an "Acquisition Proposal") or otherwise
facilitate any effort or attempt to make or implement an Acquisition Proposal.
(c) The Company may furnish information and access, but only in
response to a request for information or access, to any Person making a bona
fide written Acquisition Proposal to the Board of Directors of the Company
after the date hereof which was not encouraged, solicited or initiated by the
Company or any of its affiliates or any officer, director, employee,
representative or agent of the Company or any of its Subsidiaries (including,
without limitation, any investment banker, attorney or accountant retained by
the Company or any of its Subsidiaries) on or after the date hereof and may
participate in discussions and negotiate with such Person concerning any such
Acquisition Proposal and may authorize the Company to enter into a binding
written agreement concerning a Superior Proposal. An Acquisition Proposal shall
be deemed to be a "Superior Proposal" if and only if the board of directors of
the Company determines in good faith, after consultation with outside legal
counsel and financial advisors to the Company, that such Acquisition Proposal,
if accepted, is reasonably likely to be consummated, taking into account all
legal, financial and regulatory aspects of the proposal and the Person making
the proposal, and would, if consummated, result in a transaction more favorable
to the Company's shareholders than the transaction contemplated by this
Agreement.
(d) Nothing in this Agreement shall prohibit the board of directors of
the Company from, to the extent applicable, complying with Rule 14e-2 or
Schedule 14D-9 promulgated under the Exchange Act with regard to an Acquisition
Proposal. The Company will notify the Parent within twenty-four (24) hours if
any such inquiries or proposals are received by, any information is requested
from, or any negotiations or discussions are sought to be initiated or
continued with the Company and shall in such notice indicate the identity of
the offeror and the material terms and conditions of any such Acquisition
Proposal and thereafter shall keep the Parent reasonably informed, on a current
basis, of the status and material terms of such Acquisition Proposal and the
status of such negotiations or discussions, providing copies to the Parent of
any Acquisition Proposals made in writing.
(e) The Company shall provide the Parent with five (5) days advance
notice of, in each and every case, its intention to either provide any
information to or enter into any agreement with any Person making any
Acquisition Proposal. Prior to providing information to or negotiating with any
other party, the Company and such other party will enter into a confidentiality
or non-disclosure agreement containing terms no less restrictive than the terms
of the letter agreement between the Company and the Parent dated November 30,
2001. The Company agrees not to release any third party from, or waive any
provisions of, any such confidentiality or non-disclosure agreement and will
use commercially reasonable efforts to enforce any such agreements at the
request of and on behalf of the Parent.
(f) The Company will inform its affiliates and the officers,
directors, employees, representatives and agents of the Company and its
Subsidiaries (including, without
29
limitation, any investment banker, attorney or accountant retained by the
Company or any of its Subsidiaries) of the obligations undertaken in this
Section 7.2.
7.3 COMPANY SHAREHOLDER APPROVAL; PROXY STATEMENT.
(a) The Company, acting through its board of directors, shall (i) call
a meeting of its shareholders (the "Company Shareholders Meeting") for the
purpose of voting to adopt this Agreement and to approve the Merger as soon as
possible following the date of this Agreement, (ii) hold the Company
Shareholders Meeting as promptly as practicable following the date of this
Agreement and (iii) recommend to its shareholders the adoption of this
Agreement and the approval of the Merger. Notwithstanding the foregoing, the
board of directors of the Company may withdraw, modify or amend any
recommendation that the shareholders approve the Merger if the Company receives
a Superior Proposal.
(b) The Company will, within ten (10) Business Days after the date of
this Agreement, prepare and file a preliminary proxy statement (the "Proxy
Statement") with respect to the Company Shareholders Meeting with the SEC, will
respond to any comments of the SEC or its staff and any request by the SEC or
its staff for amendments or supplements to the Proxy Statement or for
additional information within five (5) Business Days and will supply the Parent
with copies of all correspondence between the Company or any of its
representatives, on the one hand, and the SEC or its staff, on the other hand,
with respect to the Proxy Statement or the Merger. The Parent and the Merger
Subsidiary shall furnish to the Company all information regarding the Parent,
the Merger Subsidiary and their affiliates that may be required (pursuant to
the Exchange Act and other applicable Laws) to be set forth in the Proxy
Statement. The Company shall give the Parent and its counsel the opportunity to
review the Proxy Statement and any supplements or amendments thereto prior to
their being filed with the SEC and shall give the Parent and its counsel the
opportunity to review all replies to comments and responses to requests for
additional information prior to their being filed with, or sent to, the SEC.
Each of the Company and the Parent agrees to use commercially reasonable
efforts, after consultation with the other parties hereto, to respond promptly
to all such comments of and requests by the SEC. Within two (2) Business Days
after the Proxy Statement has been cleared by the SEC, the Company shall mail
the Proxy Statement to the shareholders of the Company. If at any time prior to
the approval of this Agreement by the Company's shareholders there shall occur
any event which should be set forth in an amendment or supplement to the Proxy
Statement, the Company will prepare and mail to its shareholders such an
amendment or supplement.
(c) The Company represents and warrants that the Proxy Statement and
any supplements or amendments thereto will comply in all material respects with
applicable provisions of the Exchange Act and, at the respective times filed
with the SEC and distributed to shareholders of the Company, will 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 light of the circumstances under which they were made, not
misleading; provided that the Company makes no representation or warranty as to
any information included in the Proxy Statement and any supplements or
amendments thereto that was provided by the Parent or the Merger Subsidiary.
The Parent represents and warrants that none of the information supplied by the
Parent or the Merger Subsidiary for inclusion in the Proxy Statement and any
supplements or amendments thereto will, at the respective times that they are
filed with the SEC and distributed
30
to shareholders of the Company, 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 light of the circumstances under
which they were made, not misleading.
7.4 APPROVALS AND CONSENTS; COOPERATION.
(a) The Company and the Parent shall cooperate with each other and use
(and shall cause their respective Subsidiaries to use) commercially reasonable
efforts to take or cause to be taken all actions, and do or cause to be done
all things, necessary, proper or advisable under this Agreement, the
Shareholders Agreement and applicable Laws to consummate and make effective the
Merger and the other transactions contemplated by this Agreement and the
Shareholders Agreement, as soon as possible, including preparing and filing as
promptly as practicable all documentation to effect all necessary applications,
notices, petitions, filings and other documents and to obtain as promptly as
practicable all permits, consents, approvals and authorizations necessary or
advisable to be obtained from any third party and/or any Governmental Entity in
order to consummate the Merger or any of the other transactions contemplated by
this Agreement and the Shareholders Agreement.
(b) The Company and the Parent each agree to use commercially
reasonable efforts to take or cause to be taken all appropriate action, and do
or cause to be done such things as may be necessary under federal or state
securities laws or the HSR Act or Foreign Merger Laws applicable to or
necessary for, and will file as promptly as practicable and, if appropriate,
use commercially reasonable efforts to have declared effective or approved, all
documents and notifications with the SEC and other Governmental Entities that
they deem necessary or appropriate for, the consummation of the Merger or any
of the other transactions contemplated hereby and each party shall give the
other information reasonably requested by such other party pertaining to it and
its Subsidiaries and affiliates to enable such other party to take such actions.
(c) The Company, the Parent and the Merger Subsidiary each agree to use
commercially reasonable efforts to contest and resist any action, including
legislative, administrative or judicial action, and to have vacated, lifted,
reversed or overturned any decree, judgment, injunction or other order (whether
temporary, preliminary or permanent) that is in effect and that restricts,
prevents or prohibits the consummation of the Merger or any of the other
transactions contemplated by this Agreement, including, without limitation, by
pursuing available avenues of administrative and judicial appeal.
(d) The Company, the Parent and the Merger Subsidiary each agree to use
commercially reasonable efforts to take any and all actions necessary to avoid
or eliminate each and every impediment under any antitrust law that may be
asserted by any Governmental Entity or any other party so as to enable the
parties to close the transactions contemplated hereby by the date specified in
Section 9.2(a) provided, however, that nothing in this Section 7.4 shall
require, or be construed to require, the Parent to proffer to, or agree to,
sell or hold separate and agree to sell, before or after the Effective Time,
any assets, businesses or interest in any assets or businesses of the Parent,
the Company or any of their respective affiliates (or to consent to any sale
of, or agreement to sell, by the Company any of its assets or businesses) or to
agree to any material change or restriction in the operations of any such
assets or businesses and provided,
31
further, that nothing in this Section 7.4 shall require, or be construed to
require, a proffer or agreement that would, in the reasonable judgment of the
Parent, be likely to have an adverse effect on the benefits to the Parent of
the transactions contemplated by this Agreement.
(e) Subject to applicable Laws relating to the exchange of information,
the Parent and the Company shall have the right to review in advance, and to
the extent practicable each will consult the other on, all the information
relating to the Parent or the Company, as the case may be, and any of their
respective Subsidiaries and affiliates, that appear in any filing made with, or
written materials submitted to, any third party and/or any Governmental Entity
in connection with the Merger and the other transactions contemplated by this
Agreement and the Shareholders Agreement. In exercising the foregoing right,
each of the Company and the Parent shall act reasonably and as promptly as
practicable.
7.5 FILINGS; OTHER ACTIONS; NOTIFICATION.
(a) The Company and the Parent each shall, upon request, furnish the
other with all information concerning itself, its Subsidiaries, affiliates,
directors, officers and shareholders or stockholders and such other matters as
may be reasonably necessary or advisable in connection with the Proxy Statement
or any other statement, filing, notice or application made by or on behalf of
the Parent, the Company or any of their respective Subsidiaries to any
Governmental Entity in connection with the Merger and the transactions
contemplated by this Agreement and the Shareholders Agreement.
(b) The Company and the Parent each shall keep the other apprised of
the status of matters relating to completion of the transactions contemplated
hereby, including promptly furnishing the other with copies of notices or other
communications received by the Parent, the Company or any of their respective
Subsidiaries from any third party or any Governmental Entity with respect to
the Merger and the other transactions contemplated by this Agreement and the
Shareholders Agreement. The Company shall give prompt notice to the Parent of
any change that has resulted in or is reasonably likely to result in a change
in any representation or warranty in Section 6.1 or a Company Material Adverse
Effect and the Parent shall give the Company prompt notice of any event, fact,
circumstance or occurrence that would be reasonably likely to have an adverse
effect on the ability of the Parent or the Merger Subsidiary to complete the
Merger or to comply with their respective obligations contained in this
Agreement.
7.6 ACCESS. From the date hereof until the earlier of the Effective Time
or the termination of this Agreement, upon reasonable notice, the Company shall
afford to the officers, employees, financial advisors, attorneys, accountants
and other representatives of the Parent reasonable access to all of its and its
Subsidiaries' properties, books and records (including security position
listings or other information concerning beneficial and record owners of the
Company's securities), their Contracts or other commitments and their officers,
management employees and representatives and, during such period, the Company
shall furnish promptly to the Parent, consistent with its obligations under
this Agreement and its other legal obligations, all information reasonably
requested concerning its business, properties and personnel.
32
7.7 DELISTING; DE-REGISTRATION. The Surviving Corporation shall use
commercially reasonable efforts to cause the Shares to be delisted from the
Nasdaq National Market and de-registered under the Exchange Act as soon as
practicable following the Effective Time.
7.8 PUBLICITY. The initial press release relating to this Agreement and
the Merger shall be a joint press release, the content of which shall be
prepared by the Parent in consultation with the Company, and thereafter the
Company shall consult with and obtain approval of the Parent prior to issuing
any press releases or otherwise making public statements with respect to the
transactions contemplated by this Agreement and prior to making any filings with
any Governmental Entity with respect to the transactions contemplated by this
Agreement; provided, however, that the Company may issue any press release or
make any public statement or make any filing it believes in good faith is
required by applicable law or the rules and regulations of the SEC (in which
case the Company will use its reasonable best efforts to give the Parent prior
notice).
7.9 BENEFITS.
(a) STOCK OPTIONS.
(i) The board of directors of the Company (or, if appropriate,
any committee administering the Stock Plans) shall adopt such resolutions or
take such other actions as are required to adjust the terms of all outstanding
Company Options to provide that, at the Effective Time, each Company Option
outstanding (whether or not vested) shall be canceled in exchange for the
right to receive a cash payment of, or can only be exercised for net cash
equal to, an amount equal to (A) the excess, if any, of (1) the Price per
Share over (2) the exercise price per share of Common Stock subject to such
Company Option, multiplied by (B) the number of shares of Common Stock for
which such Company Option shall not theretofor have been exercised. Upon
surrender to the Surviving Corporation at the address set forth in Section
10.6 of Company Options and/or such other documents as may reasonably be
requested by the Surviving Corporation, the Parent hereby agrees to cause the
Surviving Corporation to deliver to the registered holders of such Company
Options (as indicated in the records of the Company) such cash payment. After
the date of this Agreement, neither the board of directors of the Company nor
any committee thereof shall cause any Company Option to become exercisable as
a result of the execution of this Agreement or the consummation of the
transactions contemplated hereby.
(ii) All amounts payable pursuant to this Section 7.9 shall be
subject to any required withholding of taxes and shall be paid without
interest.
(iii) The board of directors of the Company shall take all
necessary action to terminate the Stock Plans as of the Effective Time and the
board of directors of the Company shall take all necessary action to delete
the provisions in any other Compensation and Benefit Plan providing for the
issuance, transfer or grant of any capital stock of the Company or any
interest in respect of any capital stock of the Company as of the Effective
Time, and the Company shall ensure that following the Effective Time no holder
of a Stock
33
Option or any participant in any Stock Plan or other Compensation and Benefit
Plan shall have any right thereunder to acquire any capital stock of the
Company or the Surviving Corporation.
(b) EMPLOYEE BENEFITS. If required by the Parent, the Company shall,
immediately prior to the Closing Date, take action to terminate, merge,
consolidate, transfer the assets of or otherwise amend the Company's
Employees' Profit Sharing and Salary Deferral Plan and Trust (the "Company
401(k)") and the Liqui-Box Corporation Employees' Stock Ownership Plan (the
"Company ESOP"), provided that any action required by the Parent will be in
compliance with all applicable requirements of the Code and regulations
thereunder so that the tax-qualified status of the Company 401(k) and the
Company ESOP will be maintained. The Company will provide to the Parent
resolutions of the board of directors of the Company authorizing any such
required action. Except for those benefits provided to employees listed on
Schedule 6.1(x), with regard to other employee benefits, at and for a period
of one (1) year after the Closing, the Parent shall provide such benefits to
the Employees by either (i) continuing the relevant Compensation and Benefit
Plans; (ii) allowing the Employees to participate in plans sponsored or
maintained by the Parent or an affiliate of the Parent; (iv) establishing new
plans or (iii) some combination of (i), (ii) and (iii); provided, that, in the
aggregate, the benefits under any such plans are substantially similar to the
benefits provided under the relevant Compensation and Benefit Plans prior to
the Closing. To the extent that the Employees participate in any employee
benefit plans sponsored or maintained by the Parent or an affiliate of the
Parent or in any newly-established plan after the Closing, the Employees will
receive credit for service under each such plan, for eligibility and/or
vesting purposes, for all service credit that they had with the Company and
its Controlled Group Affiliates prior to the Closing in a comparable plan.
7.10 EXPENSES. The Surviving Corporation shall pay all charges and
expenses, including those of the Depositary, in connection with the transactions
contemplated in Article V. Except as otherwise provided in Section 9.5(b),
whether or not the Merger is consummated, all costs and expenses incurred in
connection with this Agreement, the Shareholders Agreement and the Merger and
the other transactions contemplated by this Agreement and the Shareholders
Agreement shall be paid by the party incurring such expense.
7.11 INDEMNIFICATION.
(a) The articles of incorporation of the Surviving Corporation shall
contain provisions no less favorable with respect to indemnification than are
set forth in Article VI of the Amended Articles of Incorporation of the
Company, which provisions shall not be amended, repealed or otherwise modified
for a period of six (6) years from the Effective Time in any manner that would
affect adversely the rights thereunder of individuals who at or prior to the
Effective Time were directors or officers of the Company, with respect to any
act or omission in their capacity as an officer or director of the Company
occurring on or prior to the Effective Time, unless such modification shall be
required by law.
(b) The Company shall, to the fullest extent permitted under
applicable law and regardless of whether the Merger becomes effective,
indemnify and hold harmless, and after the Effective Time, the Surviving
Corporation shall, to the fullest extent permitted under applicable law,
indemnify and hold harmless each present and former director and officer of
the Company (collectively, the "Indemnified Parties") against all costs and
expenses (including
34
reasonable attorneys' fees), judgments, fines, losses, claims, damages,
liabilities and settlement amounts paid in connection with any claim, action,
suit, proceeding or investigation (whether arising before or after the
Effective Time), whether civil, criminal, administrative or investigative,
arising out of or directly pertaining to any action or omission in their
capacity as an officer or director of the Company occurring at or prior to the
Effective Time, whether asserted or claimed prior to, at or after the
Effective Time, for a period of six (6) years after the Effective Time, in
each case to the fullest extent permitted under applicable law (and shall pay
any expenses in advance of the final disposition of such action or proceeding
to each Indemnified Party to the fullest extent permitted under applicable
law, upon receipt from the Indemnified Party to whom expenses are advanced of
an undertaking to repay such advances required under applicable law) if he
acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Corporation, and with respect to any
criminal action or proceeding, had no reasonable cause to believe his conduct
was unlawful. The termination of any action, suit, or proceeding by judgment,
order, settlement, conviction, or upon a plea of nolo contendere or its
equivalent, shall not, of itself, create a presumption that the person did not
act in good faith and in a manner which he reasonably believed to be in or not
opposed to the best interests of the Corporation, and with respect to any
criminal action or proceeding, he had reasonable cause to believe that his
conduct was unlawful. In the event of any such claim, action, suit, proceeding
or investigation, (i) the Company or the Surviving Corporation, as the case
may be, shall pay the reasonable fees and expenses of counsel selected by the
Indemnified Parties and reasonably satisfactory to the Parent promptly after
statements therefor are received and (ii) the Company or the Surviving
Corporation, as the case may be, shall cooperate with the Indemnified Parties
in the defense of any such matter. In the event that any claim for
indemnification is asserted or made within such six-year period, all rights to
indemnification in respect of such claim shall continue until the final
disposition of such claim.
(c) In the event the Company or the Surviving Corporation or any of
their respective successors or assigns (i) consolidates with or merges into
any other person and shall not be the continuing or surviving corporation or
entity of such consolidation or merger or (ii) transfers all or substantially
all of its properties and assets to any person, then, and in each such case,
proper provision shall be made so that the successors and assigns of the
Company or the Surviving Corporation, as the case may be, or at the Parent's
option, the Parent, shall assume the obligations set forth in this Section
7.11.
(d) The provisions of this Section 7.11 are intended to be for the
benefit of, and shall be enforceable by, each of the Indemnified Parties as
intended third party beneficiaries and their heirs and estates and shall be
binding on all successors and assigns of the Parent and the Surviving
Corporation.
7.12 ANTITAKEOVER STATUTES. If any Antitakeover Statute is or may become
applicable to the Merger or the other transactions contemplated by this
Agreement or the Shareholders Agreement, each of the Parent and the Company
and their respective boards of directors shall grant such approvals and take
such lawful actions as are reasonably practicable so that such transactions
may be consummated as promptly as practicable on the terms contemplated by
this Agreement or the Shareholders Agreement or by the Merger and otherwise
act to eliminate or minimize the effects of such statute or regulation on such
transactions;
35
provided, however, that in no event shall the Parent be required
to take any actions which, in its reasonable judgment, would subject it to
undue burden or expense.
7.13 RELEASE OF COMPANY GUARANTEES. Prior to the Effective Time, the
Company shall obtain releases of any guarantees by the Company of loans to
employees.
7.14 SALE OF CERTAIN ITEMS. Prior to the Effective Time, if so requested
in writing by Xxxxxx X. Xxxxx, the Company shall sell to Xxxxxx X. Xxxxx the
items listed on Schedule 7.14 at their fair market value, as determined by
independent appraisers selected by the Company, for cash due at the time of such
sale.
7.15 TITLE TO REAL PROPERTY. Prior to the Effective Time, the Company
shall execute and record the documents necessary to establish title to the
Worthington, Ohio property and the Ashland, Ohio property in the Company.
ARTICLE VIII
Conditions
8.1 CONDITIONS TO THE OBLIGATIONS OF THE PARENT AND THE MERGER
SUBSIDIARY. The obligations of the Parent and the Merger Subsidiary are subject
to the satisfaction or waiver at or prior to the Closing of each of the
following conditions:
(a) SHAREHOLDER APPROVAL. The shareholders of the Company shall have
adopted this Agreement and approved the Merger at the Company Shareholders
Meeting.
(b) REGULATORY CONSENTS. Any waiting period applicable to the
consummation of the Merger under the HSR Act or any Foreign Merger Laws shall
have expired or been terminated.
(c) REPRESENTATIONS AND WARRANTIES. The representations and
warranties set forth in Section 6.1 above (disregarding any qualifications
contained therein regarding materiality or Company Material Adverse Effect)
shall be true and correct at and as of the Closing Date, except to the extent
that such breach has not had, or would not be reasonably likely to have, a
Company Material Adverse Effect.
(d) COVENANTS. The Company shall have performed and complied with all
of its covenants set forth in Article 7 in all material respects through the
Closing Date.
(e) DISSENTERS. No more than ten percent (10%) of the outstanding
shares of Common Stock shall be Dissenting Shares.
(f) NO INJUNCTIONS OR RESTRAINTS. (i) No court or Governmental Entity
of competent jurisdiction shall have enacted, issued, enforced or entered any
statute, rule, regulation, judgment, decree, injunction or other order
(whether temporary, preliminary or
36
permanent) (collectively, an "Order") that is in effect and restrains, enjoins
or otherwise prohibits consummation of the Merger; provided, however, that
prior to invoking this provision, each party shall use commercially reasonable
efforts to have any such Order lifted or withdrawn, and (ii) no Governmental
Entity shall have instituted any proceeding seeking any such Order.
8.2 CONDITIONS TO THE OBLIGATIONS OF THE COMPANY. The obligations of the
Company are subject to the satisfaction or waiver at or prior to the Closing of
each of the following conditions:
(a) SHAREHOLDER APPROVAL. The shareholders of the Company shall have
adopted this Agreement and approved the Merger at the Company Shareholder
Meeting.
(b) REGULATORY CONSENTS. Any waiting period applicable to the
consummation of the Merger under the HSR Act or any Foreign Merger Laws shall
have expired or been terminated.
(c) REPRESENTATIONS AND WARRANTIES. The representations and
warranties set forth in Section 6.2 above shall be true and correct at and as
of the Closing Date.
(d) NO INJUNCTIONS OR RESTRAINTS. (i) No court or Governmental Entity
of competent jurisdiction shall have enacted, issued, enforced or entered any
Order that is in effect and restrains, enjoins or otherwise prohibits
consummation of the Merger; provided, however, that prior to invoking this
provision, each party shall use commercially reasonable efforts to have any
such Order lifted or withdrawn, and (ii) no Governmental Entity shall have
instituted any proceeding seeking any such Order.
ARTICLE IX
Termination
9.1 TERMINATION BY MUTUAL CONSENT. This Agreement may be terminated and
the Merger may be abandoned at any time prior to the Effective Time, whether
before or after the approval by shareholders of the Company referred to in
Section 8.1(a), by mutual written consent of the Company, the Parent and the
Merger Subsidiary.
9.2 TERMINATION BY EITHER THE PARENT OR THE COMPANY. This Agreement may be
terminated and the Merger may be abandoned at any time prior to the Effective
Time by action of the Parent or the board of directors of the Company if:
(a) the Merger shall not have been consummated by August 30, 2002,
whether such date is before or after the date of approval by the shareholders
of the Company referred to in Section 8.1(a); provided, however, that if a
request for additional information is received from a Governmental Entity or
pursuant to the HSR Act or Foreign Merger Laws, then such date shall be
extended to the thirtieth (30th) day following the date when such Governmental
Entity has deemed the Parent and/or the Company, as applicable, to be in
substantial compliance with such request for additional information, but in
any event not later than September 30, 2002,
37
provided that the right to terminate this Agreement pursuant to this Section
9.2(a) shall not be available to any party that has breached in any material
respect its obligations under this Agreement in any manner that shall have
been the proximate cause of, or resulted in, the failure to consummate the
Merger by the date referred to in this Section 9.2(a);
(b) the Company Shareholders Meeting shall have been convened, held
and completed and the approval referred to in Section 8.1(a) shall not have
been obtained thereat or at any adjournment or postponement thereof; or
(c) any Order permanently restraining, enjoining or otherwise
prohibiting the Merger shall become final and non-appealable (whether before
or after the approval referred to in Section 8.1(a)), provided, however, that
the right to terminate this Agreement pursuant to this Section 9.2(c) shall
not be available to any party that has breached its covenant in Section 7.4 to
use commercially reasonable efforts to prevent such Order from being issued
and to use commercially reasonable efforts to cause such Order to be vacated,
withdrawn or lifted.
9.3 TERMINATION BY THE COMPANY. This Agreement may be terminated and the
Merger may be abandoned at any time prior to the Effective Time by action of the
board of directors of the Company if:
(a) the board of directors of the Company authorizes the Company,
subject to compliance with the terms of this Agreement, including Section 7.2,
to enter into a binding written agreement concerning a Superior Proposal and
the Company notifies the Parent in writing that it intends to enter into such
an agreement, attaching the most current version of such agreement to such
notice; provided, however, that the Company (x) will not enter into a binding
agreement concerning a Superior Proposal until at least the first calendar day
following the fifth (5th) Business Day after it has provided the written
notice to the Parent required thereby, (y) will notify the Parent promptly if
its intention to enter into the binding written agreement referred to in such
notice shall change at any time after giving such notification and (z) will
not terminate this Agreement or enter into a binding agreement if the Parent
has, within the period referred to in clause (x) of this sentence, made a
written offer that is deemed by the Special Committee, in consultation with
its outside legal counsel and financial advisors, to be at least as favorable
to the Company's shareholders as the Superior Proposal; or
(b) any representation or warranty of the Parent or the Merger
Subsidiary in this Agreement shall not be true and correct in any material
respect, as if such representation or warranty was made as of such time on or
after the date of this Agreement; or the Parent or the Merger Subsidiary shall
have failed to perform in any material respect any obligation or to comply in
any material respect with any agreement or covenant of the Parent or the
Merger Subsidiary to be performed or complied with by it under this Agreement
and which, in any such case, shall not have been cured within five (5)
Business Days following receipt of notice thereof.
9.4 TERMINATION BY THE PARENT. This Agreement may be terminated and the
Merger may be abandoned at any time prior to the Effective Time by action of the
Parent if:
38
(a) the board of directors of the Company shall have failed to
recommend, or shall have withdrawn or adversely modified its approval or
recommendation of, the Merger or failed to reconfirm its recommendation of the
Merger within two (2) Business Days after a written request by the Parent to
do so, or shall have resolved to do any of the foregoing; or
(b) any representation or warranty of the Company in this Agreement
(disregarding any qualifications contained therein regarding materiality or
Company Material Adverse Effect) shall not be true and correct, as if such
representation or warranty was made as of such time on or after the date of
this Agreement, except to the extent that such failure to be true and correct
has not had, and is not reasonably likely to have, a Company Material Adverse
Effect, or the Company shall have failed to perform in any material respect
any obligation or to comply in any material respect with any agreement or
covenant of the Company to be performed or complied with by it under this
Agreement and which, in any such case, shall not have been cured within five
(5) Business Days following receipt of notice thereof.
9.5 EFFECT OF TERMINATION AND ABANDONMENT.
(a) In the event of termination of this Agreement and the abandonment
of the Merger pursuant to this Article IX, this Agreement (other than as set
forth in Section 10.1) shall become void and of no effect with no liability of
any party hereto (or any of its directors, officers, employees, agents, legal
and financial advisors or other representatives); provided, however, that,
except as otherwise provided herein, no such termination shall relieve any
party hereto of any liability or damages resulting from any willful breach of
this Agreement or for payment of the termination fees or expenses payable
pursuant to Section 9.5(b).
(b) In the event that (i)(A) a bona fide Acquisition Proposal shall
have been made to the Company or any of its shareholders or any Person shall
have announced an intention (whether or not conditional) to make an
Acquisition Proposal with respect to the Company, and on or following the date
of this Agreement, such Acquisition Proposal, announcement or intention is or
becomes publicly known, and (B) on or following the date on which such
Acquisition Proposal, announcement or intention is or becomes publicly known,
this Agreement is terminated by either the Parent or the Company pursuant to
Section 9.2(a), or (ii) this Agreement is terminated (A) by the Company
pursuant to Section 9.3(a) or (B) by the Parent pursuant to Section 9.4(a),
then the Company shall promptly, but in no event later than two (2) Business
Days after the date of such termination if terminated by the Parent or the
Merger Subsidiary and simultaneously if terminated by the Company pay to the
Parent a termination fee of $12,000,000 in cash payable by wire transfer of
same day funds to an account to be specified by the Parent and shall promptly,
but in no event later than two (2) Business Days after the date of
notification by the Parent of the amount, reimburse the Parent for all actual,
documented out-of-pocket costs, charges and expenses actually incurred by
DuPont Canada Inc., the Parent or the Merger Subsidiary in connection with
this Agreement and the Shareholders Agreement and the transactions
contemplated by this Agreement and the Shareholders Agreement, including,
without limitation, fees and expenses of accountants, attorneys and financial
advisors, in cash by wire transfer of same day funds to an account to be
specified by the Parent. The Company acknowledges that the agreements
contained in this Section 9.5(b) are an integral part of the transactions
contemplated by this Agreement and that, without these agreements, the Parent
and
39
the Merger Subsidiary would not enter into this Agreement; accordingly, if the
Company fails to promptly pay the amount due pursuant to this Section 9.5(b)
and, in order to obtain such payment, the Parent or the Merger Subsidiary
commences a suit which results in a binding nonappealable judgment rendered by
a court of competent jurisdiction against the Company for the fee set forth in
this paragraph (b), the Company shall pay to the Parent or the Merger
Subsidiary its costs and expenses (including reasonable attorneys' fees) in
connection with such suit, together with interest on the amount of the fee at
the prime rate of The Chase Manhattan Bank in effect on the date such payment
was required to be made.
ARTICLE X
Miscellaneous and General
10.1 SURVIVAL. This Article X and the agreements of the Company, the
Parent and the Merger Subsidiary contained in Articles II, III, IV and V and
Sections 7.9 (Benefits), 7.10 (Expenses) and 7.11 (Indemnification) shall
survive the consummation of the Merger. This Article X and the agreements of the
Company, the Parent and the Merger Subsidiary contained in Section 7.10
(Expenses), and Section 9.5 (Effect of Termination and Abandonment) shall
survive the termination of this Agreement. All other agreements and all
representations, warranties and covenants in this Agreement shall not survive
the consummation of the Merger or the termination of this Agreement.
10.2 MODIFICATION OR AMENDMENT. Subject to the provisions of applicable
law, at any time prior to the Effective Time, the parties hereto may modify or
amend this Agreement, by written agreement executed and delivered by duly
authorized officers of the respective parties.
10.3 WAIVER OF CONDITIONS. The conditions to each of the parties'
obligations to consummate the Merger are for the sole benefit of such party and
may be waived by such party in whole or in part to the extent permitted by
applicable law.
10.4 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each such counterpart being deemed to be an original instrument,
and all such counterparts shall together constitute the same agreement.
10.5 GOVERNING LAW AND VENUE; WAIVER OF JURY TRIAL.
(a) THIS AGREEMENT SHALL BE DEEMED TO BE MADE IN AND IN ALL RESPECTS
SHALL BE INTERPRETED, CONSTRUED AND GOVERNED BY AND IN ACCORDANCE WITH THE
LAWS OF THE STATE OF
DELAWARE WITHOUT REGARD TO THE CONFLICT OF LAW PRINCIPLES
THEREOF. THE PARTIES HEREBY IRREVOCABLY SUBMIT TO THE JURISDICTION OF THE
COURTS OF THE STATE OF
DELAWARE AND THE FEDERAL COURTS OF THE UNITED STATES OF
AMERICA LOCATED IN THE COUNTY OF NEW CASTLE,
DELAWARE SOLELY IN RESPECT OF THE
INTERPRETATION AND ENFORCEMENT OF THE PROVISIONS OF THIS AGREEMENT AND THE
SHAREHOLDERS AGREEMENT AND
40
OF THE DOCUMENTS REFERRED TO IN THIS AGREEMENT AND THE SHAREHOLDERS AGREEMENT,
AND IN RESPECT OF THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY, AND HEREBY
WAIVE, AND AGREE NOT TO ASSERT, AS A DEFENSE IN ANY ACTION, SUIT OR PROCEEDING
FOR THE INTERPRETATION OR ENFORCEMENT HEREOF OR OF ANY SUCH DOCUMENT, THAT IT
IS NOT SUBJECT THERETO OR THAT SUCH ACTION, SUIT OR PROCEEDING MAY NOT BE
BROUGHT OR IS NOT MAINTAINABLE IN SAID COURTS OR THAT THE VENUE THEREOF MAY
NOT BE APPROPRIATE OR THAT THIS AGREEMENT OR THE SHAREHOLDERS AGREEMENT OR ANY
SUCH DOCUMENT MAY NOT BE ENFORCED IN OR BY SUCH COURTS, AND THE PARTIES HERETO
IRREVOCABLY AGREE THAT ALL CLAIMS WITH RESPECT TO SUCH ACTION OR PROCEEDING
SHALL BE HEARD AND DETERMINED IN SUCH A
DELAWARE STATE OR FEDERAL COURT. THE
PARTIES HEREBY CONSENT TO AND GRANT ANY SUCH COURT JURISDICTION OVER THE
PERSON OF SUCH PARTIES AND OVER THE SUBJECT MATTER OF SUCH DISPUTE AND AGREE
THAT MAILING OF PROCESS OR OTHER PAPERS IN CONNECTION WITH ANY SUCH ACTION OR
PROCEEDING IN THE MANNER PROVIDED IN SECTION 10.6 OR IN SUCH OTHER MANNER AS
MAY BE PERMITTED BY LAW, SHALL BE VALID AND SUFFICIENT SERVICE THEREOF.
(b) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY
ARISE UNDER THIS AGREEMENT OR THE SHAREHOLDERS AGREEMENT IS LIKELY TO INVOLVE
COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT
OF OR RELATING TO THIS AGREEMENT OR THE SHAREHOLDERS AGREEMENT, OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EACH PARTY CERTIFIES AND
ACKNOWLEDGES THAT (I) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY
HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN
THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (II) EACH SUCH
PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (III)
EACH SUCH PARTY MAKES THIS WAIVER VOLUNTARILY AND (IV) EACH SUCH PARTY HAS
BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL
WAIVERS AND CERTIFICATIONS IN THIS SECTION 10.5.
10.6 NOTICES. Any notice, request, instruction or other document to be
given hereunder by any party to the others shall be in writing and delivered
personally or sent by registered or certified mail, postage prepaid, or by
facsimile:
41
if to the Parent or the Merger Subsidiary:
Enhance Packaging Technologies Inc.
0000 Xxxxxxxxxxx Xxxx
Xxxxxxxxxxx, Xxxxxxx X0X 0X0
Attention: General Counsel
Fax: (000) 000-0000
with copies to:
Xxxxxx X. Xxxxx, Esq.
Xxxxxxx Xxxxx Xxxxxxx & Ingersoll, LLP
0000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxxxxx, XX 00000-0000
Fax: (000) 000-0000
if to the Company:
Liqui-Box Corporation
0000 Xxxxxxxxxxx-Xxxxxx Xxxx
Xxxxxxxxxxx, Xxxx 00000
Attention: Xxxxxx X. Xxxxx
Fax: (000) 000-0000
with copies to:
Xxxxxx X. Xxxxxx, Xx., Esq.
Vorys, Xxxxx, Xxxxxxx and Xxxxx LLP
00 Xxxx Xxx Xxxxxx
Xxxxxxxx, Xxxx 00000
Fax: (000) 000-0000
or to such other persons or addresses as may be designated in writing by the
party to receive such notice as provided above.
10.7 ENTIRE AGREEMENT. This Agreement (including any exhibits hereto) and
the letter agreement between the Company and the Parent dated November 30, 2001
constitute the entire agreement, and supersede all other prior agreements,
understandings, representations and warranties both written and oral, among the
parties, with respect to the subject matter hereof.
10.8 NO THIRD PARTY BENEFICIARIES. Except as provided in Section 7.11
(Indemnification), this Agreement is not intended to confer upon any Person
other than the parties hereto any rights or remedies hereunder.
10.9 OBLIGATIONS OF THE PARENT AND OF THE COMPANY. Whenever this Agreement
requires a Subsidiary of the Parent to take any action, such requirement shall
be deemed to include an undertaking on the part of the Parent to cause such
Subsidiary to take such action.
42
Whenever this Agreement requires a Subsidiary of the Company to take any
action, such requirement shall be deemed to include an undertaking on the part
of the Company to cause such Subsidiary to take such action and, after the
Effective Time, on the part of the Surviving Corporation to cause such
Subsidiary to take such action.
10.10 SEVERABILITY. The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions hereof. If any
provision of this Agreement, or the application thereof to any Person or any
circumstance, is invalid or unenforceable, (a) a suitable and equitable
provision shall be substituted therefor in order to carry out, so far as may be
valid and enforceable, the intent and purpose of such invalid or unenforceable
provision and (b) the remainder of this Agreement and the application of such
provision to other Persons or circumstances shall not be affected by such
invalidity or unenforceability, nor shall such invalidity or unenforceability
affect the validity or enforceability of such provision, or the application
thereof, in any other jurisdiction.
10.11 SPECIFIC PERFORMANCE. The parties hereto each acknowledge that, in
view of the uniqueness of the subject matter hereof, the parties hereto would
not have an adequate remedy at law for money damages if this Agreement were not
performed in accordance with its terms, and therefore agree that the parties
hereto shall be entitled to specific enforcement of the terms hereof in addition
to any other remedy to which the parties hereto may be entitled at law or in
equity.
10.12 INTERPRETATION. The table of contents and Article, Section and
Paragraph headings herein are for convenience of reference only, do not
constitute part of this Agreement and shall not be deemed to limit or otherwise
affect any of the provisions hereof. Where a reference in this Agreement is made
to a Section, Schedule or Exhibit, such reference shall be to a Section of or a
Schedule or Exhibit to this Agreement unless otherwise indicated. Whenever the
words "include," "includes" or "including" are used in this Agreement, they
shall be deemed to be followed by the words "without limitation."
10.13 ASSIGNMENT. This Agreement shall not be assignable by operation of
law or otherwise; provided, however, that either of the Parent or the Merger
Subsidiary may assign its rights and obligations under this Agreement to any of
the Parent's Subsidiaries or affiliates, in the event of which, all references
herein to the Parent or to the Merger Subsidiary shall be deemed references to
such other Subsidiary or affiliate or Subsidiaries or affiliates. Any purported
assignment made in contravention of this Agreement shall be null and void.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by
duly authorized officers of the parties hereto as of the date hereof.
LIQUI-BOX CORPORATION
By: /s/ X. X. Xxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Chairman, Chief Executive Officer
and Treasurer
ENHANCE PACKAGING TECHNOLOGIES INC.
By: /s/ Ash Sahi
-------------------------------------
Name: Ash Sahi
Title: President and Chief Executive
Officer
EPT NEWCO, INC.
By: /s/ Ash Sahi
-------------------------------------
Name: Ash Sahi
Title: President and Chief Executive
Officer
GUARANTEE OF DUPONT CANADA INC.
DuPont Canada Inc., on behalf of itself and its successors and assigns,
hereby guarantees the obligations of the Parent, the Merger Subsidiary and the
Surviving Corporation and their successors and assigns with respect to this
Agreement.
DUPONT CANADA INC.
By: /s/ Xxxx X. Xxxxxxxxx
-------------------------------------
Name: Xxxx X. Xxxxxxxxx
Title: Chairman, President and Chief
Executive Officer
44
