Exhibit 2.1
STOCK PURCHASE AGREEMENT
AMONG
XXXXXX PACKAGING COMPANY, L.P.,
OI PLASTIC PRODUCTS FTS, INC.
AND
XXXXX-ILLINOIS, INC.
DATED AS OF JULY 28, 2004
TABLE OF CONTENTS
Page
ARTICLE I
THE PURCHASE; CERTAIN RELATED MATTERS
1.1 The Purchase.........................................................................1
1.2 Purchase Price.......................................................................1
1.3 Purchase Price Adjustments...........................................................2
1.4 Closing 5
1.5 Closing Deliveries....................................................................
1.6 Foreign Subsidiaries.................................................................6
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF O-I AND SELLER
2.1 Due Organization.....................................................................7
2.2 Authorization and Validity of this Agreement and the Additional Agreements...........8
2.3 Subsidiaries.........................................................................8
2.4 No Conflict..........................................................................8
2.5 Capitalization; Ownership of Stock...................................................9
2.6 Financial Statements................................................................10
2.7 Absence of Material Adverse Change..................................................12
2.8 Absence of Undisclosed Liabilities; No Indebtedness.................................15
2.9 Real Property Ownership.............................................................15
2.10 Leased Real Property................................................................16
2.11 Real Property.......................................................................17
2.12 Condition of Properties.............................................................17
2.13 Tax Matters.........................................................................18
2.14 Legal Proceedings...................................................................21
2.15 Government Licenses, Permits and Related Approvals; Environmental Matters...........21
2.16 Employee Benefit Plans..............................................................23
2.17 Intellectual Property...............................................................26
2.18 Insurance...........................................................................31
2.19 Material Contracts..................................................................32
2.20 Transactions with Affiliates........................................................35
2.21 Brokers, Finders, etc...............................................................36
2.22 Employment-Related Matters..........................................................36
2.23 Inventory...........................................................................37
2.24 Accounts Receivable.................................................................38
2.25 Sufficiency of Assets...............................................................38
2.26 Product Liability; Recalls..........................................................39
2.27 Customers and Suppliers.............................................................39
2.28 Accounts Payable....................................................................40
2.29 Books and Records...................................................................40
2.30 Rebates 40
2.31 Propriety of Past Payments..........................................................41
2.32 Bank Accounts.......................................................................41
2.33 No Other Representations and Warranties.............................................41
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF O-I
3.1 Due Organization....................................................................41
3.2 Authorization and Validity of this Agreement and the Additional Agreements..........41
3.3 No Conflict.........................................................................42
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER
4.1 Due Organization....................................................................43
4.2 Authorization and Validity of this Agreement and the Additional Agreements..........43
4.3 No Conflict.........................................................................43
4.4 Brokers, Finders, etc...............................................................44
4.5 Available Funds.....................................................................44
4.6 Purchase for Investment.............................................................44
4.7 Legal Proceedings...................................................................45
ARTICLE V
COVENANTS
5.1 Access; Information and Records; Confidentiality....................................45
5.2 Conduct of the Businesses of the Company Prior to the Closing Date..................46
5.3 Antitrust Laws......................................................................51
5.4 Non-Solicitation....................................................................52
5.5 Additional Agreements...............................................................53
5.6 Termination of Affiliate Relations..................................................54
5.7 Further Actions.....................................................................54
5.8 Insurance...........................................................................57
5.9 Access to Records and Personnel.....................................................57
5.10 Use of Xxxxx-Illinois Name..........................................................58
5.11 Guarantees..........................................................................59
5.12 No Debt 59
5.13 Transfer of Assets..................................................................60
5.14 Non-Competition.....................................................................60
5.15 Confidentiality.....................................................................63
5.16 No Third Party Discussions..........................................................63
5.17 Remittance of Accounts Receivable...................................................64
5.18 Notice of Developments..............................................................64
5.19 Financing-Related Cooperation.......................................................65
5.20 New Jersey Industrial Site Recovery Act.............................................65
5.21 Delivery of Financial Information...................................................66
5.22 Confidentiality Undertakings........................................................69
ARTICLE VI
CONDITIONS PRECEDENT
6.1 Conditions Precedent to Obligations of Parties......................................69
6.2 Conditions Precedent to Obligations of Buyer........................................70
6.3 Conditions Precedent to the Obligations of Seller...................................71
ARTICLE VII
TAXES
7.1 Termination of Tax Sharing Agreements...............................................72
7.2 Seller's Returns and Taxes..........................................................72
7.3 Buyer's Returns and Taxes...........................................................73
7.4 Tax Cooperation.....................................................................74
7.5 Tax Indemnification.................................................................75
7.6 Contests; Refunds...................................................................76
7.7 Transfer Taxes......................................................................77
7.8 Conflicts; Survival.................................................................77
ARTICLE VIII
LABOR MATTERS, EMPLOYEE RELATIONS AND BENEFITS
8.1 Parent Plans, Company Plans.........................................................77
8.2 Collective Bargaining Agreements....................................................78
8.3 Post-Closing Benefits...............................................................78
8.4 Service Credit........................................................................
8.5 Pension and Retiree Medical.........................................................79
8.6 Certain Additional Matters..........................................................80
8.7 Vacation 80
8.8 Welfare Plans.......................................................................80
8.9 WARN 81
8.10 Annual Bonuses......................................................................81
8.11 Transition Services.................................................................81
8.12 Pre-Closing Claims..................................................................82
8.13 No Third-Party Beneficiary Rights...................................................82
ARTICLE IX
INDEMNIFICATION
9.1 Survival Period.....................................................................82
9.2 Indemnification by Seller...........................................................83
9.3 Indemnification by Buyer............................................................87
9.4 Indemnification Calculations........................................................87
9.5 Indemnification Procedures..........................................................89
9.6 Constar Action; NAC Action; and Schedule 9.2(a) Claims Indemnification..............90
ARTICLE X
MISCELLANEOUS
10.1 Certain Definitions.................................................................91
10.2 Termination and Abandonment.........................................................94
10.3 Fees and Expenses...................................................................96
10.4 Notices 96
10.5 Entire Agreement....................................................................97
10.6 No Third Party Beneficiaries........................................................98
10.7 Assignability.......................................................................98
10.8 Amendment and Modification; Waiver..................................................98
10.9 Public Announcements................................................................99
10.10 Section Headings Table of Contents..................................................99
10.11 Severability........................................................................99
10.12 Counterparts........................................................................99
10.13 Enforcement........................................................................100
10.14 Choice of Forum....................................................................100
10.15 Waiver of Jury Trial...............................................................100
10.16 Governing Law......................................................................101
10.17 Interpretation.....................................................................101
SCHEDULES
Schedule 1.3(a)(i) Net Working Capital
Schedule 1.3(a)(ii) 2004 Budget
Schedule 1.3(a)(iii) Pension Deficiency Amounts
Schedule 5.14(b) Specified Health Care Products
EXHIBITS
Exhibit A Form of Transition Services Agreement
Exhibit B(i)-B(ix) Form of Contract Manufacturing Agreements
Exhibit C Form of Resin Purchase Agreement
Exhibit D-(i) to D-(iii) Form of Intellectual Property Agreements
INDEX OF DEFINED TERMS
Term Page
1991 Cross License............................................................................29
1991 Toyo Agreement...........................................................................29
2003 Unaudited Pro Forma Financial Statements.................................................11
2004 Adjusted Unaudited Pro Forma Financial Statements........................................68
2004 Audited Financial Statements.............................................................68
2004 Budget....................................................................................2
2004 March Adjusted Unaudited Pro Forma Financial Statements..................................69
2004 Unaudited Pro Forma Financial Statements.................................................68
2005 Plan.....................................................................................69
Accrued Time..................................................................................80
Acquisition Transactions......................................................................64
Additional Agreements.........................................................................54
Additional Material Contracts.................................................................32
Adjusted Unaudited Pro Forma Financial Statements.............................................11
Adjustment Statement...........................................................................2
Adjustments...................................................................................91
Affected Party................................................................................76
Affiliate.....................................................................................91
Agreement......................................................................................1
Alternative Financing.........................................................................55
Apportioned Tax Attributes....................................................................20
Assignment Contracts..........................................................................56
Audited Financial Statements..................................................................10
Australian Restructuring......................................................................74
Basket........................................................................................84
Books and Records.............................................................................58
Burdensome Condition..........................................................................51
Business......................................................................................91
Business Day..................................................................................91
Business Employee.............................................................................91
Buyer..........................................................................................1
Buyer Disclosure Schedule.....................................................................43
Buyer Indemnified Parties.....................................................................83
Buyer Subs.....................................................................................6
Buyer Tax Act.................................................................................76
Buyer's Acquired Business.....................................................................62
Buyer's Competing Operations..................................................................62
Buyer's Competitive Business..................................................................61
Buyer's Returns...............................................................................73
Buyer's Taxes.................................................................................73
Cap...........................................................................................85
Capital Expenditures Amount....................................................................2
Capital Expenditures Deficiency Amount.........................................................3
Capital Stock.................................................................................91
Cash..........................................................................................91
CBA Consents..................................................................................78
Cleanup.......................................................................................91
Closing........................................................................................5
Closing Cash Amount............................................................................2
Closing Date...................................................................................5
Closing Date Balance Sheet.....................................................................2
Closing Deadline..............................................................................95
COBRA.........................................................................................81
Code..........................................................................................19
Collective Bargaining Agreements..............................................................78
Commitment Letters............................................................................44
Commitment Termination Notice.................................................................95
Commodity Closures............................................................................61
Company........................................................................................1
Company Intellectual Property.................................................................30
Company Material Contracts....................................................................32
Company Plans.................................................................................24
Competition Laws...............................................................................9
Conclusive Adjustment Statement................................................................4
Conclusive Statement...........................................................................4
Confidentiality Agreement.....................................................................46
Consent Contracts.............................................................................56
Contract Manufacturing Agreements.............................................................53
Contributed Assets............................................................................60
Control.......................................................................................92
Controlling Party.............................................................................76
Corporate Restructuring........................................................................8
CPT...........................................................................................90
Deficiency Amount..............................................................................2
Employee Plan.................................................................................23
Environmental Laws............................................................................22
ERISA.........................................................................................23
ERISA Affiliate...............................................................................23
Excess Amount..................................................................................2
Executed Material Agreements..................................................................34
Executed Material Confidential Agreements.....................................................35
Executed Material Confidential Summaries......................................................35
Financing.....................................................................................44
FIRPTA Certificate............................................................................70
Foreign Benefit Plan..........................................................................25
Foreign Subsidiary Capital Stock...............................................................6
Foreign Subsidiary Purchase Agreements.........................................................7
Foreign Subsidiary Purchase Incremental Taxes..................................................7
GAAP..........................................................................................92
Governmental Approval.........................................................................92
Governmental Authority........................................................................21
Governmental Licenses.........................................................................21
Guarantees....................................................................................59
Hazardous Materials...........................................................................92
Health Care Products..........................................................................62
Historical Financial Statements...............................................................10
HSR Act........................................................................................9
Indebtedness..................................................................................92
Indemnified Party.............................................................................89
Indemnifying Party............................................................................89
Indemnity Notice..............................................................................90
Information Memorandum........................................................................93
Intellectual Property.........................................................................30
Intellectual Property Agreements..............................................................54
IP Contracts..................................................................................28
ISRA..........................................................................................65
June Adjusted Unaudited Pro Forma Financial Statements........................................67
June Unaudited Financial Statements...........................................................67
June Unaudited Pro Forma Financial Statements.................................................67
Knowledge.....................................................................................93
Law...........................................................................................93
Lease.........................................................................................16
Leased Real Property..........................................................................16
Lenders.......................................................................................44
Liens.........................................................................................93
Losses........................................................................................83
March Unaudited Financial Statements..........................................................68
March Unaudited Pro Forma Financial Statements................................................69
Material Adverse Effect.......................................................................93
Material Contracts............................................................................32
May 31 Unaudited Pro Forma Balance Sheet......................................................11
May Unaudited Financial Statement.............................................................10
May Unaudited Pro Forma Financial Statements..................................................11
Monthly Unaudited Pro Forma Financial Statements..............................................66
Net Working Capital............................................................................3
Neutral Auditor................................................................................3
NJDEP.........................................................................................66
O-I............................................................................................1
O-I Agreements................................................................................55
O-I Disclosure Schedule........................................................................6
O-I Mexico....................................................................................57
O-I Names.....................................................................................58
O-I Parties...................................................................................16
Other Material Contracts......................................................................33
Xxxxx Illinois Plastic Container Business.....................................................93
Owned Real Property...........................................................................15
P&G...........................................................................................28
P&G Agreement.................................................................................28
Parcel........................................................................................15
Parent Plans..................................................................................77
Parties........................................................................................1
Party..........................................................................................1
Payment Date..................................................................................81
Pension Plans.................................................................................79
Permitted Liens...............................................................................16
Person........................................................................................93
Plan..........................................................................................74
Plastic Molding Technology....................................................................30
Pre-Closing Periods...........................................................................75
Pro Rata Bonus Payment........................................................................81
Purchase.......................................................................................1
Purchase Price.................................................................................1
Qualified Employee Plan.......................................................................24
R&B Agreement.................................................................................29
Real Property.................................................................................16
Release.......................................................................................93
Remediation Standard..........................................................................93
Representatives...............................................................................46
Resin Purchase Agreement......................................................................54
Resolution Period..............................................................................3
Retained Assets...............................................................................60
Retained Inactive Employee....................................................................50
Retained Inactive Employees...................................................................78
Retained Indebtedness..........................................................................2
Retained Subsidiaries..........................................................................8
Retiree Medical Plans.........................................................................80
Returns.......................................................................................18
SAS 100.......................................................................................67
Schedule 9.2(a) Claims........................................................................84
Securities Act................................................................................44
Seller.........................................................................................1
Seller Bonus Plans............................................................................81
Seller Indemnified Parties....................................................................87
Seller IP.....................................................................................31
Seller's Acquired Business....................................................................61
Seller's Closure Business.....................................................................61
Seller's Competing Operations.................................................................61
Seller's Health Care Business.................................................................61
Seller's Returns..............................................................................72
September Adjusted Unaudited Pro Forma Financial Statements...................................68
September Unaudited Financial Statements......................................................67
September Unaudited Pro Forma Financial Statements............................................67
Significant Agreement.........................................................................34
Spare Parts Amount.............................................................................2
Spare Parts Deficiency Amount..................................................................3
Spare Parts Excess Amount......................................................................3
Specified Subsidiaries.........................................................................8
Statement......................................................................................2
Stock..........................................................................................1
Straddle Period...............................................................................73
Subsidiary....................................................................................94
Tax...........................................................................................18
Tax Claim.....................................................................................76
Taxes.........................................................................................18
Termination Fee...............................................................................96
Third Party Claim.............................................................................89
Three Party Agreements........................................................................55
Top 10 Suppliers..............................................................................39
Top 20 Customers..............................................................................39
Toyo..........................................................................................29
Transfer Taxes................................................................................77
Transition Services Agreement.................................................................53
Unaudited Pro Forma Financial Statements......................................................11
Unexecuted Material Agreement Summaries.......................................................34
Unexecuted Material Agreements................................................................34
Unexecuted Material Confidential Agreement Summaries..........................................35
Unexecuted Material Confidential Agreements...................................................35
Union Employees...............................................................................78
WARN Act......................................................................................81
STOCK PURCHASE AGREEMENT, dated as of July 28, 2004 (the
"Agreement"), among Xxxxxx Packaging Company, L.P., a Delaware limited
partnership ("Buyer"), OI Plastic Products FTS, Inc., a Delaware corporation
("Seller"), an indirect and wholly owned subsidiary of Xxxxx-Illinois, Inc., a
Delaware corporation ("O-I"), and O-I. Buyer, Seller and O-I are collectively
referred to herein as the "Parties" and each individually as a "Party."
W I T N E S S E T H:
WHEREAS, Seller owns 82,383 shares of common stock, no par
value, of Xxxxx-Xxxxxxxx Plastic Products Inc., a Delaware corporation (the
"Company"), constituting all the issued and outstanding Capital Stock (as
defined below) of the Company (all such shares being referred to herein as the
"Stock");
WHEREAS, O-I and Seller desire to sell to Buyer, and Buyer
desires to purchase from Seller, the Stock upon the terms and subject to the
conditions set forth in this Agreement;
WHEREAS, the Board of Directors of each of O-I and Seller,
and the general partner of Buyer has approved the sale and purchase of the
Stock upon the terms and subject to the conditions set forth in this Agreement
(the "Purchase"); and
WHEREAS, prior to the consummation of the Purchase, O-I and
Seller shall cause the Corporate Restructuring (as defined below) to be
completed.
NOW, THEREFORE, in consideration of the foregoing and the
respective representations, warranties, covenants and agreements set forth in
this Agreement, and intending to be legally bound hereby, the Parties agree as
follows:
ARTICLE I
THE PURCHASE; CERTAIN RELATED MATTERS
1.1 The Purchase. Subject to the satisfaction or waiver of
the conditions set forth in this Agreement, at the Closing (as defined below),
Seller shall, and O-I shall or shall cause Seller to, sell, convey, assign,
transfer and deliver to Buyer the Stock representing the entire issued and
outstanding Capital Stock of the Company, free and clear of all Liens (as
defined below).
1.2 Purchase Price. The purchase price for the Stock shall be
$1,200,000,000 (the "Purchase Price"), subject to the purchase price
adjustments set forth in Section 1.3. The Purchase Price shall be payable in
immediately available federal funds to a U.S. bank account of Seller designated
by Seller in writing to Buyer at least two Business Days (as defined below)
prior to Closing.
1.3 Purchase Price Adjustments.
(a) Within 90 calendar days after the Closing Date, Buyer
shall prepare and deliver to Seller a balance sheet of the Company and its
Subsidiaries as of the close of business on the Closing Date (the "Closing Date
Balance Sheet") and a statement (the "Statement") setting forth the (i) Net
Working Capital (as defined below) reflected in the Closing Date Balance Sheet,
and the components and calculation thereof, as of the close of business of the
Company and its Subsidiaries on the Closing Date, (ii) the aggregate amount of
any Indebtedness (as defined below) outstanding as of the Closing Date
excluding Indebtedness incurred in connection with the Financing (as defined
below) (the "Retained Indebtedness"), net of any Cash (as defined below)
reflected on the Closing Date Balance Sheet (the "Closing Cash Amount"), (iii)
the aggregate amount of capital expenditures made by the Company and its
Subsidiaries from January 1, 2004 through the Closing Date (the "Capital
Expenditures Amount") and (iv) the aggregate amount of spare parts reflected in
the Closing Date Balance Sheet (the "Spare Parts Amount"). All spare parts of
the Company and its Subsidiaries reflected on the Closing Date Balance Sheet
are usable in machinery and equipment currently used or held for use in the
Business and are free of any obvious damage. The Closing Date Balance Sheet and
the Statement will be prepared in accordance with the principles and procedures
set forth on Schedule 1.3(a)(i), GAAP (as defined below) consistently applied,
and to the extent consistent with GAAP, the methods used in preparing the
Audited Financial Statements (as defined below) and the Unaudited Pro Forma
Financial Statements (as defined below); provided, however, that the principles
and procedures set forth on Schedule 1.3(a)(i) shall govern the preparation of
the Closing Date Balance Sheet and the Statement. Concurrently therewith, Buyer
shall cause to be prepared and delivered to Seller a statement (the "Adjustment
Statement") setting forth the calculations of (A) the amount by which the Net
Working Capital as shown on the Statement (x) exceeds $195,908,000 (as such
amount may be amended by the Parties (as defined below) as set forth on
Schedule 1.3(a)(i), the "Excess Amount") or (y) is less than $195,908,000 (as
such amount may be amended by the Parties as set forth on Schedule 1.3(a)(i),
the "Deficiency Amount"), (B) the amount of Retained Indebtedness, net of the
Closing Cash Amount, (C) the amount, if any, by which the Capital Expenditures
Amount is less than (x) if the Closing occurs prior to January 1, 2005, (1) the
aggregate amount of capital expenditures planned to be made by the Company and
its Subsidiaries pursuant to the Company's 2004 capital budget attached hereto
as Schedule 1.3(a)(ii) (the "2004 Budget") for each full calendar month in 2004
elapsed prior to the Closing Date plus (2) the product of the amount of capital
expenditures planned to be made by the Company and its Subsidiaries pursuant to
the 2004 Budget during the calendar month in which the Closing occurs and a
fraction, the numerator of which is the actual number of days elapsed in the
calendar month in which the Closing occurs and the denominator of which is the
actual number of days in the calendar month in which the Closing occurs or (y)
if the Closing occurs on or after January 1, 2005, an amount equal to the sum
of (1) $43,700,000 and (2) the product of $60,000,000 and a fraction, the
numerator of which is the number of days elapsed from January 1, 2005 to the
Closing Date and the denominator of which is 365 (the amount determined
pursuant to clause (x) or (y) above, as applicable, the "Capital Expenditures
Deficiency Amount"), (D) the amount by which the Spare Parts Amount as shown on
the Statement (x) exceeds $25,400,000 (the "Spare Parts Excess Amount") or (y)
is less than $23,400,000 (the "Spare Parts Deficiency Amount") and (E) the
Pension Deficiency Amount. "Net Working Capital" shall mean (without
duplication) (a) the sum of inventory (raw materials, work in process,
in-transit inventory, finished goods and supplies, net of all related reserves
and excluding the LIFO reserve); provided, however, in no event for purposes of
calculating Net Working Capital shall inventory exceed $155,500,000, plus trade
accounts receivable (net of all related reserves) plus prepaid expenses
(excluding any prepaid or deferred Taxes (as defined below)) less (b) trade
accounts payable plus salaries and wages plus other accrued liabilities
(excluding any accrued Taxes or Indebtedness). In addition, within 90 calendar
days after the Closing Date, each of O-I and Buyer shall use its commercially
reasonable best efforts to have the Designated Actuary (as defined in Schedule
1.3(a)(iii)) prepare and deliver the Pension Deficiency Amount Report (as
defined in Schedule 1.3(a)(iii)) in accordance with Schedule 1.3(a)(iii),
setting forth the aggregate amount of any Pension Deficiency Amount (as defined
in Schedule 1.3(a)(iii)) as of the Closing Date as determined in accordance
with Schedule 1.3(a)(iii).
(b) After receipt of the Statement and the Adjustment
Statement, Seller will have 30 calendar days to review the Statement and the
Adjustment Statement together with the work papers used in their preparation.
Unless Seller delivers written notice to Buyer setting forth the specific items
disputed by Seller, on or prior to the thirtieth day after its receipt of the
Statement and the Adjustment Statement, Seller will be deemed to have accepted
and agreed to the Statement and the Adjustment Statement and such agreement
will be final and binding. If Seller so notifies Buyer of its objections to any
of the Statement or the Adjustment Statement, Buyer and Seller will, within 30
days following the notice (the "Resolution Period"), attempt to resolve their
differences. Any resolution by Buyer and Seller during the Resolution Period as
to any disputed amounts will be final, binding and conclusive.
(c) If Buyer and Seller do not resolve all disputed items on
the Statement and Adjustment Statement by the end of the Resolution Period,
then all items remaining in dispute will be submitted within 30 days after the
expiration of the Resolution Period to a partner of PricewaterhouseCoopers or
such other national independent accounting firm mutually acceptable to Buyer
and Seller (the "Neutral Auditor"). The Neutral Auditor shall act as an
arbitrator to determine only those items in dispute. Buyer, Seller and O-I
shall cooperate with the Neutral Auditor and, subject to customary
confidentiality and indemnity agreements, provide the Neutral Auditor with
access to the books, records, personnel and representatives of it and such
other information as such firm may require in order to render its
determination. All fees and expenses relating to the work, if any, to be
performed by the Neutral Auditor will be allocated between Buyer, on the one
hand, and Seller and O-I, on the other hand, in the same proportion that the
aggregate amount of the disputed items so submitted to the Neutral Auditor that
is unsuccessfully disputed by each such Party (as finally determined by the
Neutral Auditor) bears to the total amount of such disputed items so submitted.
The Neutral Auditor will deliver to Buyer and Seller a written determination
(such determination to include a work sheet setting forth all material
calculations used in arriving at such determination and to be based solely on
information provided to the Neutral Auditor by Buyer and Seller) of the
disputed items within 45 days of receipt of the disputed items, which
determination will be final, binding and conclusive. Notwithstanding the
foregoing, the Neutral Auditor shall not be permitted or authorized to
determine an amount with respect to any disputed item that is outside of the
range between the amounts of such disputed item as finally proposed by Buyer,
on the one hand, and Seller and O-I, on the other hand. The final, binding and
conclusive Statement and Adjustment Statement, which either are agreed upon by
Buyer and Seller or are delivered by the Neutral Auditor in accordance with
this Section 1.3, will be the "Conclusive Statement" and the "Conclusive
Adjustment Statement," respectively. In the event that either Buyer or Seller
fails to submit its statement regarding any items remaining in dispute within
the time determined by the Neutral Auditor, then the Neutral Auditor shall
render a decision based solely on the evidence timely submitted to the Neutral
Auditor by Buyer and Seller.
(d) If the Conclusive Adjustment Statement contains a
Deficiency Amount, the Purchase Price will be reduced dollar-for-dollar by such
Deficiency Amount and Seller and O-I, jointly and severally, shall pay to Buyer
an amount in cash equal to such Deficiency Amount. If the Conclusive Adjustment
Statement contains an Excess Amount, the Purchase Price will be increased
dollar-for-dollar by such Excess Amount, and Buyer shall pay to Seller an
amount in cash equal to such Excess Amount. If the Conclusive Adjustment
Statement contains a Spare Parts Deficiency Amount, the Purchase Price will be
reduced dollar-for-dollar by such Spare Parts Deficiency Amount and Seller and
O-I, jointly and severally, shall pay to Buyer an amount in cash equal to such
Spare Parts Deficiency Amount. If the Conclusive Adjustment Statement contains
a Spare Parts Excess Amount, the Purchase Price will be increased
dollar-for-dollar by such Spare Parts Excess Amount, and Buyer shall pay to
Seller an amount in cash equal to such Spare Parts Excess Amount. The Purchase
Price will also be reduced dollar-for-dollar by the Retained Indebtedness net
of the Closing Cash Amount, the Pension Deficiency Amount and the Capital
Expenditures Deficiency Amount, if any, and Seller and O-I, jointly and
severally, shall pay to Buyer an amount in cash equal to the Capital
Expenditures Deficiency Amount, Pension Deficiency Amount and Retained
Indebtedness net of the Closing Cash Amount; provided, however, with respect to
items of Retained Indebtedness, in lieu of making a payment to Buyer in the
amount of such Retained Indebtedness, to the extent permitted under the
agreements to such Indebtedness and to the extent such Indebtedness is then
outstanding, Seller and O-I may elect to redeem, repay and cancel in full all
such items of Retained Indebtedness or otherwise eliminate all liability
(contingent or otherwise) of the Companies and its Subsidiaries for such items
of Retained Indebtedness and deliver to Buyer evidence thereof, in form and
substance satisfactory to Buyer. To the extent any Retained Indebtedness is
denominated in a currency other than dollars, the equivalent thereof in dollars
shall be determined in accordance with Schedule 1.3(a)(i). All payments to be
made pursuant to this Section 1.3(d) will be made no later than the fifth
Business Day following the date on which Buyer and Seller agree to, or the
Neutral Auditor delivers, the Conclusive Statement and the Conclusive
Adjustment Statement. Any payment required to be made by Buyer, on the one
hand, or Seller and O-I, on the other hand, pursuant to this Section 1.3(d)
shall bear interest from the Closing Date through the date of payment at a rate
of interest equal to the prime rate per annum publicly announced from time to
time by Citibank, N.A. at its principal office in New York City, and shall be
payable by wire transfer of immediately available funds to an account or
accounts designated by the Party entitled to receive such funds at least two
Business Days prior to the date when such payment is due.
1.4 Closing. Unless this Agreement shall have been terminated
and the transactions herein contemplated shall have been abandoned pursuant to
Section 10.2, and subject to the satisfaction or waiver of the conditions set
forth in Article VI, the closing of the Purchase (the "Closing") will take
place at 10:00 a.m. on the second Business Day (the "Closing Date"), following
the satisfaction or waiver of each of the conditions set forth in Article VI
(other than those conditions that by their nature are to be satisfied at the
Closing (but subject to the satisfaction or waiver thereof)), at the offices of
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, Xxxx Xxxxx Xxxxxx, Xxx Xxxx, XX
00000, unless another date, time or place is agreed to in writing by the
Parties. The Closing shall be deemed effective as of 12:01 a.m., New York City
time, on the Closing Date.
1.5 Closing Deliveries.
(a) At the Closing, Buyer shall deliver, or cause one or more
of its Affiliates to deliver, to Seller:
(i) the Purchase Price as provided in Section 1.2;
(ii) the documents described in Section 6.3; and
(iii) such other documents and instruments as counsel for
Buyer and Seller mutually agree to be reasonably necessary to
consummate the transactions described herein.
(b) At the Closing, O-I and Seller shall deliver, or cause
one or more of their Affiliates to deliver, to Buyer:
(i) stock certificates evidencing the Stock duly endorsed,
for transfer to Buyer or accompanied by stock powers duly executed in
blank and with any required stock Transfer Tax stamps affixed thereto;
(ii) the documents described in Section 6.2;
(iii) a document duly executed by Seller reciting that such
document shall become effective simultaneously with the Closing that
(A) consents to the appointment as officers and directors of the
Company and each of its Subsidiaries of those persons designated by
notice given by Buyer to the Company at least two days prior to the
Closing, naming such persons and (B) effects the resignation of
existing officers and directors of the Company and each of its
Subsidiaries;
(iv) all of the Books and Records (as defined below) of
Seller and O-I relating to the Company, its Subsidiaries and the
Business (as defined below);
(v) evidence, satisfactory in form and substance to Buyer,
that all Indebtedness (other than as set forth on Section 5.12 of the
schedule of disclosures delivered by O-I and Seller to Buyer
concurrent with the execution of this Agreement (the "O-I Disclosure
Schedule") or as may be otherwise agreed by Buyer and Seller) has been
redeemed or repaid by Seller or with respect to items of Indebtedness
referred to in clause (e) or clause (f) of the definition of
Indebtedness, Seller shall have otherwise eliminated all liability
(contingent or otherwise) of the Company and its Subsidiaries for such
items of Indebtedness, any Liens that existed in connection therewith
have been released and discharged and all guarantees set forth on
Section 1.5(b)(v) of the O-I Disclosure Schedule made by the Company
and any of its Subsidiaries of Indebtedness of Seller or any of its
Affiliates have been released;
(vi) such instruments of transfer and other documents and
instruments as shall be necessary to consummate the transfer, if any,
of the Foreign Subsidiary Capital Stock (as defined below) in
accordance with the provisions of the Foreign Subsidiary Purchase
Agreements (as defined below); and
(vii) such other documents and instruments as counsel for
Buyer and Seller mutually agree to be reasonably necessary to
consummate the transactions described herein.
1.6 Foreign Subsidiaries. Not later than the earlier of (i)
15 days following receipt by Buyer of all Tax and other relevant financial
information relating to the Foreign Subsidiaries as reasonably requested by
Buyer and an opportunity to review such information with O-I and (ii) 30 days
following the date hereof, Buyer shall have the right to provide to O-I a
written list identifying the Affiliate(s) of Buyer (the "Buyer Subs") that
Buyer proposes to acquire directly the Capital Stock of one or more of the
following Subsidiaries on the Closing Date (the "Foreign Subsidiary Capital
Stock"): each of the Specified Subsidiaries (as defined below), Xxxxxx, X.X. de
C.V., Continental PET Holdings, S. de X.X. de C.V., Continental PET
Technologies de Mexico, S.A., de C.V., Xxxxx-Illinois Plastic Products de
Mexico, S. de X.X. de C.V., Consultores en Controles, S.A. de C.V. and
Especialidades Technologicas, S.A. de C.V.; provided that Buyer shall not
unreasonably delay in providing such list to O-I within the relevant period.
Within 10 days following Seller's receipt of the foregoing written list, O-I
and Buyer shall negotiate, and cause their respective Affiliates to, execute
and deliver commercially reasonable agreement(s) (the "Foreign Subsidiary
Purchase Agreements") pursuant to which the Buyer Subs shall acquire the
Foreign Subsidiary Capital Stock directly from the Affiliates of O-I that own
such Foreign Subsidiary Capital Stock for no additional consideration, and each
such Foreign Subsidiary Purchase Agreement shall set forth the portion of the
Purchase Price as the Parties may reasonably agree allocable to each seller of
Foreign Subsidiary Capital Stock. Notwithstanding the foregoing, to the extent
that the structure contemplated by the Foreign Subsidiary Purchase Agreements
(i) differs materially from the steps set forth in Section 5.13(c) of the O-I
Disclosure Schedule with respect to the Corporate Restructuring and (ii)
results in any material incremental Taxes ("Foreign Subsidiary Purchase
Incremental Taxes") to O-I, Buyer shall indemnify Seller for such Foreign
Subsidiary Purchase Incremental Taxes as set forth in Section 7.5(b)(ii).
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF O-I AND SELLER
O-I and Seller, jointly and severally, represent and warrant
to Buyer as follows, in each case, as of the date hereof and as of the Closing
Date (or, in each case, if made as of a specific date, as of such date):
2.1 Due Organization.
(a) Seller is a corporation duly organized, validly existing
and in good standing under the Laws (as defined below) of the State of
Delaware. Seller has all requisite corporate power and authority to enter into
this Agreement and the Additional Agreements (as defined below) to which it is
a party and to perform its obligations under this Agreement and the Additional
Agreements.
(b) Each of the Company and its Subsidiaries is duly
organized, validly existing and in good standing under the Laws of the
jurisdiction of its organization. Each of the Company and its Subsidiaries (i)
has all requisite corporate or other power and authority to own its properties
and assets and to carry on its business as it is now being conducted and (ii)
is duly qualified to own its properties and assets and transact business as a
foreign corporation and is in good standing in each jurisdiction in which such
qualification is required, except to the extent the failure to so qualify would
not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect (as defined below). Seller has delivered, or caused to
be delivered, to Buyer true, correct and complete copies of the certificate of
incorporation and bylaws or similar organizational documents of the Company and
each of its Subsidiaries as presently in effect. Section 2.1(b) of the O-I
Disclosure Schedule sets forth the name and jurisdiction of incorporation of
the Company and each of its Subsidiaries and the jurisdictions in which the
Company and each of its Subsidiaries is qualified to do business.
2.2 Authorization and Validity of this Agreement and the
Additional Agreements. The execution, delivery and performance by Seller of
this Agreement and the Additional Agreements to which it is a party and the
consummation by it of the transactions contemplated hereby and thereby have
been duly authorized by its board of directors and all other necessary
corporate action on the part of Seller, and no other corporate action on the
part of Seller is necessary for the execution, delivery and performance by
Seller of this Agreement and the Additional Agreements to which it is a party
and the consummation by it of the transactions contemplated hereby and thereby.
This Agreement has been, and each of the Additional Agreements to which it is a
party have been, or at the Closing will be, duly and validly executed and
delivered by Seller and, assuming the due authorization, execution and delivery
by the other parties hereto and thereto (other than O-I), is a legal, valid and
binding obligation of Seller, enforceable against Seller in accordance with
their respective terms, except to the extent that its enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or other laws
relating to or affecting creditors' rights generally and by general equity
principles.
2.3 Subsidiaries.
(a) Except as set forth on Section 2.3(a) of the O-I
Disclosure Schedule, (i) the Company does not own, directly or indirectly, nor
have the right or option to acquire, any Capital Stock of any Person (as
defined below) or have any direct or indirect equity or ownership interest in
any business or Person and (ii) neither the Company nor any of its Subsidiaries
is a party to any partnership agreement, joint venture agreement or similar
arrangement with any other Person.
(b) Section 2.3(b) of the O-I Disclosure Schedule lists the
entities owned by the Company or any of its Subsidiaries as of the date hereof
that will be transferred to O-I or its Affiliates (other than the Company and
any of its Subsidiaries) prior to the Closing Date (such entities, the
"Retained Subsidiaries").
(c) Subject to Section 1.6, Section 7.4(b) and Section
7.4(c), Section 2.3(c) of the O-I Disclosure Schedule lists the entities owned
by O-I or its Affiliates (other than the Company and any of its Subsidiaries)
as of the date hereof that will be transferred to the Company or any of its
Subsidiaries prior to the Closing Date (such entities, the "Specified
Subsidiaries," and the transactions described in Sections 2.3(b) and 2.3(c),
collectively with the transfer of assets contemplated by Section 5.13, the
"Corporate Restructuring").
2.4 No Conflict. Except as set forth on Section 2.4 of the
O-I Disclosure Schedule, the execution, delivery and performance by Seller of
this Agreement and the Additional Agreements to which it is a party and the
consummation by Seller of the transactions contemplated hereby and thereby: (a)
does not and will not violate or conflict with in any material respect any
provision of Law applicable to Seller, the Company or any of its Subsidiaries
or any of their respective properties or assets; (b) does not and will not
require any consent or approval of, or filing with or notice to, any
Governmental Authority (as defined below) under any provision of Law applicable
to Seller, the Company or any of its Subsidiaries, except for the requirements
of the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended (the
"HSR Act"), and any consent, approval, filing or notice as may be required
under similar Laws in any applicable jurisdiction outside the United States
(collectively, "Competition Laws"), and except for any consent, approval,
filing or notice requirements that become applicable solely as a result of the
specific regulatory status of Buyer or its Affiliates or that Buyer or its
Affiliates are otherwise required to obtain; (c) does not and will not violate
or conflict with any provision of the certificate of incorporation, bylaws or
similar organizational documents of Seller, the Company or any of its
Subsidiaries; and (d) does not and will not require any consent, approval or
notice under, and does not and will not conflict with, or result in the breach
or termination of, or constitute (or but for the passage of time, the giving of
notice or both would constitute) a default or give rise to any right of payment
under, or result (or but for the passage of time, the giving of notice or both
would result) in the acceleration of the performance by Seller or the Company
or any of its Subsidiaries under, or the termination, amendment or cancellation
of any indenture, mortgage, deed of trust, lease, license, franchise, contract,
agreement or any other similar instrument or obligation to which Seller or the
Company or any of its Subsidiaries is a party or by which any of them, or any
of their respective properties or assets are bound or encumbered, except in
this clause (d) for violations, conflicts, breaches, or defaults which, or
consents, approvals or waivers (in each case, other than with respect to any
Company Material Contract (as defined below) or IP Contract (as defined below))
the absence of which would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect or would not prevent or materially
delay the consummation of the transactions contemplated by this Agreement and
the Additional Agreements.
2.5 Capitalization; Ownership of Stock.
(a) The authorized Capital Stock of the Company consists of
300,000 shares of common stock, no par value per share, 82,383 of which are
outstanding as of the date hereof. Seller is, and will be on the Closing Date,
the record and beneficial owner of the Stock. The Stock represents all of the
issued and outstanding Capital Stock of the Company and there are no other
authorized shares of or other interests in the Capital Stock of the Company.
Except as set forth on Section 2.5(a) of the O-I Disclosure Schedule, Seller
holds the Stock free and clear of all Liens. The Stock has been duly authorized
and validly issued and is fully paid and nonassessable. Upon the consummation
of the Purchase, Buyer will have good and marketable title to the Stock, free
and clear of all Liens.
(b) Section 2.5(b) of the O-I Disclosure Schedule sets forth
the authorized and outstanding Capital Stock of each Subsidiary of the Company
and each Specified Subsidiary. Except as set forth on Section 2.5(b) of the O-I
Disclosure Schedule, all the outstanding shares of Capital Stock of each
Subsidiary and each Specified Subsidiary have been validly issued and are fully
paid and nonassessable and are or, in the case of the Specified Subsidiaries,
on the Closing Date, will be owned by the Company or a wholly-owned Subsidiary
of the Company free and clear of all Liens.
(c) There are no (i) outstanding options, warrants, calls,
voting agreements or other rights of any kind relating to the sale, transfer,
issuance or voting of any Capital Stock of any class of, or other ownership
interests in, the Company or any of its Subsidiaries that have been issued,
granted or entered into by Seller, the Company or any of its Subsidiaries or
any of their Affiliates or any securities convertible into or evidencing the
right to purchase any Capital Stock of any class of, or other ownership
interests in, the Company or any of its Subsidiaries, (ii) shares of the
Capital Stock of the Company or any of its Subsidiaries reserved for any
purpose, (iii) preemptive or similar rights with respect to the issuance, sale
or other transfer (whether present, past or future) of the Capital Stock of the
Company or any of its Subsidiaries; or (iv) agreements or other obligations
(contingent or otherwise) that may require the Company or any of its
Subsidiaries to repurchase, redeem or otherwise acquire any of its Capital
Stock.
2.6 Financial Statements.
(a) Section 2.6(a) of the O-I Disclosure Schedule contains
true, correct and complete copies of:
(i) the audited combined balance sheet of the
Xxxxx-Illinois Plastic Container Business (as defined below) as of
December 31, 2003 and December 31, 2002 and the related combined
statements of results of operations, cash flows and net parent
investment for each of the three years in the period ended December
31, 2003 (together with the notes thereto and related report of
independent auditors, the "Audited Financial Statements");
(ii) the unaudited combined balance sheet of the
Xxxxx-Illinois Plastic Container Business as of May 31, 2004 and the
related unaudited combined statement of results of operations for the
five month period then ended (together with the notes thereto, the
"May Unaudited Financial Statement" and, together with the Audited
Financial Statements, the "Historical Financial Statements");
(iii) the pro forma unaudited consolidated balance sheet of
the Business as of December 31, 2003, and the related pro forma
unaudited consolidated results of operations for the year ended
December 31, 2003 (together with the notes thereto, the "2003
Unaudited Pro Forma Financial Statements");
(iv) the pro forma unaudited consolidated balance sheet of
the Business as of May 31, 2004 (the "May 31 Unaudited Pro Forma
Balance Sheet") and the related pro forma unaudited consolidated
results of operations for the five month period then ended (together
with the notes thereto, the "May Unaudited Pro Forma Financial
Statements" and, together with the 2003 Unaudited Pro Forma Financial
Statements, the "Unaudited Pro Forma Financial Statements"); and
(v) (A) a schedule setting forth reconciliations from EBIT
to EBITDA, both as derived from the 2003 Unaudited Pro Forma Financial
Statements, to adjusted EBIT and adjusted EBITDA before corporate
allocations, both as presented in section 8 of the Information
Memorandum, by application of the Adjustments and (B) a schedule
setting forth reconciliations from EBIT and EBITDA, both as derived
from the May Unaudited Pro Forma Financial Statements, to adjusted
EBIT and adjusted EBITDA before corporate allocations, by application
of the Adjustments (the schedules in clause (A) and (B), the "Adjusted
Unaudited Pro Forma Financial Statements").
(b) The Historical Financial Statements have been, and if
delivered, the June Unaudited Financial Statements (as defined below), the
September Unaudited Financial Statements (as defined below), the March
Unaudited Financial Statements (as defined below) and the 2004 Audited
Financial Statements (as defined below) will be, prepared from the Books and
Records (as defined below) of the Company and its Subsidiaries and Affiliates
in accordance with GAAP applied on a consistent basis throughout the periods
covered thereby, except as may be indicated in the notes thereto. Except as set
forth on Section 2.6(b) of the O-I Disclosure Schedule, the Historical
Financial Statements present fairly in all material respects, and if delivered
the June Unaudited Financial Statements, September Unaudited Financial
Statements, March Unaudited Financial Statements and the 2004 Audited Financial
Statements will present fairly in all material effects, the combined financial
position and combined statements of results of operations of the Xxxxx-Illinois
Plastic Container Business, as of the dates and for the periods stated therein,
subject in the case of the June Unaudited Financial Statements and, if
delivered the September Unaudited Financial Statements and March Unaudited
Financial Statements, to normal year-end adjustments consistent with past
practice that are not or will not be material either individually or in the
aggregate.
(c) The Unaudited Pro Forma Financial Statements have been,
and if delivered, the June Unaudited Pro Forma Financial Statements (as defined
below), the September Unaudited Pro Forma Financial Statements (as defined
below), the March Unaudited Financial Statements (as defined below) and the
2004 Unaudited Pro Forma Financial Statements (as defined below) will be,
prepared from the Books and Records of the Company and its Subsidiaries and
Affiliates in accordance with GAAP applied on a consistent basis throughout the
periods covered thereby, except as may be indicated in the notes thereto.
Except as set forth on Section 2.6(c) of the O-I Disclosure Schedule, the
Unaudited Pro Forma Financial Statements present fairly in all material
respects, and, if delivered, the June Unaudited Pro Forma Financial Statements,
the September Unaudited Pro Forma Financial Statements, the March Unaudited
Financial Statements and the 2004 Unaudited Pro Forma Financial Statements will
present fairly in all material respects, the pro forma combined financial
position and the pro forma combined statements of results of operations of the
Business, as of the dates and for the periods then ended, giving effect to the
Corporate Reorganization as if consummated on the last day of the periods
presented for purposes of the combined balance sheets and as if consummated on
the first day of the periods presented for purposes of the combined statements
of operations.
(d) The Adjusted Unaudited Pro Forma Financial Statements
reflect and, if delivered, the June Adjusted Unaudited Pro Forma Financial
Statements (as defined below), the September Adjusted Unaudited Pro Forma
Financial Statements (as defined below), the March Adjusted Unaudited Pro Forma
Financial Statements (as defined below) and the 2004 Adjusted Unaudited Pro
Forma Financial Statements will reflect, the application of the Adjustments to
the Pro Forma Unaudited Financial Statements, the June Unaudited Pro Forma
Financial Statements, the September Unaudited Pro Forma Financial Statements,
the March Unaudited Pro Forma Financial Statements and the 2004 Adjusted
Unaudited Pro Forma Financial Statements, respectively. The Adjustments have
been prepared from the Books and Records of the Company and its Subsidiaries
and Affiliates, except for the adjustment for the cost of stand-alone insurance
coverage that represents management's best estimate of the related cost.
2.7 Absence of Material Adverse Change. Except (i) as set
forth on Section 2.7 of the O-I Disclosure Schedule and (ii) for the
consummation of the Corporate Restructuring, since December 31, 2003, the
Company and each of its Subsidiaries have conducted and operated the Business
in the ordinary course of business consistent with past practice, and none of
the Company or any of its Subsidiaries has:
(a) redeemed, purchased or otherwise acquired, directly or
indirectly, any Stock or other Capital Stock of the Company or any of its
Subsidiaries or declared, set aside for payment or paid any dividends or other
distributions (whether Cash, Capital Stock or property) with respect to any of
their Capital Stock;
(b) issued, sold or transferred any of its Capital Stock,
securities convertible into its Capital Stock or warrants, options or other
rights to acquire its Capital Stock, or any bonds or other securities issued by
it;
(c) borrowed or become liable as a guarantor for any amount
in excess of $1,000,000 in the aggregate, except for current liabilities
incurred in the ordinary course of business consistent with past practice and
liabilities under contracts entered into in the ordinary course of business
consistent with past practice;
(d) paid, discharged or satisfied any Lien in excess of
$1,000,000, other than in the ordinary course of business consistent with past
practice;
(e) mortgaged, pledged or subjected to any Lien in excess of
$1,000,000 any of its properties or assets, except Liens for current property
Taxes or assessments not yet due and payable and those arising in the ordinary
course of business consistent with past practice;
(f) sold, assigned or transferred any of its material assets,
except in the ordinary course of business consistent with past practice, or
canceled without adequate consideration any material debts owing to or held by
it;
(g) made or granted any bonus or any wage or salary increase
to any employee or group of employees (other than in the ordinary course of
business consistent with past practice, or as required pursuant to the terms of
any existing Employee Plan (as defined below) or any existing Collective
Bargaining Agreement (as defined below)) or made or granted any increase in any
employee benefits (other than in the ordinary course of business consistent
with past practice, or as required pursuant to the terms of any existing
Employee Plan or any existing Collective Bargaining Agreement), or amended or
terminated any existing Employee Plan or adopted any new Employee Plan (other
than as required pursuant to the terms of any existing Collective Bargaining
Agreement or as required by applicable Law);
(h) other than as reflected in the Company's 2003 capital
budget or 2004 Budget or for departures or substitutions made to such capital
budgets in the ordinary course of business consistent with past practice, made
any capital expenditures or commitments individually in excess of $1,000,000 or
in the aggregate in excess of $5,000,000;
(i) made any loans or advances to, or sold, transferred or
leased any properties or assets to, or guarantees for the benefit of, any
Person, including its officers or directors or any of its Affiliates, in excess
of $250,000 individually or $1,000,000 in the aggregate (other than loans or
advances made to employees in the ordinary course of business consistent with
past practice and not exceeding $25,000 individually and $250,000 in the
aggregate and other than loans pursuant to the Company's 401(k) plan in
accordance with the terms thereof);
(j) modified any Company Material Contract (as defined
below), Lease (as defined below) or IP Contract in any material respect or
waived any material rights or obligations thereunder or terminated or consented
to the termination of any Company Material Contract, Lease or IP Contract prior
to the stated termination or expiration date thereof, except in the ordinary
course of business consistent with past practice;
(k) entered into any other transaction or agreement requiring
the Company or any of its Subsidiaries to make aggregate annual payments in
excess of $1,500,000 or aggregate payments in excess of $4,000,000;
(l) written down the value of any (i) inventory (including
write-downs by reason of shrinkage or xxxx-down) or (ii) written off as
uncollectable any notes or accounts receivable, except in the case of each of
clause (i) and (ii), for write-downs and write-offs in the ordinary course of
business consistent with past practice and not exceeding in the aggregate
$1,000,000;
(m) disposed of or permitted to lapse any rights to the use
of any material Intellectual Property (as defined below) except for
non-exclusive licenses and other dispositions in the ordinary course of
business consistent with past practice, or disclosed to any Person other than
representatives of Buyer any material trade secret relating to the Business
(including any material confidential information, financing and marketing
information, technology, know-how, inventions, proprietary processes, formulae,
algorithms, models and methodologies) except pursuant to a non-disclosure
agreement or obligation of confidentiality;
(n) suffered any damage, destruction or loss, whether or not
covered by insurance, which has had any material adverse change in the
financial condition, business or results of operations, assets or operations of
the Company and its Subsidiaries and the Business, taken as a whole;
(o) merged or consolidated with or acquired substantially all
or a material part of the assets of, or entered into a transaction with a
Variable Interest Entity (as defined in FASB Interpretation No. 46), or
otherwise acquired any business of, any Person;
(p) except as may otherwise be required by applicable Law or
by GAAP, (i) made any change in any method of accounting or accounting
practices, including for financial or Tax purposes or (ii) made or revoked any
Tax election, except in the ordinary course of business;
(q) cancelled, waived or made any settlement, release,
assignment or compromise relating to or affecting any action, suit, proceeding,
claim, arbitration or litigation with a value in excess of $1,000,000
individually or in the aggregate;
(r) suffered any damage, destruction or loss (whether or not
covered by insurance) with respect to any of its properties or assets in excess
of $1,000,000;
(s) made any material revaluation of any assets of the
Company or any of its Subsidiaries;
(t) made any request or demand to any Person to pay any
amounts under or in respect of any accounts receivable of the Company or any of
its Subsidiaries prior to the stated maturity thereof, or any factoring or
other disposition of any accounts receivable of the Company or any of its
Subsidiaries, in each case, except in the ordinary course of business
consistent with past practice, or made any discharge or forgiveness of any
obligations of any obligor thereunder;
(u) deferred or delayed the payment of accounts payable of
the Company or any of its Subsidiaries beyond the stated maturity thereof,
other than in the ordinary course of business consistent with past practice;
(v) adopted any plan of liquidation, dissolution, merger,
consolidation, restructuring, recapitalization or other reorganization of the
Company or any of its Subsidiaries;
(w) suffered a Material Adverse Effect nor has there been any
event, occurrence or development that would, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect; or
(x) agreed, whether in writing or otherwise, committed or
arranged to take any of the actions described in this Section 2.7.
2.8 Absence of Undisclosed Liabilities; No Indebtedness.
(a) Except as set forth on Section 2.8(a) of the O-I
Disclosure Schedule, since December 31, 2003, none of the Company or its
Subsidiaries has incurred or assumed any obligations or liabilities (whether
accrued, absolute, contingent, unliquidated or otherwise, whether due or to
become due and regardless of when or by whom asserted) that would be required
to be reflected or reserved against on a consolidated balance sheet, or notes
thereto, of the Company and its Subsidiaries prepared in accordance with GAAP,
except (i) liabilities incurred in the ordinary course of business consistent
with past practice, (ii) liabilities reflected on the May 31 Unaudited Pro
Forma Balance Sheet and (iii) liabilities, debts or obligations that would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
(b) Except as set forth on Section 5.12 of the O-I Disclosure
Schedule or as may be otherwise agreed by Buyer and Seller, on the Closing
Date, the Company and each of its Subsidiaries will have no Indebtedness.
2.9 Real Property Ownership. Section 2.9(a) of the O-I
Disclosure Schedule lists all real property owned (the "Owned Real Property")
by each of the Company and its Subsidiaries as of the date hereof, which
Section 2.9(a) of the O-I Disclosure Schedule includes the legal address and
use of each Parcel (as defined below) and the owner thereof. With respect to
each parcel of Owned Real Property (each, a "Parcel"):
(i) except as disclosed on Section 2.9(a)(i) of the O-I
Disclosure Schedule, the entity owning such Parcel has record and
marketable fee simple title to such Parcel and all buildings, fixtures
and improvements situated thereon, free and clear of all Liens, other
than (A) installments of special assessments not yet delinquent or the
amount or validity of which is being contested in good faith by
appropriate proceedings and for which adequate reserves for monies
owed are reflected in the Financial Statements in accordance with
GAAP, (B) Taxes not yet due and payable or the amount or validity of
which is being contested in good faith by appropriate proceedings and
for which adequate reserves for monies owed are reflected in the
Historical Financial Statements in accordance with GAAP, (C) statutory
liens arising or incurred in the ordinary course of business, such as
carriers', warehousemen's, materialmen's and mechanic's liens and
other similar liens, with respect to which the underlying obligations
are not delinquent or the amount or validity of which is being
contested in good faith by appropriate proceedings and for which
adequate reserves for monies owed are reflected in the Historical
Financial Statements in accordance with GAAP or (D) encumbrances,
encroachments, covenants, restrictions or other agreements or
imperfections of title that do not impair the use, occupancy or
marketability of the property (real or personal) subject thereto as
currently used in the Business (clauses (A) through (D) hereof,
collectively "Permitted Liens");
(ii) each Parcel is in compliance with all applicable
building, zoning, subdivision, land use and other similar applicable
Laws affecting such Parcel, except as would not, individually or in
the aggregate, reasonably be expected to have a Material Adverse
Effect; and
(iii) there are no outstanding options or rights of first
refusal to purchase any Parcel or any material portion thereof or
interest therein.
2.10 Leased Real Property.
(a) Section 2.10(a) of the O-I Disclosure Schedule lists all
real property leased (the "Leased Real Property" and together with the Owned
Real Property, collectively, the "Real Property") by the Company and each of
its Subsidiaries as of the date hereof pursuant to any real property lease
providing for annual payments by the Company or any such Subsidiary of an
amount in excess of $100,000 per year (each, a "Lease"), which Section 2.10(a)
of the O-I Disclosure Schedule includes the legal address and use of the
premises demised under each Lease, the lessor and lessee (or sublessor and
sublessee, in the case of a sublease), the term, under the applicable Lease and
the rent. With respect to each lease, and except as disclosed on Section
2.10(a)(i) of the O-I Disclosure Schedule, (i) the tenant under each Lease has
legal and valid leasehold title to such Lease, free and clear of all Liens
other than Permitted Liens, (ii) such Lease is pursuant to a written Lease that
has been executed and is in full force and effect, (iii) neither the Company
nor its applicable Subsidiary that is a party to such Lease nor, to the
Knowledge (as defined below) of Seller or the Company or any of its
Subsidiaries (collectively, the "O-I Parties") any other party to such Lease,
is in material breach or default, and no event has occurred which, with notice
or lapse of cure period, would constitute such a material breach or default or
permit termination, modification or acceleration, under such Lease, (iv) each
Lease is the legal, valid and binding obligation of the tenant thereunder and
will continue to be binding in accordance with its terms following the Closing,
except as may result from actions that may be taken by Buyer or its Affiliates
following the Closing, (v) to the Knowledge of the O-I Parties no party to such
Lease has repudiated any provision thereof, (vi) each Lease grants the Company
or its applicable Subsidiary the exclusive right to use and occupy the premises
demised thereunder, subject to the terms of the applicable Lease, (vii) no
Lease has been assigned, mortgaged or hypothecated and no Lease has otherwise
been encumbered, except for Permitted Liens and (viii) except as would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect, all covenants to be performed by the Company or its applicable
Subsidiary and, to the Knowledge of the O-I Parties, all covenants to be
performed by the lessor or lessee (or sublessor or sublessee, in the case of a
sublease) under each Lease, have been performed in all respects.
(b) Section 2.10(b) of the O-I Disclosure Schedule separately identifies all
Leases for which consents, waivers or approval must be obtained on or prior to
the Closing Date (or which have been obtained) in order for such Lease to
continue in effect according to their terms, as in effect immediately prior to
and on the date hereof, after the Closing Date.
2.11 Real Property.
(a) The Real Property constitutes all the interests in real
property owned, leased, used or held for use by the Company or any of its
Subsidiaries in connection with, or that are necessary for, or otherwise
material to, the conduct of the Business as presently conducted.
(b) (i) None of the O-I Parties has received notice of any
pending, proposed or threatened condemnation, proceedings or litigation or
administrative actions relating to any Real Property, (ii) neither Seller nor
the Company or any of its Subsidiaries has received notice of any order
outstanding, pending or threatened relating to the ownership, lease, use,
occupancy or operation of any Real Property and (iii) there are no parties
(other than one or more of the Company and any of its Subsidiaries) in
possession of any Real Property, other than tenants under written leases or
subleases who are in possession of space to which they are entitled.
(c) Prior to the date hereof, Seller has delivered, or caused
to be delivered, to Buyer true, correct and complete copies of all Leases,
deeds, mortgages, surveys, licenses, leases, title insurance policies
(including any underlying documents relating to Permitted Liens), if any,
certificates of occupancy or equivalent documentation with respect to the Real
Property and other material documents relating to or affecting the title to the
Real Property in the possession or control of Seller, the Company or any of its
Subsidiaries.
2.12 Condition of Properties. Except as set forth on Section
2.12 of the O-I Disclosure Schedule, the buildings, machinery, fixtures,
equipment and other tangible assets necessary for the conduct of the Business
as presently conducted, owned or leased by the Company and any of its
Subsidiaries are in sufficiently good operating condition and repair to permit
their use in the continuing operations of the Company and each of its
Subsidiaries as such operations are presently conducted, subject to normal wear
and tear and that currently require no material maintenance, repairs or
replacements, except for ordinary maintenance, repairs or replacements, which
are not material in nature or cost.
2.13 Tax Matters.
(a) Certain Defined Terms. For purposes of this Agreement,
the following definitions shall apply:
(i) the term "Tax" and "Taxes" shall mean all taxes,
assessments, customs, duties, fees, or other like charges of any kind
whatsoever, however denominated, including any interest, penalties or
other additions to tax that may become payable in respect thereof,
imposed by any federal, territorial, state, local or foreign
government or any agency or political subdivision of any such
government, which taxes shall include, without limiting the generality
of the foregoing, all income or profits taxes (including federal
income taxes and state income taxes), payroll and employee withholding
taxes, unemployment insurance taxes, social security taxes, sales and
use taxes, ad valorem taxes, excise taxes, franchise taxes, gross
receipts taxes, business license taxes, occupation taxes, real and
personal property taxes, stamp taxes, environmental taxes, transfer
taxes, and other obligations of the same or of a similar nature to any
of the foregoing;
(ii) the term "Returns" shall mean all reports, estimates,
declarations of estimated Tax, information statements and returns
relating to, or required to be filed in connection with, any Taxes.
(b) Except as set forth on Section 2.13(b) of the O-I
Disclosure Schedule, (i) all Returns required to be filed by or on behalf of
the Company and any of its Subsidiaries have been duly filed on a timely basis
and are true, correct and complete, (ii) all Taxes due or claimed to be due
with respect to the Company and any of its Subsidiaries by any Governmental
Authority have been paid in full, (iii) each of the Company and its
Subsidiaries has withheld and paid over all material Taxes required to have
been withheld and paid over, and complied with all information reporting
requirements, including maintenance of required records with respect thereto,
in connection with amounts paid or owing to any employee, creditor, independent
contractor or third party for all periods for which the statute of limitations
has not expired and (iv) there are no Liens on any of the assets of any of the
Company and its Subsidiaries with respect to Taxes, other than liens for Taxes
not yet due and payable for which appropriate reserves have been established.
Except as set forth on Section 2.13(b) of the O-I Disclosure Schedule, since
December 31, 2003, none of the Company nor any of its Subsidiaries has incurred
any liability for Taxes other than (A) in the ordinary course of business
consistent with past practice or (B) in connection with the Corporate
Restructuring.
(c) Except as set forth on Section 2.13(c) of the O-I
Disclosure Schedule: (i) there is no audit by a Governmental Authority or
Taxing authority in process or pending with respect to any Tax or Return of the
Company and/or any of its Subsidiaries; (ii) no deficiencies exist or have been
asserted, in writing, with respect to any Taxes of the Company and any of its
Subsidiaries and neither the Company nor any of its Subsidiaries has received
written notice that it has not filed a material Return or paid Taxes required
to be filed or paid by it; (iii) neither the Company nor any of its
Subsidiaries are a party to any action or proceeding for assessment or
collection of any Taxes, nor has such event been asserted, in writing against
the Company or any of its Subsidiaries or any of their assets; and (iv) no
waiver or extension of any statute of limitations is in effect or has been
requested with respect to any material Taxes of the Company or any of its
Subsidiaries.
(d) Except as set forth on Section 2.13(d) of the O-I
Disclosure Schedule, neither the Company nor any of its Subsidiaries is a party
to any tax allocation agreement or tax sharing agreement, and neither the
Company nor any of its Subsidiaries has assumed the liability for Taxes of any
other Person under contract or otherwise.
(e) Except as set forth on Section 2.13(e) of the O-I
Disclosure Schedule, none of the Company nor any of its Subsidiaries has sought
or received a written ruling from any Governmental Authority and no closing
agreement pursuant to Section 7121 of the Internal Revenue Code of 1986, as
amended (the "Code") (or any similar provision of state, local or foreign Law)
has been entered into by or with respect to the Company or any of its
Subsidiaries.
(f) Except as set forth on Section 2.13(f) of the O-I
Disclosure Schedule, no jurisdiction where the Company or any of its
Subsidiaries does not file a Return has made a claim that such entity is
required to file a Return for such jurisdiction.
(g) Except as set forth on Section 2.13(g) of the O-I
Disclosure Schedule, none of the Company or any of its Subsidiaries has (i)
entered into any settlement or compromise regarding any Tax liability or (ii)
entered into any agreement to adjust any Tax attribute.
(h) Except as set forth on Section 2.13(h) of the O-I
Disclosure Schedule, none of the Company or any of its Subsidiaries has been,
since January 1, 1998, or currently is, a member of a federal consolidated (or
state or local combined, unitary or similar) group other than the group of
which O-I is the common parent.
(i) Since January 1, 1999, none of the Company or any of its
Subsidiaries has been a "distributing corporation" or a "controlled
corporation" with respect to any distribution to which Section 355 of the Code
is applicable.
(j) Other than any Returns which have not yet been required
to be filed, the Company has made available to Buyer true, correct and complete
copies of its and its Subsidiaries' U.S. federal income Tax Returns and all
material state, local and/or foreign Returns for each of the taxable years
ended December 31, 2003, 2002, 2001 and 2000. Seller has delivered, or caused
to be delivered, to Buyer true, correct and complete copies of each of (i) all
audit reports, letter rulings, technical advice memoranda and similar documents
issued by a Governmental Authority relating to the U.S. federal, state, local
or foreign Taxes due from or with respect to the Company and any of its
Subsidiaries and (ii) any closing agreements entered into by the Company or any
of its Subsidiaries with any Tax authority in each case existing on the date
hereof.
(k) None of the Company's non-U.S. Subsidiaries is a passive
foreign investment company as defined under Sections 1291 through 1298 of the
Code.
(l) The Company and its Subsidiaries have conducted all
intercompany transactions on terms commensurate with third-party terms as
provided for in section 482 of the Code and any similar provisions of state,
local and non-U.S. Law.
(m) To the Knowledge of the O-I Parties, the Company and its
Subsidiaries have not participated and do not participate in international
boycotts as defined under Section 999(b) of the Code and have complied with all
reporting requirements to substantiate such nonparticipation.
(n) The Company has made valid elections under Treasury
Regulation 301.7701-3(c) for all of its Subsidiaries electing disregarded
entity status for U.S. income tax purposes.
(o) None of the Subsidiaries of the Company has been subject
to the dual consolidated loss rules as defined in Section 1503(d) of the Code
and the Treasury Regulations promulgated thereunder.
(p) The sum of (i) net operating loss for U.S. federal income
Tax purposes and (ii) the product of (A) credits for U.S. federal income tax
purposes and (B) 1/.35 shall equal at least $100 million (collectively, the
"Apportioned Tax Attributes"). The Apportioned Tax Attributes will be (x)
valid, (y) allocated to the Company and its Subsidiaries effective immediately
after Closing and (z) available to be carried forward to Taxable periods of the
Company and its Subsidiaries beginning after the Closing Date (A) in accordance
with the Code including the rules of Sections 172 and 39 of the Code and (B)
subject to applicable limitations under the Code (including limitations caused
by any ownership change (as defined in the Code) arising from any of the
transactions contemplated by this Agreement under Sections 382 and 383 of the
Code) and other applicable Law.
(q) With respect to Returns relating to income and franchise
Taxes with potential Tax liability of at least $1,000,000 and except as set
forth on Section 2.13(q) of the O-I Disclosure Schedule, such Returns of the
Company and its Subsidiaries have been examined by the applicable Governmental
Authorities (or the applicable statutes of limitation for the assessment of
Taxes for such periods have expired) for all periods through and including
December 31, 1999, and no material deficiencies were asserted as a result of
such examinations that have not been resolved and fully paid.
(r) Seller has provided to Buyer the opportunity to review
each duly executed Form 8832 making valid elections under Treasury Regulation
301.7701-3(c) for all of its Subsidiaries electing disregarded entity status
for U.S. income Tax purposes.
2.14 Legal Proceedings. Except as set forth on Section 2.14
of the O-I Disclosure Schedule, (a) there are no claims, filed complaints,
arbitrations, actions, charges, suits, proceedings, orders or, to the Knowledge
of the O-I Parties, investigations, pending or, to the Knowledge of the O-I
Parties, threatened against or affecting, in each case, the Company, any of its
Subsidiaries, the Business or any of the assets or properties owned or used by
the Company or any of its Subsidiaries at law or in equity, or before or by any
domestic or foreign federal, state, municipal, foreign or other governmental
department, commission, board, bureau, agency, court or instrumentality or any
arbitrator or arbitration panel (each, a "Governmental Authority"), (b) there
are no pending or, to the Knowledge of the O-I Parties, threatened actions that
would prevent or delay O-I or Seller from consummating the transactions
contemplated hereby or by the Additional Agreements and (c) none of the
Company, its Subsidiaries or the Business are subject to any outstanding order,
writ, injunction, judgment, ruling, charge or decree of any court or any
Governmental Authority that would, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect. Except as would violate the
terms of any applicable protective order or would result in the loss of legal
privilege, Seller has made available to Buyer true, correct and complete copies
of all pleadings, material correspondence and other material documents relating
to each of the claims, filed complaints, arbitrations, actions, charges, suits,
proceedings, orders and investigations set forth on Section 2.14 of the O-I
Disclosure Schedule.
2.15 Government Licenses, Permits and Related Approvals;
Environmental Matters. Except as set forth on Section 2.15 of the O-I
Disclosure Schedule:
(a) Except where failure to own or possess would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect, the Company and each of its Subsidiaries owns or possesses all
permits, licenses, franchises, certificates, approvals and other authorizations
that are required under applicable Laws by such entity in the conduct of the
Business as it is presently conducted (collectively, the "Governmental
Licenses"), including all Governmental Licenses required under applicable Laws
relating to (i) pollution or the protection of the environment or human health
(to the extent related to exposure to Hazardous Materials (as defined below)),
(ii) Releases (as defined below) or threatened Releases of Hazardous Materials,
(iii) the manufacture, processing, distribution, use, transport, handling,
treatment, storage or disposal of any Hazardous Material and (iv)
record-keeping notification, disclosure and reporting requirements respecting
Hazardous Materials (collectively, "Environmental Laws"). All such Governmental
Licenses are in full force and effect.
(b) No loss of any Governmental License is pending, or, to
the Knowledge of the O-I Parties, threatened as a result of the transactions
contemplated by this Agreement, the Additional Agreements or otherwise, except
for normal expiration in accordance with the terms thereof or where the loss
would not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect. No transfers of any permits or other governmental
authorizations under Environmental Laws, and no additional permits or other
governmental authorizations under Environmental Laws, will be required to
permit Buyer to conduct the Business in full compliance with all applicable
Environmental Laws immediately following the Closing Date, as conducted by the
Company and its Subsidiaries immediately prior to the Closing Date.
(c) The Company and each of its Subsidiaries has complied
within the applicable statute of limitations period, and are in compliance with
all terms and conditions of all Governmental Licenses and with all other
limitations, restrictions, conditions, standards, prohibitions, requirements,
obligations, schedules and timetables contained in any applicable Environmental
Laws, except where failure to be in compliance would not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect. There
are no past or present actions, activities, circumstances, conditions, events
or incidents that may prevent or interfere with such compliance in the future.
(d) Except as would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect: the Company and each
of its Subsidiaries has complied within the applicable statute of limitations
period, and are in compliance with all Laws applicable to the Business or any
Real Property of the Company and its Subsidiaries and to which the Company and
its Subsidiaries are subject (including all such Environmental Laws), and
neither Seller, the Company nor any of its Subsidiaries has received any
written or oral notice or claim against the Company and its Subsidiaries
alleging a violation of any such Laws.
(e) Except as would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect, none of Seller, the
Company or its Subsidiaries has received any written or oral notice or claim
alleging that the Company or any of its Subsidiaries is or may be liable to any
Person (including potential liability for investigation costs, cleanup costs,
response costs, natural resource damages, personal injuries or penalties) as a
result of a Release or threatened Release of Hazardous Material under
applicable Environmental Laws, at any location, whether or not currently or
previously owned or operated by Seller, the Company or its Subsidiaries and
none of Seller, the Company or its Subsidiaries has filed any notice required
under applicable Environmental Laws of any such Release or violation.
(f) Except where it would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect, (i)
neither the Company nor any of its Subsidiaries is subject to any outstanding
order from or agreement with any Governmental Authority or person respecting
environmental or health matters under any Environmental Laws and (ii) neither
the Company nor any of its Subsidiaries is a party to any pending judicial or
administrative proceedings or is the subject of any investigations by any
Governmental Authority, pursuant to any Environmental Laws.
(g) Except as would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect, there are no past or
present (or to the Knowledge of the O-I Parties, future) actions, activities,
circumstances, conditions, events or incidents, including the Release,
threatened Release or presence of any Hazardous Material that could result in
an environmental claim against the Company or its Subsidiaries, or to the
Knowledge of the O-I Parties, against any Person whose liability for any
environmental claim the Company or any of its Subsidiaries has or may have
retained or assumed either contractually or by operation of Law, under
Environmental Laws.
(h) Seller has made available to Buyer true and correct
copies of any material reports, studies, analyses and similar documents
possessed by Seller, the Company or any of its Subsidiaries pertaining to
Hazardous Materials in, on, or beneath or adjacent to any property currently or
formerly owned, operated or leased by the Company or any of its Subsidiaries,
or regarding the Company's or any of its Subsidiaries compliance with
applicable Environmental Laws.
2.16 Employee Benefit Plans.
(a) Section 2.16(a) of the O-I Disclosure Schedule contains a
true, correct and complete list of each deferred compensation and each
incentive compensation, stock purchase, stock option and other equity
compensation plan, program, agreement or arrangement; each severance or
termination pay, medical, surgical, hospitalization, life insurance and other
"welfare" plan, fund or program (within the meaning of Section 3(1) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA")); each
profit-sharing, stock bonus or other "pension" plan, fund or program (within
the meaning of Section 3(2) of ERISA); each employment, termination or
severance agreement; and each other employee benefit plan, fund, program,
agreement or arrangement, in each case, that is sponsored, maintained or
contributed to or required to be contributed to by Seller, O-I, the Company or
any of its Subsidiaries or by any trade or business, whether or not
incorporated, that together with Seller, O-I, the Company or any of its
Subsidiaries would be deemed a "single employer" within the meaning of Section
4001(b) of ERISA (an "ERISA Affiliate"), or to which the Company or any of its
Subsidiaries is a party, for the benefit of any present or former employee,
consultant or director of the Company or any of its Subsidiaries (each, an
"Employee Plan"). Except as contemplated by this Agreement or the Additional
Documents, neither the Company, any of its Subsidiaries nor any ERISA Affiliate
has any commitment or formal plan, whether legally binding or not, to create
any additional employee benefit plan or modify or change any existing Employee
Plan that would materially increase the liability of the Company or any of its
Subsidiaries. Section 2.16(a) of the O-I Disclosure Schedule separately
identifies those Employee Plans that are sponsored, maintained, contributed to,
or required to be contributed to solely by the Company and its Subsidiaries,
and not by Seller, or O-I or any of their other ERISA Affiliates (other than
the Company and its Subsidiaries) ("Company Plans").
(b) Except as described on Section 2.16(b) of the O-I
Disclosure Schedule or except as would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect:
(i) each Employee Plan has been administered and is in
compliance with the terms of such Employee Plan and all applicable
Laws, including ERISA and the Code;
(ii) each Employee Plan intended to be qualified within the
meaning of Section 401 of the Code has received a favorable
determination letter as to its qualification from the Internal Revenue
Service, and nothing has occurred that could reasonably be expected to
result in the revocation of such letter; and
(iii) there are no pending or, to the Knowledge of the O-I
Parties, threatened claims and no pending or, to the Knowledge of the
O-I Parties, threatened litigation involving any Employee Plan (other
than routine claims for benefits) by participants or beneficiaries
covered under such Employee Plans.
(c) With respect to each Employee Plan, Seller has delivered,
or caused to be delivered, to Buyer true, correct and complete copies of the
Employee Plan and any amendments thereto (or if the Employee Plan is not a
written Employee Plan, a description thereof), any related trust or other
funding vehicle, the most recent summary plan description and any summaries of
material modifications thereto and the most recent determination letter
received from the Internal Revenue Service with respect to each Employee Plan
intended to qualify under Section 401 of Code.
(d) Except as set forth on Section 2.16(d) of the O-I
Disclosure Schedule, none of the Employee Plans is a "multiemployer plan," as
such term is defined in Section 3(37) of ERISA. No liability under Title IV or
Section 302 of ERISA has been incurred by Seller, O-I, the Company, any of its
Subsidiaries or any ERISA Affiliate that has not been satisfied in full, and no
condition exists that presents a material risk to Seller, O-I, the Company, any
of its Subsidiaries or any ERISA Affiliate of incurring any such material
liability, in each case other than liability for premiums due the Pension
Benefit Guaranty Corporation (which premiums have been paid when due). Insofar
as the representation made in this Section 2.16(d) applies to Sections 4064,
4069 or 4204 of Title IV of ERISA, it is made with respect to any employee
benefit plan, program, agreement or arrangement subject to Title IV of ERISA to
which Seller, O-I, the Company, any of its Subsidiaries or any ERISA Affiliate
made, or was required to make, contributions during the five year period ending
on the last day of the most recent plan year ended prior to the Closing Date.
With respect to each Employee Plan that is subject to Section 302 or Title IV
of ERISA or Section 412 of the Code ("Qualified Employee Plan"), no accumulated
funding deficiency (as defined in Section 402 of ERISA or Section 412 of the
Code) exists nor has any funding waiver from Internal Revenue Service has been
received or requested with respect to any such Qualified Employee Plan.
(e) Except as would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect, neither the Company
or any of its Subsidiaries, any Employee Plan, any trust created thereunder, or
any trustee thereof, has engaged in a transaction with respect to any Employee
Plan in connection with which the Company or any of its Subsidiaries could be
subject to either a civil penalty assessed pursuant to Sections 409 or 502(i)
of ERISA or a tax imposed pursuant to Sections 4975 or 4976 of the Code.
(f) Except as set forth on Section 2.16(f) of the O-I
Disclosure Schedule, no Employee Plan provides medical, surgical or
hospitalization benefits (whether or not insured) for employees or former
employees of the Company or any of its Subsidiaries for periods extending
beyond such employee's retirement or other termination of service, other than
(i) coverage mandated by applicable Law or (ii) benefits the full cost of which
is borne by the current or former employee (or such employee's beneficiary).
(g) Except as set forth on Section 2.16(g) of the O-I
Disclosure Schedule, the consummation of the transactions contemplated by this
Agreement or by the Additional Agreements will not, either alone or in
combination with another event, (i) entitle any current or former employee or
officer of the Company or any Subsidiary to severance pay, termination pay,
separation pay, retention pay or "change-in-control" or "change-of-control"
payments, except as expressly provided in this Agreement or (ii) accelerate the
time of payment or vesting, or increase the amount of compensation due any such
employee or officer. No amounts payable under the Employee Plans, or any other
plan, agreement or arrangement, will fail to be deductible by the Company or
its Subsidiaries, for federal income Tax purposes by virtue of Section 280G of
the Code.
(h) With respect to each Employee Plan that is not subject to
U.S. Law (each, a "Foreign Benefit Plan"), except as set forth on Section
2.16(h) of the O-I Disclosure Schedule or except as would not, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect:
(i) all employer and employee contributions to each Foreign
Benefit Plan required by applicable Law or by the terms of such
Foreign Benefit Plan as of the date hereof have been made, or, if
applicable, accrued, in accordance with normal accounting practices;
and
(ii) each Foreign Benefit Plan required to be registered
has been registered and has been maintained in good standing with
applicable regulatory authorities.
(i) With respect to all hourly Business Employees (as defined
below), all Accrued Time (as defined below) with respect to the period
commencing in the fiscal year in which Closing Date occurs and ending on the
Closing Date will be accrued on the Closing Date Balance Sheet.
(j) Other than the bonuses that will be paid by O-I or Seller
pursuant to Section 8.10, the pro rata portion of the annual bonuses under the
Benefit Plans for active Business Employees, in respect of the period
commencing in the fiscal year in which the Closing Date occurs and ending on
the Closing Date, will be accrued on the Closing Date Balance Sheet.
2.17 Intellectual Property.
[This section has been omitted and filed on a confidential
basis with the Commission.]
2.18 Insurance.
(a) Section 2.18(a) of the O-I Disclosure Schedule sets forth
(i) a true, correct and complete list of all insurance policies, other
insurance arrangements and other contracts or arrangements for the transfer or
sharing of insurance risks by the Company or any of its Subsidiaries in force
on the date hereof with respect to the Business or any assets of the Company or
any of its Subsidiaries, together with a statement of the aggregate amount of
general and product liability claims paid out and any such claims pending under
each such insurance policy or other arrangement and (ii) a description of any
deductibles with respect to such policies. The Company and each of its
Subsidiaries has in force policies of insurance underwritten by reputable
insurance companies or associations in amounts and with retentions and
deductibles and covering such risks as are in accordance with reasonable
business practices. All such policies are in full force and effect, all
premiums due thereon have been paid by the Company or any of its Subsidiaries
(or will have been paid prior to the end of any grace period), and the Company
and each of its Subsidiaries is otherwise in compliance in all material
respects with the terms and provisions of such policies. Other than in the
ordinary course of business, neither the Company nor any of its Subsidiaries
has received any notice of cancellation or non-renewal of any such policy or
arrangement nor is the termination of any of such policies or arrangements
threatened.
(b) To the Knowledge of the O-I Parties, since December 31,
2003, neither the Company nor any of its Subsidiaries has been affected in any
way as a result of flood, fire, explosion or other casualty (whether or not
covered by insurance). To the Knowledge of the O-I Parties, none of the Company
or any of its Subsidiaries is aware of any such circumstance that would
reasonably be expected to have a Material Adverse Effect.
2.19 Material Contracts.
(a) Except (i) as set forth on Section 2.19(a) of the O-I
Disclosure Schedule (collectively, "Material Contracts" and, together with the
Additional Material Contracts (as defined below), the "Company Material
Contracts"), (ii) for this Agreement, any Foreign Subsidiary Purchase Agreement
and any agreements necessary to effect the Corporate Restructuring and the
Australia Restructuring and (iii) for agreements entered into following the
date hereof in the ordinary course of business consistent with past practice
(such agreements, to the extent they would be required to be set forth on
Section 2.19(a) of the O-I Disclosure Schedule if they were in effect on the
date hereof, the "Additional Material Contracts"), none of the Company or any
of its Subsidiaries is a party to or bound by, nor are any of their properties
or assets or the Business affected by any:
(i) loan agreement, note, mortgage, security agreement or
indenture relating to the borrowing of money or to the mortgaging or
pledging of any of its assets, in each case, pursuant to which the
outstanding indebtedness is in excess of $1,000,000;
(ii) agreement with respect to the lending or investing of
funds in excess of $1,000,000;
(iii) guaranty of any obligation for borrowed money or
otherwise in excess of $1,000,000, other than endorsements made for
collection in the ordinary course of business consistent with past
practice;
(iv) indemnification or other reimbursement obligation in
excess of $1,000,000;
(v) license or royalty agreement involving annual payments
in 2003 or 2004 by the Company or any of its Subsidiaries to third
parties of more than $1,000,000;
(vi) vendor or supply agreement pursuant to which the
Company or one of its Subsidiaries makes purchases involving the
payment of $1,000,000 or more in any 12 consecutive month period,
which agreements have a remaining term of one year or more;
(vii) contract that prohibits the Company or any of its
Subsidiaries from freely engaging in any business in any geographic
region or from competing with any Person;
(viii) agreement (other than this Agreement and the
Additional Agreements) relating to the acquisition or disposition of
any Person (whether by merger, sale of stock, sale of assets or
otherwise);
(ix) employment contract providing for annual base salary
and bonus in excess of $200,000 with respect to any employee of the
Company or any Subsidiary;
(x) Collective Bargaining Agreement or similar contract
with any labor union, works council or other labor organization
relating to wages, hours and other conditions of employment in effect
as of the date hereof;
(xi) any agreement with respect to any hedging, swap,
forward, future or derivative transaction or option or similar
agreement involving, or settled by reference to, one or more rates,
currencies, commodities, equity or debt instruments or securities, or
economic, financial or pricing indices or measures of economic,
financial or pricing risk or value or any similar transaction or any
combination of these transactions;
(xii) partnership, limited liability company, joint venture
agreement or other agreement involving a sharing of profits or
expenses;
(xiii) any other contract not described above that involves
the payment by, or liability of, the Company or any of its
Subsidiaries of $1,500,000 or more in any 12 consecutive month period
or $4,000,000 in the aggregate; and
(xiv) any other contract not described above that involves
the payment to the Company or any of its Subsidiaries of $1,500,000 or
more in any 12 consecutive month period or $4,000,000 in the
aggregate.
(b) (i) Except as set forth on Section 2.19(b)(i) of the O-I
Disclosure Schedule, each Material Contract and, when executed and delivered,
each Additional Material Contract the subject of which is covered by Sections
2.19(a)(i)-2.19(a)(xiii) (the "Other Material Contracts"), is or will be valid,
binding and enforceable in all material respects against the Company or, if any
Subsidiary of the Company is the party to such Other Material Contract, such
Subsidiary and to the Knowledge of the O-I Parties, each other party thereto,
in each case, in accordance with their respective terms, (ii) except as set
forth on Section 2.19(b)(ii) of the O-I Disclosure Schedule, each of the
Company and its Subsidiaries has performed all material obligations under the
Other Material Contracts required to be performed by it and the Company and
each of its Subsidiaries is not in default, has not received any written notice
or claim of default under any Other Material Contract and to the Knowledge of
the O-I Parties each other party thereto has performed all material obligations
under the Other Material Contracts required to be performed by it and (iii)
except as set forth on Section 2.19(b)(iii) of the O-I Disclosure Schedule,
none of the Company or any of its Subsidiaries is in material breach of any
Other Material Contract and to the Knowledge of the O-I Parties each other
party to any Other Material Contract is not in material breach of any Other
Material Contract. Except as set forth on Section 2.19(b)(iv) of the O-I
Disclosure Schedule, Seller has made available to Buyer true, correct and
complete copies of each Material Contract and, prior to the Closing, Seller
shall have delivered to Buyer true, correct and complete copies of each
Additional Material Contract.
(c) Section 2.19(c)(i) of the O-I Disclosure Schedule sets
forth a true, complete and correct list of each agreement or contract that
involves the payment to the Company or any of its Subsidiaries of $1,500,000 or
more in any 12 consecutive month period or $4,000,000 in the aggregate (each, a
"Significant Agreement") that has been duly executed and delivered by the
parties thereto (collectively, the "Executed Material Agreements"). Each
Executed Material Agreement is valid, binding and enforceable in all material
respects against the Company or, if any Subsidiary of the Company is the party
to such Executed Material Agreement, such Subsidiary and, to the Knowledge of
the O-I Parties, each other party thereto, in each case, in accordance with its
respective terms. Except as set forth on Section 2.19(c)(ii) of the O-I
Disclosure Schedule, each of the Company and its Subsidiaries has performed all
of its material obligations under the Executed Material Agreements required to
be performed by it and none of the Company or any of its Subsidiaries is in
default or breach, or has received any written notice or claim of default or
breach, under any Executed Material Agreement and to the Knowledge of the O-I
Parties each other party thereto has performed all of its material obligations
under the Executed Material Agreements required to be performed by it and is
not in default or breach thereunder. Except as set forth on Section
2.19(c)(iii) of the O-I Disclosure Schedule, Seller has made available to Buyer
true, correct and complete copies of each Executed Material Agreement.
(d) Section 2.19(d)(i) of the O-I Disclosure Schedule sets
forth a true, complete and correct list of each Significant Agreement that has
not been duly executed and delivered by all of the parties thereto (the
"Unexecuted Material Agreements"). Section 2.19(d)(i) of the O-I Disclosure
Schedule sets forth a summary of all material terms and conditions of business
as currently conducted between the Company or a Subsidiary of the Company, as
the case may be, and the third party to such Unexecuted Material Agreements
(the "Unexecuted Material Agreement Summaries"). The Unexecuted Material
Agreement Summaries are true, complete and accurate in all material respects.
(e) Section 2.19(e)(i) of the O-I Disclosure Schedule sets
forth a true, complete and correct list of each Executed Material Agreement
that is subject to confidentiality provisions prohibiting disclosure to Buyer
(the "Executed Material Confidential Agreements"). O-I has in its possession
true, complete and correct copies of the Executed Material Confidential
Agreements and upon notification from the relevant third party to such Executed
Material Confidential Agreement that the confidentiality provision has been
waived with respect to a review of such agreement by Buyer, will deliver true,
complete and correct copies of the Executed Material Confidential Agreements to
Buyer. Section 2.19(e)(ii) of the O-I Disclosure Schedule sets forth a summary
of terms of the Executed Material Confidential Agreements (the "Executed
Material Confidential Summaries"). The Executed Material Confidential Summaries
are true, complete and accurate in all material respects. Except as set forth
on Section 2.19(e)(iii) of the O-I Disclosure Schedule, each of the Company and
its Subsidiaries has performed all of its material obligations under the
Executed Material Confidential Agreements required to be performed by it and
none of the Company or any of its Subsidiaries is in default or breach, or has
received any written notice or claim of default or breach, under any Executed
Material Confidential Agreement and to the Knowledge of the O-I Parties each
other party thereto has performed all of its material obligations under the
Executed Material Confidential Agreements required to be performed by it and is
not in default or breach thereunder.
(f) Section 2.19(f)(i) of the O-I Disclosure Schedule sets
forth a true, complete and correct list of each Unexecuted Material Agreement
that is subject to confidentiality provisions prohibiting disclosure to Buyer
(the "Unexecuted Material Confidential Agreements"). O-I has in its possession
true, complete and correct copies of the Unexecuted Material Confidential
Agreements and upon notification from the relevant third party to such
Unexecuted Material Confidential Agreement that the confidentiality provision
has been waived with respect to a review of such agreement by Buyer, will
deliver true, complete and correct copies of the Unexecuted Material
Confidential Agreements to Buyer. Section 2.19(f)(ii) of the O-I Disclosure
Schedule sets forth a summary of terms and conditions of business as currently
conducted between the Company or a Subsidiary of the Company, as the case may,
and the third party to such Unexecuted Material Confidential Agreements (the
"Unexecuted Material Confidential Agreement Summaries"). The Unexecuted
Material Confidential Summaries are true, complete and accurate in all material
respects.
2.20 Transactions with Affiliates. Except as set forth
herein, including, as set forth in Article V, in Section 2.20 of the O-I
Disclosure Schedule or pursuant to the transactions expressly contemplated
hereby, the Company and its Subsidiaries have not engaged in any material
transaction, outside the ordinary course of business consistent with past
practice, with O-I or its Affiliates (other than the Company and its
Subsidiaries) since December 31, 2003, which was (i) not on arm's length terms
or (ii) undertaken in contemplation of the sale of the Company.
2.21 Brokers, Finders, etc. Except for the Person set forth
on Section 2.21 of the O-I Disclosure Schedule, whose fee is the sole
responsibility of O-I or its Affiliates (other than the Company and its
Subsidiaries), none of Seller or any of its Affiliates has employed, nor is
Seller on any of its Affiliates subject to any valid claim of, any broker,
agent, investment banker, financial advisor, finder, consultant or other
intermediary in connection with the transactions contemplated by this Agreement
or by the Additional Agreements who might be or is entitled to a fee or
commission in connection with such transactions contemplated hereby or thereby.
2.22 Employment-Related Matters. Except as set forth in
Section 2.22 of the O-I Disclosure Schedule:
(a) (i) The Company and any of its Subsidiaries are neither
party to, nor bound by, any labor agreement, collective bargaining agreement,
or any other labor-related agreements or arrangements with any labor union or
labor organization or works council and (ii) no employees of the Company or any
of its Subsidiaries are represented by any labor organization with respect to
their employment with the Company or any of its Subsidiaries;
(b) To the Knowledge of the O-I Parties, no labor union,
labor organization, or group of employees of the Company or any of its
Subsidiaries has made a pending demand for recognition or certification, and
there are no representation or certification proceedings or petitions seeking a
representation proceeding presently pending or threatened in writing to be
brought or filed with the National Labor Relations Board or any other labor
relations tribunal or authority, and no campaigns are being conducted to
solicit cards from any employees of the Company or its Subsidiaries, or to
otherwise organize such employees, to authorize representation by any labor
organization;
(c) Since January 1, 2002, there has been no labor strike,
slowdown, work stoppage, dispute, or lockout in effect or, to the Knowledge of
the O-I Parties, threatened with respect to any employees of the Company or any
of its Subsidiaries;
(d) No unfair labor practice charge or complaint is pending
or, to the Knowledge of the O-I Parties, threatened by or on behalf of any
employee of the Company or any of its Subsidiaries;
(e) Neither the Company nor any of its Subsidiaries is a
party to, or otherwise bound by, any consent decree with, or citation by, any
Governmental Authority relating to employees or employment practices;
(f) The Company and its Subsidiaries are in material
compliance with all applicable Laws relating to employment, employment
practices and the termination of employment, including any obligations pursuant
to the WARN Act (as defined below) and any similar foreign, state or local Law
relating to plant closings and layoffs;
(g) The Company and each of its Subsidiaries have not been
delinquent in payments to, or on behalf of, any employees or former employees
for any services or amounts required to be reimbursed or otherwise paid, except
as would not, individually or in the aggregate, reasonably be expected to have
a Material Adverse Effect;
(h) The Company and each of its Subsidiaries have not
received (i) notice of any unfair labor practice charge or complaint pending or
threatened before the National Labor Relations Board, (ii) written notice of
any complaints, material grievances or arbitrations arising out of any
Collective Bargaining Agreement, (iii) written notice of any charge or
complaint pending before the Equal Employment Opportunity Commission or any
other Governmental Authority responsible for the prevention of unlawful
employment practices, (iv) written notice of the intent of any Governmental
Authority responsible for the enforcement of labor, employment, wages and hours
of work, child labor, immigration, or occupational safety and health Laws to
conduct an investigation or (v) written notice of any complaint, lawsuit or
other proceeding pending or threatened in any forum by or on behalf of any
present or former employee of such entities, any applicant for employment or
classes of the foregoing alleging breach of any express or implied contract of
employment, any applicable Law governing employment or the termination thereof
or other discriminatory, wrongful or tortious conduct in connection with the
employment relationship;
(i) The Company has not closed any plant or facility,
effectuated any mass layoffs of employees or implemented any early retirement,
separation or window program within the past three years;
(j) To the Knowledge of the O-I Parties, no employee of the
Company or any of its Subsidiaries is in violation of any agreement or
statutory, common law or similar duty or obligation relating (i) to the right
of any employee who immediately reports to Vice Presidents or above (other than
administrative support employees) to be employed by the Company or any of its
Subsidiaries or (ii) to the use of trade secrets or proprietary information;
(k) To the Knowledge of the O-I Parties, no current employee
of the Company or any of its Subsidiaries who immediately reports to Vice
Presidents or above (other than administrative support employees) has given
notice of termination of his or her employment; and
(l) The execution and delivery of this Agreement and the
Additional Agreements and the consummation of the transactions contemplated
hereby and thereby will not result in any breach or other violation of any
collective bargaining agreement, employment agreement, consulting agreement or
any other labor-related agreement to which the Company or any of its
Subsidiaries is a party.
2.23 Inventory. Except as set forth on Section 2.23(a) of the
O-I Disclosure Schedule, all inventory of the Company and its Subsidiaries
reflected on the balance sheets included in the Historical Financial Statements
consisted, and all such inventory acquired since the Most Recent Financial
Statements consists, of a quality and quantity usable and salable in the
ordinary course of business consistent with past practice, subject to normal
and customary reserves and allowances (including for spoilage, damage and
outdated and excess items) consistent with past practice, which items have been
written off or written down on the Historical Financial Statements to fair
market value or for which adequate reserves have been provided therein. All
inventories have been priced at the lower of LIFO (for domestic operations) or
average cost (for international operations) as consistent with past practice,
or market. Except as disclosed in the notes to the Historical Financial
Statements, all items included in the inventory of the Company and its
Subsidiaries are the property of the Company and its Subsidiaries, free and
clear of any Lien other than Permitted Liens, have not been pledged as
collateral, are not held by the Company and its Subsidiaries on consignment
from others and conform in all material respects to all standards applicable to
such inventory or its use or sale imposed by any Governmental Authority. Except
for items which have been written off or written down on the Historical
Financial Statements to fair market value on the Historical Financial
Statements or for which adequate reserves have been specifically established on
the Historical Financial Statements, all work-in-process and finished goods
inventory held by the Company or any of its Subsidiaries is free of any
material defect.
2.24 Accounts Receivable. Except as set forth on Section
2.24(i) of the O-I Disclosure Schedule, the accounts and notes receivable of
the Company and its Subsidiaries reflected on the balance sheet included in the
Historical Financial Statements or to be reflected in the Closing Date Balance
Sheet on the Closing Date, and all accounts and notes receivable arising
subsequent to the date of the Most Recent Financial Statements, represent bona
fide sales or royalty transactions made or rendered in the ordinary course of
business consistent with past practice and are payable on ordinary trade terms
in the ordinary course of business consistent with past practices with respect
to each such customer. Section 2.24(ii) of the O-I Disclosure Schedule sets
forth a description of any security arrangements and collateral securing the
repayment or other satisfaction of receivables of the Company and its
Subsidiaries. To the Knowledge of the O-I Parties, all steps necessary to
render all such security arrangements legal, valid, binding and enforceable,
and to give and maintain for the Company and its Subsidiaries a perfected
security interest in the related collateral, have been taken.
2.25 Sufficiency of Assets. (a) Upon the consummation of the
transactions contemplated hereby, the properties and other assets (tangible and
intangible) of the Company and each of its Subsidiaries together with the
properties and assets (tangible and intangible) and services to be provided to
Buyer under the Additional Agreements will constitute the properties and other
assets (tangible and intangible) sufficient for the continued operation and
conduct of the Business by Buyer and its Affiliates immediately following the
Closing in substantially the same manner as it is conducted on the date hereof
and as proposed to be conducted.
(b) Upon the removal by Buyer of the Sold Equipment (as
defined in each Contract Manufacturing Agreement) (as defined below) from each
Plant (as defined in each Contract Manufacturing Agreement) to its own
manufacturing plants, the Sold Equipment (as set forth on Exhibit A of each
applicable Contract Manufacturing Agreement) will constitute in all material
respects the equipment sufficient for the continued manufacture of the Buyer's
Products (as defined in each applicable Contract Manufacturing Agreement) by
Buyer and its Affiliates in substantially the same manner as such manufacture
is conducted on the date hereof at such Plant and as proposed to be conducted,
subject to the provision by Buyer, at each location in which Buyer intends to
use such Sold Equipment, of appropriate utilities, resin feeders, air
compression machines, water chillers or other system cooling equipment, piping,
central computer system to control the manufacturing process (collectively, the
"Supporting Equipment") and other similar Supporting Equipment.
2.26 Product Liability; Recalls. Except as set forth on
Section 2.26 of the O-I Disclosure Schedule, neither the Company nor any of its
Subsidiaries has received any written notice relating to, nor, to the Knowledge
of the O-I Parties, are there any facts or circumstances that would reasonably
be expected to give rise to, any material action, suit, demand, claim, hearing,
notice of violation relating to or involving any service provided or any
product designed, manufactured, serviced, produced, modified, distributed,
marketed, shipped or sold by or on behalf of the Company and its Subsidiaries,
resulting from an alleged defect, hazard or impurity, whether in design,
manufacture, processing, materials or workmanship, performance, or any failure
to warn of the existence of any defect, impurity, or dangerous propensity
associated with any foreseeable use of a product, or from any alleged breach of
implied or express warranties or representations, or any alleged noncompliance
with any applicable Laws, other than notices or claims that have been settled
or resolved by the Company or any Subsidiary prior to the date of this
Agreement. There is no pending or, to the Knowledge of the O-I Parties,
threatened, recall or investigation of any product designed, manufactured,
shipped, sold, marketed, distributed and/or otherwise introduced into the
stream of commerce by or on behalf of the Company or any of its Subsidiaries,
which has been filled by the customer, including any product sold in the United
States by the Company or any of its Subsidiaries as the distributor, agent or
pursuant to any other contractual relationship with a non-U.S. manufacturer.
2.27 Customers and Suppliers(a) . Section 2.27(a)(i) of the
O-I Disclosure Schedule contains a list of the top 20 customers of the Company
and its Subsidiaries (determined on the basis of revenues) (the "Top 20
Customers") and the amount of revenues generated for the fiscal year ended
December 31, 2003. Section 2.27(a)(ii) of the O-I Disclosure Schedule contains
a list of the top 10 suppliers of the Company and its Subsidiaries (determined
on the basis of cost of items purchased) (the "Top 10 Suppliers") and the
approximate total purchases for the fiscal year ended December 31, 2003. Except
as set forth on Section 2.27(a)(iii) of the O-I Disclosure Schedule, during the
90 days prior to the date hereof (A) no such customer or supplier has ceased to
do business with the Company and its Subsidiaries, (B) no such customer has
made a material change in the allocation of its business to the Company and its
Subsidiaries or has reduced the volume of its business with the Company and its
Subsidiaries by an amount in excess of $1,000,000, on an annual basis, (C) to
the Knowledge of the O-I Parties, no such customer or supplier has threatened
to cancel in whole or in part or otherwise terminate in whole or in part its
relationship with the Company or any of its Subsidiaries, which threat could
reasonably be expected to result in such a termination and (D) no such supplier
has decreased, limited or otherwise modified or, to the Knowledge of the O-I
Parties, threatened to decrease, limit or otherwise modify, the services,
supply of resin or any other materials it provides to the Company or any of its
Subsidiaries which threat could reasonably be expected to result in any such
decrease, limitation or modification and, to the Knowledge of the O-I Parties,
the consummation of the transactions contemplated hereby and by the Additional
Agreements are not reasonably expected to materially adversely affect any of
such relationships.
2.28 Accounts Payable. Since December 31, 2003 and except as
set forth on Section 2.28 of the O-I Disclosure Schedule, to the Knowledge of
the O-I Parties, neither the Company nor any of its Subsidiaries has delayed or
postponed the payment of accounts payable and there are no unpaid invoices or
bills representing amounts alleged to be owed by the Company or alleged to be
owed by any of its Subsidiaries, or other alleged obligations of the Company or
any of its Subsidiaries, which the Company or any of its Subsidiaries has
disputed or determined to dispute or refuse to pay except in the ordinary
course of business consistent with past practice.
2.29 Books and Records. The Books and Records of the Company
and each of its Subsidiaries are complete and correct in all material respects
and fairly reflect the transactions and dispositions of the Company and each of
its Subsidiaries. The Company and each of its Subsidiaries maintains a system
of internal accounting controls sufficient to provide reasonable assurances
that (a) transactions are executed in accordance with management's general or
specific authorizations, (b) transactions are recorded as necessary to permit
preparation of financial statements in accordance with GAAP and to maintain
asset accountability, (c) access to assets is permitted only in accordance with
management's general or specific authorization and (d) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.
2.30 Rebates. Except as set forth on Section 2.30 of the O-I
Disclosure Schedule, neither the Company nor any of its Subsidiaries provide or
allow rebates in connection with the Business. Section 2.30 of the O-I
Disclosure Schedule sets forth a summary of the Company's policies with respect
to discounts, allowances and returns of the Business. Except as set forth on
Section 2.30 of the O-I Disclosure Schedule, the Company and any of its
Subsidiaries do not sell any products of the Business on consignment, on
approval or with any right of return except if such products are non-conforming
or defective.
2.31 Propriety of Past Payments. To the Knowledge of the O-I
Parties, none of the Company or its Subsidiaries or any of their respective
Representatives (as defined below) has made any unlawful payment to foreign or
domestic government officials or employees or to foreign or domestic political
parties or campaigns or violated any provision of the Foreign Corrupt Practices
Act of 1977, as amended.
2.32 Bank Accounts. Section 2.32 of the O-I Disclosure
Schedule sets forth the names and locations of all banks, trust companies,
savings and loan associations and other financial institutions at which the
Company or any of its Subsidiaries maintains safe deposit boxes, checking
accounts or other accounts of any nature the available balance of which
customarily exceeds $25,000 and the names of all Persons authorized to draw
thereon, make withdrawals therefrom or have access thereto.
2.33 No Other Representations and Warranties. Except for the
representations and warranties contained in this Agreement (including the
Schedules, O-I Disclosure Schedule, Buyer Disclosure Schedule, Exhibits, and
Annexes) and the Additional Agreements (including the schedules and exhibits
thereto), O-I and its Affiliates are making no other representations or
warranties relating to the Company, its Subsidiaries and the Business, express
or implied.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF O-I
O-I represents and warrants to Buyer as follows, in each
case, as of the date hereof and as of the Closing Date (or, in each case, if
made as of a specific date, as of such date):
3.1 Due Organization. O-I is a corporation duly organized,
validly existing and in good standing under the Laws of the State of Delaware.
O-I has all requisite corporate power and authority to enter into this
Agreement and the Additional Agreements to which it is a party and to perform
its obligations hereunder and thereunder.
3.2 Authorization and Validity of this Agreement and the
Additional Agreements. The execution, delivery and performance by O-I of this
Agreement and the Additional Agreements to which it is a party and the
consummation by it of the transactions contemplated hereby and thereby have
been duly authorized by its board of directors and all other necessary
corporate actions on the part of O-I, and no other corporate action on the part
of O-I is necessary for the execution, delivery and performance by O-I of this
Agreement and the Additional Agreements to which it is a party and the
consummation by it of the transactions contemplated hereby and thereby. This
Agreement has been, and each of the Additional Agreements to which it is a
party have been, or at the Closing will be, duly and validly executed and
delivered by O-I and, assuming the due authorization, execution and delivery by
the other parties hereto and thereto, is a legal, valid and binding obligation
of O-I, enforceable against O-I in accordance with their respective terms,
except to the extent that its enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or other laws relating to or affecting
creditors' rights generally and by general equity principles.
3.3 No Conflict. Except as set forth on Section 3.3 of the
O-I Disclosure Schedule, the execution, delivery and performance by O-I of this
Agreement and the Additional Agreements to which it is a party and the
consummation by it of the transactions contemplated hereby and thereby: (a)
does not and will not violate or conflict with in any material respect any
provision of Law applicable to O-I or any of its properties or assets; (b) will
not require any consent or approval of, or filing with or notice to, any
Governmental Authority under any provision of Law applicable to O-I, except for
the requirements of the HSR Act and Competition Laws in any applicable
jurisdiction outside the United States, and except for any consent, approval,
filing or notice requirements that become applicable solely as a result of the
specific regulatory status of Buyer or its Affiliates or that Buyer or its
Affiliates are otherwise required to obtain; (c) does not and will not violate
or conflict with any provision of the organizational documents of O-I; and (d)
does not and will not require any consent, approval or notice under, and does
not and will not conflict with, or result in the breach or termination of, or
constitute (or but for the passage of time, the giving of notice or both would
constitute) a default or give rise to any right of payment under, or result (or
but for the passage of time, the giving of notice or both would result) in the
acceleration of the performance by O-I under, or the termination, amendment or
cancellation of any indenture, mortgage, deed of trust, lease, license,
franchise, contract, agreement or any other similar instrument or obligation to
which O-I is a party or by which it, or any of its properties or assets are
bound or encumbered, except in this clause (d) for violations, conflicts,
breaches, or defaults which, or consents, approvals or waivers (in each case,
other than with respect to any Company Material Contract or IP Contract) the
absence of which would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect or would not prevent or materially
delay the consummation of the transactions contemplated by this Agreement and
the Additional Agreements.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to Seller and O-I as
follows, in each case, as of the date hereof and as of the Closing Date (or, in
each case, if made as of a specific date, as of such date):
4.1 Due Organization. Buyer is a limited partnership duly
formed, validly existing and in good standing under the Laws of the
jurisdiction of its formation. Buyer has all requisite power and authority to
enter into this Agreement and the Additional Agreements and perform its
obligations hereunder and thereunder.
4.2 Authorization and Validity of this Agreement and the
Additional Agreements. The execution, delivery and performance by Buyer of this
Agreement and the Additional Agreements and the consummation by Buyer of the
transactions contemplated hereby and thereby have been duly authorized by the
general partner of Buyer and all other necessary partnership action on the part
of Buyer, and no other action on the part of Buyer is or will be necessary for
the execution, delivery and performance by Buyer of this Agreement and the
Additional Agreements and the consummation by Buyer of the transactions
contemplated hereby and thereby. This Agreement has been, and each of the
Additional Agreements to which it is a party have been, or at the Closing will
be, duly and validly executed and delivered by Buyer and, assuming the due
authorization, execution and delivery by the other parties hereto and thereto,
is a legal, valid and binding obligation of Buyer, enforceable against Buyer in
accordance with their respective terms, except to the extent that
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or other laws relating to or affecting creditors' rights generally
and by general equity principles.
4.3 No Conflict. Except as set forth on Section 4.3 of the
schedule of disclosures delivered by Buyer to O-I and Seller concurrent with
the execution of this Agreement, (the "Buyer Disclosure Schedule"), the
execution, delivery and performance by Buyer of this Agreement and the
Additional Agreements to which it is a party and the consummation by Buyer of
the transactions contemplated hereby and thereby: (a) does not and will not
violate or conflict with in any material respect any provision of Law
applicable to Buyer; (b) does not and will not require any consent or approval
of, or filing with or notice to, any Governmental Authority under any provision
of Law applicable to Buyer, except for the requirements of the HSR Act and
Competition Laws in any applicable jurisdiction outside the United States, and
except for any consent, approval, filing or notice requirements that become
applicable solely as a result of the specific regulatory status of O-I or its
Affiliates or that O-I or its Affiliates are otherwise required to obtain; (c)
does not and will not violate any provision of the partnership agreement of
Buyer; and (d) will not require any consent, approval or notice under, and does
not and will not conflict with, or result in the breach or termination of, or
constitute (or but for the passage of time, the giving of notice or both would
constitute) a default or give rise to any right of payment under, or result (or
but for the passage of time, the giving of notice or both would result) in the
acceleration of the performance by Buyer under, or the termination, amendment
or cancellation of any indenture, mortgage, deed of trust, lease, license,
franchise, contract, agreement or any other similar instrument or obligation to
which Buyer is a party or by which it, or any of its properties or assets are
bound or encumbered, except in this clause (d) for violations, conflicts,
breaches, or defaults which, or consents, approvals or waivers the absence of
which would not prevent or materially delay the consummations of the
transactions contemplated by this Agreement and the Additional Agreements.
4.4 Brokers, Finders, etc. Except as set forth on Section 4.4
of the Buyer Disclosure Schedule, Buyer has not employed, nor is subject to the
valid claim of, any broker, agent, investment banker, financial advisor,
finder, consultant, or other intermediary in connection with the transactions
contemplated by this Agreement or the Additional Agreements who might be or is
entitled to a fee or commission in connection with the transactions
contemplated hereby or thereby, all of which are the sole responsibility of
Buyer.
4.5 Available Funds.
(a) Buyer will, upon the termination of this Agreement by
Buyer pursuant to Section 10.2(a)(iv) or Section 10.2(a)(vii), have available
sufficient funds in Cash to pay the Termination Fee (as defined below) required
under the circumstances set forth in Section 10.2(b)(ii).
(b) Seller has previously been provided with commitment
letters, copies of which are set forth on Section 4.5(b) of the Buyer
Disclosure Schedule (the "Commitment Letters"), from lenders (the "Lenders")
relating to such financing for Buyer for purposes of obtaining the funds
necessary to make the payments contemplated by Section 1.2 and defray all of
Buyer's expenses incurred in connection with the Purchase (the "Financing"). On
the date hereof, the Commitment Letters have not been amended or modified in
any respect. As of the date hereof, the Lenders have not advised Buyer or any
of its Affiliates of any facts that cause them to believe the Financings
contemplated by the Commitment Letters will not be consummated substantially in
accordance with the terms thereof.
4.6 Purchase for Investment. Buyer is aware that no shares of
Capital Stock being acquired pursuant to the transactions contemplated hereby
are registered under the Securities Act of 1933, as amended (the "Securities
Act"), or under any state or foreign securities laws. Buyer is an "accredited
investor" within the meaning of Rule 501(a) of Regulation D of the Securities
Act. Buyer is purchasing the Stock solely for investment for its own account,
with no present intention to distribute any such shares of Stock to any Person.
4.7 Legal Proceedings.
(a) There are no claims, filed complaints, arbitrations,
actions, suits, inquiries, charges, proceedings, orders or, to the Knowledge of
Buyer, investigations, pending or (to the knowledge of Buyer) threatened
against or affecting Buyer or any of its Controlled (as defined below)
Affiliates at law or in equity, or before or by any Governmental Authority that
would or seeks to enjoin, rescind, or delay the transactions contemplated by
this Agreement or the Additional Agreements or otherwise hinder Buyer from
timely complying with the terms and provisions of this Agreement or the
Additional Agreements;
(b) There are no pending or, to the Knowledge of Buyer,
threatened actions that would prevent or delay Buyer from consummating the
transactions contemplated hereby or by the Additional Agreements; and
(c) Neither Buyer nor any of its Affiliates is subject to any
outstanding order, writ, injunction, judgment, ruling, charge or decree of any
Governmental Authority that would or seeks to enjoin, rescind, or delay the
transactions contemplated by this Agreement or the Additional Agreements or
otherwise hinder Buyer from timely complying with the terms and provisions of
this Agreement or the Additional Agreements.
ARTICLE V
COVENANTS
5.1 Access; Information and Records; Confidentiality.
(a) During the period commencing on the date hereof and
ending on the Closing Date, O-I and Seller shall, and shall cause the Company
and its Subsidiaries to afford to Buyer, its Representatives (as defined below)
and financing sources (and their respective Representatives), upon Buyer's
reasonable written request and notice, reasonable access during normal business
hours and at Buyer's expense to the plants, properties, senior management,
officers, directors, senior employees, books and records of the Company and its
Subsidiaries, in order that Buyer may have the opportunity to make such
reasonable investigations as it shall desire to make of the affairs of the
Company and its Subsidiaries; provided that any contacts with such senior
management, officers, directors and senior employees shall only take place
under the supervision of Seller; provided, further, that Seller's supervision
does not unduly delay any such Buyer investigation. O-I and Seller will use
their commercially reasonable best efforts to cause their officers, employees,
accountants and other agents to furnish to Buyer, at O-I's expense, such
additional financial and operating data, tax information, books and records,
contracts, documents and other information with respect to the Company and its
Subsidiaries as Buyer, its Representatives and financing sources (and their
respective Representatives) may from time to time reasonably request.
(b) During the period commencing on the date hereof and
ending on the Closing Date, upon Buyer's reasonable written request and notice,
Seller shall use its commercially reasonable best efforts to provide access to,
and assist Buyer in contacting the suppliers, customers or technology partners
of the Company or the Subsidiaries in connection with or pertaining to any
subject matter of this Agreement.
(c) Buyer will (i) hold, and will cause its respective
partners, directors, officers, employees and representatives of its legal,
accounting and financial advisors and other representatives and Affiliates (the
"Representatives") to hold, any nonpublic information in confidence to the
extent required by, and in accordance with, the provisions of the
confidentiality agreement dated April 3, 2004, between Xxxxxx Packaging
Holdings Company and O-I (the "Confidentiality Agreement") and (ii) comply, and
will cause its Representatives to comply, with the provisions of the
Confidentiality Agreement applicable to them. Notwithstanding anything to the
contrary herein or in the Confidentiality Agreement, (A) Buyer may contact
Seller's customers to inform customers of this Agreement and to explain the
transaction only if Seller is extended the opportunity to participate in the
contact and (B) Buyer and its Representatives shall be entitled to distribute
information to potential sources of Financing so long as such sources agree to
customary confidentiality undertakings in connection with the arrangement and
syndication of financing. Notwithstanding the foregoing, nothing in this
Agreement shall limit Buyer's ability to contact Seller's customers
unilaterally for the purposes of (x) selling Buyer's products in the ordinary
course of Buyer's business or (y) negotiating contingent terms between Buyer
and Seller's customers for sale of products after the Closing.
5.2 Conduct of the Businesses of the Company Prior to the
Closing Date.
(a) Except as expressly permitted by this Agreement, or as
otherwise consented to or approved in writing by Buyer, during the period
commencing on the date hereof and ending at the Closing Date, O-I and Seller
covenant that:
(i) the Business shall be conducted in the ordinary course
of business consistent with past practice;
(ii) except as may be required by applicable Law, none of
the Company or any of its Subsidiaries will amend its organizational
documents;
(iii) the Company and its Subsidiaries will use their
commercially reasonable best efforts to preserve intact their business
organization, to keep available the services of their present officers
and key employees, and to preserve the good will of those having
business relationships with them;
(iv) none of the Company or any of its Subsidiaries will
redeem, purchase or otherwise acquire, directly or indirectly, any
Stock or other Capital Stock of the Company or any of its Subsidiaries
or declare, set aside for payment or pay any dividends or make any
other distributions (whether Cash, Capital Stock or property) with
respect to any of their Capital Stock;
(v) none of the Company or any of its Subsidiaries will
issue, sell or transfer any of its Capital Stock, securities
convertible into Capital Stock or warrants, options or other rights to
acquire its Capital Stock, or any bonds or other securities issued by
it;
(vi) except as may otherwise be required by applicable Law
or by GAAP, none of the Company or any of its Subsidiaries will make
any change in any method of accounting or accounting practices,
including for financial or Tax purposes; provided that the Company
shall be entitled to revise its standard cost system from time to time
in accordance with GAAP in the ordinary course of business consistent
with past practice and; provided, further, that the Company shall
promptly notify Buyer of any such revision;
(vii) none of the Company or any of its Subsidiaries shall
enter into any settlement or compromise regarding any Tax liability,
enter into any agreement to adjust any Tax attribute, or, except in
the ordinary course of business make or revoke any Tax election;
(viii) none of the Company or any of its Subsidiaries shall
borrow or become liable as a guarantor for any amount in excess of
$1,000,000 in the aggregate, except for current liabilities incurred
in the ordinary course of business consistent with past practice and
liabilities under contracts entered into in the ordinary course of
business consistent with past practice and except for guarantees that
will be released and Indebtedness that will be repaid in full at or
prior to the Closing;
(ix) none of the Company or any of its Subsidiaries shall
mortgage, pledge or subject to any Liens in excess of $1,000,000, any
of its properties or assets, except Liens for current property Taxes
or assessments not yet due and payable and those arising in the
ordinary course of business consistent with past practice and except
for mortgages, pledges or Liens that will be repaid, satisfied,
terminated and released at or prior to the Closing;
(x) none of the Company or any of its Subsidiaries shall
sell, assign or transfer any of its material assets, except in the
ordinary course of business consistent with past practice, or cancel
without adequate consideration any material debts owing to or held by
it;
(xi) none of O-I or any of its Affiliates will issue any
broadly distributed communication of a general nature to Business
Employees (including general communications relating to benefits and
compensation), except (A) for communications that either are in the
ordinary course of business consistent with past practice that do not
relate to the transactions contemplated hereby or by the Additional
Agreements or are made pursuant to a communications plan approved by
Buyer; provided that Buyer's approval will not be unreasonably
withheld or delayed, or (B) for communications that are not in the
ordinary course of business consistent with past practice to the
extent such communications do not relate to Buyer or the transactions
contemplated hereby or by the Additional Agreements; provided that
prior to distribution of any such communication O-I and Seller provide
Buyer with a reasonable opportunity to review such communication and
consult with Buyer concerning the contents of such communication;
(xii) none of the Company or any of its Subsidiaries will
make or grant any bonus or any wage or salary increase to any employee
or group of employees (other than in the ordinary course of business
consistent with past practice, or as required pursuant to the terms of
any existing Employee Plan or any existing Collective Bargaining
Agreement) or make or grant any increase in any employee benefits
(other than in the ordinary course of business consistent with past
practice, or as required pursuant to the terms of any existing
Employee Plan or any existing Collective Bargaining Agreement), or
amend or terminate any existing Employee Plan or adopt any new
Employee Plan (other than as required pursuant to the terms of any
existing Collective Bargaining Agreement or as required by applicable
Law);
(xiii) except as set forth on Section 5.2(xiii) of the O-I
Disclosure Schedule, none of the Company or any of its Subsidiaries
will layoff, terminate (including by way of constructive termination)
or dismiss any employee without cause, and none of O-I, Seller, the
Company or any of its Subsidiaries will discourage any employee of the
Company or any of its Subsidiaries from continuing following the
Closing Date to be employed by the Company or any of its Subsidiaries,
or from accepting, if offered, employment with Buyer or any of its
Affiliates;
(xiv) none of the Company or any of its Subsidiaries will
commit to making capital expenditures in excess those contemplated by
the 2004 Budget and, if applicable, the 2005 Plan (as defined below);
(xv) none of the Company or any of its Subsidiaries will
make any loans or advances to, or sell, transfer or lease any
properties or assets to, or guarantees for the benefit of, any Person,
including its officers or directors or any of its Affiliates, in
excess of $250,000 individually or $1,000,000 in the aggregate (other
than loans or advances made to employees in the ordinary course of
business consistent with past practice and not exceeding $25,000
individually and $250,000 in the aggregate and other than loans
pursuant to any defined contribution pension plan maintained by O-I,
Seller and their respective Affiliates in accordance with the terms
thereof), except for intercompany and intracompany loans that will be
repaid or redeemed at or prior to the Closing Date;
(xvi) none of the Company or any of its Subsidiaries will
amend, terminate, extend, waive, assign or otherwise modify any rights
under, or discharge any other party of any of its obligations under,
any Company Material Contract, Lease or IP Contract (except for the
settlement of the Constar Litigation pursuant and in accordance with
Section 9.6), or enter into any Additional Material Contract, except
in the ordinary course of business consistent with past practice;
(xvii) none of the Company or any of its Subsidiaries will
(A) enter into any waiver, settlement or release with respect to any
action, proceeding, suit, claim, arbitration or litigation affecting
the Business (except for the settlement of the Constar Litigation
pursuant and in accordance with Section 9.6) or (B) commence any
litigation or other legal proceeding other than in the ordinary course
of business consistent with past practice;
(xviii) none of the Company or any of its Subsidiaries will
enter into any other transaction or agreement requiring the Company or
any of its Subsidiaries to make aggregate annual payments in excess of
$1,500,000 or aggregate payments in excess of $4,000,000;
(xix) none of the Company or any of its Subsidiaries will
dispose of or permit to lapse any rights to the use of any material
Company Intellectual Property except for non-exclusive licenses and
other dispositions in the ordinary course of business consistent with
past practice, or disclose to any Person other than representatives of
Buyer any material trade secret relating to the Business (including
any material confidential information, financing and marketing
information, technology, know-how, inventions, proprietary processes,
formulae, algorithms, models and methodologies) except pursuant to a
non-disclosure agreement or obligation of confidentiality;
(xx) none of the O-I Parties or any of their Affiliates
shall (A) grant any Lien affecting title to Intellectual Property
owned by the Company or to Seller IP or grant any license in or upon
any Company Intellectual Property or (B) do any act or omit to do any
act whereby any Company Intellectual Property may lapse, become
abandoned, dedicated to the public, or unenforceable, except in either
case in the ordinary course of business consistent with past practice,
and, in the case of clause (B) above, only as to Company Intellectual
Property which is not in current use (or currently planned (with
respect to filed applications or registrations (including patents)) to
be used) or that does not have material economic value;
(xxi) none of the Company or any of its Subsidiaries will
incur any Indebtedness, except in the ordinary course of business
consistent with past practice and that will be repaid or redeemed at
or prior to the Closing Date;
(xxii) none of the Company or any of its Subsidiaries will
merge or consolidate with or acquire substantially all or a material
part of the assets of, or enter into a transaction with a Variable
Interest Entity, or otherwise acquire any business of, any Person;
(xxiii) none of the Company or any of its Subsidiaries will
make any request or demand to any Person to pay any amounts under or
in respect of any accounts receivable of the Company or any of its
Subsidiaries prior to the stated maturity thereof, or factor or
otherwise dispose of any accounts receivable of the Company or any of
its Subsidiaries or discharge or forgive any obligations of any
obligor thereunder except in the ordinary course of business
consistent with past practice;
(xxiv) none of the Company or any of its Subsidiaries will
defer or delay the payment of accounts payable of the Company or any
of its Subsidiaries beyond the stated maturity thereof except in the
ordinary course of business consistent with past practice;
(xxv) write down the value of any (A) inventory (including
write-downs by reason of shrinkage or xxxx-down) or (B) write off as
uncollectable any notes or accounts receivable, except in the case of
each of clause (A) and (B), for write-down and write-off in the
ordinary course of business consistent with past practice and not
exceeding in the aggregate $1,000,000;
(xxvi) make any material revaluation of any assets of the
Company or any of its Subsidiaries;
(xxvii) make any request or demand to any Person to pay any
amounts under or in respect of any accounts receivable of the Company
or any of its Subsidiaries prior to the stated maturity thereof, or
any factoring or other disposition of any accounts receivable of the
Company or any of its Subsidiaries, in each case, except in the
ordinary course of business consistent with past practice, or make any
discharge or forgiveness of any obligations of any obligor thereunder;
(xxviii) adopt any plan of liquidation, dissolution,
merger, consolidation, restructuring, recapitalization or other
reorganization of the Company or any of its Subsidiaries;
(xxix) transfer any person providing services as an
employee, director, officer, independent contractor or consultant (i)
from O-I, Seller of any of their respective Affiliates to the Company
or any of its Subsidiaries or (ii) from the Company or any of its
Subsidiaries to O-I, Seller or any of their respective Affiliates
(except, for purposes of this clause (ii), if O-I or the Seller elects
to cause the transfer of employment of a Retained Inactive Employee
(as defined below)).
(xxx) none of the Company or any of its Subsidiaries will
enter into any material agreement or contract with any Controlled
Affiliate of O-I; and
(xxxi) neither the Company nor any of its Subsidiaries will
take any action authorizing any of the foregoing or which would result
in the representations and warranties contained in Articles II and III
being untrue as of the Closing Date or any of the conditions to
Closing not being satisfied.
(b) Notwithstanding anything to the contrary herein, nothing
shall prevent the transfer by the Company and its Subsidiaries of Cash to
Seller in the ordinary course of business consistent with past practice.
(c) Notwithstanding anything to the contrary in this Section
5.2, nothing herein shall prevent O-I or Seller from effecting any transaction
relating to the Corporate Restructuring as set forth on Section 5.13(c) of the
O-I Disclosure Schedule, including any restructuring with respect to Foreign
Subsidiary Capital Stock, or the Australian Restructuring, in each case, in the
manner permitted by this Agreement.
5.3 Antitrust Laws.
(a) Each Party shall use its commercially reasonable best
efforts to take, or cause to be taken, all actions, and to do, or cause to be
done, all things necessary, proper or advisable under applicable Laws to cause
the conditions set forth in Article VI, as the case may be, to be satisfied and
to consummate and make effective the transactions contemplated by this
Agreement and by the Additional Agreements as promptly as practicable. In
furtherance and not in limitation of the foregoing, from the date hereof until
the Closing Date, the Parties shall use their respective commercially
reasonable best efforts to cause to be obtained or to obtain promptly all
Governmental Approvals that may be or become necessary for the execution and
delivery of, and consummation of the transaction contemplated by this Agreement
and by the Additional Agreements. The Parties agree to make all necessary or
appropriate filings to obtain such Governmental Approvals as required by any
Governmental Authority or pursuant to any applicable Law with respect to the
transactions contemplated by this Agreement or by the Additional Agreements as
soon as reasonably practicable and to supply to the appropriate Governmental
Authorities any additional information and documentary material that may be
requested thereof as soon as reasonably practicable. The Parties shall
reasonably assist each other in seeking to obtain all such Governmental
Approvals and in making all such filings. Notwithstanding the foregoing or any
other covenant contained herein, Buyer shall not be required to (nor, without
Buyer's written consent, shall Seller or its Affiliates) take or commit to take
any action if the taking of such action would reasonably be expected to deprive
Buyer of a material benefit or benefits of the transactions contemplated by
this Agreement and by the Additional Agreements, taken as a whole (a
"Burdensome Condition").
(b) Each Party shall, as soon as reasonably practicable,
notify the other Parties of any material communication it, or any of its
Representatives, makes to or receives from any supervisory or Governmental
Authority relating to the matters that are the subject of this Agreement or the
Additional Agreements and permit the other to review in advance any proposed
communication by such Party to any supervisory or Governmental Authority. To
the extent permitted by such supervisory or Governmental Authority, each Party
agrees to give the other a reasonable opportunity to attend and participate at
any meeting with any Governmental Authority in respect of any filings,
investigation or other inquiry. Subject to Section 5.1, the Parties shall
coordinate and cooperate fully with each other in exchanging such information
and providing such assistance as the other may reasonably request in connection
with the foregoing and in seeking the earliest possible termination of any
applicable waiting periods or suspension effects imposed by any Law. Subject to
Section 5.1, each Party shall provide the other Parties with true, correct and
complete copies of all correspondence, filings and material communications
between any supervisory or Governmental Authority or members of its staff, on
the one hand, and the Parties or any of their Representatives (as the case may
be), on the other hand, with respect to this Agreement or any Additional
Agreement or the transactions contemplated hereby or thereby. Upon the terms
and subject to the conditions herein provided, including the last sentence of
Section 5.3(a), in case at any time after the Closing Date any further action
is necessary or desirable to secure supervisory approvals or Governmental
Approvals from any supervisory or Governmental Authority necessary to carry out
the purposes of this Agreement or the Additional Agreements, the Parties shall
use their commercially reasonable best efforts to take or cause to be taken all
such necessary action.
5.4 Non-Solicitation.
(a) Buyer and its Controlled Affiliates will not, from and
after the date hereof and for a period of two years following the Closing Date,
without the prior written consent of Seller, directly or indirectly, solicit,
encourage, entice or induce any person who is an employee of O-I or its
Controlled Affiliates, at the date hereof or at any time hereafter until the
Closing Date, to terminate his or her employment with O-I or any of its
Controlled Affiliates. Notwithstanding the foregoing, the restrictions set
forth in this Section 5.4(a) will not prohibit Buyer or its Controlled
Affiliates from: (i) advertising employment opportunities in any general
solicitation, including national newspaper, trade journal or other publications
in a major metropolitan area or any third-party Internet website posting, or
negotiating with, offering employment to or employing any person contacted
through such medium; (ii) participating in any third-party hiring fair or
similar event open to the public or negotiating with, offering employment to or
employing any person contacted through such medium; (iii) negotiating with,
offering employment to or employing any person contacted by Buyer or its
Controlled Affiliates as of the date hereof with respect to employment with
Buyer or a Controlled Affiliate thereof; (iv) negotiating with, offering
employment to or employing any employee employed by O-I or any of its
Affiliates working on the production line who are associated with the plastic
molding machinery contemplated to be purchased by Buyer located at Seller's
plant in Hungary; or (v) soliciting, negotiating with, offering employment to
or employing any person at any time (A) following 90 days after the termination
by such person of his or her employment with O-I or any of its Controlled
Affiliates or (B) after the termination by O-I or any of its Controlled
Affiliates of such person's employment with O-I or any of its Controlled
Affiliates. Buyer agrees that any remedy at Law for any breach by it of this
Section 5.4(a) would be inadequate, and Seller would be entitled to injunctive
relief in such a case. If it is ever held that the restriction placed on Buyer
by this Section 5.4(a) is too broad to permit enforcement of such restriction
to its fullest extent, Buyer agrees that a court of competent jurisdiction may
enforce such restriction to the maximum extent permitted by Law, and Buyer
hereby consents and agrees that such scope may be judicially modified
accordingly in any proceeding brought to enforce such restriction.
(b) Each of O-I and Seller agree that, from and after the
date hereof and for a period of two years following the Closing Date, each of
O-I and its Controlled Affiliates will not, without the prior written consent
of Buyer, directly or indirectly, solicit for employment, or encourage, entice
or induce any person who is an employee of the Company or any of its
Subsidiaries at the date hereof and/or at the Closing Date to terminate his or
her employment with the Company or any of its Subsidiaries or Buyer or any of
its Affiliates. Notwithstanding the foregoing, the restrictions set forth in
this Section 5.4(b) will not prohibit O-I and Seller during the period
beginning on the one-year anniversary of the Closing Date from advertising
employment opportunities in any general solicitation in a national newspaper
with an average daily circulation of greater than 500,000. O-I agrees that any
remedy at law for any breach by it of this Section 5.4(b) would be inadequate,
and Buyer would be entitled to injunctive relief in such a case. If it is ever
held that the restriction placed on O-I and its Controlled Affiliates by this
Section 5.4(b) is too broad to permit enforcement of such restriction to its
fullest extent, O-I (on its behalf and on behalf of its Controlled Affiliates)
agrees that a court of competent jurisdiction may enforce such restriction to
the maximum extent permitted by Law, and O-I (on its behalf and on behalf of
its Controlled Affiliates) hereby consents and agrees that such scope may be
judicially modified accordingly in any proceeding brought to enforce such
restriction.
5.5 Additional Agreements.
(a) On the Closing Date, Buyer and O-I shall execute and
deliver an agreement, substantially in the form attached hereto as Exhibit A
(the "Transition Services Agreement"), pursuant to which Buyer and O-I shall
each agree to provide certain transition services.
(b) On the Closing Date, Buyer and O-I shall execute and
deliver agreements, substantially in the form attached hereto as Exhibits B-(i)
through B-(ix) (the "Contract Manufacturing Agreements"), pursuant to which (i)
Buyer would agree to manufacture certain products for O-I, or one of its
Affiliates, using equipment retained by O-I, or one of its Affiliates, at the
facilities being purchased by Buyer in Harrisonburg, VA, Chicago, IL and
Henderson, NV until such time as that equipment can be removed from such
facilities and (ii) O-I, or one of its Affiliates, would agree to manufacture
certain products for Buyer using equipment purchased by Buyer at certain
facilities being retained by O-I in Nashua, NH, Washington, NJ (Xxxxxxxx),
Greenville, SC, Las Piedras, Puerto Rico and Hungary until such time as that
equipment can be removed from such facilities.
(c) On the Closing Date, Buyer and O-I shall execute and
deliver an agreement, substantially in the form attached hereto as Exhibit C
(the "Resin Purchase Agreement") pursuant to which Buyer and O-I shall each
agree to jointly purchase polyethylene terephthalate resin, high-density
polyethylene resin and polypropylene resin.
(d) On the Closing Date, O-I and the Company shall enter into
agreements substantially in the form attached hereto as Exhibit D-(i) to
D-(iii) (the "Intellectual Property Agreements," and together with the
Transition Services Agreement, the Contract Manufacturing Agreements and the
Resin Purchase Agreement, the "Additional Agreements").
5.6 Termination of Affiliate Relations. Except as
contemplated by this Agreement or the Additional Agreements, on or prior to the
Closing Date, (i) the Company and each of its Subsidiaries shall have repaid or
otherwise settled all of their outstanding Indebtedness (including interest
thereon) and satisfied all of their other liabilities as of the Closing Date,
(but excluding payables for goods sold and services rendered which shall be
paid in the ordinary course of the business) owed to Seller or its Affiliates
(including O-I, but other than the Company and any of its Subsidiaries) and
(ii) Seller and its Affiliates (including O-I, but other than the Company and
any of its Subsidiaries) shall have repaid or otherwise settled all of their
outstanding Indebtedness (including interest thereon) and satisfied all of
their other liabilities (other than payables for goods sold and services
rendered which shall be paid in the ordinary course of the business) owed to
the Company and any of its Subsidiaries. Except as set forth on Section 5.6 of
the O-I Disclosure Schedule, all agreements between the Company and any of its
Subsidiaries and Seller and its Affiliates (including O-I) (other than
agreements solely between the Company and any of its Subsidiaries, agreements
contemplated by this Agreement or the Additional Agreements and agreements
listed on Section 5.6 of the O-I Disclosure Schedule) shall be terminated as of
the Closing Date, and all obligations and liabilities thereunder shall have
been satisfied. O-I and Seller agree to keep Buyer apprised of the contemplated
steps to effectuate the transactions contemplated by this Section 5.6 and to
cooperate in good faith with Buyer in implementing such steps in a manner to
minimize Tax liabilities of, and maximize Tax benefits to, the Company, its
Subsidiaries and Buyer associated with such transactions.
5.7 Further Actions.
(a) Subject to the terms and conditions of this Agreement,
including the last sentence of Section 5.3(a), each of the Parties agrees to
use its commercially reasonable best efforts to take, or cause their respective
Affiliates to take, all actions and to do, or cause to be done, all things
necessary, proper or advisable to consummate and make effective the
transactions contemplated by this Agreement and by the Additional Agreements,
including using its commercially reasonable best efforts (i) to obtain, in
addition to approvals referred to in Section 5.3, any licenses, transfers of
existing permits or Governmental Licenses, permits, consents, approvals,
authorizations, Governmental Licenses relating to Environmental Laws and
qualifications and orders of federal, state, local and foreign Governmental
Authorities and parties to contracts with the Company or any of its
Subsidiaries as are required in connection with the consummation of the
transactions contemplated hereby, (ii) to effect, in addition to filings
referred to in Section 5.3, all required registrations and filings required in
connection with the consummation of the transactions contemplated hereby and
(iii) to defend any lawsuits or other legal proceedings, whether judicial or
administrative, whether brought derivatively or on behalf of third parties
(including Governmental Authorities), challenging this Agreement or the
consummation of the transactions contemplated hereby and thereby. Each Party
agrees to use its commercially reasonable best efforts to furnish to each other
such information and assistance and to consult with respect to the terms of any
registration, filing, application or undertaking as reasonably may be requested
in connection with the foregoing.
(b) In addition to, and without limitation of the foregoing,
Buyer shall use its commercially reasonable best efforts to (i) obtain the
Financing as of the Closing and (ii) to the extent that borrowings under the
Commitment Letters are unavailable, to arrange for alternative financing on
terms satisfactory to Buyer in its sole discretion (the "Alternative
Financing").
(c) (i) O-I shall use its commercially reasonable best
efforts to obtain amendments and or restatements to any contract or agreement
that is among O-I or Affiliates of O-I, the Company or any of its Subsidiaries,
and a third party, including those set forth on Section 5.7(c)(i)(A) of the O-I
Disclosure Schedule (the "Three Party Agreements"), and excluding those set
forth on Section 5.7(c)(i)(B), to bifurcate the rights and obligations under
such Three Party Agreement into separate contracts or agreements between (x)
O-I or Affiliates of O-I on the one hand and the third party on the other hand
and (y) the Company or its Subsidiaries on the one hand and the third party on
the other hand, on commercial terms and conditions substantially identical to
the terms and conditions under such Three Party Agreement, including a fair
allocation of the rebates, discounts and sales prices (to the extent such sales
prices are not specified in such Three Party Agreement) thereunder.
(ii) O-I shall use its commercially reasonable best efforts
to obtain under any contract between O-I or Affiliates of O-I (other
than the Company and its Subsidiaries) on the one hand and a third
party, on the other hand, relating to the Business, including those
set forth on Section 5.7(c)(ii) of the O-I Disclosure Schedule (the
"O-I Agreements") an assignment to the Company or one of the
Subsidiaries of the rights of O-I or its Affiliates, as the case may
be, pursuant to such O-I Agreement.
(iii) O-I shall use its commercially reasonable best
efforts to obtain all other consents relating to all other licenses,
agreements and leases, including those set forth on Section
5.7(c)(iii) of the O-I Disclosure Schedule ("Assignment Contracts" and
together with the Three Party Contracts and O-I Agreements, the
"Consent Contracts").
(iv) In the event that O-I is unable to obtain any such
consent, approval or amendment or if any consent, approval or
amendment would result in the Company or its Subsidiaries not
receiving all of the rights with respect to such Three Party
Agreements, O-I Agreements or Assignment Contracts, at or prior to the
Closing Date, O-I and Buyer will enter into a mutually agreeable
arrangement pursuant to which the Company or its Subsidiaries would
(A) obtain with respect to Three Party Agreements the benefits of
bifurcation contemplated by (c) and (i) above and would assume the
obligations under such Three Party Agreements, (B) obtain with respect
to the O-I Agreements and the Assignment Contracts, the benefits and
assume the obligations with respect to such O-I Agreements and
Assignment Contracts, including in each case, as applicable an
agreement between O-I and the Company or its Subsidiaries for
sub-contracting, sub-licensing or sub-leasing to the Company or its
Subsidiaries or its Affiliates, as the case may be, and in all cases
under which O-I or one of its Affiliates, as the case may, would
enforce for the benefit of the Company or its Subsidiaries any and all
rights of O-I or one of its Affiliates against a third party thereto.
(v) O-I shall and shall cause its Affiliates to pay and
remit to the Company or its Subsidiaries as the case may be, without
any further consideration, promptly all monies, rights and other
considerations received in respect of the Company's or its
Subsidiaries' performance of such obligations under the O-I Agreements
and the Assignment Contracts.
(vi) If and when any such consent shall be obtained or such
agreement, license or lease shall otherwise become assignable or able
to be novated, O-I or one of its Affiliates, as the case may be, shall
promptly assign and novate all of its rights and obligations
thereunder to the Company or its Subsidiaries without payment of
further consideration and the Company or its Subsidiaries will assume
such rights and obligations thereunder.
(vii) With respect to any Three Party Agreement that has
not been bifurcated on or prior to the Closing Date, (A) the Company
or its Subsidiaries shall indemnify and hold harmless the Seller
Indemnified Parties (as defined below) from and against all Losses
arising out of or resulting from the Company's or its Subsidiaries'
failure to perform under or breach of such Three Party Agreement and
(B) O-I shall indemnify and hold harmless the Buyer Indemnified
Parties (as defined below) from and against all Losses arising out of
or resulting from O-I's and its Affiliates' failure to perform under
or breach of such Three Party Agreement.
(viii) Each of O-I and Buyer hereby covenants and agrees
that it will at the request of the other party at any time and from
time to time after the date hereof and without further consideration,
do, execute, acknowledge and deliver, or will cause to be done,
executed, acknowledged and delivered, all such further acts, to
accomplish the foregoing with respect to each of the Consent
Contracts.
(d) Seller shall provide to Buyer copies of each acceptance
by the Internal Revenue Service of each duly executed Form 8832 pursuant to
Section 2.13(r) certifying that the Company has made valid elections under
Treasury Regulation 301.7701-3(c) for all of its Subsidiaries electing
disregarded entity status for U.S. income tax purposes.
(e) O-I and Seller shall use their commercially reasonable
best efforts to cause Xxxxx-Illinois Plastic Products de Mexico, S.A. de C.V.
("O-I Mexico") to take all necessary actions pursuant to applicable Law to
perfect and record its right, title and interest in the 6,000 square meters
parcel located at Xx. Xxxxxxxxx Xx. 0 Xxx Xxx Xxxxx Xxxxxxxx, Xxxxxxxxxxxx
Xxxxxx de Mexico CP 54090 and subject of the agreement, dated November 3, 1998,
between O-I Mexico and Vidrieria los Xxxxx, X.X. de C.V.
5.8 Insurance.
(a) Effective on and after the Closing Date, O-I and Seller
shall have no obligation to provide insurance coverage for the Company and any
of its Subsidiaries for occurrences after the Closing Date. After the Closing
Date, the claims administrators listed on Section 5.8(a) of the O-I Disclosure
Schedule and any other third party administrators who administer claims prior
to the Closing Date shall continue to administer for the benefit of the Company
and any of its Subsidiaries, as to occurrences prior to the Closing Date, all
such insurance programs (other than as provided in Section 8.12(b)) in
accordance with the terms and conditions in effect on the date hereof at the
expense of the Company solely with respect to claims relating specifically to
the Company and its Subsidiaries (it being understood that any recovery for any
such claims made under the terms of the applicable insurance programs (other
than as provided in Section 8.12(b)) shall be for the benefit of the Company
and its Subsidiaries and paid to the Company by O-I or its Affiliates promptly
upon the receipt thereof).
(b) Buyer shall use its commercially reasonable best efforts
to obtain (or otherwise satisfy the requirements to obtain such letters of
credit or surety bonds) letters of credit and surety bonds effective on and as
of the Closing Date (including letters of credit collateralizing any such
surety bonds, if necessary) with respect to the letters of credit and surety
bonds set forth in Section 5.8(b) of the O-I Disclosure Schedule.
5.9 Access to Records and Personnel.
(a) Buyer shall, and shall cause its Controlled Affiliates
to, retain the books, records, documents, instruments, accounts, material
correspondence, material writings, evidences of title and other material papers
relating to the Company and the Subsidiaries in their possession (the "Books
and Records") for a period of five years (except Books and Records relating to
Taxes, which shall be retained for seven years) from the Closing Date or for
such longer period as may be required by Law or any applicable court order.
Notwithstanding the foregoing, at Seller's expense, Buyer shall retain (or
provide copies to Seller) for such longer periods any and all Books and Records
that relate to any ongoing litigation, investigation or proceeding as Seller
notifies Buyer of in writing until such time as Seller notified Buyer in
writing of the conclusion of such matter.
(b) To the extent permitted or required by applicable Law,
Buyer shall, and shall cause its Controlled Affiliates to, provide Seller and
its authorized Representatives upon reasonable written request and notice with
reasonable access during normal business hours to such Books and Records, and
to personnel having knowledge of the whereabouts and/or contents of such Books
and Records in connection with the preparation of financial statements, Returns
or the defense of litigation or Tax audits that relates to O-I or any of its
Subsidiaries; provided that any such access will be conducted, at Seller's
expense, at a reasonable time on the premises of Buyer, under the supervision
of the personnel of Buyer and in such a manner as not to interfere unreasonably
with the normal operation of the business of Buyer. Except for the sole
purposes described in the immediately preceding sentence, Seller will hold in
confidence all confidential information identified as such by, and obtained
from, Buyer or any of its Representatives and enter into any customary
confidentiality undertaking provided by Buyer with respect thereto; provided,
however, that information that (i) was in the public domain, (ii) was in fact
known to Seller prior to disclosure by Buyer, its officers, agents,
representatives or employees or (iii) becomes known to Seller from or through a
third party not under an obligation of non-disclosure to the disclosing party,
shall not be deemed to be confidential information.
5.10 Use of Xxxxx-Illinois Name.
(a) Notwithstanding anything in this Agreement to the
contrary, Buyer expressly agrees that Buyer and its Affiliates are not
acquiring ownership of, or any right to use (whether as, or as part of a
trademark, service xxxx, trade name, brand name, domain name, trade dress, logo
or other source indicator) the trademarks "Xxxxx-Illinois," "Xxxxx-Xxxxxxxx,"
"Xxxxx," "O-I," "O-B" or any other trademark, service xxxx, trade name, brand
name, domain name, trade dress, logo or other source indicator that is owned or
used by O-I or any of its Affiliates but is not owned or used by the Company or
any of its Subsidiaries (the "O-I Names"), and any license (whether oral or
written) by Seller to the Company or any of its Subsidiaries to use the O-I
Names shall be terminated as of the Closing Date, subject to use solely for 150
days thereafter in accordance with this Section 5.10 or for historical or
descriptive purposes in a non-trademark manner, or as otherwise required by
applicable Law. Buyer shall use its commercially reasonable best efforts to (i)
apply to change all corporate, trade and other names or registrations that
include any O-I Names to a name that is not the same or confusingly similar
thereto as soon as reasonably practicable but in no event later than 150 days
after the Closing Date (such number of days to be extended for any delay
resulting from acts or omissions by O-I or any of its Affiliates), (ii) remove,
redact or cover any O-I Names from any documents or materials in its possession
or control (other than documents for purely internal distribution or where such
removal, redaction or cover is impracticable) as soon as reasonably practicable
but in no event no later than 150 days after the Closing Date (such number of
days to be extended for any delay resulting from acts or omissions by O-I or
any of its Affiliates), (iii) remove the O-I Names from molds and dies (except
where such removal is impracticable or unduly burdensome) as soon as reasonably
practicable, but in no event later than 30 months after the Closing Date and
(iv) remove the O-I Names from all other equipment affixing the O-I Names to
products (except where such removal is impracticable or unduly burdensome) as
soon as reasonably practicable, but in no event later than 150 days after the
Closing Date (such number of days to be extended for any delay resulting from
acts or omissions by O-I or any of its Affiliates).
(b) Notwithstanding the foregoing, (i) during the two year
period following the Closing Date, the Company and any of its Subsidiaries
shall have the right to sell all inventory in its possession or control as of
the Closing Date that bears the O-I Names and (ii) Buyer and its Affiliates
shall have the non-transferable and non-sublicensable perpetual right to use
any materials or property existing on the Closing Date that bear the O-I Names
where the removal of such name would be impractical (excluding letterhead,
marketing materials or other means of communication with present or prospective
customers that are not unduly burdensome to replace).
(c) Without limitation to Seller's other obligations herein,
Seller and its Affiliates shall use their commercially reasonable best efforts
to cease all use, if any, of the trademark SURSHOT (whether as, or as part of,
a trademark, service xxxx, trade name, brand name, domain name, trade dress,
logo or other source indicator), within 150 days after the Closing Date, except
for historical or descriptive purposes in a non-trademark manner or as
otherwise required by applicable Law.
5.11 Guarantees. Buyer shall use its commercially reasonable
best efforts (which shall not include agreeing to any modifications of the
terms of the underlying obligations) to cause itself or one or more of its
Affiliates to be substituted in all respects for O-I, Seller and any of its
Subsidiaries or Affiliates, effective as of the Closing Date, in respect of all
obligations of O-I, Seller and any such Subsidiaries or Affiliates under each
of the guarantees, indemnities, surety bonds, letters of credit and letters of
comfort obtained by O-I, Seller or any such Subsidiaries or Affiliates for the
benefit of the Company and the Subsidiaries set forth in Section 5.11 of the
O-I Disclosure Schedule (the "Guarantees"). If Buyer is unable to effect such a
substitution with respect to any such Guaranty after using its commercially
reasonable best efforts to do so, then Buyer shall obtain letters of credit, on
terms and from financial institutions reasonably satisfactory to Seller, with
respect to the obligations covered by each of the Guarantees for which Buyer
does not effect such substitution.
5.12 No Debt. Except as set forth on Section 5.12 of the O-I
Disclosure Schedule or as may be otherwise agreed by Buyer and Seller, O-I
shall cause the Company and its Subsidiaries to have no Indebtedness,
liabilities or any other obligations to pay money (including any intercompany
or intracompany Indebtedness incurred by any party in connection with the
Corporate Restructuring) other than trade payables or other similar current
liabilities (as determined in accordance with GAAP and on a basis consistent
with the preparation of the Historical Financial Statements) incurred in the
ordinary course of business and consistent with past practice, on or prior to
the Closing Date.
5.13 Transfer of Assets.
(a) Prior to the Closing Date, Seller shall cause the Company
and each of its Subsidiaries to, convey, assign, transfer and deliver to O-I or
any of its Affiliates (other than the Company and any of its Subsidiaries) all
of the Company's or any of its Subsidiaries', as applicable, right, title and
interest in and to the assets, rights, properties, claims and contracts, of
every kind, nature, character and description, tangible and intangible, real,
personal or mixed, set forth on Section 5.13(a) of the O-I Disclosure Schedule
as such schedule shall be amended by the Parties from time to time after the
date hereof and prior to the Closing Date following Buyer's review and
inspection of the assets at the relevant facilities (collectively, the
"Retained Assets").
(b) Prior to the Closing Date, O-I shall, and shall cause its
Affiliates (other than the Company and any of its Subsidiaries) to, convey,
assign, transfer and deliver to the Company or any of its Subsidiaries all of
O-I's or its Affiliates', as applicable, right, title and interest in and to
its assets, rights, properties, claims and contracts, of every kind, nature,
character and description, tangible and intangible, real, personal or mixed,
set forth on Section 5.13(b) of the O-I Disclosure Schedule as such schedule
shall be amended by the Parties from time to time after the date hereof and
prior to the Closing Date following Buyer's review and inspection of the assets
at the relevant facilities (collectively, and including the Specified
Subsidiaries, the "Contributed Assets").
(c) Set forth on Section 5.13(c) of the O-I Disclosure
Schedule is an accurate description in reasonable detail of the corporate and
other steps required to effectuate the Corporate Restructuring.
5.14 Non-Competition.
[This section has been omitted and filed on a confidential
basis with the Commission.]
5.15 Confidentiality. The Parties shall treat the contents of
this Agreement as confidential and shall refrain from disclosing this Agreement
and its contents, in whole or in part, to any third party, except as required
by any applicable Laws, in which case the disclosing Party shall give prior
written notice to the other Party; provided, however, that Buyer may disclose
this Agreement and its contents to any prospective lender or investor in
connection with the Financing. O-I and Seller acknowledge that Buyer has
legitimate and continuing interests in the protection of confidential
information relating to the Company, its Subsidiaries and the Business. Except
with respect to matters covered under the Intellectual Property Agreements, for
a period of five years following the Closing, O-I and Seller will not, and
shall cause their Affiliates not to, disclose, furnish or make accessible to
any Person or use to its benefit or the benefit of any other Person any
confidential information of the Company, its Subsidiaries or the Business,
except to the extent that such information (i) thereafter becomes lawfully
obtainable from other sources not known to O-I or any of its Affiliates or
Representatives to be bound by any confidentiality or fiduciary duty to Buyer
or any of its Affiliates or (ii) is required to be disclosed in any document to
be filed with any Governmental Authority or by applicable Law. Following the
Closing, neither Buyer nor any of its Affiliates or Representatives will be
bound by the Confidentiality Agreement.
5.16 No Third Party Discussions. From and after the date of
this Agreement until the first to occur of the Closing or the termination of
this Agreement, none of O-I, any of its Affiliates or any officer, director,
employee, representative or agent of O-I or any of its Affiliates, will,
directly or indirectly solicit, encourage or initiate any inquiry, offer or
proposal from, or engage in any discussions or negotiations with, or provide
any non-public information to, any Person, other than Buyer and its Affiliates,
and their respective employees, representatives and agents, concerning any
purchase, transfer or other disposition of any Capital Stock of the Company or
any of its Subsidiaries, any merger, consolidation, business combination or
other similar transaction involving the Company or any of its Subsidiaries, any
sale of all or any part of the assets of the Company or any of its Subsidiaries
or any similar transaction involving the Company or any of its Subsidiaries,
the Business or any properties or assets thereof (such transactions,
"Acquisition Transactions") nor shall O-I or any of its Affiliates accept any
proposal with respect to any Acquisition Transaction. From and after the date
hereof and until the earlier of the Closing Date or the termination of this
Agreement pursuant to Section 10.2, if O-I or any of its Affiliates or
Representatives shall receive any proposal with respect to any Acquisition
Transaction, O-I shall promptly communicate (but in no event later than 24
hours) to Buyer the material terms of such proposal.
5.17 Remittance of Accounts Receivable. O-I agrees that it
shall, and shall cause its Affiliates to, promptly deliver on a daily basis to
Buyer any Cash or other property received directly or indirectly by O-I or any
of its Affiliates after the Closing Date with respect to the accounts
receivable of the Company, any of its Subsidiaries or the Business; provided
that O-I or its Affiliates may set-off against such accounts receivable any
accounts payable of the Company and its Subsidiaries actually paid by O-I after
the Closing Date, if any, at the time such accounts receivable are due to Buyer
under this Section 5.17.
5.18 Notice of Developments. From time to time prior to the
Closing, O-I and Seller, on the one hand, and Buyer, on the other hand, shall
(a) promptly supplement and amend the O-I Disclosure Schedule or Buyer
Disclosure Schedule, as the case may be, with respect to any matter that, if
existing or occurring at or prior to the date of this Agreement, would have
been required to be set forth or described in the O-I Disclosure Schedule or
Buyer Disclosure Schedule, as the case may be, or that is necessary to correct
any information in the O-I Disclosure Schedule or Buyer Disclosure Schedule, as
the case may be, that has been rendered inaccurate by an event occurring after
the date hereof; provided, however, if such supplements, amendments or notices
by Buyer, on the one hand, and O-I and Seller, on the other hand, individually
or in the aggregate, are material, such supplements, amendments or notices
shall not be deemed to cure any breach of any representation or warranty made
in this Agreement or the Additional Agreements for purposes of determining
satisfaction of the conditions set forth in Article VI or effect, limit or
modify in any manner a Party's indemnification rights under this Agreement or
termination rights under Section 10.2; provided, further, if such supplements,
amendments or notices by Buyer, on the one hand, and O-I and Seller, on the
other hand, individually and in the aggregate, are immaterial, such
supplements, amendments or notices shall be deemed to have been disclosed as of
the date hereof for purposes of determining satisfaction of the conditions set
forth in Article VI and determining a Party's indemnification rights under this
Agreement or termination rights under Section 10.2.
5.19 Financing-Related Cooperation.
(a) O-I agrees to provide, and shall cause Seller, the
Company and each of its Subsidiaries and its and their respective
Representatives and other advisors to provide all cooperation reasonably
necessary in connection with the arrangement of any Financing (including any
Alternative Financing), including:
(i) in connection with Buyer's preparation of bank books,
offering memoranda, registration statements or other appropriate
disclosure documents, participation in due diligence sessions, the
delivery of audited, unaudited historical, interim and pro forma
financial statements and projections of the Company, its Subsidiaries
and Affiliates giving effect to the Corporate Restructuring and by the
Additional Agreements;
(ii) as may be reasonably necessary for the Buyer to create
and maintain a valid and perfected security interest in the Sold
Equipment for the benefit of the Lenders and to enable Buyer and the
Lenders to exercise and enforce their rights and remedies with respect
to the Sold Equipment; provided, however, that nothing in this Section
5.19(a)(ii) shall require O-I, Seller or the Company or any of its
Subsidiaries to take any action that would violate the Second Amended
and Restated Secured Credit Agreement dated March 15, 2004 and any
related collateral documents; and
(iii) taking such other actions related to such Financing
or Alternative Financing as are reasonably required by Buyer.
(b) At the sole cost and expense of Buyer, O-I shall instruct
and shall use its commercially reasonable best efforts to cause Ernst & Young
to provide and allow the filing of such consents and other documentation as may
be required or customary for the inclusion of any financial statements or
information of the Company and the Business prepared at the request of Buyer or
Seller (or any of their respective Affiliates) so as to allow for the use of
such financial statements or information in public or private financing
documents or other documents filed with the U.S. Securities and Exchange
Commission (or any successor agency thereof), whether before or after the
Closing. In addition, Seller and the Company shall obtain "comfort" letters and
updates thereof from Ernst & Young, addressed to each of the underwriters in
any underwritten offering, such letters to be in customary form and covering
the matters of the type customarily covered in "comfort" letters in connection
with offerings of securities and such other matters as are reasonably requested
by the underwriters.
5.20 New Jersey Industrial Site Recovery Act.
(a) To the extent that the New Jersey Industrial Site
Recovery Act, N.J.S.A. 13:1K-6, et seq. ("ISRA") is applicable to one or more
of the New Jersey Properties, prior to the Closing Seller and/or O-I shall
cause the Company to take all necessary actions to comply with the requirements
of ISRA with respect to the transactions contemplated by this Agreement,
including submitting all necessary forms and conducting any required
investigation and remediation (and Seller and O-I shall bear all of the costs
and expenses associated with such compliance). Following the Closing, Buyer
shall cause the Company to cooperate with Seller and O-I with respect to such
compliance, including (A) providing Seller, O-I and their representatives and
consultants with reasonable access after the Closing Date to the New Jersey
Properties in order to undertake actions required pursuant to ISRA and (B)
executing any ISRA forms requiring Buyer's or, after the Closing Date, the
Company's, signature. Seller and O-I shall provide the Company with reasonable
advance notice prior to entering the New Jersey Properties and the Company
shall have the right to monitor Seller's and O-I's representatives and
consultants in connection with any work performed at the New Jersey Properties.
For purposes of this Agreement, the "New Jersey Properties" shall mean any Real
Properties located in New Jersey.
(b) Seller and O-I shall provide Buyer (and after the
Closing, the Company) with advance copies of all correspondence and documents
to be filed in connection with ISRA and shall incorporate all reasonable
comments timely provided by Buyer into such filings. Seller and O-I shall
ensure that any of the activities that they conduct pursuant to ISRA will not
unreasonably interfere with the Company's operations at the New Jersey
Properties. To the extent there is a dispute with respect to an action that
Buyer believes will interfere with its operations, the Company shall have the
right to petition the New Jersey Department of Environmental Protection (the
"NJDEP") to modify such requirement. In addition, notwithstanding anything else
contained herein, if the Company is unable to obtain satisfaction with respect
to such matter, Buyer reserves all of its legal rights with respect to such
matter.
5.21 Delivery of Financial Information.
(a) Prior to the Closing, within 15 Business Days from the
last day of each calendar month, O-I and Seller shall deliver to Buyer a pro
forma unaudited combined balance sheet of the Business as of such last day and
the related pro forma combined statement of operations for the calendar month
ended on such last day (together with the notes thereto, the "Monthly Unaudited
Pro Forma Financial Statements") and a schedule setting forth reconciliations
from EBIT to EBITDA, both as derived from the Monthly Unaudited Pro Forma
Financial Statements to adjusted EBIT and adjusted EBITDA before corporate
allocations, by application of the Adjustments, accompanied by a certificate of
a responsible officer of O-I representing and warranting (on behalf of O-I),
that such balance sheets and related statement of operations (i) have been
prepared from, and in accordance with and accurately reflect the Books and
Records of the Company and each of its Subsidiaries and Affiliates, (ii) have
been prepared in accordance with GAAP applied on a consistent basis throughout
the periods covered thereby, except as may be indicated in the notes thereto
and (iii) present fairly in all material respects the pro forma combined
financial position and pro forma consolidated results of operations of the
Business as of the last day of and for such calendar month, after giving effect
to the Corporate Restructuring.
(b) As soon as practicable following the date hereof but in
no event later than August 1, 2004, O-I and Seller shall deliver to Buyer:
(i) an unaudited combined balance sheet of the
Xxxxx-Illinois Plastic Container Business as of June 30, 2003 and June
30, 2004 and the related unaudited combined statements of results of
operations, cash flows and net parent investment for the six month
periods ended June 30, 2003 and June 30, 2004 (together with the notes
thereto, the "June Unaudited Financial Statements");
(ii) a pro forma unaudited consolidated balance sheet of
the Business as of June 30, 2004 and the related pro forma unaudited
consolidated statement of operations for the six months ended June 30,
2003 and June 30, 2004 (together with the notes thereto, the "June
Unaudited Pro Forma Financial Statements");
(iii) a schedule setting forth reconciliations from EBIT
and EBITDA, both as derived from the June Unaudited Pro Forma
Financial Statements to adjusted EBIT and adjusted EBITDA before
corporate allocations, by application of the Adjustments (the "June
Adjusted Unaudited Pro Forma Financial Statements"); and
(iv) at Buyer's expense, the June Unaudited Financial
Statements will be reviewed by O-I's independent auditors pursuant to
Statement of Auditing Standards ("SAS 100").
(c) In the event the Closing Date shall not have occurred by
November 14, 2004, O-I and Seller shall deliver to Buyer, not later than
November 14, 2004:
(i) an unaudited combined balance sheet of the
Xxxxx-Illinois Plastic Container Business as of September 30, 2003 and
September 30, 2004 and the related unaudited combined statements of
results of operations, cash flows and net parent investment for the
nine month periods ended September 30, 2003 and September 30, 2004
(together with the notes thereto, the "September Unaudited Financial
Statements");
(ii) a pro forma unaudited consolidated balance sheet of
the Business as of September 30, 2004 and the related pro forma
unaudited consolidated statement of operations for the nine months
ended September 30, 2003 and September 30, 2004 (together with the
notes thereto, the "September Unaudited Pro Forma Financial
Statements"); and
(iii) a schedule setting forth reconciliations from EBIT
and EBITDA, both as derived from the September Unaudited Pro Forma
Financial Statements to adjusted EBIT and adjusted EBITDA before
corporate allocations, by application of the Adjustments (the
"September Adjusted Unaudited Pro Forma Financial Statements").
(d) In the event that the Closing shall not have occurred by
February 14, 2005, O-I and Seller shall deliver to Buyer, not later than
February 14, 2004:
(i) an audited combined balance sheet of the Xxxxx-Illinois
Plastic Container Business as of December 31, 2003 and December 31,
2004 and the related combined statements of results of operations,
cash flows and statement of net parent investment for each of the
three years in the period ended December 31, 2004 and related report
of the independent auditors (together with the notes thereto, the
"2004 Audited Financial Statements");
(ii) a pro forma unaudited consolidated balance sheet of
the Business as of December 31, 2004 and the related pro forma
unaudited consolidated statement of operations for the years then
ended December 31, 2003 and December 31, 2004 (together with the notes
thereto, the "2004 Unaudited Pro Forma Financial Statements"); and
(iii) a schedule setting forth reconciliations from EBIT
and EBITDA, both as derived from the 2004 Unaudited Pro Forma
Financial Statements to adjusted EBIT and adjusted EBITDA before
corporate allocations, by application of the Adjustments (the "2004
Adjusted Unaudited Pro Forma Financial Statements").
(e) In the event the Closing Date shall not have occurred by
May 9, 2005, O-I and Seller shall deliver to Buyer, not later than May 9, 2005:
(i) an unaudited combined balance sheet of the
Xxxxx-Illinois Plastic Container Business as of March 31, 2004 and
March 31, 2005 and the related unaudited combined statements of
results of operations, cash flows and net parent investment for the
three month periods ended March 31, 2004 and March 31, 2005 (together
with the notes thereto, the "March Unaudited Financial Statements");
(ii) a pro forma unaudited consolidated balance sheet of
the Business as of March 31, 2005 and the related pro forma unaudited
consolidated statements of operations for the three months ended March
31, 2004 and March 31, 2005 (together with the notes thereto, the
"March Unaudited Pro Forma Financial Statements"); and
(iii) a schedule setting forth reconciliations from EBIT
and EBITDA, both as derived from the March Unaudited Pro Forma
Financial Statements to adjusted EBIT and adjusted EBITDA before
corporate allocations, by application of the Adjustments (the "2004
March Adjusted Unaudited Pro Forma Financial Statements").
(f) If requested by Buyer at or prior to 30 days prior to the
end of the relevant period to which the financial statements relate and at
Buyer's expense, any or all of the September Unaudited Financial Statements and
the March Unaudited Financial Statements will be reviewed by O-I's independent
auditors pursuant to SAS 100 and such SAS 100 review will be delivered to Buyer
at the time specified in this Section 5.21 for delivery of the applicable
financial statements.
(g) In the event that the Closing Date shall not have
occurred by November 14, 2004, as promptly as practicable but in no event later
than November 30, 2004, O-I shall cause Seller to deliver to Buyer a budget and
capital plan for the Business for 2005. Buyer shall have the right to inspect
such budget and capital plan for compliance with Seller's and O-I's commitment
to operate the Business in the ordinary course of business consistent with past
practice (such budget and capital plan as inspected by Buyer, the "2005 Plan").
5.22 Confidentiality Undertakings. Effective as of the
Closing, the O-I Parties shall, and shall cause their respective Affiliates to,
assign and transfer to Buyer all right, title and interest (but not the
obligations) of the O-I Parties and their respective Affiliates in and to any
rights under the confidentiality undertakings entered into by an O-I Party in
connection with the sales process relating to the Company; provided, however,
if any such undertaking is not assignable, Buyer will have the right to cause
the O-I Parties to exercise its rights and remedies under such undertakings as
directed by Buyer.
ARTICLE VI
CONDITIONS PRECEDENT
6.1 Conditions Precedent to Obligations of Parties. The
respective obligations of each of the Parties are subject to the satisfaction
or waiver, at or prior to the Closing Date, of each of the following
conditions:
(a) No Injunction. At the Closing Date, there shall be no
injunction, restraining order or decree of any nature of any court or
Governmental Authority of competent jurisdiction that is in effect that
restrains or prohibits the consummation of the Purchase.
(b) Regulatory Authorizations. (i) The applicable waiting
periods specified under the HSR Act with respect to the transactions
contemplated by this Agreement and the Additional Agreements shall have lapsed
or been terminated and (ii) all clearances, approvals or confirmations, if any,
required by the execution and delivery of this Agreement and the Additional
Agreements and the transactions contemplated hereby and thereby pursuant to the
applicable requirements of foreign Competition Laws shall have been obtained,
except if any such clearance, approval or confirmation is not required to be
obtained prior to Closing and is not reasonably likely to impose on Buyer or
any of its Affiliates, or require Buyer or any of its Affiliates to accept, a
Burdensome Condition.
6.2 Conditions Precedent to Obligations of Buyer. The
obligation of Buyer to consummate the transactions contemplated by this
Agreement and the Additional Agreements is subject to the satisfaction or
waiver by Buyer at or prior to the Closing Date of each of the following
additional conditions:
(a) Accuracy of Representations and Warranties. The
representations and warranties of Seller and O-I contained in this Agreement
and the Additional Agreements that are not qualified as to materiality or
Material Adverse Effect or words of similar import shall be true and correct in
all material respects as of the date hereof and as of Closing Date as if made
at and as of such date and the representations and warranties of Seller and O-I
contained in this Agreement and the Additional Agreements that are qualified as
to materiality or Material Adverse Effect or words of similar import shall be
true and correct in all respects as of the date hereof and as of the Closing
Date as if made at and as of such date (except those representations and
warranties that address matters only as of a particular date or only with
respect to a specific period of time, which need only be true and correct (or
true and correct in all material respects, as applicable) as of such date or
with respect to such period).
(b) Performance of Agreement. Each of Seller and O-I shall
have performed in all material respects all obligations and agreements, and
complied in all material respects with all covenants and conditions, contained
in this Agreement and the Additional Agreements to be performed or complied
with by it prior to or at the Closing Date.
(c) Certificate. Buyer shall have received a certificate of
each of Seller and O-I, dated the Closing Date, duly executed on behalf of each
of Seller and O-I, respectively, by an authorized officer, to the effect that
the conditions specified in paragraphs (a) and (b) as applicable to it above
have been satisfied.
(d) Additional Agreements. O-I shall have executed and
delivered to Buyer the Additional Agreements.
(e) FIRPTA. Buyer shall have received from Seller a duly
executed certificate of non-foreign status in the form and manner that complies
with Section 1445 of the Code and the Treasury Regulations promulgated
thereunder (a "FIRPTA Certificate") certifying that the transactions
contemplated by this Agreement are exempt from withholding; provided, however,
that if Seller fails to deliver a FIRPTA Certificate and Buyer elects to
proceed with the Closing, Buyer shall withhold from the Purchase Price such
amounts as are required to be withheld pursuant to Section 1445 of the Code.
(f) Third Party Consents. All consents and approvals (or in
lieu thereof, waivers) (i) set forth on Section 6.2(f) of the O-I Disclosure
Schedule and (ii) set forth in Sections 5.7(c)(ii) and 5.7(c)(iii) of the O-I
Disclosure Schedule the absence of which, in the aggregate, would reasonably be
expected to have a Material Adverse Effect, (A) shall have been obtained, and a
true, correct and complete copy of each consent shall have been delivered to
Buyer at or prior to the Closing, (B) shall not be subject to the satisfaction
of any condition that has not been satisfied or waived and (C) shall be in full
force and effect.
(g) Absence of Material Adverse Change. There shall not have
occurred after the date hereof any fact, event, change or development that,
individually or in the aggregate, has had or could reasonably be expected to
have a Material Adverse Effect.
(h) Financing Condition. Buyer shall have completed all
arrangements necessary to obtain the Financing from such sources and in such
amounts and on such terms and conditions as set forth in the Commitment Letters
or similar letters relating to any Alternative Financing and Buyer shall have
received the cash proceeds from the Financing.
(i) ISRA. If ISRA is applicable to one or more of the New
Jersey Properties, with respect to each such property, Seller, O-I and/or the
Company shall have (i) delivered to Buyer a no further action letter, (ii)
obtained and delivered to Buyer an approval of a Remedial Action Workplan (as
such term is defined by ISRA), (iii) entered into a Remediation Agreement (as
such term is defined by ISRA) with the NJDEP that does not impose any
obligation or liability on Buyer, the Company or any of its Subsidiaries other
than as may relate to reasonable access to the New Jersey Properties or the
execution and/or filing of any ISRA forms required after Closing or (iv)
obtained such other approval as authorized by ISRA to allow for the Closing of
the transactions contemplated by this Agreement and the Additional Agreements.
(j) Repayment of Indebtedness; Release of Liens. Other than
Indebtedness set forth on Section 5.12 of the O-I Disclosure Schedule or as may
be otherwise agreed by Buyer and Seller, all existing Indebtedness shall have
been redeemed or repaid, any Liens that existed in connection therewith have
been released and discharged and O-I and Seller shall have delivered to Buyer
evidence satisfactory to Buyer of the foregoing.
6.3 Conditions Precedent to the Obligations of Seller. The
obligation of Seller to consummate the transactions contemplated by this
Agreement is subject to the satisfaction or waiver at or prior to the Closing
Date of each of the following additional conditions:
(a) Accuracy of Representations and Warranties. The
representations and warranties of Buyer contained in this Agreement that are
not qualified as to materiality or words of similar import shall be true and
correct in all material respects as of the date hereof and as of Closing Date
as if made at and as of such date and the representations and warranties of
Buyer contained in this Agreement that are qualified as to materiality or words
of similar import shall be true and correct in all respects as of the date
hereof and as of the Closing Date as if made at and as of such date (except
those representations and warranties that address matters only as of a
particular date or only with respect to a specific period of time, which need
only be true and correct (or true and correct in all material respects, as
applicable) as of such date or with respect to such period).
(b) Performance of Agreement. Buyer shall have performed in
all material respects all obligations and agreements, and complied in all
material respects with all covenants and conditions, contained in this
Agreement and the Additional Agreements to be performed or complied with by it
prior to or at the Closing Date.
(c) Certificate. Seller shall have received a certificate of
Buyer dated the Closing Date, duly executed on behalf of Buyer by its President
or any Vice President, to the effect that the conditions specified in Sections
6.3(a) and 6.3(b) have been satisfied.
(d) Additional Agreements. Buyer shall have executed and
delivered to O-I the Additional Agreements.
ARTICLE VII
TAXES
7.1 Termination of Tax Sharing Agreements. O-I and Seller
shall terminate, or cause to be terminated, all Tax allocation agreements or
Tax sharing agreements among O-I, Seller, the Company and/or any Subsidiaries
of the Company as of the Closing Date, and shall ensure that such agreements
are of no further force or effect as to any of the Company and its Subsidiaries
on and after the Closing Date and that there shall be no liabilities or
obligations of the Company or any of its Subsidiaries under any such agreements
as of such date.
7.2 Seller's Returns and Taxes.
(a) Except as provided for in this Section 7.2(a), Seller
shall timely prepare and file (or cause to be timely prepared and filed) all
income Tax Returns required to be filed by or on behalf of the Company and any
of its Subsidiaries for taxable periods that end on or before the Closing Date
and all other Returns of the Company and any of its Subsidiaries required to be
filed on or before the Closing Date ("Seller's Returns"). If any Seller's
Returns are due after the Closing and Seller is not authorized by Law to file
such Seller's Returns, Seller shall submit drafts of such Seller's Returns to
Buyer for its review and approval at least 30 days prior to the due date of any
such Seller's Return, which approval shall not be unreasonably withheld or
delayed, and Buyer shall timely file such Seller's Returns due after the
Closing Date with the appropriate Taxing authorities. All Seller's Returns
shall be prepared and filed in a manner that is consistent with the prior
practice of the Company and any of its Subsidiaries, except as required by
applicable Law. Seller shall timely pay (or cause to be paid) all Taxes due or
claimed to be due with respect to the Company and any of its Subsidiaries with
respect to Taxable periods covered by Seller's Returns by any Governmental
Authority, including all Taxes shown as due and payable on Seller's Returns and
all Taxes that arise or are due as a result of the transfer of assets described
in Section 5.14; provided, however, that if any Seller's Return is due after
the Closing and is to be filed by Buyer, Seller shall pay to Buyer, in
immediately available funds, all Taxes due and payable in respect of such
Returns no later than three days prior to the due date of such Return.
(b) Buyer and Seller agree that to the extent that the
Company and/or any of its Subsidiaries is permitted or required under any
applicable Tax Law to treat the Closing Date as the last day of a taxable
period, Buyer and Seller shall treat (and cause the Company and/or any of its
Subsidiaries, as the case may be, to treat) the Closing Date as the last day of
a taxable period.
7.3 Buyer's Returns and Taxes.
(a) Buyer shall timely prepare and file (or cause to be
timely prepared and filed) all Returns of the Company and each of its
Subsidiaries other than Seller's Returns ("Buyer's Returns"). Subject to
Sections 7.3(b) and 7.5, Buyer shall timely pay or cause to be paid all Taxes
relating to Buyer's Returns ("Buyer's Taxes").
(b) Buyer shall deliver to Seller for its review and
approval, which approval shall not be unreasonably withheld, a true, correct
and complete copy of each Buyer's Return that includes a Taxable period that
(i) ends on or before the Closing Date or (ii) that begins on or before and
ends after the Closing Date (each, a "Straddle Period"), at least 30 days prior
to the date such Return is to be filed. Each Buyer's Return that involves a
Straddle Period shall be accompanied by an allocation between the pre-Closing
and post-Closing portions of the Straddle Period (in a manner determined
pursuant to Section 7.3(c)) of any Taxes shown to be due on such Return. Within
10 days after the date of receipt by Seller of any Buyer's Return that is for a
period ending on or before the Closing Date or a Straddle Period, Seller may
deliver to Buyer a written request for changes to such Return and/or allocation
with respect to a Straddle Period. If Buyer and Seller are unable to resolve
their differences within 10 days after Buyer has received Seller's written
request for changes to such Return and/or allocation, then any disputed issues
shall be immediately submitted to the Neutral Auditor selected pursuant to
Section 1.3(d) to resolve in a final binding manner prior to the due date for
such Return. The fees and expenses of the Neutral Auditor shall be shared
equally between Seller and Buyer. No later than three days prior to the filing
of any Buyer's Return that is for a period ending on or before the Closing Date
or a Straddle Period, Seller shall pay to Buyer, in immediately available
funds, (i) in the case of a Buyer's Return that is for a period that ends on or
before the Closing Date, the entire amount of unpaid Taxes shown to be due on
such Buyer's Return, and (ii) in the case of a Buyer's Return that is for a
Straddle Period, the unpaid amount of Seller's share of the Tax liability for
the Straddle Period determined under this Section 7.3.
(c) In the case of any Straddle Period, the amount of Taxes
allocable to the portion of the Straddle Period ending on the Closing Date
shall be deemed to be (i) in the case of Taxes imposed on a periodic basis
(such as real or personal property Taxes), the amount of such Taxes for the
entire period (or, in the case of such Taxes determined on an arrears basis,
the amount of such Taxes for the immediately preceding period) multiplied by a
fraction, the numerator of which is the number of calendar days in the Straddle
Period ending on and including the Closing Date and the denominator of which is
the number of calendar days in the entire relevant Straddle Period and (ii) in
the case of Taxes not described in clause (i) above (such as franchise Taxes,
Taxes that are based upon or related to income or receipts, based upon
occupancy or imposed in connection with any sale or other transfer or
assignment of property (real or personal, tangible or intangible)), the amount
that would be payable if the taxable year or period ended on the Closing Date.
7.4 Tax Cooperation.
(a) Buyer and O-I shall, and shall each cause its
Subsidiaries and Controlled Affiliates to, provide to the other Party such
cooperation and information (including access to Books and Records), as and to
the extent reasonably requested, in connection with the filing of any Return,
amended Return or claim for refund, determining liability for Taxes or a right
to refund of Taxes, or in conducting any audit, litigation or other proceeding
with respect to Taxes, and Seller will reasonably cooperate with Buyer in
Buyer's understanding of the nature and magnitude of any Tax liabilities
incurred in connection with the Corporate Restructuring.
(b) Prior to the Closing Date, Seller shall develop a plan
(the "Plan") to and shall cause the transfer of the ownership interests of
Continental PET Holdings PTY, Ltd. to an Affiliate of Seller (other than the
Company or any of its Subsidiaries) (the "Australian Restructuring"). Prior to
execution of the Plan, Seller shall provide the Plan to Buyer. To the extent
that the Plan is different from the steps set forth in Section 7.4(b) of the
O-I Disclosure Schedule, Buyer shall have the right to review and approve the
Plan which approval shall not be unreasonably withheld or delayed.
Notwithstanding anything to the contrary in this Agreement, Seller shall be
responsible for all Losses (whether related to Taxes or otherwise) resulting
from or attributable to the Australian Restructuring. Seller shall have the
right, but not the obligation, to cause the transfer of the ownership interests
of OI Australia Inc., ACI America Holdings, Continental PET Technologies Inc.
and/or ACI Ventures to Seller or any of Seller's Affiliates in order to achieve
the Australian Restructuring. To the extent necessary as a result of the
Australian Restructuring, Buyer shall have the right to separately purchase the
stock of any of the foregoing entities and the Parties shall agree as to the
amount of the Purchase Price to be allocated to such purchase.
(c) Without limiting the generality of the foregoing and
except as provided in Section 7.4 (b) with respect to the Australian
Restructuring, Seller and Buyer shall reasonably cooperate with each other
during the period between the date hereof and the Closing Date with respect to
Tax planning relating to intercompany debt, foreign subsidiary structuring,
mutually acceptable changes to the Corporate Restructuring, and other similar
planning; provided, however, that for the avoidance of doubt, none of Seller,
any O-I Party or Buyer, as applicable, shall be required to take any action
under this Section 7.4(c) if Seller reasonably believes that such action could
cause Seller to incur material incremental Taxes in any Pre-Closing Period or
could otherwise cause Seller or Buyer, as applicable, to incur material
incremental costs or expenses.
(d) Until the expiration of the applicable statute of
limitations (taking into account all extensions thereof) with respect to any
Returns filed or required to be filed covering all Pre-Closing Periods (as
defined below), Seller or its Affiliates shall retain all Tax work papers and
related materials in its possession and under its control that were used in the
preparation of any Returns. Seller will notify Buyer 60 days prior to disposing
of any Tax records relating to Pre-Closing Periods and will deliver to Buyer
any such records requested by Buyer.
7.5 Tax Indemnification.
(a) Seller and O-I, jointly and severally, shall from time to
time defend, indemnify and hold Buyer Indemnified Parties harmless from and
against, and shall reimburse Buyer for, any and all Losses arising out of,
based upon or relating or attributable to (without duplication):
(i) all Taxes imposed on the Company and any of its
Subsidiaries under section 1.1502-6 of the Treasury Regulations
promulgated under the Code (and corresponding provisions of state,
local or foreign Law) as a result of being a member of any federal,
state, local or foreign consolidated, unitary, combined or similar
group for any taxable period ending on or before, or that includes,
the Closing Date;
(ii) all Taxes imposed on the Company and any of its
Subsidiaries relating or attributable to taxable periods ending on or
before the Closing Date ("Pre-Closing Periods") and, with respect to
any Straddle Period, the portion of such Straddle Period deemed to end
on and include the Closing Date (in the manner determined pursuant to
Section 7.3(c)); provided, however, that the indemnity provided under
this Section 7.5(ii) shall not cover Tax liabilities resulting from
any transaction of Buyer or any of its Affiliates not in the ordinary
course of business (other than the transactions contemplated
hereunder) that occurs on the Closing Date but after the Closing (a
"Buyer Tax Act"); and
(iii) all Taxes that arise as a result of the Corporate
Restructuring and the Australian Restructuring.
(b) Buyer shall indemnify and hold harmless Seller from and
against any (i) Taxes attributable or apportioned to the post-Closing period of
any Straddle Period (in the manner determined pursuant to Section 7.3(c)), (ii)
Taxes resulting from a Buyer Tax Act and (iii) any Foreign Subsidiary Purchase
Incremental Taxes.
(c) All payments made by O-I, Seller or Buyer, as the case
may be, to or for the benefit of the other Party or its Affiliates pursuant to
this Article VII shall be treated as adjustments to the Purchase Price for Tax
purposes, unless otherwise required by applicable Law. Except as provided in
this Article VII, any amounts owed by any Party to any other Party under this
Article VII shall be paid in cash in immediately available funds within five
days notice from such other Party.
7.6 Contests; Refunds.
(a) In the event that Buyer, the Company or any of its
Subsidiaries receives written notice of any pending or threatened audit,
examination, claim settlement, proposed adjustment, deficiency, assessment,
lawsuit or similar or related matter with respect to Taxes ("Tax Claim") that
could affect Seller (or any of its Affiliates), or if Seller (or any of its
Affiliates) receives notice of any Tax Claim that could affect Buyer (or any of
its Affiliates), the Party receiving notice shall provide written notification
of such Tax Claim to the potentially affected Party within 10 days thereof. The
failure of any Party to give such notice shall not impair that Party's rights
under this Agreement or under the Additional Agreements except to the extent
that the other Party demonstrates that it has been materially damaged by such
failure.
(b) Each of Seller and Buyer (as applicable, the "Controlling
Party") shall have the right to control the conduct of any Tax Claim relating
to or with respect to those Returns that its is required to prepare and file
pursuant to Sections 7.2 and 7.3; provided that in the event that any Tax Claim
could affect the Tax liability of the other Party (the "Affected Party"), the
Controlling Party shall (i) give the Affected Party written notice of such Tax
Claim, (ii) permit the Affected Party to participate in the resolution of such
Tax Claim to the extent the adjustment might affect the Tax liability of the
Affected Party and (iii) not settle or otherwise compromise such Tax Claim
without the prior written consent of the Affected Party, which consent shall
not be unreasonably withheld. Seller and Buyer each shall be entitled to retain
for its own account any refunds of Taxes attributable to those taxable periods
for which it is required to indemnify the other pursuant to Section 7.5 and
shall pay to the other the amount of any refund to which the other is entitled
within 15 days after the receipt of such refund; provided, however, that Seller
shall not be entitled to any refund of the Company or any of its Subsidiaries
relating to a carryback of a Tax attribute relating to any period ending after
the Closing Date; provided, further, that any refund relating to a Straddle
Period shall be apportioned in a manner consistent with the principles set
forth in Section 7.3(c).
7.7 Transfer Taxes. All Transfer Taxes arising out of or in
connection with the transactions effected pursuant to this Agreement and the
Additional Agreements (other than the Corporate Restructuring and all
transactions incidental thereto) shall be paid by the Party primarily liable
(or, where both Parties are primarily liable, 50 percent by the Buyer and 50
percent by the Seller) for such Transfer Tax under applicable Law. Seller and
Buyer shall reasonably cooperate to minimize any Transfer Tax arising from any
of the transactions contemplated by this Agreement, and, as required, shall
cooperate in order to properly execute, deliver and file all necessary
documentation and Returns with respect to such Transfer Taxes. For purposes of
this Agreement, "Transfer Taxes" shall mean transfer, real property transfer,
documentary, sales, use, registration, recording, documentary, stamp, stock
transfer and other similar Taxes and fees (including any penalties, interest,
fines, fees, additions to Tax or additional amounts with respect thereto).
7.8 Conflicts; Survival. The obligations of the Parties
hereto set forth in this Article VII shall (a) be unconditional and absolute
and shall be the sole and exclusive remedy for any claim in respect of Taxes,
except for the breach of representations and warranties set forth in Section
2.13, which shall be governed by Section 9.1 and (b) remain in full force and
effect until six months following the expiration of the applicable statute of
limitations.
ARTICLE VIII
LABOR MATTERS,
EMPLOYEE RELATIONS AND BENEFITS
8.1 Parent Plans, Company Plans. As of the Closing Date, the
Company and its Subsidiaries shall cease to be participating employers under
the Employee Plans or any other employee benefit plans (other than the Company
Plans) that are sponsored, contributed to, entered into or maintained by O-I or
Seller (the "Parent Plans"), and as of the Closing Date, except to extent set
forth in Section 8.2(b), the Business Employees shall cease to accrue further
benefits and shall cease to be active participants under the Parent Plans.
Except as otherwise provided herein, from and after the Closing Date, the
Company and its Subsidiaries shall be solely responsible for all obligations
and liabilities under the Company Plans, and from and after the Closing Date
none of O-I, Seller or their respective Affiliates shall have any obligations
or liabilities under any Company Plan, whether such obligations or liabilities
arose before, on or after the Closing Date. Notwithstanding anything herein to
the contrary, O-I, Seller and their respective Affiliates shall retain all
liabilities and obligations relating to employees of the Company or its
Subsidiaries who, as of the Closing Date, are on long-term disability
(collectively, the "Retained Inactive Employees"), until such time as the
employee presents him or herself for active employment with the Company or its
Subsidiaries, at which time the Company and its Subsidiaries shall have
responsibility and liability for such employee and shall cover such employee
under its employee benefit plans, in each case, effective as of the date such
employee commences active employment with the Company or its Subsidiaries.
8.2 Collective Bargaining Agreements. With respect to each of
the collective bargaining agreements listed on Section 8.2 of the O-I
Disclosure Schedule (collectively, the "Collective Bargaining Agreements"),
Seller shall cause the Company to use its commercially reasonable best efforts
to obtain, prior to the Closing Date, written consents from the unions
representing the Business Employees covered by the Collective Bargaining
Agreements (the "Union Employees") allowing the Union Employees to participate
in new benefit plans maintained and administered by, or on behalf of, Buyer or
one of Buyer's Affiliates, with such plans to provide the identical levels of
benefits (or to the extent it is commercially impracticable to provide the
identical level of certain benefits, then the substantially same level of such
benefits) as those described in the Collective Bargaining Agreements and
related plan documents instead of the benefit plans in which Union Employees
participate on the date immediately prior to the Closing Date (the "CBA
Consents"). Regardless whether such CBA Consents are obtained by the Company,
Buyer or one of Buyer's Affiliates will institute and maintain benefit plans in
which the Union Employees will participate as of the Closing Date that provide
the identical levels of benefits (or to the extent it is commercially
impracticable to provide the identical level of certain benefits, then the
substantially same level of such benefits) as those described in the Collective
Bargaining Agreements and related plan documents. In the event Seller does not
obtain one or more of the CBA Consents on or prior to the Closing Date and;
provided, further that Buyer or one of Buyer's Affiliates comply in all
material respects with their obligations pursuant to this Section 8.2, Seller
shall defend, indemnify, and hold the Company and the Buyer Indemnified Parties
harmless from and against any and all Losses arising out of or resulting from
the change in benefit plans in which the Union Employees participate as of the
Closing Date as provided for in this Section 8.2 without regard to the Basket
or the Cap (as all such terms are defined in Section 9.2). The procedures set
forth in Section 9.5 shall apply to any claim for indemnification brought by
the Company or any Buyer Indemnified Party pursuant to this Section 8.2.
8.3 Post-Closing Benefits.
(a) Except as otherwise permitted under Section 8.2,
effective immediately following the Closing Date and for a period of not less
than 12 months following the Closing Date, Buyer shall provide, or shall cause
the Company and its Subsidiaries to provide, to each present Business Employee
(other than (A) the Union Employees, (B) Business Employees employed outside of
the United States who are covered by a labor agreement, collective bargaining
agreement or any other labor-related agreements or arrangements with any labor
union or labor organization or works council that otherwise address terms and
conditions of employment and (C) Business Employees who are on leave for "lack
of work" on the Closing Date) (i) base salary and other cash-based
compensation, bonus and incentive opportunities (other than equity-based
compensation) that are no less favorable than such compensation and
opportunities provided to such Business Employee immediately prior to the
Closing Date, (ii) cash severance benefits that are no less favorable than the
cash severance benefits set forth on Section 8.3(a)(ii) of the O-I Disclosure
Schedule, after giving effect to any increases in compensation and service on
and after the Closing Date and through the date of termination of employment
and (iii) other employee benefits that are no less favorable in the aggregate
to those provided to similarly situated employees of the Buyer and its
Controlled Affiliates; provided, however, that the Buyer shall have no
obligation to provide, or cause the Company or its Subsidiaries to provide, for
participation in a defined benefit pension plan for any hourly non-Union
Business Employee who is not as of the Closing Date a participant in a Benefit
Plan that is a defined benefit pension plan.
(b) Notwithstanding any provision hereof, (i) none of Buyer,
the Company or any of their respective Subsidiaries will have any obligation
hereunder to continue the employment of any Business Employee for any period
following the Closing Date and (ii) nothing herein shall prevent Buyer, the
Company or any of their respective Subsidiaries from amending or terminating
the Company Plans in accordance with the terms of such plan; provided that the
requirements of Sections 8.1, 8.2, 8.3(a), 8.4, 8.6, 8.7 and 8.8 are otherwise
satisfied.
8.4 Service Credit. Buyer shall provide, or shall cause the
Company and its Subsidiaries to provide, each Business Employee with full
service credit for all purposes (other than for purposes of benefit accruals
under a defined benefit pension plan and other than to the extent such credit
would result in duplication of benefits) under all employee benefit plans,
policies and arrangements made available to Business Employees by Buyer, the
Company or any of their Controlled Affiliates on or after the Closing Date to
the same extent such Business Employee's service was recognized under the
corresponding type of plans, policies and arrangements in which such Business
Employee participated immediately prior to the Closing Date.
8.5 Pension and Retiree Medical. Section 8.5 of the O-I
Disclosure Schedule sets forth a list of each Employee Plan which is subject to
Title IV of ERISA ("Pension Plans") and each Employee Plan (other than the
Fifth Amended and Restated Trust Agreement for GMP - Employers Retiree Trust,
dated July 1, 1996, as amended, referenced in the Multiple Plan Union Shop
Contract and Working Rules made by Xxxxx-Xxxxxxxx Plastic Products and the
Glass, Molders, Pottery, Plastics & Allied Workers Intl. Union AFL-CIO,
pertaining to Baltimore, MD, Chicago, IL, Cincinnati, OH, Edison, NJ, N. Kansas
City, MO, and St. Louis, MO, and the Union Shop Agreement made by
Xxxxx-Xxxxxxxx Plastics Products, Inc. - Florence, KY and the Glass Molders,
Pottery, Plastics & Allied Workers Intl. Union AFL-CIO, Local No. 176), which
provides for post-retirement welfare benefits ("Retiree Medical Plans")).
Seller shall retain, and Buyer shall not assume, all the liabilities and
obligations under the Pension Plans, whether such liabilities or obligations
arose before, on or after the Closing Date. Seller shall retain, and Buyer
shall not assume, the liabilities and obligations for retiree medical benefits
under the Retiree Medical Plans, whether such liabilities and obligations arose
before, on or after the Closing Date. Seller shall provide those Business
Employees who are eligible to receive, or who are already receiving, as of the
Closing Date retiree medical benefits under the terms of the Retiree Medical
Plan as of the Closing Date with benefits under such Retiree Medical Plan in
accordance with its terms.
8.6 Certain Additional Matters. O-I and Buyer agree that
certain employee matters shall be governed in accordance with the provisions of
Section 8.6 of the O-I Disclosure Schedule.
8.7 Vacation. Buyer shall honor, or shall cause the Company
and any of its Subsidiaries to honor, all earned but unused vacation and other
time-off accrued by the Business Employee prior to the Closing Date ("Accrued
Time") in accordance with the applicable policies in effect with respect to the
Business Employee immediately prior to the Closing Date; provided, however,
that O-I shall reimburse Buyer for any payments made in respect of such Accrued
Time by Buyer to any salaried Business Employee in connection with such
Business Employee's termination of employment on or within four months
following the Closing Date.
8.8 Welfare Plans. Buyer shall, or shall cause the Company
and its Subsidiaries to (a) waive all limitations as to pre-existing
conditions, evidence of insurability, exclusions and waiting periods with
respect to participation and coverage requirements applicable to any Business
Employee under any welfare benefit plan of Buyer, the Company or any of their
Controlled Affiliates in which such Business Employee may be eligible to
participate on or after the Closing Date to the extent such limitations were or
would have been waived under the Parent Plans and Company Plans in which the
Business Employee participated immediately prior to the Closing Date and (b)
provide each Business Employee with credit for any co-payments, deductibles and
out-of-pocket expenses paid prior to the Closing Date in satisfying any
applicable co-payment, deductible and out-of-pocket expense requirements under
any welfare plan of Buyer, the Company or any of their Affiliates in which such
Business Employee may be eligible to participate on or after the Closing Date
to the extent such credit was or would have been given under the Parent Plans
and Company Plans in which the Business Employee participated immediately prior
to the Closing Date for the year in which the Closing Date occurs. Buyer shall
provide, or shall cause the Company or any of its Subsidiaries to provide,
continuation health care coverage to Business Employees and their qualified
beneficiaries who incur or incurred a qualifying event, in accordance with the
continuation health care coverage requirements of Section 4980B of the Code and
Title I, Subtitle B, Part 6 of ERISA ("COBRA") or any similar provisions of
state Law, with respect to claims incurred after the Closing Date.
8.9 WARN. Seller agrees that between the date hereof and the
Closing Date, it will cause the Company and its Subsidiaries not to effect or
permit a "plant closing" or "mass layoff" as those terms are defined in the
Worker Adjustment and Retaining Notification Act of 1988 (the "WARN Act")
without complying with the WARN Act or similar foreign, state or local Law. O-I
and Seller have delivered, or have caused to be delivered, to Buyer a true,
correct and complete list of the name and site of employment of any and all
employees of the Company and its Subsidiaries who have experienced an
employment loss or layoff (as defined by the WARN Act) within 90 days prior to
the date hereof. O-I and Seller shall update this list every 30 days up to and
including the Closing Date. Buyer shall indemnify, defend and hold Seller
harmless from and against any and all claims, actions, suits, demands,
proceedings, losses, expenses, damages, obligations and liabilities arising out
of or otherwise in respect of any causes of action brought against Seller under
the WARN Act with regard to any employment losses of any Business Employee that
occurred within the Company or any of its Subsidiaries in the 90 day period
preceding the Closing Date and as to which no WARN Act notices were required to
be given as of the day before the Closing Date, but only to the extent any such
alleged liability arises as a result of employment losses that occur within the
Company or any of its Subsidiaries commencing on the Closing Date or in the 90
day period thereafter.
8.10 Annual Bonuses. O-I shall pay a pro rata portion (based
on the portion of the applicable fiscal year in which the Closing Date occurs)
of the amount an eligible Business Employee would have received pursuant to the
O-I Senior Management Incentive Bonus Plan for the entire year and plant
production bonuses (described in the O-I Salary Policy Manual and the 2004
Xxxxx-Xxxxxxxx Plastics Group Plan Incentive Plan, Bottle Plants) (the "Seller
Bonus Plans") for such year consistent with past practice (the "Pro Rata Bonus
Payment"). The Pro Rata Bonus Payments will be made no later than the time
annual bonus payments are made to other O-I employees participating in the
applicable Seller Bonus Plan (or, in the event that no such bonus payments are
made to other employees other than the Business Employees with respect to such
year, in no event later than 90 days following the end of such year) (such
applicable date in either case, the "Payment Date"). In addition, if the
Closing occurs on or after January 1, 2005, O-I shall pay to Business
Employees, on the Payment Date, any earned but unpaid annual bonuses in respect
of fiscal year 2004 determined under the Seller Bonus Plan for such year
consistent with past practice.
8.11 Transition Services. Pursuant to the terms of the
Transition Services Agreement, O-I, Seller or their respective Affiliates shall
(a) facilitate the implementation and administration of employee benefit plans
for the benefit of Business Employees, (b) continue to provide payroll services
with respect to Business Employees and (c) provide such other services relating
to employment matters as may be agreed to by the parties thereto.
8.12 Pre-Closing Claims.
(a) O-I or Seller shall, or shall cause the applicable
welfare benefit plans of O-I or Seller (other than Company Plans), as
applicable, to be responsible for providing welfare benefits (including
medical, hospital, dental, accidental death and dismemberment, life, disability
and other similar benefits) to Business Employees for all claims incurred prior
to the Closing under and subject to the generally applicable terms and
conditions of such employee benefit plans, programs and arrangements in which
such employees were entitled to participate immediately prior to the Closing
(other than the Company Plans). For purposes of this Section 8.12, a claim is
incurred with respect to (i) accidental death and dismemberment, disability,
life and other similar benefits when the event giving rise to such claim
occurred and (ii) medical, dental, and other similar benefits when the services
with respect to such claim are rendered. Any claim above that relates to a
continuous period of hospitalization shall be deemed to be incurred at the
commencement of such period of hospitalization.
(b) O-I shall be responsible for all Losses arising out of or
relating to workers' compensation claims of any Business Employee if the event
giving rise to the claim occurs prior to the Closing Date and shall have the
sole responsibility and authority for administering such claims.
8.13 No Third-Party Beneficiary Rights. Nothing herein,
expressed or implied, shall confer upon any Business Employees (or any of their
beneficiaries or alternate payees) any rights or remedies (including any right
to employment or continued employment, or any right to compensation or benefits
for any period) of any nature or kind whatsoever, under or by reason of this
Agreement or otherwise. In addition, the provisions of this Article VIII, are
for the sole benefit of the parties to this Agreement and are not for the
benefit of any third party.
ARTICLE IX
INDEMNIFICATION
9.1 Survival Period.
(a) The representations and warranties of the Parties set
forth in Articles II, III and IV shall survive the Closing until the third
anniversary of the Closing Date; provided, however, that the representations
and warranties contained in (i) Sections 2.1, 2.2, 2.3, 2.4, 2.5, 2.8(b), 2.21,
3.1, 3.2, 3.3, 4.1, 4.2, 4.3 and 4.4, shall survive indefinitely and (ii) the
representations and warranties contained in Section 2.13 shall survive until
the six-month anniversary of the expiration of the applicable statutes of
limitations (including any extensions thereof and including, with respect to
Section 2.13(p), the statutes of limitations applicable to any Taxable period
to which an Apportioned Tax Attribute is carried forward) and (iii) the
representation contained in Section 2.15 (to the extent relating to
environmental matters) shall survive until the fifteenth anniversary of the
Closing Date.
(b) The period of time a representation or warranty survives
the Closing pursuant to Section 9.1(a) shall be the "Survival Period" with
respect to such representation or warranty. In the event notice of any claim
for indemnification under Section 9.2 shall have been given within the
applicable Survival Period and such claim has not been finally resolved by the
expiration of such Survival Period, the representations or warranties that are
the subject of such claim shall survive, solely for purposes of such claim,
until such claim is finally resolved.
(c) The right to indemnification, payment of Losses of a
Buyer Indemnified Party or for other remedies based on any representation,
warranty, covenant or obligation of Seller or O-I contained in or made pursuant
to this Agreement or the Additional Agreements shall not be affected by any
investigation conducted with respect to, or any knowledge acquired (or capable
of being acquired) at any time, with respect to the accuracy or inaccuracy of
or compliance with, any such representation, warranty, covenant or obligation.
9.2 Indemnification by Seller.
(a) Subject to the limits set forth in this Section 9.2,
Seller and O-I, jointly and severally, shall from time to time defend,
indemnify and hold Buyer and its existing and future Affiliates and their
respective officers, directors, agents and employees (collectively, the "Buyer
Indemnified Parties") harmless from and against (i) any and all liabilities
(whether asserted or unasserted, absolute or contingent), obligations, losses,
damages, deficiencies, demands, claims, fines, penalties, interest,
assessments, judgments, Liens, charges, orders, decrees, rulings, dues,
assessments, actions, injunctions, proceedings and suits of whatever kind and
nature and all costs and expenses relating thereto, including fees and expenses
of counsel, accountants and other experts, and other expenses of investigation
and litigation (hereinafter "Losses") arising out of or resulting from (A) any
breach of any of the representations and warranties (without regard to any
materiality, Material Adverse Effect or words of similar import contained in
such representation or warranty) by Seller or O-I contained in Article II or
Article III or in the Additional Agreements or any certificate or other
instrument delivered pursuant to the terms hereof or thereof and (B) failure to
perform any or comply with any of the covenants or conditions, of Seller or O-I
set forth herein, (ii) Losses arising out of or resulting from the Release or
threatened Release of any Hazardous Materials (or allegation of same) (A) prior
to the Closing Date on or from any property currently or formerly owned,
operated or leased by O-I, Seller, the Company, any of its Subsidiaries or any
of their respective Affiliates or (B) on or from any other property where,
prior to the Closing Date, Hazardous Materials are or were (or are or were
alleged to be) Released or threatened to be Released in connection with any
property currently or formerly owned, operated or leased by O-I, Seller, the
Company, any of its Subsidiaries or any of their respective Affiliates, whether
or not, in any case, such Release or threatened Release was in compliance with
Environmental Law, (iii) Losses arising out of or resulting from the violation
of any Environmental Law prior to the Closing Date (or allegation of same), by
O-I, Seller, the Company, any of its Subsidiaries or any other Person in
connection with the Business, or any property currently or formerly owned,
operated or leased by O-I, Seller, the Company, any of its Subsidiaries or any
of their respective Affiliates, (iv) Losses arising out of or resulting from
the installation of any pollution control equipment to the extent that such
equipment is required to bring any property owned, operated or leased by O-I,
Seller, the Company, any of its Subsidiaries or any of their respective
Affiliates into compliance with requirements of any Environmental Law as of the
Closing Date, (v) any Losses arising out of or resulting from or in connection
with the Contributed Assets other than those arising out of or resulting from
the operation and ownership by Buyer of the Contributed Assets following the
Closing, (vi) any Losses arising out of or resulting from or in connection with
the Corporate Restructuring and (vii) subject to Section 9.6, any Losses
arising out of or resulting from or in connection with (a) the Constar Action
(as defined on Section 2.14 of the O-I Disclosure Schedule), (b) the claims set
forth on Section 9.2(a) of the O-I Disclosure Schedule (the "Schedule 9.2(a)
Claims") and (c) the NAC Action (as defined on Section 2.14 of the O-I
Disclosure Schedule). For the avoidance of doubt, in computing whether Buyer
has a Loss arising out of or resulting from any breach of Section 2.13(p), and
in computing the amount of any such Loss, Buyer shall first use all of its
available net operating losses and credits, including any Apportioned Tax
Attributes.
(b) Seller and O-I, jointly and severally, shall indemnify,
defend and hold the Buyer Indemnified Parties harmless from and against all
Losses asserted against, imposed upon or incurred by the Buyer Indemnified
Parties directly or indirectly, in connection with, by reason of, relating to,
or resulting from any obligation or liability arising out of the assets,
properties, liabilities, business or operations of O-I and its Affiliates
(other than the Company and its Subsidiaries), other than Seller's ownership of
the Stock.
(c) Neither Seller nor O-I shall have any obligation under
Section 9.2(a)(i)(A) to indemnify Buyer, from and against any Losses arising
out of any breach of any representation or warranty of Seller or O-I until
Buyer and its Affiliates have suffered Losses resulting from such breach for
which Buyer and its Affiliates are entitled to be indemnified, together with
other Losses (except for Losses resulting out of or from breaches of warranties
contained in Sections 2.1, 2.2, 2.3, 2.4, 2.5, 2.8(b), 2.13), 3.1, 3.2 and 3.3)
in excess of $7,500,000 in the aggregate (the "Basket") at which time Buyer
Indemnified Parties will be entitled to indemnification as set forth in this
Section 9.2 for all Losses in excess of the Basket. Notwithstanding the
foregoing, the aggregate liability of Seller and O-I to indemnify Buyer
Indemnified Parties under Section 9.2(a)(i)(A) arising out of or resulting from
any breaches of representation and warranties (except for Losses resulting out
of or from breaches of representations and warranties contained in Sections
2.1, 2.2, 2.3, 2.4, 2.5, 2.8(b), 2.13, 3.1, 3.2 and 3.3) and under Section
9.2(a)(ii)(A), 9.2(a)(iii) and 9.2(a)(iv) shall not exceed $240,000,000 in the
aggregate (the "Cap").
(d) With respect to Losses described under Sections
9.2(a)(i)(A) and 9.2(a)(ii)(A) that are incurred in connection with the Cleanup
of any of the Real Property, O-I and Seller shall only be required to indemnify
and hold harmless the Buyer Indemnified Parties to the extent that:
(i) Cleanup of the Hazardous Materials is required by a
Governmental Authority under an applicable Environmental Law that is
in effect as of and is enforceable as of the Closing Date or is
required by an applicable Environmental Law that is in effect as of
and is enforceable as of the Closing Date;
(ii) the Remediation Standards (as defined below) that must
be met in order to satisfy the requirements of the applicable
Environmental Law or Governmental Authority (A) are no more stringent
than the Remediation Standards that were in effect as of and were
enforceable as of the Closing Date under the applicable Environmental
Law that is the source of the obligation to conduct a Cleanup, or,
where no such Remediation Standards had been promulgated and were
enforceable as of the Closing Date, Remediation Standards that were
applied, within one year prior to the Closing Date, on a case-by-case
basis, to properties that are most similar to the property that is
subject to a Cleanup and (B) are also those Remediation Standards that
would be the least stringent Remediation Standards that would be
applicable given the use of the property as of the day before the
Closing Date;
(iii) such Cleanup is for substances that were designated
as Hazardous Materials under an applicable Environmental Law in effect
and enforceable as of the Closing Date and would have been subject to
Cleanup under an applicable Environmental Law had such Cleanup been
initiated on or before the Closing Date;
(iv) such Cleanup is conducted using commercially
reasonable and cost effective methods for investigation, removal,
remediation and/or containment consistent with applicable
Environmental Law or the requirements of a Governmental Entity; and
(v) the cost of any such Cleanup with respect to an
individual site, together with all other Cleanups at such site,
exceeds $25,000 in the aggregate.
(e) With respect to Losses described in Section 9.2(a)(iii)
and (iv), O-I and Seller shall only be required to indemnify and hold harmless
the Buyer Indemnified Parties to the extent that:
(i) any such Loss with respect to an individual site,
together with all other such Losses at such site, exceeds $25,000 in
the aggregate; and
(ii) the action taken to address a violation of
Environmental Law and/or the installation of pollution control
equipment is done in a commercially reasonable and cost-effective
manner.
(f) Notwithstanding anything to the contrary herein, (A) if
the cost of Cleanup or correcting a non-compliance with the Environmental Law
subject to indemnification by O-I and Seller are increased after the Closing
Date due to an act or omission by Buyer or any of its Subsidiaries, Seller
shall not be responsible for any such increase in costs incurred and (B) if any
costs incurred in connection with a Cleanup relating to the Release or
threatened Release of Hazardous Materials on or from a Real Property are in
excess of the costs that would be incurred for a Cleanup meeting the conditions
set forth in Section 9.2(d), O-I and Seller shall have no obligation to
indemnify the Buyer Indemnified Parties for such excess Cleanup costs.
(g) Indemnification shall be available under Section
9.2(a)(ii)(A), 9.2(a)(iii) and 9.2(a)(iv) only with respect to those claims for
which the Buyer Indemnified Party has provided written notice to Seller by the
15th anniversary of the Closing Date. Such notice must include, if available
and based on reasonably available evidence, the following: (A) location; (B)
the extent of contamination and the impacted media, if known; (C) a copy of any
notices filed with or received from any Governmental Authority or other Person
or, if no such notice has been filed or received, the basis upon which the
claimant seeks indemnification; and (D) whether the Cleanup was or will be
consistent with the conditions set forth in Section 9.2(d). For claims relating
to Cleanup costs within the scope of Section 9.2(d), Seller shall have the
right, but not obligation, to assume responsibility for managing the Cleanup
and related matters thereto, by providing notice to Buyer within a reasonable
time of receipt of the written notice required under this Section 9.2(g). If
O-I and Seller assume responsibility for management of a Cleanup under this
Section 9.2(g), O-I and Seller shall be obligated to comply with all applicable
Laws with respect to such Cleanup; provided that O-I and Seller reserve the
right to seek reimbursement of the Cleanup costs that are incurred for work
that is in excess of work that would be required in accordance with the
conditions set forth in Sections 9.2(d) and 9.2(f)(B). Where O-I and Seller
have assumed responsibility for management of a Cleanup under this Section
9.2(g), Buyer may participate in good faith and, at its own cost and expense,
in activities related to the Cleanup, including participation in meetings with
respect to the determination of applicable Remediation Standards or methods for
conducting the Cleanup.
(h) Except as provided in Article VII, following the Closing,
the indemnity provided in this Section 9.2 for breaches of representations and
warranties contained in Article II and Article III shall be the sole and
exclusive remedy of Buyer and its Affiliates against Seller, O-I and their
Affiliates at law or equity for any Losses arising out of or resulting from
such breaches (other than any breach that was intentional or claims based on
fraud).
9.3 Indemnification by Buyer.
(a) Subject to the limits set forth in this Section 9.3,
Buyer shall defend, indemnify and hold Seller and its existing and future
Affiliates and their respective officers, directors, agent and employees (other
than the Company and any of its Subsidiaries) (collectively, the "Seller
Indemnified Parties") harmless from and against any and all Losses, arising out
of or resulting from (i) any breach of any of the representations and
warranties by Buyer contained in Article IV and in the Additional Agreements or
in any certificate or other instrument delivered pursuant to the terms hereof
or thereof or (ii) failure to perform any or comply with any of the covenants
or conditions, of Buyer set forth herein.
(b) Buyer shall not have any obligation under Section 9.3(a)
to indemnify the Seller Indemnified Parties from and against any Losses caused
by the breach of the representations and warranties of Buyer until the Seller
Indemnified Parties have suffered Losses for which Seller Indemnified Parties
are entitled to be indemnified for the breach of any such representation or
warranty (except for Sections 4.1, 4.2, 4.3 and 4.4), in excess of the Basket
at which xxxx Xxxxxx Indemnified Parties will be entitled to indemnification as
set forth in this Section 9.3 for all Losses, in excess of the Basket.
Notwithstanding the foregoing, the aggregate liability of Buyer to indemnify
Seller Indemnified Parties for breach of representations and warranties of
Buyer (except for Sections 4.1, 4.2, 4.3 and 4.4) shall not exceed the Cap.
(c) Following the Closing, the indemnity provided in this
Section 9.3 for breaches of representations and warranties contained in Article
IV shall be the sole and exclusive remedy of O-I and its Affiliates against
Buyer and its Affiliates at law or equity for any Losses arising out of or
resulting from such breaches (other than any breach that was intentional or
claims based on fraud).
9.4 Indemnification Calculations.
(a) The amount of any Losses for which indemnification is
provided under this Article IX shall be computed net of any insurance proceeds
resulting from the subject matter of such Loss actually received by the
Indemnified Party in respect of such Loss (net of any resulting increase in
insurance premiums and any expenditures made in connection with obtaining such
insurance recovery).
(b) The Parties agree that any indemnification payments made
pursuant to this Agreement shall be treated for Tax purposes as an adjustment
to the Purchase Price, unless otherwise required by applicable Law.
(c)
(i) The amount of any Losses of the Buyer Indemnified
Parties or Seller Indemnified Parties, as the case may be, or Taxes
for which indemnification is provided under Article VII or this
Article IX shall be (A) increased to take account of any net Tax cost
actually incurred, in the Taxable year in which the payment giving
rise to such indemnification was accrued, by the indemnified Party or
its Affiliates arising from the receipt of indemnity payments
hereunder (grossed up for such increase) and (B) reduced to take
account of any net Tax benefit actually realized, in the Taxable year
in which the payment giving rise to such indemnification was accrued,
by the indemnified Party or its Affiliates arising from the incurrence
or payment of any such Losses of the Buyer Indemnified Parties or
Seller Indemnified Parties, as the case may be, or Taxes. In computing
the amount of any such Tax cost or Tax benefit, the Buyer Indemnified
Parties or Seller Indemnified Parties, as the case may be, shall be
deemed to recognize all other items of income, gain, loss, deduction
or credit before recognizing any item arising from the receipt of any
indemnity payment hereunder or the incurrence or payment of any
indemnified Loss or Tax. Any indemnification payment under Article VII
or this Article IX shall initially be made without regard to this
Section 9.4(c) and shall be increased or reduced to reflect any such
net Tax cost (including gross-up) or net Tax benefit only after the
indemnified Party or its Affiliates has actually realized such cost or
benefit.
(ii) Section 9.4(c)(i)(B) shall apply only with respect to
Losses of the Buyer Indemnified Parties or Taxes for which Buyer is
indemnified under Article VII or this Article IX only (A) if the
Apportioned Tax Attributes pursuant to Section 2.13(p) equal or exceed
$125 million or (B) if the Apportioned Tax Attributes are less than
$125 million, to the extent that the Losses of the Buyer Indemnified
Parties for which payments are actually paid by O-I and Seller or
Taxes for which Buyer is indemnified under Article VII or this Article
IX exceed the difference between $125 million and the Apportioned Tax
Attributes.
(iii) For purposes of Section 9.4(c)(i): (A) a Buyer
Indemnified Party or Seller Indemnified Party, as the case may be,
shall be deemed to have "actually realized" a net Tax cost or a net
Tax benefit to the extent that, and at such time as, the amount of
Taxes payable by such Buyer Indemnified Party or Seller Indemnified
Party, as the case may be, is increased above or reduced below, as the
case may be, the amount of Taxes that such Buyer Indemnified Party or
Seller Indemnified Party, as the case may be, would be required to pay
but for the receipt of the indemnity payment or the incurrence or
payment of such Loss or Tax, as the case may be; (B) the amount of any
increase or reduction hereunder shall be adjusted to reflect any final
determination with respect to the Buyer Indemnified Party's or Seller
Indemnified Party's, as the case may be, liability for Taxes, and
payments between the Parties to reflect such adjustment shall be made
if necessary; and (C) a Party's good faith determination of the net
Tax cost or net Tax benefit actually realized shall be binding upon
the other Party.
9.5 Indemnification Procedures.
(a) If any third party shall notify any Party (the
"Indemnified Party") with respect to any matter (a "Third Party Claim") which
may give rise to an indemnifiable Loss against any other Party (the
"Indemnifying Party") then the Indemnified Party shall promptly notify each
Indemnifying Party thereof in writing. The failure to notify the Indemnifying
Party promptly of a Third Party Claim shall not relieve the Indemnifying Party
from its indemnification obligation hereunder, except to the extent that the
Indemnifying Party is materially prejudiced thereby.
(b) Any Indemnifying Party will have the right at any time to
assume and thereafter conduct the defense of the Third Party Claim with counsel
of its choice reasonably satisfactory to the Indemnified Party; provided,
however, that the Indemnifying Party shall not waive any defense, cause of
action or counterclaim or consent to the entry of any judgment or enter into
any settlement with respect to the Third Party Claim without the prior written
consent of the Indemnified Party (not to be withheld unreasonably). In the
event that the Indemnifying Party assumes the defense as provided in this
Section 9.5, the Indemnified Party shall have the right to participate in such
defense (including with counsel of its choice), at its own expense, and the
Indemnifying Party shall reasonably cooperate with the Indemnified Party in
connection with such participation. In the event that the Indemnified Party
shall in good faith determine that the Indemnified Party may have available to
it one or more defenses or counterclaims that are inconsistent with one or more
of those that may be available to the Indemnifying Party in respect of any
Third Party Claim or any litigation relating thereto, the Indemnified Party
shall have the right at all times to take over and assume control over the
defense, settlement, negotiations or litigation relating to any such Third
Party Claim at the sole cost of the Indemnifying Party; provided that if the
Indemnified Party does so take over and assume control, the Indemnified Party
shall not consent to the entry of any judgment or enter into a settlement with
respect to such Third Party Claim without the prior written consent of the
Indemnifying Party (not to be withheld unreasonably).
(c) Unless and until an Indemnifying Party assumes the
defense of the Third Party Claim as provided in Section 9.5(b), the Indemnified
Party may defend against the Third Party Claim in any manner it reasonably may
deem appropriate, on behalf of and for the risk of the Indemnifying Party.
(d) In no event will the Indemnified Party consent to the
entry of any judgment or enter into any settlement with respect to the Third
Party Claim without the prior written consent of the Indemnifying Party (not to
be withheld unreasonably).
(e) The Party assuming the defense under this Section 9.5(e)
shall keep the appropriate Parties fully informed regarding the progress and
status thereof.
(f) In the event any Indemnified Party should have a claim
against any Indemnifying Party hereunder which does not involve a Third Party
Claim, the Indemnified Party shall promptly transmit to the Indemnifying Party
a written notice (the "Indemnity Notice") describing in reasonable detail the
nature of the claim and the basis of the Indemnified Party's request for
indemnification under this Agreement; provided, however, that failure of the
Indemnified Party to give the Indemnity Notice will not relieve the
Indemnifying Party from liability hereunder unless solely and to the extent the
Indemnifying Party did not otherwise learn of such claim and such failure
results in the forfeiture by the Indemnifying Party of substantial rights and
defenses, and will not in any event relieve the Indemnifying Party from any
obligations to the Indemnified Party other than the indemnification obligation
provided herein. In the event that the Indemnifying Party disputes the validity
or scope of the claim set forth in the Indemnity Notice, the Parties will use
their good faith and commercially reasonable best efforts to resolve such
matter within 30 days of receipt of the Indemnity Notice.
9.6 Constar Action; NAC Action; and Schedule 9.2(a) Claims
Indemnification. The provisions of Sections 9.2 through 9.5 (other than Section
9.2(c), (d), (e), (f) and (g)) shall apply to Seller and O-I's obligation under
Section 9.2(a)(vii) to indemnify the Buyer Indemnified Parties, except as
follows: (i) Seller shall have the sole right, at its expense and with the
reasonable cooperation of Buyer and its Affiliates, to settle the Constar
Action; provided that such settlement is on terms no less favorable to Buyer
and its Affiliates than those terms set forth on Section 9.6 of the O-I
Disclosure Schedule, and Seller regularly apprises Buyer of and consults with
Buyer regarding such settlement negotiations; and (ii) Seller's and O-I's
obligation with respect to any Losses arising out of or resulting from or in
connection with the NAC Action shall be limited to those Losses owed to third
parties by CPT or the Company arising out of (A) products or processes made,
used, sold, distributed, imported, or exported by or on behalf of Continental
PET Technologies, Inc. ("CPT") and/or the Company prior to the Closing Date,
and (B) the indemnity obligations of CPT under the October 2000 Indemnity
Agreement, as amended on April 1, 2001 (but excluding any amendments thereto
after the Closing Date that adversely affect any such obligations), by and
among CPT, Coca-Cola Enterprises Inc., Coca-Cola Bottling Co. Consolidated,
Southeastern Container, Inc. and Western Container Corp., or under any other
indemnity agreement between Seller and/or any of its Affiliates, on the one
hand, and any other third party, on the other hand. The Parties agree that the
Constar Action, the Schedule 9.2(a) Claims and the NAC Action are Third Party
Claims for which the Buyer is the Indemnified Party, Seller is the Indemnifying
Party and notice is deemed given, all pursuant to Section 9.5(a). Buyer
acknowledges that Seller expressly retains all rights of reimbursement,
contribution, setoff, attorneys' fees, costs or other theories or claims
against third parties (other than Buyer and its Affiliates) (including cross
claims or counterclaims) that would reduce, offset or mitigate any monetary
judgment or settlement under the NAC Action, the Schedule 9.2(a) Claims and
Constar Action to the extent related to, and to the extent of, the Losses for
which Seller and O-I indemnify Buyer and its Affiliates for such actions
hereunder, and Buyer and its Affiliates shall cooperate at Seller's expense,
but for no additional consideration, to assist Seller in any recovery of the
foregoing.
ARTICLE X
MISCELLANEOUS
10.1 Certain Definitions. For purposes of this Agreement, the
following defined terms shall have the meanings indicated below:
"Adjustments" shall mean, with respect to the year ended
December 31, 2003, the pro forma adjustments used to calculate adjusted EBIT
and EBITDA in section 8 of the Information Memorandum (as defined below), and,
with respect to all other periods, shall represent the comparable amounts
applicable for the period being presented.
"Affiliate" shall mean, with respect to a specified Person,
another Person that directly, or indirectly through one or more intermediaries,
Controls or is Controlled by or is under common Control with the Person
specified.
"Business Day" shall mean any day other than a Saturday,
Sunday or a day on which banks in New York, New York are authorized or
obligated by applicable Law or executive order to close or are otherwise
generally closed.
"Business" shall mean, after giving effect to the Corporate
Restructuring, the blow-molded plastic container business as conducted by O-I
through the Company and its Subsidiaries and all other Affiliates of O-I on the
date hereof, including all the business operations relating to the sale,
development, manufacture, marketing or distribution of rigid plastic containers
or plastic bottles and other plastic parts and any services or customer
relationships related thereto, including the business described in the
Historical Financial Statements and in the Information Memorandum; provided,
however, that the Business does not include the Seller's Health Care Business
or the Closure Field.
"Business Employee" shall mean any present or former employee
of the Company or any of its Subsidiaries.
"Capital Stock" shall mean, with respect to any Person, any
and all shares, interests, participations or other equivalents (however
designated) of such Person's capital stock whether now outstanding or issued
after the date of this Agreement.
"Cash" shall mean cash, cash equivalents and short-term
marketable investments, determined in accordance with GAAP applied on a basis
consistent with the preparation of the Audited Financial Statements.
"Cleanup" shall mean all actions required to (a) cleanup,
remove, treat or remediate Hazardous Materials in the indoor or outdoor
environment, (b) prevent the Release of Hazardous Materials so that they do not
migrate, endanger or threaten to endanger public health or welfare or the
indoor or outdoor environment, (c) perform pre-remedial studies and
investigations and post-remedial monitoring and care, or (d) respond to any
government requests for information or documents in any way relating to
cleanup, removal, treatment or remediation or potential cleanup, removal,
treatment or remediation of Hazardous Materials in the indoor or outdoor
environment.
"Control" shall mean the possession, directly or indirectly,
of the power to direct or cause the direction of the management or policies of
a Person, whether through the ability to exercise voting power, by contract or
otherwise. "Controlling" and "Controlled" have meanings correlative thereto.
"GAAP" shall mean U.S. generally accepted accounting
principles.
"Governmental Approval" shall mean any permit, license,
franchise, approval, consent, waiver, certification, decree, registration,
qualification, clearance, decision or other authorization issued, granted,
given or otherwise made available or the expiration or termination of any
applicable waiting period by or under the authority of any Governmental
Authority or pursuant to any Law.
"Hazardous Materials" shall mean all substances defined as
Hazardous Substances, Oils, Pollutants or Contaminants in the National Oil and
Hazardous Substances Pollution Contingency Plan, 40 C.F.R. ss. 300.5, toxic
mold, or defined as such by, or regulated as such under, any Environmental Law.
"Indebtedness" shall mean (a) the principal amount of any
indebtedness of the Company or any of its Subsidiaries for borrowed money, (b)
any unpaid interest, premium, fees, penalties and any other amounts owing on
any such indebtedness of the Company or any of its Subsidiaries, (c)
obligations of the Company or any of its Subsidiaries in respect of capitalized
leases and obligations for the deferred purchase price of goods or services
(other than trade payables incurred in the ordinary course of business and
consistent with past practice), (d) any payment obligation in respect of
interest under any existing interest rate swap or hedge agreement entered into
by the Company or any of its Subsidiaries with respect to any Indebtedness
described in clauses (a) or (b) above and (e) all indebtedness or obligations
of the types referred to in the preceding clauses (a) through (d) of any other
Person secured by any claim, liability or encumbrance on any assets of the
Company or any of its Subsidiaries, even though the Company or such Subsidiary
(as applicable) has not assumed or otherwise become liable for the payment
thereof, but excluding customer deposits and interest payable thereon in the
ordinary course of business and consistent with past practice, (f) all
indebtedness or obligations of the types referred to in the preceding clauses
(a) through (e) of the others guaranteed by the Company or any of its
Subsidiaries (including guarantees in the form of an agreement to repurchase to
reimburse but excluding intercompany debt and guarantees, letters of credit and
guarantees by a company of performance obligations of another) and (g) all
negative Cash or overdraft balances.
"Information Memorandum" shall mean the Confidential
Information Memorandum of O-I distributed by Deutsche Bank Securities, dated
2004, as supplemented in May 2004.
"Knowledge" shall mean with respect to the O-I Parties, with
respect to any matter in question, the collective knowledge of the individuals
listed on Section 10.1(a) of the O-I Disclosure Schedule after reasonable
investigation (it being understood that in no circumstances shall "reasonable
investigation" require more than inquiry of responsible managerial employees).
"Law" shall mean any statute, law (including common law),
regulation, ordinance, rule, code, order, writ, judgment, injunction, decree,
governmental restriction or other requirement or rule of law of any
Governmental Authority.
"Liens" shall mean any and all liens, charges, security
interests, options, claims, mortgages, pledges, proxies, voting trusts or
agreements, other legal or equitable encumbrances, obligations, understandings
or arrangements or other restrictions on title or transfer of any nature
whatsoever.
"Material Adverse Effect" shall mean, with respect to the
Company, any of its Subsidiaries or the Business, any event, change,
circumstance or effect that is materially adverse, individually or in the
aggregate, to the assets, liabilities, prospects, condition (financial or
otherwise) or results of operations of the Company and the Subsidiaries taken
as a whole, excluding any effects related to or resulting from events affecting
(a) the United States or global economy or (b) the blow-molded plastic
container industry generally and, in the case of each of clauses (a) and (b),
to the extent such events, changes, circumstances or effects do not affect the
Company and its Subsidiaries disproportionately.
"Xxxxx Illinois Plastic Container Business" shall mean the
plastic container business as conducted by O-I without giving effect to the
Corporate Restructuring.
"Person" shall mean any individual, corporation (including
not-for-profit), general or limited partnership, limited liability company,
joint venture, estate, trust, association, organization, Governmental Authority
or other entity of any kind or nature.
"Release" shall mean any release, spill, emission, discharge,
leaking, pumping, injection, deposit, disposal, dispersal, leaching or
migration into the indoor or outdoor environment (including ambient air,
surface water, groundwater and surface or subsurface strata) or into or out of
any property, including the movement of Hazardous Materials through or in the
air, soil, surface water, groundwater or property.
"Remediation Standard" shall mean a numerical standard that
defines the concentrations of Hazardous Materials that may be permitted to
remain in any environmental media after an investigation, removal, remediation
or containment of a Release or threatened Release of Hazardous Materials.
"Subsidiary" of any Person shall mean any corporation,
partnership, joint venture or other legal entity of which such Person owns,
directly or indirectly, a majority of the stock or other equity interests, the
holders of which are generally entitled to vote for the election of the board
of directors or other governing body of such corporation or other legal entity.
For purposes of this Agreement, unless the context otherwise requires, all
Specified Subsidiaries shall be deemed Subsidiaries of the Company and all
Retained Subsidiaries shall be deemed not to be Subsidiaries of the Company.
10.2 Termination and Abandonment.
(a) General. This Agreement may be terminated and the
transactions contemplated hereby may be abandoned at any time, but not later
than the Closing Date:
(i) by mutual written consent of Buyer, Seller and O-I;
(ii) by either Buyer or Seller if an injunction,
restraining order or decree of any nature of any Governmental
Authority of competent jurisdiction is issued that prohibits the
consummation of the Purchase and such injunction, restraining order or
decree is final and non-appealable;
(iii) by Buyer if (A) any of the representations and
warranties of Seller or O-I contained in this Agreement or in any
Additional Agreement shall fail to be true and correct or (B) Seller
or O-I shall have breached or failed to comply with any of their
covenants or obligations under this Agreement or in any Additional
Agreement such that any of the conditions set forth in Sections 6.2(a)
and 6.2(b) would not be satisfied and such breach or failure shall not
be capable of being remedied or, if capable of being remedied, shall
continue unremedied for a period of 30 days after Seller has received
written notice from Buyer of the occurrence of such breach or failure;
(iv) by Buyer if any of the conditions set forth in
Sections 6.1 and 6.2 has not been satisfied or waived by Buyer prior
to or at such time as such condition can no longer be satisfied;
(v) by Seller if (A) any of the representations and
warranties of Buyer contained in this Agreement or in any Additional
Agreement shall fail to be true and correct or (B) Buyer shall have
breached or failed to comply with any of its covenants or obligations
under this Agreement or in any Additional Agreement such that any of
the conditions set forth in Sections 6.3(a) and 6.3(b) would not be
satisfied and such breach or failure shall not be capable of being
remedied or, if capable of being remedied, shall continue unremedied
for a period of 30 days after Buyer has received written notice from
Seller of the occurrence of such failure or breach;
(vi) by Seller if any of the conditions set forth in
Sections 6.1 and 6.3 has not been satisfied or waived by Seller prior
to or at such time as such condition can no longer be satisfied;
(vii) by either Buyer or Seller if the Closing shall not
have been consummated on or before December 31, 2004 (the "Closing
Deadline"); provided that if
A. the Closing shall not occur on or before the
Closing Deadline due to the act or omission of Seller or
O-I, on the one hand, or Buyer, on the other hand, then
such Party may not terminate this Agreement pursuant to
this clause (vii);
B. subject to the provisions of Section
10.2(a)(vii)(D) below, the Closing shall not occur on or
before the Closing Deadline because the condition set forth
in Section 6.1(b) has not been satisfied, at the sole
option of Buyer, the Closing Deadline may be extended from
time to time up to an aggregate of 180 days; and
C. notwithstanding the provisions of Section
10.2(a)(vii)(B), in the event that the condition set forth
in Section 6.1(b) is satisfied at any time between November
29, 2004 and December 31, 2004, the Closing Deadline shall
automatically be extended without any action of the Parties
but in no event later than January 28, 2005; or
(viii) by Seller, if Buyer has received written notice from
the Lenders that the Lenders have terminated the commitment set forth
in the Commitment Letter or Alternative Financing (if applicable) (a
"Commitment Termination Notice") and Buyer shall not have arranged for
alternative financing within 30 days of receipt of such Commitment
Termination Notice.
(b) Procedure Upon and Effect of Termination.
(i) In the event of the termination and abandonment of this
Agreement, written notice thereof shall promptly be given to the other
Parties and this Agreement shall terminate and the transactions
contemplated hereby shall be abandoned without further action by any
of the Parties without any further liability or obligation on the part
of any Party or its respective Affiliates other than the provisions of
this Agreement that survive termination pursuant to Section 10.2(c);
provided, however, that nothing herein shall relieve any Party from
liability for willful breach of any of its representations,
warranties, covenants or agreements hereunder; provided, further, that
Buyer shall promptly deliver to Seller all documents, work paper and
other materials of Seller, the Company and its Subsidiaries related to
the transactions contemplated hereby, whether or not obtained before
or after the execution hereof.
(ii) In the event that this Agreement is terminated by
Buyer pursuant to (A) Section 10.2(a)(iv) as a result of the condition
set forth in Section 6.1(b) not being capable of being satisfied or
waived by Buyer prior to or at such time as such condition can no
longer be satisfied or (B) Section 10.2(a)(vii) as a result of the
failure of the condition set forth in Section 6.1(b) to have been
satisfied by the Closing Deadline, Buyer will pay to Seller, within 10
Business Days of such termination, a termination fee equal to
$25,000,000 (the "Termination Fee") in immediately available funds;
provided that the Termination Fee shall not be payable if O-I, Seller
or any of their respective Affiliates have, in bad faith,
intentionally failed to comply with the provisions of the third
sentence of Section 5.3(a). The Termination Fee shall be paid by Buyer
to Seller regardless of whether Buyer has complied with its
obligations under Section 5.3 and 5.7. If this Agreement is terminated
in the manner contemplated by this Section 10.2(b)(ii), and Buyer has
not, in bad faith, intentionally failed to comply with the provisions
of the third sentence of Section 5.3(a), the Termination Fee payable
pursuant to this Section 10.2(b)(ii) shall be the Seller's sole and
exclusive remedy for all purposes under this Agreement or otherwise,
and Buyer shall have no liability whatsoever if this Agreement is
terminated under the circumstances provided in this Section
10.2(b)(ii) (including liability for actual, direct, indirect,
consequential (including lost profits), punitive, exemplary or special
damages), other than the obligation to pay any Termination Fee
required to be paid pursuant to this Section 10.2(b)(ii).
(c) Survival of Certain Provisions. The respective
obligations of the Parties pursuant to Section 5.1(c), Section 5.15, Article IX
and this Article X shall survive any termination of this Agreement.
10.3 Fees and Expenses. Whether or not the transactions
contemplated hereby or by the Additional Agreements are consummated, except as
expressly provided herein or therein, each of the Parties shall pay its own
fees and expenses incident to the negotiation, preparation, execution and
performance of this Agreement and the Additional Agreements, including
attorneys', accountants' and other advisors' fees and the fees and expenses of
any agent, broker, finder, investment banker, financial advisor or agent
retained by such Party in connection with the transactions contemplated by this
Agreement or by the Additional Agreements.
10.4 Notices. All notices, requests, demands, waivers and
other communications required or permitted to be given under this Agreement or
by the Additional Agreements shall be in writing and shall be deemed to have
been duly given if delivered personally or mailed, certified or registered mail
with postage prepaid, or sent by telegram or facsimile, as follows:
(a) if to Seller, to it at:
OI Plastic Products FTS, Inc.
c/o Owens-Illinois, Inc.
One Seagate
Xxxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxxxxx, Esq.
with a copy (which shall not constitute notice) to:
Xxxxxxx Xxxxxxx & Xxxxxxxx LLP
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxx X. Xxxxx, Esq.
(b) If to O-I, to it at the address set forth in Section 10.4
(a), with a copy (which shall not constitute notice) to Xxxxxxx Xxxxxxx &
Xxxxxxxx LLP at the address set forth in Section 10.4(a).
(c) if to Buyer, to it at:
Xxxxxx Packaging Company, L.P.
0000 Xxxxxxxx Xxxxxx Xxxx
Xxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxx X. Xxxxxxxx
with a copy (which shall not constitute notice) to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
Xxxx Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxx X. Xxxxx, Esq.
Xxxxxxx X. Xxxxxxxxx, Esq.
or to such other Person or address as a Party shall specify by notice in
writing to the other Parties. All such notices, requests, demands, waivers and
communications shall be deemed to have been received on the date of personal
delivery or on the third Business Day after the mailing thereof or, in the case
of notice by facsimile, when receipt thereof is confirmed by telephone.
10.5 Entire Agreement. This Agreement (including the
Schedules, O-I Disclosure Schedule, Buyer Disclosure Schedule, Exhibits,
Annexes, Additional Agreements and documents referred to herein and therein)
and the Confidentiality Agreement constitute the entire agreement between the
Parties and supersede all prior agreements and understandings, oral and
written, between the Parties with respect to the subject matter hereof.
10.6 No Third Party Beneficiaries. This Agreement shall inure
to the benefit of and be binding upon the Parties and their respective
successors and permitted assigns. Except as provided in Sections 9.1 and 9.2,
nothing in this Agreement or in any Additional Agreement, expressed or implied,
is intended to confer or shall confer upon any Person other than the Parties or
their respective successors and permitted assigns, any rights (whether legal or
equitable), benefits, remedies, obligations or liabilities of any nature
whatsoever under or by reason of this Agreement.
10.7 Assignability. This Agreement or any of the rights,
interests or obligations hereunder shall not be assigned by any of the Parties
without the prior written consent of the other Parties hereto; provided that
Buyer may, without the prior written consent of O-I or Seller, assign any or
all of its rights and/or delegate any or all of its obligations to a direct or
indirect wholly-owned subsidiary or other Affiliate of Buyer; provided,
however, that, notwithstanding any such assignment, Buyer shall remain liable
to perform all of its obligations hereunder, including the obligations to fund
the full amount of the Purchase Price. Notwithstanding anything to the contrary
set forth herein, Buyer and the Company may assign and transfer to any entity
providing financing for the transactions contemplated by this Agreement (or any
refinancing of such financing) as security for such financing all of the
interest, rights and remedies of Buyer and the Company with respect to this
Agreement. O-I and Seller hereby expressly consent to such assignment. Any such
assignment will be made for collateral security purposes only and will not
release or discharge the Buyer from any obligations it may have pursuant to
this Agreement. Notwithstanding anything to the contrary set forth herein,
Buyer and the Company may (i) authorize and empower such financing sources to
assert, either directly or on behalf of Buyer or the Company, any claims Buyer
or the Company may have against Seller or O-I under this Agreement and (ii)
make, constitute and appoint one agent bank in respect of such financing (and
all officers, employees and agents designated by such agent) as the true and
lawful attorney and agent-in-fact of Buyer and the Company for the purpose of
enabling the financing sources to assert and collect any such claims.
Notwithstanding anything to the contrary herein, Buyer may assign and transfer
any of its interest, rights, remedies and obligations with respect to this
Agreement to any Buyer Sub in connection with any Foreign Subsidiary Purchase
Agreement, but no such assignment shall relieve Buyer of its respective
obligations hereunder. Any purported assignment or delegation in violation of
this Section 10.7 shall be null and void.
10.8 Amendment and Modification; Waiver. Subject to
applicable Law, this Agreement may be amended, modified and supplemented by a
written instrument authorized and executed on behalf of the Parties at any time
prior to the Closing Date with respect to any of the terms contained herein. No
waiver by any Party of any of the provisions hereof or any default,
misrepresentation or breach of warranty or covenant hereunder, whether
intentional or not, shall be effective and valid unless explicitly set forth in
writing and executed by the Party so waiving. Except as provided in the
preceding sentence, no action taken pursuant to this Agreement, including any
investigation by or on behalf of any Party, shall be deemed to constitute a
waiver by the Party taking such action of compliance with any representations,
warranties, covenants or agreements contained herein and in any documents
delivered or to be delivered pursuant to this Agreement and in connection with
the Closing hereunder. The waiver by any Party of any default,
misrepresentation or breach of warranty or covenant hereunder shall not operate
or be construed as a waiver of any other prior or subsequent default,
misrepresentation or breach of warranty or covenant hereunder or affect in any
way any rights arising by virtue of any prior or subsequent such occurrence.
10.9 Public Announcements. Unless otherwise required by
applicable Law or the rules of any applicable stock exchange, prior to the
Closing Date, no press release or other public announcement pertaining to the
transactions contemplated by this Agreement or by the Additional Agreements
will be made by or on behalf of any Party, without the prior written approval
of the other Parties. Prior to issuing a press release or other public
announcement required by applicable Law or the rules of any applicable stock
exchange or stock market with respect to the execution and delivery of or the
transactions contemplated by this Agreement or by the Additional Agreements,
Buyer and Seller shall consult with each other and each Party shall have
reasonable opportunity to comment on such press release and prior to issuing a
press release or other public announcement with respect to the Closing, Buyer
and Seller shall mutually agree on the form of such press release or other
public announcement.
10.10 Section Headings Table of Contents. The section
headings contained in this Agreement and the table of contents to this
Agreement are inserted for reference purposes only and shall not affect in any
way the meaning or interpretation of this Agreement.
10.11 Severability. If any term or provision of this
Agreement shall be declared by any court of competent jurisdiction to be
invalid, illegal, void or unenforceable, all other terms and provisions of this
Agreement shall not be affected and shall remain in full force and effect, and
the validity and enforceability of the offending term or provision shall not be
affected in any other situation or in any other jurisdiction.
10.12 Counterparts. This Agreement may be executed in any
number of counterparts (including by means of facsimile), each of which shall
be deemed to be an original, and all of which together shall be deemed to be
one and the same instrument. Delivery of an executed counterpart of a signature
page to this Agreement by facsimile shall be effective as delivery of a
manually executed counterpart of this Agreement.
10.13 Enforcement. The Parties agree that irreparable damage
would occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached.
It is accordingly agreed that the Parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement in any court of the United States
located in the State of New York, this being in addition to any other remedy to
which they are entitled at law or in equity. In addition, each of the Parties
hereto (i) consents to submit itself to the personal jurisdiction of the United
States District Court for the Southern District of New York or any court of the
State of New York located in such district in the event any dispute arises out
of this Agreement or any of the transactions contemplated by this Agreement,
(ii) agrees that it will not attempt to deny or defeat such personal
jurisdiction or venue by motion or other request for leave from any such court
and (iii) agrees that it will not bring any action relating to this Agreement
or any of the transactions contemplated by this Agreement in any court other
than such courts sitting in the State of New York.
10.14 Choice of Forum. Each Party (a) consents to submit
itself to the personal jurisdiction of the U.S. District Court for the Southern
District of New York or any court of the State of New York located in such
district in the event any dispute arises out of this Agreement or the
Additional Agreements or any of the transactions contemplated hereby or
thereby, (b) agrees that it will not attempt to deny or defeat such personal
jurisdiction or venue by motion or other request for leave from any such court
and (c) agrees that it will not bring any action relating to this Agreement or
the Additional Agreements or any of the transactions contemplated hereby or
thereby in any court other than such courts sitting in the State of New York.
10.15 Waiver of Jury Trial. THE PARTIES HEREBY WAIVE ANY
RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING
TO THIS AGREEMENT OR ANY ADDITIONAL AGREEMENT OR ANY TRANSACTION CONTEMPLATED
HEREBY OR THEREBY, WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER
SOUNDING IN CONTRACT, TORT OR OTHERWISE. THE PARTIES AGREE THAT ANY OF THEM MAY
FILE A COPY OF THIS SECTION 10.15 WITH ANY COURT AS WRITTEN EVIDENCE OF THE
KNOWING, VOLUNTARY AND BARGAINED-FOR AGREEMENT AMONG THE PARTIES IRREVOCABLY TO
WAIVE TRIAL BY JURY AND THAT ANY ACTION OR PROCEEDING WHATSOEVER BETWEEN THEM
RELATING TO THIS AGREEMENT OR ANY ADDITIONAL AGREEMENT OR ANY TRANSACTION
CONTEMPLATED HEREBY OR THEREBY SHALL INSTEAD BE TRIED IN A COURT OF COMPETENT
JURISDICTION BY A JUDGE SITTING WITHOUT A JURY.
10.16 Governing Law. This Agreement and the rights and duties
of the Parties hereunder shall be governed by, and construed in accordance
with, the Laws of the State of New York.
10.17 Interpretation. When a reference is made in this
Agreement to an Article, Section or Exhibit, such reference shall be to an
Article or Section of, or an 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." The words "hereof," "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement. All terms defined in this
Agreement shall have the defined meanings when used in any certificate or other
document made or delivered pursuant hereto unless otherwise defined therein.
The definitions contained in this Agreement are applicable to the singular as
well as the plural forms of such terms and to the masculine as well as to the
feminine and neuter genders of such term. Any agreement, instrument or statute
defined or referred to herein or in any agreement or instrument that is
referred to herein means such agreement, instrument or statute as from time to
time amended, modified or supplemented, including (in the case of agreements or
instruments) by waiver or consent and (in the case of statutes) by succession
of comparable successor statutes and references to all attachments thereto and
instruments incorporated therein. References to a Person are also to its
permitted successors and permitted assigns.
WITNESS WHEREOF, each Party has duly executed and delivered
this Agreement as of the date
first above written.
XXXXXX PACKAGING COMPANY, L.P.
By GPC OPCO GP LLC, ITS GENERAL PARTNER
/s/Xxxx X. Xxxxxxxx
By:______________________________
Name: Xxxx X. Xxxxxxxx
Title: Chief Financial Officer,
Treasurer and Secretary
OI PLASTIC PRODUCTS FTS, INC.
/s/Xxxxx X. Xxxxxxx
By:______________________________
Name: Xxxxx X. Xxxxxxx
Title: Vice President
XXXXX-ILLINOIS, INC.
/s/Xxxxxx X. XxXxxxxxx
By:______________________________
Name: Xxxxxx X. XxXxxxxxx
Title: Chairman and Chief
Executive Officer
