Exhibit 2
STOCK PURCHASE AGREEMENT
BETWEEN
XXXXX BROS. CORPORATION
AND
SONOCO PRODUCTS COMPANY,
AS THE SOLE SHAREHOLDER OF
KMI CONTINENTAL FIBRE DRUM, INC., A DELAWARE CORPORATION, SONOCO
PLASTIC DRUM, INC., AN ILLINOIS CORPORATION, AND GBC HOLDING CO,
A DELAWARE CORPORATION
AND AS THE SOLE MEMBER OF
TOTAL PACKAGING SYSTEMS OF GEORGIA, LLC, A DELAWARE LIMITED
LIABILITY COMPANY
DATED: March 30, 1998
TABLE OF CONTENTS
Page
ARTICLE 1. DEFINITIONS 2
Section 1.1. Definitions 2
ARTICLE 2. PURCHASE AND SALE OF SHARES 10
Section 2.1. Purchase and Sale of Shares and TPS
Interest 10
Section 2.2. Purchase Price 11
Section 2.3. Delivery of Share Certificates and the
Assignment of the TPS Interest 11
ARTICLE 3. CLOSING 11
Section 3.1. Closing 11
Section 3.2. Transactions at Closing 11
ARTICLE 4. REPRESENTATIONS AND WARRANTIES OF THE SELLER 13
Section 4.1. Authority of Seller; No Conflict 13
Section 4.2. Organization and Qualification of Each
Acquired Company 14
Section 4.3. Capitalization of Each Acquired Company 15
Section 4.4. Books and Records 15
Section 4.5. Financial Statements 16
Section 4.6. Events Subsequent to Most Recent Fiscal
Year End 16
Section 4.7. Undisclosed Liabilities 17
Section 4.8. Compliance with Legal Requirements;
Governmental Authorizations 17
Section 4.9. Legal Proceedings; Orders 18
Section 4.10. Taxes 18
Section 4.11. Real Property 19
Section 4.12. Intellectual Property 21
Section 4.13. Personal Property; Condition and
Sufficiency of Assets 23
Section 4.14. Inventory 24
Section 4.15. Contracts; No Defaults 24
Section 4.16. Notes, Accounts and Other Miscellaneous
Receivables 25
Section 4.17. Bank Accounts; Powers of Attorney 26
Section 4.18. Insurance 26
Section 4.19. Product Warranty 26
Section 4.20. Product Liability 26
Section 4.21. Labor Relations and Compliance 27
Section 4.22. Employee Benefits 28
Section 4.23. Customers 30
Section 4.24. Guaranties 30
Section 4.25. Environmental Matters 30
Section 4.26. Certain Payments 31
Section 4.27. Related Person Services 31
Section 4.28. Brokers' Fees 00
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Xxxxxxx 4.29. Financial Projections 32
Section 4.30. Disclosure 32
ARTICLE 5. REPRESENTATIONS AND WARRANTIES OF BUYER 32
Section 5.1. Organization and Good Standing 32
Section 5.2. Authority; No Conflict 32
Section 5.3. Certain Proceedings 33
Section 5.4. Brokers' Fees 33
Section 5.5. Investment 33
Section 5.6. No Default 33
Section 5.7. Available Funds 33
ARTICLE 6. CERTAIN AGREEMENTS 33
Section 6.1. Investigation of the Acquired Companies
by Buyer 33
Section 6.2. Preserve Accuracy of Representations and
Warranties 34
Section 6.3. Consents of Third Parties; Governmental
Authorizations 34
Section 6.4. Operations Prior to the Closing Date 35
Section 6.5. Notification by Seller of Certain Matters 36
Section 6.6. Title Abstracts and Surveys 36
Section 6.7. Compliance with Environmental Property
Transfer Acts 37
Section 6.8. Change of Corporate Names 37
ARTICLE 7. ADDITIONAL AGREEMENTS 37
Section 7.1. Covenant Not to Compete or Solicit
Business 37
Section 7.2. Access to Records after Closing 39
Section 7.3. Employees and Employee Benefit Plans 39
Section 7.4. Confidential Nature of Information 45
Section 7.5. No Solicitation 45
Section 7.6. Notes, Accounts and Other Miscellaneous
Receivables 45
Section 7.7. Environmental Matters 46
Section 7.8. Financial Statement Consents 47
Section 7.9. Delivery of Audited Financial Statements 47
Section 7.10. Certain Contracts in the Name of Seller
Relating to the Industrial Container Business 47
Section 7.11. Option to Purchase Far East Fibre Drum
Operations 48
Section 7.12. Post Closing Real Estate Matters 49
Section 7.13. Post Closing Intellectual Property
Matters 49
Section 7.14. Patent Litigation Matters 50
ARTICLE 8. CONDITIONS PRECEDENT TO OBLIGATIONS TO CLOSE 50
Section 8.1. Conditions Precedent to Buyer's
Obligation to Close 50
Section 8.2. Conditions Precedent to Seller's
Obligation to Close 51
ARTICLE 9. COVENANTS AS TO TAX MATTERS 52
Section 9.1. Section 338(h)(10) Election 52
Section 9.2. Liability for Taxes 53
Section 9.3. Preparation and Filing of Tax Returns 54
Section 9.4. Cooperation and Assistance 55
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Section 9.5. Transfer Taxes 55
Section 9.6. Nonforeign Affidavit 55
ARTICLE 10. INDEMNIFICATION; REMEDIES 55
Section 10.1. Survival of Representations and
Warranties 55
Section 10.2. Indemnification and Payment of Damages
by Seller 56
Section 10.3. Indemnification and Payment of Damages
by Buyer 56
Section 10.4. Limitations on Indemnification 57
Section 10.5. Procedure for Indemnification--Third
Party Claims 57
Section 10.6. Procedure for Indemnification--Direct
Claims 58
Section 10.7. Procedure for Indemnification--Direct
Environmental Claims 58
ARTICLE 11. TERMINATION 61
Section 11.1. Termination 61
Section 11.2. Notice of Termination 61
Section 11.3. Effect of Termination 61
ARTICLE 12. GENERAL PROVISIONS 61
Section 12.1. Expenses 61
Section 12.2. Public Announcements 62
Section 12.3. Notices 62
Section 12.4. Further Assurances 63
Section 12.5. Waiver 63
Section 12.6. Entire Agreement and Modification 63
Section 12.7. Assignments, Successors, and No Third-
Party Rights 63
Section 12.8. Severability 64
Section 12.9. Section Headings, Construction 64
Section 12.10. Time of Essence 64
Section 12.11. Governing Law 64
Section 12.12. Counterparts 64
Section 12.13. Incorporation of Exhibits and Schedules 64
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STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement ("Agreement") is made as
of March 30, 1998, by and between Xxxxx Bros. Corporation, a
Delaware corporation (the "Buyer"), and Sonoco Products Company,
a South Carolina corporation (the "Seller").
WITNESSETH:
WHEREAS, Seller owns (a) directly all of the issued and
outstanding shares of KMI Continental Fibre Drum, Inc., a
Delaware corporation ("KMI"), which wholly owns, as a Subsidiary,
Sonoco Fibre Drum, Inc., a Delaware corporation ("SFD"), which in
turn wholly owns, as a Subsidiary, Sonoco Packaging Services,
Inc., a Delaware corporation ("SPS"), (b) directly all of the
issued and outstanding shares of Sonoco Plastic Drum, Inc., an
Illinois corporation ("SPD"), which wholly owns, as Subsidiaries,
Sonoco Plastic Drum Southwest Division, Inc., a Texas corporation
("SPD Southwest") and Sonoco Plastic Drum, Inc., a Kentucky
corporation ("SPD Southeast"), (c) directly all of the issued and
outstanding shares of GBC Holding Co., a Delaware corporation
("GBC Holding"), (d) indirectly through wholly-owned Subsidiaries
all of the issued and outstanding shares of Fibro Xxxxxx, X.X. de
C.V., a Mexican corporation ("Fibro Tambor") and (e) directly
100% percent of the membership interest in the equity and
earnings of Total Packaging Systems of Georgia, LLC, a Delaware
limited liability company ("TPS").
WHEREAS, KMI, SPD, GBC Holding, Fibro Tambor, TPS and
their respective Subsidiaries (including SFD, SPS, SPD Southwest
and SPD Southeast) are in the business of producing,
manufacturing, selling and leasing plastic drums, fibre drums and
intermediate bulk containers principally in the United States and
Mexico and refurbishing and reconditioning plastic drums
principally in the United States and Mexico, and the business
operations of such entities, together with the Far East Fibre
Drum Operations, constitute all of industrial container business
operation of the Seller and its affiliates (all of such business,
excluding therefrom the production, manufacturing, selling and
leasing of intermediate bulk containers pursuant to or in
connection with a License Agreement dated April 1, 1989 with
Sotralentz, S. A. (the "IBC Business") shall hereinafter be
referred to as the "Industrial Container Business").
WHEREAS, Seller desires to sell, and Buyer desires to
purchase, the Industrial Container Business in the manner set
forth in this Agreement.
WHEREAS, Seller desires to sell, and Buyer desires to
purchase, (a) all of the issued and outstanding shares (the
"Shares") of capital stock of (i) KMI, (ii) SPD, (iii) GBC
Holding and (iv) Fibro Tambor and (b) all of the membership
interest of Seller in the equity and earnings of TPS (the "TPS
Interest") for the consideration and on the terms set forth in
this Agreement.
NOW, THEREFORE, in consideration of the foregoing
premises and the representations, warranties, covenants and
agreements contained herein, Buyer and Seller agree as follows:
ARTICLE 1. DEFINITIONS
Section 1.1. Definitions. For purposes of this
Agreement, the following terms shall have the following meanings:
"Accounting Firm" has the meaning specified in Section
9.3(d).
"Acquired Company" means, individually, KMI, SPD, GBC
Holding, Fibro Tambor, TPS and each of their respective
Subsidiaries, including SFD, SPD Southwest, SPD Southeast and
SPS.
"Acquired Companies" means KMI, SPD, GBC Holding, Fibro
Tambor, TPS and each of their respective Subsidiaries, including
SFD, SPD Southwest, SPD Southeast and SPS, collectively.
"Agreement" has the meaning specified in the first
paragraph of this document.
"Allocations" has the meaning specified in Section
9.1(b).
"Applicable Contract" means any Contract specified in
Section 4.15.
"Assets" means all right, title and interest in and to
all of the assets of the Acquired Companies, including, without
limitation, (a) all real property, leaseholds and subleaseholds
therein, improvements, fixtures and fittings thereon, and
easements, rights-of-way and other appurtenances thereto, (b) all
tangible personal property (such as machinery, equipment,
inventories of raw materials and supplies, manufactured and
purchased parts, goods in process and finished goods, furniture,
automobiles, trucks, tractors, trailers, tools, jigs, dies and
office equipment), (c) Intellectual Property of the Acquired
Companies (excluding the name "Sonoco" and any derivations,
abbreviations or symbols thereof), the goodwill associated
therewith, licenses and sublicenses granted and obtained with
respect thereto, and rights thereunder, (d) accounts, accounts
receivable, notes receivable and all other receivables, (e) cash
and cash equivalents, (f) prepaid assets, (g) marketable
securities and (h) deposits.
"Basis" means any past or present fact, situation,
circumstance, status, condition, activity, practice, plan,
occurrence, event, incident, action, failure to act, or
transaction that forms or could form the basis for any specified
consequence.
"Buyer" has the meaning specified in the first paragraph of
this Agreement.
"Buyer Ancillary Agreements" means all Contracts,
instruments and documents being or to be executed and delivered
by Buyer under this Agreement or in connection herewith.
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"CERCLA" means the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended, and the
regulations promulgated thereunder.
"Closing" has the meaning specified in Section 3.1.
"Closing Date" means the date as of which the Closing
actually takes place.
"Company" means, individually, (a) KMI, (b) SPD and (c)
GBC Holding.
"Company Group" means the "affiliated group" (as
defined in Section 1504(a) of the IRC without regard to the
limitations contained in Section 1504(b) of the IRC) that
includes Seller.
"Company Property" means any real or personal property,
plant, building, facility, structure, underground storage tank,
equipment or unit, or other asset currently or formerly owned,
leased or operated by any of the Acquired Companies.
"Copyrights" means United States and foreign
copyrights, copyrightable works, and mask work, whether
registered or unregistered, and pending applications to register
the same.
"Consent" means any approval, consent, ratification,
waiver, or other authorization (including any Governmental
Authorization).
"Contaminant" means any waste, pollutant, hazardous or
toxic substance, petroleum, petroleum-based substance or waste,
or any other substance that is listed, defined, designated or
classified as, or otherwise determined to be, hazardous,
radioactive or toxic, or a pollutant or a contaminant under or
pursuant to, any Environmental Law.
"Contemplated Transactions" means all of the
transactions contemplated by this Agreement, including: (a) the
sale of the Shares of KMI, SPD, GBC Holding and Fibro Tambor by
Seller (or, in the case of the Shares of Fibro Tambor, one or
more of its wholly-owned Subsidiaries) to Buyer (or in the case
of the Shares of Fibro Tambor, one or more affiliates of Buyer
identified by Buyer; (b) the sale of the TPS Interest by Seller
to Buyer; (c) the sale of the entire Industrial Container
Business by Seller to Buyer, including the indirect acquisition
by Buyer of all of the issued and outstanding shares of SFD, SPD
Southwest, SPD Southeast and SPS, which entities are wholly-owned
Subsidiaries of either KMI or SPD; and (d) the performance by
Buyer and Seller of their respective covenants and obligations
under this Agreement.
"Contract" means any agreement, contract, obligation,
promise, or undertaking (whether written or oral and whether
express or implied) that is legally binding.
"Election" shall have the meaning specified in Section
9.1(a).
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"Encumbrance" means any lien (statutory or other),
claim, charge, security interest, mortgage, deed of trust,
pledge, hypothecation, assignment, conditional sale or other
title retention agreement, preference, priority or other security
agreement or preferential arrangement of any kind or nature, and
any easement, encroachment, covenant, restriction, right of way,
defect in title or other encumbrance of any kind.
"Environment" means soil, land surface or subsurface
strata, surface waters (including navigable waters, ocean waters,
streams, ponds, drainage basins, and wetlands), groundwaters,
drinking water supply, stream sediments, ambient air (including
indoor air), plant and animal life, and any other environmental
medium or natural resource.
"Environmental Encumbrance" means an Encumbrance in
favor of any Governmental Body for (a) any Liability under any
Environmental Law or (b) damages arising from, or costs incurred
by such Governmental Body in response to, a Release or threatened
Release of a Contaminant into the Environment.
"Environmental Law" means all Legal Requirements relating to
or addressing the Environment, including those that require or
relate to: (a) advising appropriate Governmental Bodies,
employees and the public of intended or actual Release of
Contaminants, violations of discharge limits, or other
prohibitions; (b) preventing, or reducing to acceptable levels,
the Release of Contaminants into the Environment; (c) reducing
the quantities, preventing the Release, or minimizing the
hazardous characteristics, of Contaminants that are generated;
(d) reducing to acceptable levels the risks inherent in the
transportation of Contaminants; (e) cleaning up Contaminants that
have been released or paying the costs of such clean up; or (f)
making responsible parties pay private parties, or groups of
them, for damages done to their health or the Environment, or
permitting self-appointed representatives of the public interest
to recover for injuries done to public assets. Environmental Law
includes, without limitation, the Clean Air Act, as amended,
CERCLA, the Federal Water Pollution Control Act, as amended, the
Occupational Safety and Health Act of 1970, as amended, RCRA, the
Safe Drinking Water Act, as amended, the Toxic Substances Control
Act, as amended, the Hazardous & Solid Waste Amendments Act of
1984, as amended, the Superfund Amendments and Reauthorization
Act of 1986, as amended, the Hazardous Materials Transportation
Act, as amended, and any state laws implementing or that are
analogs to the foregoing federal laws.
"Environmental Property Transfer Acts" means any
applicable Legal Requirements that, for environmental reasons,
conditions, restricts, prohibits or requires any notification or
disclosure with respect to the direct or indirect transfer, sale,
lease or closure of any property, including any so-called
"Environmental Cleanup Responsibility Acts" or "Responsible
Property Transfer Acts."
"ERISA" means the Employee Retirement Income Security
Act of 1974 or any successor law, and regulations and rules
issued pursuant to that Act or any successor law.
"Exclusive Distributorship Agreement" means the
Exclusive Distributorship Agreement between Buyer and Seller
attached hereto as Exhibit C.
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"Expenses" means any and all expenses incurred in
connection with investigating, defending or asserting any claim,
action, suit or proceeding incident to any matter indemnified
against hereunder (including, without limitation, court filing
fees, court costs, arbitration fees or costs, witness fees, and
reasonable fees and disbursements of legal counsel,
investigators, expert witnesses, consultants, accountants and
other professionals).
"Far East Fibre Drum Operations" has the meaning
specified in Section 7.1.
"Fibro Tambor" has the meaning specified in the
recitals of this Agreement.
"Financial Statements" has the meaning specified in
Section 4.5.
"GAAP" means generally accepted United States
accounting principles, applied on a basis consistent with the
basis on which any balance sheet or other financial statements
referred to in Section 4.5 were prepared.
"GBC Holding" has the meaning specified in the recitals
of this Agreement.
"Governmental Authorization" means any approval,
consent, license, permit, waiver, or other authorization issued,
granted, given, or otherwise made available by or under the
authority of any Governmental Body or pursuant to any Legal
Requirement.
"Governmental Body" means any: (a) nation, state,
county, city, town, village, district, or other jurisdiction of
any nature; (b) federal, state, local, municipal, foreign, or
other government; (c) governmental or quasi-governmental
authority of any nature (including any governmental agency,
branch, department, official, or entity and any court or other
tribunal); (d) multi-national organization or body; or (e) body
exercising, or entitled to exercise, any administrative,
executive, judicial, legislative, police, regulatory, or taxing
authority or power of any nature.
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976 or any successor law, and regulations
and rules issued pursuant to that Act or any successor law.
"IBC Business" has the meaning specified in the
recitals of this Agreement.
"IBC Sales Agreement" shall mean the IBC Sales
Agreement attached as Exhibit D.
"Industrial Container Business" has the meaning
specified in the recitals of this Agreement.
"Intellectual Property" means Copyrights, Patent
Rights, Trademarks and Trade Secrets and all agreements,
contracts, licenses, sublicenses, assignments and indemnities
which relate or pertain to any of the foregoing.
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"Interest Rate" has the meaning specified in Section
9.1(d).
"IRC" means the Internal Revenue Code of 1986 or any
successor law, and regulations issued by the IRS pursuant to the
Internal Revenue Code or any successor law.
"IRS" means the United States Internal Revenue Service
or any successor agency, and, to the extent relevant, the United
States Department of the Treasury.
"KMI" has the meaning specified in the first paragraph
of this document.
"Knowledge of the Seller" means the actual knowledge,
after due inquiry, of (a) any executive officer of Seller charged
with responsibility for the Industrial Container Business, (b)
any of the officers or management employees (including plant
managers) of any of the Acquired Companies, (c) any in-house
legal counsel for Seller or any of the Acquired Companies with
duties relating to the Industrial Container Business, (d) any
internal accountant, auditor or other employee of Seller or any
of the Acquired Companies charged with the responsibility for
preparing financial statements for any of the Acquired Companies
or for compliance by any of the Acquired Companies with Legal
Requirements relating to Taxes, including compliance with Legal
Requirements relating to Taxes when an Acquired Company is a
member of an affiliated, consolidated, combined or unitary group,
(e) any employee of Seller or any of the Acquired Companies
charged with responsibility for compliance by any of the Acquired
Companies with any Environmental Law or (f) any employee of
Seller or of the Acquired Companies charged with responsibility
for compliance by any of the Acquired Companies with Legal
Requirements relating to employment.
"Leased Real Property" has the meaning specified in
Section 4.11(b).
"Legal Requirement" means any federal, state, local,
municipal, foreign, international, multinational, or other
administrative order, constitution, law, ordinance, principle of
common law, regulation, statute, or treaty.
"Liability" mean any liability (whether known or
unknown, whether asserted or unasserted, whether absolute or
contingent, whether accrued or unaccrued, whether liquidated or
unliquidated, and whether due or to become due), including any
liability for Taxes.
"Losses" means any and all losses, costs, obligations,
liabilities, settlement payments, awards, judgments, fines,
penalties, damages, expenses, deficiencies or other charges.
"Material Adverse Effect" means any condition,
circumstance, change or effect (or any development that, insofar
as can be reasonably foreseen, would result in any condition,
circumstance, change or effect) that is materially adverse to the
Assets, business, financial condition, results of operations or
prospects of the Acquired Companies, taken as a whole.
"Most Recent Financial Statements" has the meaning
specified in Section 4.5.
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"Most Recent Fiscal Month End" has the meaning
specified in Section 4.5.
"Most Recent Fiscal Year End" has the meaning specified
in Section 4.5.
"Order" means any award, decision, injunction,
judgment, order, ruling, subpoena, or verdict entered, issued,
made, or rendered by any court, administrative agency, or other
Governmental Body or by any arbitrator.
"Ordinary Course of Business" means an action taken by
a Person if: (a) such action is consistent with the past
practices of such Person (including with respect to quantity and
frequency) and is taken in the ordinary course of the normal day-
to-day operations of such Person; and (b) such action is not
required to be authorized by the board of directors of such
Person (or by any Person or group of Persons exercising similar
authority).
"Organizational Documents" means (a) the articles or
certificate of incorporation and the bylaws or code of
regulations of a corporation; (b) the partnership agreement and
any certificate or statement of partnership of a general
partnership; (c) the limited partnership agreement and the
certificate of limited partnership of a limited partnership;
(d) the articles or certificate of organization of a limited
liability company and the operating agreement or limited
liability company agreement of a limited liability company;
(e) any charter or similar document adopted or filed in
connection with the creation, formation or organization of a
Person; and (f) any amendment to any of the foregoing.
"Owned Real Property" has the meaning specified in
Section 4.11(a).
"Owned Software" has the meaning specified in Section
4.12(g).
"Patent Rights" means United States and foreign
patents, patent applications, continuations, continuations-in-
part, divisions, reissues, patent disclosures, inventions
(whether or not patentable or reduced to practice) and
improvements thereto.
"Permitted Encumbrances" means: (a) liens for Taxes and
other governmental charges and assessments arising in the
Ordinary Course of Business which are not yet due and payable,
(b) liens of landlords and liens of carriers, warehousemen,
mechanics and materialmen and other like liens arising in the
Ordinary Course of Business for sums not yet due and payable (c)
other liens on property which are not material in amount, and (d)
easements, encroachments, covenants, restrictions, rights of way,
defects in title or other encumbrance of any kind which do not
interfere with, and are not violated by, the consummation of the
Contemplated Transactions, and do not impair the marketability
of, or materially detract from the value of, or materially impair
the existing use of, the property affected thereby.
"Person" means any individual, corporation (including
any non-profit corporation), general or limited partnership,
limited liability company, joint venture, estate, trust,
association, organization, labor union, or other entity or
Governmental Body.
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"Plan" has the meaning specified in Section 4.22.
"Proceeding" means any action, arbitration, audit,
hearing, investigation, litigation, or suit (whether civil,
criminal, administrative, investigative, or informal) commenced,
brought, conducted, or heard by or before, or otherwise
involving, any Governmental Body or arbitrator.
"Purchase Price" has the meaning specified in
Section 2.2.
"RCRA" means the Resource Conservation and Recovery Act of
1976, as amended, and the regulations promulgated thereunder.
"Related Person" means, with respect to a particular
individual: (a) each other member of such individual's Family;
(b) any Person that is directly or indirectly controlled by such
individual or one or more members of such individual's Family;
(c) any Person in which such individual or members of such
individual's Family hold (individually or in the aggregate) a
Material Interest; and (d) any Person with respect to which such
individual or one or more members of such individual's Family
serves as a director, officer, partner, executor, or trustee (or
in a similar capacity). With respect to a specified Person other
than an individual: (a) any Person that directly or indirectly
controls, is directly or indirectly controlled by, or is directly
or indirectly under common control with such specified Person;
(b) any Person that holds a Material Interest in such specified
Person; (c) each Person that serves as a director, officer,
partner, executor, or trustee of such specified Person (or in a
similar capacity); (d) any Person in which such specified Person
holds a Material Interest; and (e) any Person with respect to
which such specified Person serves as a general partner or a
trustee (or in a similar capacity). For purposes of this
definition, (a) the "Family" of an individual includes (i) the
individual, (ii) the individual's spouse, (iii) any other natural
person who is related to the individual or the individual's
spouse within the first degree, and (iv) any other natural person
who resides with such individual, and (b) "Material Interest"
means direct or indirect beneficial ownership (as defined in
Rule 13d-3 under the Securities Exchange Act of 1934) of voting
securities or other voting interests representing at least 10% of
the outstanding voting power of a Person or equity securities or
other equity interests representing at least 10% of the
outstanding equity securities or equity interests in a Person.
"Release" means any release, spill, emission, leaking,
pumping, injection, deposit, disposal, discharge, dispersal,
leaching or migration of a Contaminant into the indoor or outdoor
Environment or into or out of any Company Property, including the
movement of Contaminants through or in the air, soil, surface
water, groundwater or Company Property.
"Representative" means, with respect to a particular
Person, any director, officer, employee, agent, consultant,
advisor, or other representative of such Person, including legal
counsel, accountants, and financial advisors.
"Seller " has the meaning specified in the first
paragraph of this Agreement.
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"Seller Ancillary Agreements" means all Contracts,
instruments and documents being or to be executed and delivered
by Seller under this Agreement or in connection herewith.
"SFD" has the meaning specified in the recitals of this
Agreement.
"SPD" has the meaning specified in the recitals of this
Agreement.
"SPD Southeast" has the meaning specified in the
recitals of this Agreement.
"SPD Southwest" has the meaning specified in the
recitals of this Agreement.
"SPS" has the meaning specified in the recitals of this
Agreement.
"Shares" has the meaning specified in the recitals of
this Agreement.
"Software" means computer software programs and
software systems, including all databases, compilations, tool
sets, compilers, higher level or "proprietary" languages, related
documentation and materials, whether in source code, object code
or human readable form.
"Straddle Periods" has the meaning specified in Section
9.2(c).
"Subsidiary" means, with respect to any Person (the
"Owner"), any corporation or other Person of which securities or
other interests having the power to elect a majority of that
corporation's or other Person's board of directors or similar
governing body, or otherwise having the power to direct the
business and policies of that corporation or other Person (other
than securities or other interests having such power only upon
the happening of a contingency that has not occurred) are held by
the Owner or one or more of its Subsidiaries.
"Tax" means any federal, state, local, or foreign tax
(including any income, gross receipts, capital gains, license,
lease, service, service use, payroll, employment, excise,
severance, stamp, occupation, premium, windfall profits,
environmental (including taxes under IRC Section 59A), customs duties,
capital stock, franchise, profits, withholding, social security
(or similar), unemployment, disability, real property, personal
property, sales, use, ad valorem, transfer, registration, value
added, alternative or add-on minimum, estimated, or other tax of
any kind whatsoever) levy, assessment, tariff, duty, deficiency
or other fee, including any interest, fine, penalty, or addition
thereto, whether disputed or not, imposed, assessed or collected
by or under the authority of any Governmental Body or payable
pursuant to any Tax Sharing Arrangement or any other Contract
relating to sharing or payment of such tax, levy, assessment,
tariff, duty, deficiency or other fee or otherwise payable as a
result of being a member of an affiliated, consolidated, combined
or unitary group.
"Tax Return" means any return (including any
information return), report, statement, schedule, notice, form,
or other document or information filed with or submitted to, or
required to be filed with or submitted to, any Governmental Body
in connection with the determination, assessment, collection, or
payment of any Tax or in connection with
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the administration, implementation, or enforcement of or
compliance with any Legal Requirement relating to any Tax.
"Tax Sharing Arrangement" means any written or
unwritten agreement or arrangement for the allocation or payment
of Tax liabilities or payment for Tax benefits with respect to a
consolidated, combined or unitary Tax Return which Tax Return
includes one or more of the Acquired Companies.
"Threatened" means, in respect of any claim,
Proceeding, dispute, action, or other matter, any demand or
statement that has been made (orally or in writing) or any notice
that has been given (orally or in writing), or any other event
that has occurred or any other circumstances exist that would
lead a prudent Person to conclude that such a claim, Proceeding,
dispute, action, or other matter is likely to be asserted,
commenced, taken, or otherwise pursued in the future.
"TPS" has the meaning specified in the recitals of this
Agreement.
"TPS Interest" has the meaning specified in the
recitals of this Agreement.
"Trademarks" means United States, state and foreign
trademarks, service marks, logos, trade dress and trade names
(including all assumed or fictitious names under which any
Acquired Company is conducting business or has within the
previous five years conducted business), corporate names
(including, with respect to each of the foregoing, all of the
goodwill associated therewith), whether registered or
unregistered, and pending applications to register the foregoing.
"Trade Secrets" means confidential information, ideas,
compositions, trade secrets, know-how, manufacturing and
production processes and techniques, research information,
drawings, specification, designs, plans, improvements, concepts,
methods, processes, formulae, reports, data, customer and
supplier lists, mailing lists, financial, business and marketing
plans, or other proprietary information.
"Transitional Services Agreement" means the
Transitional Services Agreement between the Buyer and Seller in
the form attached hereto as Exhibit A.
ARTICLE 2. PURCHASE AND SALE OF SHARES
Section 2.1. Purchase and Sale of Shares and TPS
Interest . On and subject to the terms and conditions of this
Agreement, Buyer agrees to purchase from Seller (or, with respect
to the Shares of Fibro Tambor, Buyer and/or one or more of its
affiliates from one or more wholly-owned Subsidiaries of Seller),
and Seller agrees (and with respect to the Shares of Fibro
Tambor, Seller agrees to cause its wholly-owned Subsidiaries) to
sell, transfer, convey and deliver to Buyer (or with respect to
Fibro Tambor, Buyer and/or one or more of its affiliates), free
and clear of all Encumbrances, all of the Shares of KMI, SPD, GBC
Holding and Fibro Tambor at the Closing. On and subject to the
terms and conditions of this Agreement, Buyer also agrees to
purchase from Seller, and Seller agrees to sell, transfer, convey
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and deliver to Buyer, free and clear of all Encumbrances, the TPS
Interest at the Closing. At the Closing, KMI shall own, free and
clear of all Encumbrances, all of the issued and outstanding
shares of SFD (which in turn shall own, free and clear of all
Encumbrances, all of the issued and outstanding shares of SPS),
and SPD shall own, free and clear of all Encumbrances, all of the
issued and outstanding shares of SPD Southeast and SPD Southwest.
Section 2.2. Purchase Price. The aggregate purchase
price (the "Purchase Price") for the Industrial Container
Business (including for all of the Shares and the TPS Interest)
is One Hundred Eighty-Five Million Three Hundred Ninety Five
Thousand Dollars ($185,395,000). At the Closing, Buyer shall pay
to Seller the Purchase Price by wire transfer in accordance with
written instructions delivered to Buyer from Seller at least two
business days prior to the Closing.
Section 2.3. Delivery of Share Certificates and the
Assignment of the TPS Interest. At the Closing, Seller shall
deliver to Buyer valid share certificates issued by KMI, SPD, GBC
Holding and Fibro Tambor evidencing all the Shares of each such
corporation owned of record by Seller (or in the case of Fibro
Tambor, owned of record by one or more wholly-owned Subsidiaries
of Seller), each duly endorsed in blank or with separate stock
powers duly endorsed in blank attached, with signatures
guaranteed by a commercial bank or by a member firm of the New
York Stock Exchange. At the Closing, Seller shall deliver an
assignment, duly executed by Seller, transferring all of the TPS
Interest to Buyer. The assignment shall be in such form as
Buyer's counsel may reasonably require.
ARTICLE 3. CLOSING
Section 3.1. Closing. The closing of the Contemplated
Transactions (the "Closing") shall take place at the offices of
Buyer's counsel, Vorys, Xxxxx, Xxxxxxx and Xxxxx LLP, at 00 Xxxx
Xxx Xxxxxx, Xxxxxxxx, Xxxx, at 2:00 p.m. (local time) on March
30, 1998.
Section 3.2. Transactions at Closing.
(a) At Closing, Seller shall deliver to Buyer the
following:
(i) the share certificates evidencing the Shares
of KMI, SPD, GBC Holding and Fibro Tambor as
provided in Section 2.3;
(ii) the original corporate minute books and stock
records of each Acquired Company, together with
the original share certificates evidencing that
(a) SFD is a wholly-owned Subsidiary of KMI,
(b) SPS is a wholly-owned Subsidiary of SFD,
(c) SPD Southwest is a wholly-owned Subsidiary
of SPD and (d) SPD Southeast is a wholly-owned
Subsidiary of SPD;
(iii) an assignment of the TPS Interest as provided
in Section 2.3, together with (a) the
releases and resignations contemplated by the
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Limited Liability Company Agreement of TPS
(including the resignations and releases of
Xxxx Xxxxxxxxxxx and Xxxx Xxxx as members of
the Members Committee of TPS) in connection
with such assignment, (b) the original minute
books of TPS and (c) copies of documents
executed in connection with the purchase by
Seller of the membership interest of Twin
City Container, Inc. in February 1998;
(iv) the certificate of an officer of Seller
described in Section 8.1(b);
(v) a certificate of good standing of Seller, as
of the most recent practicable date, from the
Secretary of State of the State of South
Carolina and from the Secretary of State of
the state of incorporation or organization
for each of the Acquired Companies;
(vi) the certificate of an officer of Seller
certifying (a) the adoption and copies of
resolutions of the Board of Directors of
Seller approving the Contemplated
Transactions and (b) the incumbency of the
officers of Seller who are either executing
this Agreement or any of the other documents
contemplated hereunder, and the certificate
of an officer of affiliates of the Seller
certifying (a) the adoption and copies of any
resolutions evidencing any other required
corporate approvals by any of the affiliates
of the Seller and (b) the incumbency of the
officers of affiliates of Seller who are
executing any of the other documents
contemplated hereunder;
(vii) the certificate of an officer of each
Acquired Company certifying and attaching
thereto true and complete copies of the
Organizational Documents of the Acquired
Company (the certificate of incorporation
attached thereto shall be certified by the
applicable Secretary of State);
(viii) opinion of counsel described in Section
8.1(d);
(ix) evidence of the receipt of the Consents, as
described in Section 8.1(f);
(x) evidence of the assignment by Seller or an
affiliate of the Seller (other than an
Acquired Company) to an Acquired Company of
specific identified Contracts (including
those requiring Consent to the assignment of
such Contract and those not requiring Consent
to the assignment of the Contract) that
relate to the Industrial Container Business
but that have as a party thereto Seller or an
affiliate of Seller other than an Acquired
Company (provided that the form of assignment
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and the Acquired Company to which such
Contract shall be assigned shall be
reasonably acceptable to Buyer);
(xi) the executed Transitional Services Agreement;
(xii) evidence of the filing of the name changes
for the Acquired Companies as contemplated by
Section 6.8 of this Agreement;
(xiii) evidence of the termination of the Trademark
License Agreement as between SPC Resources,
Inc. and any one or more of the Acquired
Companies that are parties to such agreement;
(xiv) the executed IBC Sales Agreement; and
(xv) the executed Exclusive Distributorship
Agreement.
(b) At Closing, Buyer shall deliver to Seller the
following:
(i) the Purchase Price, in the manner set forth
in Section 2.2;
(ii) the certificate of an officer of Buyer
described in Section 8.2(b);
(iii) opinion of counsel described in Section
8.2(d);
(iv) certificates of incumbency of the officers of
Buyer who are executing this Agreement and
the other documents contemplated hereunder;
(v) certified copies of resolutions of the Board
of Directors of Buyer approving the
Contemplated Transactions;
(vi) the executed Transitional Services Agreement;
(vii) the executed IBC Sales Agreement; and
(viii) the executed Exclusive Distributorship
Agreement.
ARTICLE 4. REPRESENTATIONS AND WARRANTIES OF THE SELLER
Seller represents and warrants to Buyer as follows:
Section 4.1. Organization and Authority of Seller; No
Conflict.
(a) Seller is a corporation duly organized, validly
existing, and in good standing under the laws of the State of
South Carolina. Seller has full corporate power and authority to
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conduct its business as it is now being conducted. Seller has
full corporate power and authority to execute, deliver and
perform this Agreement and each Seller Ancillary Agreement to
which it is a party. This Agreement and each Seller Ancillary
Agreement has been duly approved and authorized by all requisite
corporate action. This Agreement constitutes the valid and
legally binding obligation of Seller, enforceable against Seller
in accordance with its terms. Upon the execution and delivery of
the Seller Ancillary Agreements, such agreements will constitute
the valid and legally binding obligations of Seller, enforceable
against Seller in accordance with their respective terms.
(b) Except as set forth in Schedule 4.1(b), neither
the execution and delivery of this Agreement or any of the Seller
Ancillary Agreements nor the consummation or performance of this
Agreement, any of the Seller Ancillary Agreements or any of the
Contemplated Transactions will, directly or indirectly (with or
without notice or lapse of time): (i) contravene, conflict with,
or result in a violation of (A) any provision of the
Organizational Documents of Seller or any of the Acquired
Companies, or (B) any resolution adopted by the board of
directors or the shareholder(s) of Seller or any of the Acquired
Companies; (ii) contravene, conflict with, or result in a
violation of, or give any Governmental Body or other Person the
right to challenge any of the Contemplated Transactions or to
exercise any remedy or obtain any relief under, any Legal
Requirement or any Order to which Seller, any of the Acquired
Companies, or any of the Assets owned or used by any of the
Acquired Companies may be subject; (iii) contravene, conflict
with, or result in a violation of any of the terms or
requirements of, or give any Governmental Body the right to
revoke, withdraw, suspend, cancel, terminate, or modify, any
material Governmental Authorization that is held by any of the
Acquired Companies or that otherwise relates to the Industrial
Container Business of, or any of the Assets owned or used by, any
of the Acquired Companies; (iv) contravene, conflict with, or
result in a violation or breach of any provision of, or give any
Person the right to declare a default or exercise any remedy
under, or to accelerate the maturity or performance of, or to
cancel, terminate, or modify, any Applicable Contract; or (v)
result in the imposition or creation of any Encumbrance upon or
with respect to any of the Assets owned or used by any of the
Acquired Companies. Except as provided under the HSR Act and
except as set forth in Schedule 4.1(b), neither Seller nor any of
the Acquired Companies is or will be required to give any notice
to or obtain any Consent from any Person (including from any
Governmental Body) in connection with the execution and delivery
of this Agreement, any of the Seller Ancillary Agreements or the
consummation or performance of any of the Contemplated
Transactions.
Section 4.2. Organization and Qualification of Each
Acquired Company. Schedule 4.2 contains a complete and accurate
list for each Acquired Company of its name, its jurisdiction of
incorporation or organization, and other jurisdictions in which
it is authorized to do business. Each Acquired Company (other
than TPS) is a corporation duly organized, validly existing, and
in good standing under the laws of its jurisdiction of
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incorporation, and is duly qualified as a foreign corporation and
is in good standing in each jurisdiction where the character of
its properties owned or leased or the nature of its activities
makes such qualification necessary, except where the failure to
be so qualified would not result in Liability of more than
$10,000 individually to any Acquired Company or more than $25,000
in the aggregate to the Acquired Companies. TPS is a limited
liability company duly organized, validly existing, and in good
standing under the laws of its jurisdiction of organization, and
is duly qualified as a foreign limited liability company and is
in good standing in each jurisdiction where the character of its
properties owned or leased or the nature of its activities makes
such qualification necessary. No other jurisdiction has
demanded, requested or otherwise indicated that any such Acquired
Company is required so to qualify. Each Acquired Company has
full power and authority to conduct its business as it is now
being conducted.
Section 4.3. Capitalization of Each Acquired Company.
Schedule 4.3 sets forth (a) the name of each Acquired Company,
(b) the authorized capital stock (or, in the case of TPS, equity
interests) of the Acquired Company, (c) the number of issued and
outstanding shares of capital stock (or, in the case of TPS,
equity interests) of each Acquired Company and (d) the beneficial
and record owner of all such shares of capital stock or equity
interest. All of the issued and outstanding shares of capital
stock (or, in the case of TPS, equity interests) of each Acquired
Company have been validly issued, are fully paid and
nonassessable. All of the issued and outstanding shares of
capital stock (or, in the case of TPS, equity interests) of each
Acquired Company are owned by the record holder thereof free and
clear of all Encumbrances. There are no outstanding
subscriptions, options, warrants, calls, rights (including
unsatisfied preemptive rights), convertible securities,
obligations to make capital contributions or advances, or voting
trust arrangements, proxies, stockholders' agreements or other
agreements, commitments or understandings of any character
relating to the issued or unissued capital stock (or, in the case
of TPS, equity interests) of any Acquired Company or securities
convertible into, exchangeable for or evidencing the right to
subscribe for any shares of such capital stock or equity
interest, or otherwise obligating Seller or any Acquired Company
to issue, transfer or sell any of such capital stock, equity
interests or such other securities. There are no outstanding or
authorized stock appreciation, phantom stock, profit
participation or similar rights with respect to any Acquired
Company or any of its securities. Except as set forth in
Schedule 4.3, no Acquired Company owns, directly or indirectly,
of record or beneficially, or has any Contract to acquire, any
equity securities or other securities of any Person (other than
equity securities of Acquired Companies).
Section 4.4. Books and Records. The books of account,
minute books, stock record books and other corporate records of
the Acquired Companies are true and complete in all material
respects, have been maintained in accordance with Legal
Requirements and accurately present and reflect in all material
respects all the transactions therein described. The minute
books of the Acquired Companies contain accurate and complete
records of all meetings held of, and action taken by, the
stockholders (or, in the case of TPS, members), the Boards of
Directors and committees of the Boards of Directors (or in the
case of TPS, the Board of Managers) of the Acquired Companies on
or after (i) in the case of SPD, SPD Southeast and SPD Southwest,
March 3, 1986, and (ii) in the case of KMI and SFD, February 25,
1985, and no meeting of any such stockholders (or, in the case of
TPS, members), Board of Directors (or in the case of TPS, the
Board of Managers) or committee has been held for which minutes
have not been prepared and are not contained in such minute
books. At the Closing, all of those books and records (including
the minute books of the Acquired Companies) will be in the
possession of the Acquired Companies.
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Section 4.5. Financial Statements. Subject to the
provisions of Section 7.9 of this Agreement, attached hereto as
Schedule 4.5 are the following financial statements (collectively
the "Financial Statements"): (a) audited consolidated financial
statements for the fiscal year ended December 31, 1995, for the
fiscal year ended December 31, 1996 and for the fiscal year ended
December 31, 1997 (with the December 31, 1997 being referred to
as the "Most Recent Fiscal Year End") for the Acquired Companies;
and (b) unaudited interim financial statements (the "Most Recent
Financial Statements") as of and for the two months ended
February 28, 1998 (the "Most Recent Fiscal Month End") for the
Acquired Companies. The audited Financial Statements (including
the notes thereto) have been prepared in accordance with GAAP
applied on a consistent basis throughout the periods covered
thereby, present fairly the financial condition of the Acquired
Companies as of such dates and the results of operations of the
Acquired Companies for such periods. The unaudited Financial
Statements have been prepared on a consistent basis with past
practices, present fairly the financial condition of the Acquired
Companies as of such date and the results of operations of the
Acquired Companies for such period. Also attached as Schedule
4.5 are the audited consolidated financial statements for the
fiscal year ended December 31, 1995, for the fiscal year ended
December 31, 1996 and for the fiscal year ended December 31, 1997
for the Acquired Companies that covers both the Industrial
Container Business and the IBC Business.
Section 4.6. Events Subsequent to Most Recent Fiscal
Year End. Since the Most Recent Fiscal Year End, there has not
been any material adverse change in the Assets, financial
condition, operations, results of operations, or the Industrial
Container Business of the Acquired Companies. Since the Most
Recent Fiscal Year End, except as set forth in Schedule 4.6 or as
provided in this Agreement, each of the Acquired Companies has
operated in the Ordinary Course of Business. Without limiting
the generality of the foregoing, since that date, except as set
forth in Schedule 4.6 or as otherwise provided in this Agreement:
(a) the Acquired Companies have not sold, leased, transferred, or
assigned any of their Assets, tangible or intangible, other than
for a fair consideration in the Ordinary Course of Business and
have not incurred any Liability other than in the Ordinary Course
of Business; (b) the Acquired Companies have not entered into any
Applicable Contract outside the Ordinary Course of Business; (c)
the Acquired Companies have not accelerated, delayed or postponed
the payment of accounts payable and other Liabilities outside the
Ordinary Course of Business or the collection of notes or
accounts receivable outside the Ordinary Course of Business; (d)
the Acquired Companies have maintained inventory (including work
-in-process) at levels consistent with their past practices in
the Ordinary Course of Business, (e) the Acquired Companies have
not accelerated, delayed or postponed the acquisition, repair or
replacement of machinery, equipment and other assets used in
connection with the business of the Acquired Companies in the
Ordinary Course of Business; (f) the Acquired Companies have not
canceled, compromised, waived, or released any right or claim (or
series of related rights and claims) outside the Ordinary Course
of Business; (g) the Acquired Companies have not experienced any
material damage, destruction, or loss (whether or not covered by
insurance) to their Assets; (h) the Acquired Companies have not
entered into any employment contract or collective bargaining
agreement, written or oral, or modified the terms of any existing
such contract or agreement outside the Ordinary Course of
Business; (i) the Acquired Companies have not made any other
change in employment terms for any of its directors, officers,
and employees outside the Ordinary Course of Business; (j) the
Acquired Companies have not made, or agreed to make, any payment
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of cash or distribution of assets to Seller or any affiliate of
Seller except for payments for services rendered or products
delivered in the Ordinary Course of Business and except for
distributions of cash made in the Ordinary Course of Business;
(k) the Acquired Companies have not made any change in the
accounting principles and practices used by the Acquired
Companies from those applied in the preparation of the Financial
Statements; (l) the Acquired Companies have not prepared or filed
any Tax Return inconsistent with past practice or, on any such
Tax Return, taken any position, made any election, or adopted any
method that is inconsistent with positions taken, elections made
or methods used in preparing or filing similar Tax Returns in
prior periods (including, without limitation, positions,
elections or methods which would have the effect of deferring
income to periods for which Buyer is liable pursuant to Section
9.2(b) or accelerating deductions to periods for which Seller is
liable pursuant to Section 9.2(a), (m) the Acquired Companies
have not paid, agreed to pay or incurred any Liability for any
payment for any contribution to any Plan other than in the
Ordinary Course of Business or paid any bonus to any employees
other than in the Ordinary Course of Business or granted any
increase in compensation to any employee other than in the
Ordinary Course of Business or made any increase or enhancement
of benefits in any of the Plans other than in the Ordinary Course
of Business and (s) there has not been any other occurrence,
event, incident, action, failure to act, or transaction outside
the Ordinary Course of Business involving any of the Acquired
Companies.
Section 4.7. Undisclosed Liabilities. Except as set
forth in Schedule 4.7, the Acquired Companies do not have any
Liability (and there is no Basis for any present or future
Proceeding against it giving rise to any Liability), except for
(a) Liabilities set forth on the face of the Most Recent
Financial Statements and (b) Liabilities which have arisen after
the Most Recent Fiscal Month End in the Ordinary Course of
Business (none of which results from, arises out of, relates to,
is in the nature of, or was caused by any breach of contract,
breach of warranty, tort, infringement, or violation of any Legal
Requirement); and (c) Liabilities which do not either singly or
in the aggregate exceed $20,000.
Section 4.8. Compliance with Legal Requirements;
Governmental Authorizations.
(a) Except as set forth in Schedule 4.8: (i) each
Acquired Company is and has been in compliance in all material
respects with each Legal Requirement that is or was applicable to
it or to the conduct or operation of the Industrial Container
Business or the ownership or use of any of its Assets; and (ii)
to the Knowledge of Seller, no Acquired Company has received any
notice or other communication from any Governmental Body or any
other Person regarding any actual or alleged violation of, or
failure to comply with, any material Legal Requirement.
(b) Schedule 4.8 contains a complete and accurate list
of each Governmental Authorization that is held by an Acquired
Company or that otherwise relates to the business of, or to any
of the Assets owned or used by, the Acquired Company. Each
Governmental Authorization listed or required to be listed in
Schedule 4.8 is valid and in full force and effect. The
Governmental Authorizations listed in Schedule 4.8 collectively
constitute all of the Governmental Authorizations necessary to
permit the Acquired Company to lawfully conduct and operate the
Industrial Container Business in the manner it currently conducts
and operates such business and to permit the Acquired Company to
own and use its Assets in the manner in which it currently owns
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and uses such Assets, except for such Governmental Authorizations
where the failure to have such Governmental Authorizations would
not result in Liability of more than $10,000 individually to any
Acquired Company or more than $25,000 in the aggregate to the
Acquired Companies. Except as set forth on Schedule 4.8, the
purchase of the TPS Interest and the Shares of KMI, SPD, GBC
Holding and Fibro Tambor by Buyer shall not invalidate any such
Governmental Authorization or otherwise require any filing with
or disclosure to any Governmental Body in order to maintain the
validity of, keep in full force and effect, the Governmental
Authorizations.
Section 4.9. Legal Proceedings; Orders. Except as set
forth in Schedule 4.9, there is no pending Proceeding: (a) that
has been commenced by or against an Acquired Company or that
otherwise relates to or may materially affect the business of, or
any of the Assets owned or used by, an Acquired Company; or (b)
that challenges, or that may have the effect of preventing,
delaying, making illegal, or otherwise interfering with, any of
the Contemplated Transactions. To the Knowledge of the Seller,
no such Proceeding has been Threatened. Except as set forth in
Schedule 4.9: (a) there is no Order to which an Acquired Company,
or any of the Assets owned or used by an Acquired Company, is
subject; and (b) to the Knowledge of the Seller, no officer,
director, agent, or employee of Acquired Company is subject to
any Order that prohibits such officer, director, agent, or
employee from engaging in or continuing any conduct, activity, or
practice relating to the business of the Acquired Company.
Section 4.10. Taxes.
(a) Except as set forth in Schedule 4.10, (i) each
Acquired Company and each Company Group has duly and timely filed
all Tax Returns required to be filed on or before the Closing
Date (taking into account permitted extensions), (ii) all items
of income, gain, loss, deduction and credit or other items
required to be included in each such Tax Return have been so
included and all information provided in each such Tax Return is
true, correct and complete, (iii) all Taxes owed by an Acquired
Company or a Company Group which have become due with respect to
the period covered by each such Tax Return have been timely paid
in full, (iv) all withholding Tax requirements imposed on or with
respect to an Acquired Company or a Company Group have been
satisfied in full, and (v) no penalty, interest or other charge
is or will become due with respect to the late filing of any such
Tax Return or late payment of any such Tax.
(b) None of the Tax Returns of an Acquired Company
that only contain financial information concerning the Acquired
Company has been audited by a Governmental Body except as set
forth in Schedule 4.10 and except for Tax Returns for periods for
which the statute of limitations has expired.
(c) There is no claim against an Acquired Company for
any Taxes, and no assessment, deficiency or adjustment has been
asserted or proposed with respect to any Tax Return of an
Acquired Company that only contains financial information
concerning the Acquired Company other than those disclosed in
Schedule 4.10. To the Knowledge of the Seller, there is no Basis
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for any assessment, deficiency or adjustment with respect to any
Tax Return of an Acquired Company that only contains financial
information concerning the Acquired Company.
(d) Except as set forth in Schedule 4.10, there is not
in force any extension of time with respect to the due date for
the filing of any Tax Return of an Acquired Company that only
contains financial information concerning the Acquired Company or
any waiver or agreement for any extension of time for the
assessment or payment of any Tax of or with respect to an
Acquired Company.
(e) Except as set forth in Schedule 4.10, none of the
Acquired Companies has any Liability for the Taxes of any Person
as a transferee or successor, by Contract or otherwise.
(f) There are no liens for Taxes (other than for
current Taxes not yet due and payable) upon the Assets of any
Acquired Company.
(g) All Tax Sharing Arrangements and Tax indemnity
arrangements relating to any Acquired Company (other than this
Agreement) will terminate prior to the Closing Date, and no
Acquired Company will have any Liability thereunder on or after
the Closing Date.
(h) None of the Acquired Companies is or has been a
United States Real Property Holding Corporation (as defined in
Section 897(c)(2) of the IRC) during the applicable period
specified in Section 897(c)(1)(A)(ii) of the IRC.
(i) TPS is disregarded as an entity separate from its
owner for federal income Tax purposes and has not elected
otherwise pursuant to Treasury Regulation Section 301.7701-3.
Section 4.11. Real Property.
(a) Schedule 4.11(a) contains a brief description of
(i) each parcel of real property owned by an Acquired Company
(the "Owned Real Property") (showing the record title holder,
legal description, permanent index number, location,
improvements, the uses being made thereof and any indebtedness
secured by an Encumbrance thereon) and (ii) each option held by
an Acquired Company to acquire any real property. Except as set
forth in Schedule 4.11(a), each Acquired Company has good,
marketable and insurable (at ordinary rates) title in fee simple
absolute to all Owned Real Property held of record by such
Acquired Company and to all buildings, structures and other
improvements thereon, in each case free and clear of all
Encumbrances, except for Permitted Encumbrances. Except as set
forth on Schedule 4.11(a), each Acquired Company has fulfilled
and performed in all material respects all its obligations, and
all obligations binding upon any Owned Real Property, under each
of the Encumbrances to which any Owned Real Property is subject,
and, to the Knowledge of Seller, no Acquired Company is in breach
or default under, or in violation of or noncompliance with, any
such Encumbrances, and to the Knowledge of Seller, no event has
occurred and no condition or state of facts exists which, with
the passage of time or the giving of notice or both, would
constitute such a breach, default, violation or noncompliance.
Except as set forth on Schedule 4.11(a), each Owned Real Property
has received all Governmental Authorizations required in
connection with the operation thereof and has been operated and
maintained in all material respects in accordance with all Legal
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Requirements (including all Legal Requirements relating to
zoning). The consummation of the Contemplated Transactions by
this Agreement will not result in any breach or violation of,
default under or noncompliance with, or any forfeiture or
impairment of any rights under, any Encumbrance to which any
Owned Real Property is subject, or require any consent, approval
or act of, or the making of any filing with, any Person party to
or benefited by or possessing the power or authority to exercise
rights or remedies under or with respect to any such Encumbrance.
All public utilities currently utilized at each Owned Real
Property give adequate service to the Owned Real Property, and
the Owned Real Property has unlimited access to and from publicly
dedicated streets, the responsibility for maintenance of which
has been accepted by the appropriate Governmental Body. Complete
and correct copies of any instruments evidencing Encumbrances,
commitments for the issuance of title insurance, title opinions,
surveys and appraisals in Seller's or the Acquired Company's
possession and any policies of title insurance currently in force
and in the possession of Seller or the Acquired Company with
respect to each such parcel have heretofore been delivered by
Seller to Buyer.
(b) Schedule 4.11(b) sets forth a list and brief
description of each lease or similar agreement (showing the
parties thereto, annual rental, expiration date, renewal,
purchase and termination options, if any, the improvements
thereon, the uses being made thereof, and the location and the
legal description of the real property covered by, and the space
occupied under, such lease or other agreement) under which (i) an
Acquired Company is lessee or sublessee of, or holds, uses or
operates, any real property owned by any third Person (the
"Leased Real Property") or (ii) an Acquired Company is lessor of
any of the Owned Real Property. Except as set forth in Schedule
4.11(b), each Acquired Company has the right to quiet enjoyment
of all the Leased Real Property described in such Schedule for
the full term of each such lease or similar agreement (and any
renewal option) relating thereto, and the leasehold or other
interest of the Acquired Company in such Leased Real Property is
not subject or subordinate to any Encumbrance, except for
Permitted Encumbrances. Except as set forth on Schedule 4.11(b)
and except for Permitted Encumbrances, there are no agreements or
other documents governing or affecting the occupancy or tenancy
of any of the Leased Real Property by an Acquired Company or of
any of the Owned Real Property by any Person other than an
Acquired Company. With respect to each lease and similar
agreement listed in Schedule 4.11(b), except as set forth on
Schedule 4.11(b) : (i) the lease is legal, valid, binding,
enforceable, and is in full force and effect; (ii) no Acquired
Company, and to the Knowledge of the Seller, no other party is in
breach or default, and to the Knowledge of Seller, no event has
occurred which, with notice or lapse of time, would constitute a
breach or default or permit termination, modification, or
acceleration thereunder; (iii) no Acquired Company, and to the
Knowledge of the Seller, no other party to the lease has
repudiated any provision thereof; (iv) there are no disputes,
oral agreements, or forbearance programs in effect as to the
lease; (v) no Acquired Company has assigned, transferred,
conveyed, mortgaged, deeded in trust, or encumbered any interest
in the leasehold; (vi) to the Knowledge of Seller all facilities
leased or subleased thereunder have received all Governmental
Authorizations required in connection with the operation thereof
and have been operated and maintained in accordance with all
Legal Requirements (including all Legal Requirements relating to
zoning); (vii) all facilities leased thereunder are supplied with
public utilities that give adequate service to the Leased Real
Property, and the Leased Real Property has unlimited access to
and from publicly dedicated streets, the responsibility for
maintenance of which has been accepted by the appropriate
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Governmental Body, (viii) no rights or interests of any Acquired
Company under the leases or subleases have been waived or
released; and (ix) no consent of the lessor is required in
connection with the Contemplated Transactions. Complete and
correct copies of any instruments evidencing Encumbrances,
commitments for the issuance of title insurance, title opinions,
surveys and appraisals in Seller's or an Acquired Company's
possession and any policies of title insurance currently in force
and in the possession of Seller or an Acquired Company with
respect to each such parcel of Leased Real Property have
heretofore been delivered by Seller to Buyer.
(c) Neither the whole nor any part of the Owned Real
Property or any Leased Real Property is subject to any Proceeding
for condemnation, eminent domain or other taking by any public
authority, and, to the Knowledge of the Seller, no such
condemnation or other taking is Threatened.
(d) Neither Seller nor any Acquired Company has
received any notice from any Governmental Body concerning any
actual or contemplated public improvements made or to be made by
any Governmental Body, the costs of which are or are to become
special assessments and a lien upon any Owned Real Property or
Leased Real Property, and, to the Knowledge of the Seller, no
such public improvement is Threatened.
Section 4.12. Intellectual Property.
(a) Schedule 4.12(a) contains a list and description
(showing in each case any product, device, process, service,
business or publication covered thereby, the registered or other
owner, expiration date and number, if any) of all Copyrights,
Patent Rights and Trademarks owned by, licensed to or used by an
Acquired Company.
(b) Schedule 4.12(b) contains a list and description
(showing in each case any owner, licensor or licensee) of all
Software owned by, licensed to or used by an Acquired Company
which is material to the Industrial Container Business, except
Software licensed to an Acquired Company that is available in
consumer retail stores and subject to "shrink-wrap" license
agreements.
(c) Schedule 4.12(c) contains a list and description
(showing in each case the parties thereto and the material terms
thereof) of all agreements, contracts, licenses, sublicenses,
assignments and indemnities which relate to (i) any Copyrights,
Patent Rights or Trademarks listed in Schedule 4.12(a), (ii) any
Trade Secrets owned by, licensed to or used by an Acquired
Company or (iii) any Software listed in Schedule 4.12(b).
(d) Except as disclosed in Schedule 4.12(d), an
Acquired Company either (i) owns the entire right, title and
interest in and to the Intellectual Property and Software
included in its Assets, free and clear of any Encumbrance or (ii)
has the perpetual, royalty-free right to use the same.
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(e) Except as disclosed in Schedule 4.12(e), (i) all
registrations for Copyrights, Patent Rights and Trademarks
identified in Schedule 4.12(a) as being owned by an Acquired
Company are valid and in force, and all applications to register
any unregistered Copyrights, Patent Rights and Trademarks so
identified are pending and in good standing, all without
challenge of any kind, (ii) the Intellectual Property owned by an
Acquired Company is valid and enforceable, (iii) an Acquired
Company has the sole and exclusive right to bring actions for
infringement or unauthorized use of the Intellectual Property and
Software owned by the Acquired Company and, to the Knowledge of
the Seller, there is no Basis for any such action, (iv) each
Acquired Company has taken all actions necessary to protect, and
where necessary register, the Copyrights, Trademarks, Software,
Patent Rights or Trade Secrets which is material to the
Industrial Container Business and (v) no Acquired Company is in
material breach of any agreement affecting the Intellectual
Property, and no Acquired Company has taken any action which
would impair or otherwise adversely affect its rights in the
Intellectual Property. Correct and complete copies of
(x) registrations for all registered Copyrights, Patent Rights
and Trademarks identified in Schedule 4.12(a) as being owned by
an Acquired Company and (y) all pending applications to register
unregistered Copyrights, Patent Rights and Trademarks identified
in Schedule 4.12(a) as being owned by an Acquired Company
(together with any subsequent correspondence, notices or filings
relating to the foregoing) have heretofore been delivered by
Seller to Buyer.
(f) Except as set forth in Schedule 4.12(f), (i) no
infringement of any Intellectual Property of any other Person has
occurred or results in any way from the operations, activities,
products, Software, equipment, machinery or processes used in the
Industrial Container Business of the Acquired Companies, (ii) no
claim of any infringement of any Intellectual Property of any
other Person has been made or asserted in respect of the
operations of the Industrial Container Business of the Acquired
Companies, (iii) no claim of invalidity of any Copyright,
Trademark or Patent Right, Software or Trade Secret has been
made, and (iv) no Proceedings are pending or, to the Knowledge of
the Seller, Threatened which challenge the validity, ownership or
use of any Intellectual Property.
(g) Except as disclosed in Schedule 4.12(g), (i) the
Software which is material to the Industrial Container Business
included in the Assets of the Acquired Companies is not subject
to any transfer, assignment, reversion, site, equipment, or other
limitations, (ii) each Acquired Company has maintained and
protected the Software which is material to the Industrial
Container Business included in the assets and properties of such
Acquired Company that it owns (the "Owned Software") (including
all source code and system specifications) with appropriate
proprietary notices, confidentiality and non-disclosure
agreements and such other measures as are necessary to protect
the proprietary, trade secret or confidential information
contained therein, (iii) the Owned Software has been registered
or is eligible for protection and registration under applicable
copyright law and has not been forfeited to the public domain,
(iv) the Acquired Companies have copies of all prior releases or
separate versions of the Owned Software so that the same may be
subject to registration in the United States Copyright Office,
(v) the Acquired Companies have complete and exclusive right,
title and interest in and to the Owned Software, (vi) the Owned
Software does not infringe any Intellectual Property of any other
Person, and (vii) any Owned Software includes the source code,
system documentation, statements of principles of operation and
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schematics, as well as any pertinent commentary, explanation,
program (including compilers), workbenches, tools, and higher
level (or "proprietary") language used for the development,
maintenance, implementation and use thereof, so that a trained
computer programmer could develop, maintain, enhance, modify,
support, compile and use all releases or separate versions of the
same.
(h) Except as disclosed in Schedule 4.12(h), to the
Knowledge of the Seller, all employees, agents, consultants or
contractors who have contributed to or participated in the
creation or development of any Intellectual Property material to
the Industrial Container Business or Software material to the
Industrial Container Business on behalf of an Acquired Company or
any predecessor in interest to any of them either (i) is a party
to a "work-for-hire" agreement under which the Acquired Company
is deemed to be the original owner/author of all property rights
therein or (ii) has executed an assignment or an agreement to
assign in favor of the Acquired Company (or such predecessor in
interest, as applicable) of all right, title and interest in such
material.
(i) The Acquired Companies have not permitted any third
party access to the Intellectual Property material to the
Industrial Container Business, except for Persons who have entered
into, and who are in full compliance with, confidentiality and
nondisclosure agreements with regard to the Intellectual Property
material to the Industrial Container Business. The Acquired
Companies have not permitted any third party to use, copy or
otherwise exploit any of the Intellectual Property except pursuant
to a valid and legally enforceable license agreement which protects
the proprietary rights of the Acquired Companies in such
Intellectual Property.
(j) No Person has asserted any royalty claim or other
claim whatsoever, including but not limited to claims of ownership,
direct or indirect, in respect of the Intellectual Property.
Section 4.13. Personal Property; Condition and
Sufficiency of Assets.
(a) Except as set forth in Schedule 4.13(a), each of
the Acquired Companies has good title to all of its personal
property (other than leased personal property), free and clear of
all Encumbrances, except for Permitted Encumbrances. Except with
respect to the sales of inventory in the Ordinary Course of
Business, no Acquired Company is a party to a Contract whereby
another Person has acquired the right or option to purchase,
obtain or acquire rights in any of the Assets.
(b) Schedule 4.13(b) contains a brief description of
each lease or other agreement under which an Acquired Company is
lessee of, or holds or operates, any machinery, equipment,
vehicle or other tangible personal property owned by a third
Person, except for any such lease, agreement or right that is
terminable by the Acquired Company without penalty or payment on
notice of 90 days or less, or which involves the payment by the
Acquired Company of rentals of less than $25,000 per year.
(c) To the Knowledge of the Seller, the buildings,
plants, structures, machinery and equipment of the Acquired
Companies that are material to the operation of the Industrial
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Container Business as currently conducted are operational and are
adequate for the uses to which they are being put. To the
Knowledge of the Seller, except as set forth on Schedule 4.13(c),
the buildings, plants and structures are not in need of
maintenance or repairs except for ordinary, routine maintenance
and repairs that are done in the Ordinary Course of Business and
are not material in nature or cost.
Section 4.14. Inventory. All inventory of the
Acquired Companies, whether or not reflected in the Most Recent
Financial Statements, are in good, merchantable and useable
condition in the Ordinary Course of Business, except for obsolete
items and items of below-standard quality, all of which have been
written off or written down to net realizable value in the Most
Recent Financial Statements. All inventories not written off
have been priced at the lower of cost or market on an accounting
basis consistent with the Acquired Companies' past practices.
The quantities of each item of inventory (whether raw materials,
work-in-process, or finished goods) are consistent in all
material respects with amounts of such inventory maintained by
the Acquired Companies in the Ordinary Course of Business
consistent with past practices.
Section 4.15. Contracts; No Defaults.
(a) Except as set forth in Schedule 4.15(a) or as
disclosed in this Agreement, no Acquired Company is a party to or
bound by: (i) any Contract for the purchase or sale of real
property; (ii) any Contract that involves the future performance
of services or delivery of goods or materials by one or more
Acquired Companies of an amount or value in excess of $100,000;
(iii) any Contract that involves the future performance of
services or delivery of goods or materials to one or more
Acquired Companies of an amount or value in excess of $100,000;
(iv) any Contract that is an output, requirements or exclusive
dealings contract (as such terms are used in Article 2 the
Uniform Commercial Code); (v) any Contract that requires or
commits any Acquired Company to purchase materials or inventory
from any Person of an amount or value in excess of $100,000,
including, without limitation, any paper supply contract; (vi)
any guarantee or similar undertaking of the obligations of
customers, suppliers, officers, directors, employees, Seller,
affiliates of Seller or others; (vii) any collective bargaining
agreement with any labor union or other employee representative
of a group of employees; (viii) any joint venture, partnership
and other Contract (however named) involving a sharing of
profits, losses, costs or liabilities by any Acquired Company
with any other Person; (ix) any Contract containing covenants
that in any way purport to restrict the business activity of any
Acquired Company or limit the freedom of any Acquired Company to
engage in any line of business or to compete with any Person; (x)
any Contract providing for payments to or by any Person based on
sales, purchases or profits, other than direct payments for goods
other than Contracts entered into in the Ordinary Course of
Business with employees and other sales personnel paying
commissions or bonuses; (xi) any Contract which provides for, or
relates to, the incurrence by an Acquired Company of debt for
borrowed money; (xii) any Contract that was not entered into in
the Ordinary Course of Business or that was entered into at a
price or prices materially in excess of those otherwise available
at the time of such Contract; (xiii) any employment Contract
regarding employees or field representatives performing services
for the Industrial Container Business which is not terminable
within thirty days without payment of any amount for any reason
whatsoever (except for amounts earned or accrued prior to
termination), (xiv) a Contract that involves any Liability of
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more than $100,000 over time, (xv) any Contract that materially
and adversely affects the ownership or leasing of any of the
Assets or any maintenance or service agreements relating to any
of the Asset, (xvi) any Contract that involves an account
receivable or note receivable of more than $100,000 and (xvii)
any other Contract which is material to the Acquired Companies,
as a whole.
(b) Except as set forth in Schedule 4.15(a) or in any
other Schedule hereto, each of the Contracts listed in Schedules
4.11(b), 4.12, 4.13(b) and 4.15(a) (collectively, the "Applicable
Contracts") constitutes a valid and binding obligation of the
parties thereto and is in full force and effect and (except as
set forth in Schedule 4.15(a) and except for those Applicable
Contracts which by their terms will expire prior to the Closing
Date) will continue in full force and effect after the Closing,
in each case without breaching the terms thereof or resulting in
the forfeiture or impairment of any rights thereunder and without
the Consent of, or the making of any filing with, any other
party. To the Knowledge of Seller, each Acquired Company is, and
at all times has been, in compliance in all material respects
with all applicable terms and requirements of each Applicable
Contract under which the Acquired Company has or had any
obligation or Liability or by which it or any of its Assets owned
or used is or was bound. Each other Person that has or had any
obligation or Liability under any Applicable Contract under which
the Acquired Company has or had any rights is, and at all times
has been, in compliance in all material respects with all
applicable terms and requirements of such Contract. No event has
occurred or, to the Knowledge of Seller, circumstance exists that
(with or without notice or lapse of time) may contravene,
conflict with, or result in a violation or breach of, or give the
Acquired Company or other Person the right to declare a default
or exercise any remedy under, or to accelerate the maturity or
performance of, or to cancel, terminate, or modify, any
Applicable Contract. No Acquired Company has given to or
received from any other Person, at any time since January 1,
1997, any notice or other communication (whether oral or written)
regarding any actual or alleged violation or breach of, or
default under, any Applicable Contract. There are no
renegotiations of, attempts to renegotiate, or outstanding rights
to renegotiate any material amounts paid or payable to the
Acquired Company under any Applicable Contracts with any Person.
Complete and correct copies of each of the Applicable Contracts
have heretofore been delivered to Buyer by Seller.
(c) Except as set forth in Schedule 4.15(c): (i)
neither Seller nor any Related Person of the Seller (excluding
any of the Acquired Companies) has any rights or obligations
under any Contract that relates to the Industrial Container
Business of, or any of the Assets owned or used by, an Acquired
Company; and (ii) no officer, director, agent, or employee of an
Acquired Company is bound by any Contract that purports to limit
the ability of such officer, director, agent, or employee, to (A)
engage in or continue any conduct, activity, or practice relating
to the Industrial Container Business of the Acquired Company, or
(B) assign to an Acquired Company or to any other Person any
rights to any invention, improvement, or discovery.
Section 4.16. Notes, Accounts and Other Miscellaneous
Receivables. All notes, accounts and other miscellaneous
receivables of each Acquired Company are reflected properly on
its books and records, are valid receivables subject to no
setoffs or counterclaims, and, subject only to the reserve for
bad debts for accounts receivable set forth on the face of the
Most Recent Financial Statements as adjusted for the passage of
time through the Closing Date in accordance with the past custom
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and practice of the Acquired Company (which bad debt reserve for
accounts receivable, shall not exceed $700,000), are
collectible.
Section 4.17. Bank Accounts; Powers of Attorney.
(a) Schedule 4.17(a) sets forth a complete and correct
list of all bank accounts and safe deposit boxes of the Acquired
Companies and Persons authorized to sign or otherwise act with
respect thereto.
(b) Except as set forth on Schedule 4.17(b), There are
no outstanding powers of attorney executed on behalf of any
Acquired Company.
Section 4.18. Insurance.
(a) Schedule 4.18(a) sets forth a list and brief
description (including nature of coverage, limits, deductibles,
whether it is occurrence based or claims made policy, and the
loss experience for the most recent five calendar years with
respect to each type of coverage) of all policies of insurance
maintained, owned or held by or for the benefit of the Acquired
Companies during the past five calendar years. Schedule 4.18(a)
also identifies any insurance policies that apply exclusively to
one or more of the Acquired Companies. Seller shall cause the
Acquired Companies to keep or cause such insurance or comparable
insurance to be kept in full force and effect through the Closing
Date. Seller and each Acquired Company have complied with each
of such insurance policies and have not failed to give any notice
or present any claim thereunder in a due and timely manner.
Copies of all such policies have been made available to Buyer.
(b) Schedule 4.18(b) describes any self-insurance
arrangement by or affecting the Acquired Companies, including any
reserves established thereunder.
(c) Schedule 4.18(c) describes all contractual
obligations of the Acquired Companies to third Persons with
respect to insurance (including such obligations under leases for
the Leased Real Property and other Applicable Contracts) and
identifies the policy under which such coverage is provided.
Section 4.19. Product Warranty. To the Knowledge of
Seller, each product manufactured, sold, leased, or delivered by
the Acquired Companies has been in conformity in all material
respects with all applicable contractual commitments and all
express and implied warranties. No product manufactured, sold,
leased, or delivered by an Acquired Company is subject to any
guaranty, warranty, or other indemnity beyond the applicable
standard terms and conditions of sale or lease. Schedule 4.19
includes copies of the standard terms and conditions of sale or
lease for an Acquired Company (containing applicable guaranty,
warranty, and indemnity provisions).
Section 4.20. Product Liability. To the Knowledge of
Seller, the Acquired Companies do not have any Liability arising
out of any injury to individuals or property as a result of the
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ownership, possession, or use of any product manufactured, sold,
leased, or delivered by the Acquired Companies.
Section 4.21. Labor Relations and Compliance.
(a) Schedule 4.21(a) contains a complete and accurate
list of the following information for each salaried employee or
commissioned salesperson of Acquired Companies with annual base
compensation in 1997 in excess of $100,000 excluding commissions,
bonuses, in-kind compensation and benefits: (i) name; (ii) job
title; (iii) current annual compensation paid or payable.
(b) To the Knowledge of the Seller, no officer or
other management employee of the Acquired Companies (i) is a
party to, or is otherwise bound by, any Contract, including any
confidentiality, noncompetition, or proprietary rights agreement,
between such employee and any other Person that in any way
adversely affects or will affect the performance of his duties as
an employee of an Acquired Company or the ability of an Acquired
Company to conduct its business, (ii) is engaged in activities in
connection with his employment by an Acquired Company that will
give rise to any valid claim by a former employer that the current
employee or the Acquired Company has appropriated or used any
Intellectual Property of the former employer or (iii) has any
plans to terminate employment with an Acquired Company.
(c) Except as set forth in Schedule 4.21(c), no
Acquired Company is a party to any collective bargaining or other
labor Contract. Except as set forth in Schedule 4.21(c), since
January 1, 1994, no Acquired Company has experienced (i) any
strike, slowdown, picketing or work stoppage, (ii) any Proceeding
against or affecting the Acquired Company relating to the alleged
violation of any Legal Requirement pertaining to labor relations
or employment matters (including any charge or complaint filed by
an employee or union with the National Labor Relations Board, the
Equal Employment Opportunity Commission, or any comparable
Governmental Body), organizational activity, or other labor or
employment dispute against or affecting the Acquired Company or
any of its premises, or (iii) any application for certification
of a collective bargaining agent. To the Knowledge of the
Seller, no organizational effort is presently being made or
Threatened by or on behalf of any labor union with respect to
employees of any Acquired Company. To the Knowledge of the
Seller, no event has occurred or circumstance exists that could
provide the basis for any work stoppage or other labor dispute.
There is no lockout of any employees by an Acquired Company, and
no such action is contemplated by an Acquired Company.
(d) Except as set forth in Schedule 4.21(d), each
Acquired Company has complied in all material respects with all
Legal Requirements relating to employment, equal employment
opportunity, nondiscrimination, immigration, wages, hours,
benefits, collective bargaining, the payment of social security
and similar Taxes, occupational safety and health, and plant
closing. The Acquired Company is not liable for the payment of
any compensation, damages, Taxes, fines, penalties, or other
amounts, however designated, for failure to comply with any of
the foregoing Legal Requirements.
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Section 4.22. Employee Benefits.
(a) Schedule 4.22 lists each "employee benefit
plan," as such term is defined in section 3(3) of ERISA
(including, but not limited to, employee benefit plans, such as
foreign plans, which are not subject to the provisions of ERISA)
("Plan"), sponsored, maintained or contributed to by Seller or
any of the Acquired Companies for the benefit of the employees of
the Acquired Companies, or that has been so sponsored, maintained
or contributed to by Seller or any of the Acquired Companies
within six years prior to the Closing. With respect to each
Plan, Seller has provided or will provide within thirty days
after the execution of this Agreement copies of (i) all documents
that set forth the terms of each Plan and of any related trust,
including (A) all plan descriptions and summary plan descriptions
and (B) all summaries and descriptions furnished to participants
and beneficiaries regarding the Plans for which a plan
description or summary plan description is not required; (ii) all
registration statements filed with respect to any Plan; (iii) all
insurance policies purchased by or to provide benefits under any
Plan; (iv) all Contracts with third party administrators,
actuaries, investment managers, consultants, and other
independent contractors that relate to any Plan; (v) the Form
5500 filed in each of the most recent two plan years, including
all schedules thereto and the opinions of independent
accountants; and (vi) with respect to each Plans intended to
qualify under Section 401(a) of the IRC, the most recent
determination letter issued by the IRS.
(b) Except as otherwise set forth in Schedule 4.22:
(i) neither Seller, any of the Acquired Companies nor
any Commonly Controlled Entity contributes to or has an
obligation to contribute to, and have not at any time within six
years prior to the Closing contributed to or had an obligation to
contribute to, a multi-employer plan within the meaning of
Section 3(37) of ERISA as the result of their employment of
employees of the Acquired Companies; and as of the Closing,
neither Seller, or any of the Acquired Companies nor any Commonly
Controlled Entity has incurred any Liability for either a
complete or partial withdrawal from a multi-employer plan;
(ii) all reports and disclosures relating to the Plans
required to be filed with or furnished to governmental agencies,
Plan participants or Plan beneficiaries have been filed or
furnished in accordance with applicable law in a timely manner,
and each Plan has been administered in all material respects in
compliance with its governing documents and in accordance with
ERISA, the IRC, and other applicable Legal Requirements;
(iii) there are no Proceedings pending (other than
routine claims for benefits) or, to the Knowledge of the Seller,
threatened against, or with respect to, any of the Plans or their
assets;
(iv) to the Knowledge of Seller, no act, omission or
transaction has occurred which would result in imposition on the
Seller or any Acquired Company of (A) breach of fiduciary duty
liability damages under the applicable provisions of ERISA,
including, but not limited to, Section 409 of ERISA, (B) a civil
penalty assessed pursuant to subsections (c), (i) or (l) of
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Section 502 of ERISA or (C) a tax imposed pursuant to Chapter 43
of Subtitle D of the IRC;
(v) each of the Plans intended to be qualified under
Section 401(a) of the IRC, to the Knowledge of Seller, satisfies
the requirements of such Section and has received a favorable
determination letter from the Internal Revenue Service regarding
such qualified status and has not, since receipt of the most
recent favorable determination letter, been amended or, to the
Knowledge of the Seller, operated in any way which would
adversely affect such qualified status;
(vi) no Plan is subject to Title IV of ERISA;
(vii) as to any Plan intended to be qualified under
Section 401(a) of the IRC, there has been no termination or
partial termination of the Plan within the meaning of
Section 411(d)(3) of the IRC;
(viii) with respect to any Plan which is sponsored,
maintained or contributed to, or has been sponsored, maintained
or contributed to within six years prior to the Closing Date, by
any corporation, trade, business or entity under common control
with the Seller, within the meaning of Section 414(b), (c) or (m)
of the IRC or Section 4001 of ERISA ("Commonly Controlled
Entity"), (A) no withdrawal liability, within the meaning of
Section 4201 of ERISA, has been incurred, which withdrawal
liability has not been satisfied, (B) no Liability to the Pension
Benefit Guaranty Corporation ("PBGC") has been incurred by any
Commonly Controlled Entity, which Liability has not been
satisfied, (C) no accumulated funding deficiency, whether or not
waived, within the meaning of Section 302 of ERISA or Section 412
of the IRC has been incurred, and (D) all contributions
(including installments) to such Plan required by Section 302 of
ERISA and Section 412 of the IRC have been timely made;
(ix) no benefit is provided under any Plan through a
voluntary employees' beneficiary association, as defined in
Section 501(c)(9) of the IRC;
(x) no amendment has been made, or is reasonably
expected to be made, to any Plan that has required or could
require the provision of security under ERISA Section 307 or IRC
Section 401(a)(29); and
(xi) Since the last valuation date for each Plan, no
event has occurred or circumstance exists that would increase the
amount of benefits under any such Plan or that would cause the
excess of Plan assets over benefit liabilities (as defined in
ERISA Section 4001) to decrease, or the amount by which benefit
liabilities exceed assets to increase.
(c) Except as set forth in Schedule 4.22, no Acquired
Company is a party to or is bound by any severance agreements,
programs or policies. Schedule 4.22 sets forth, and the Seller
has provided to Buyer, true and correct copies (where in writing)
of (i) all agreements with employees or consultants of each
Acquired Company, (ii) all non-competition agreements with an
Acquired Company executed by officers of the Acquired Company,
and (iii) all plans, programs, agreements and other arrangements
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of the Acquired Company with or relating to the employment and to
the remuneration and compensation of its employees.
(d) (i) Except as set forth in Schedule 4.22, no Plan
provides retiree medical or retiree life insurance benefits to
any person and (ii) the Acquired Companies are not contractually
or otherwise obligated (whether or not in writing) to provide any
person with life insurance or medical benefits upon retirement or
termination of employment, other than as required by the
provisions of Section 601 through 608 of ERISA and Section 4980B
of the IRC.
(e) Except as set forth in Schedule 4.22 or as
contemplated in this Agreement, Seller and the Acquired
Companies have not amended, terminated or taken any other actions
with respect to any of the Plans or any of the plans, programs,
agreements, policies or other arrangements described in
Section 4.22 of this Agreement since the Most Recent Fiscal Year
End.
(f) Seller, each Acquired Company and each Commonly
Controlled Entities have complied with the provisions of ERISA
Section 601 et seq. and IRC Section 4980B.
(g) No payment that is owed or may become due to any
director, officer, employee, or agent of any Acquired Company
will be non-deductible to the Acquired Companies or subject to
tax under IRC Section 280G or Section 4999; nor will any Acquired
Company be required to "gross up" or otherwise compensate any
such Person because of the imposition of any excise tax on a
payment to such Person.
(h) The consummation of the Contemplated Transactions
will not result in the payment, vesting, or acceleration of any
benefit.
Section 4.23. Customers. Schedule 4.23 sets forth
(i) a list of names and addresses of the twenty largest customers
(measured by dollar volume of purchases during the eleven month
period ended November 30, 1997) of the Acquired Companies (which
dollar volume includes sales not only related to the Industrial
Container Business, but also the IBC Business). Except as set
forth in Schedule 4.23, there exists no actual or threatened
termination, cancellation or limitation of, or any modification
or change in, the business relationship with any customer or
group of customers listed in Schedule 4.23 with respect to the
Industrial Container Business or the IBC Business, or whose
purchases individually or in the aggregate are material to the
Industrial Container Business or the IBC Business or the
operation of such businesses. To the Knowledge of Seller, an
Acquired Company is not materially affected by any dispute or
controversy with a union or with respect to unionization or
collective bargaining involving any supplier or customer of an
Acquired Company.
Section 4.24. Guaranties. The Acquired Companies are
not a guarantor or otherwise liable for any Liability or
obligation (including indebtedness) of any other Person.
Section 4.25. Environmental Matters. Except for
matters disclosed in Schedule 4.25, none of the Acquired
Companies and the properties and operations of an Acquired
Company are subject to any existing, pending or, to the Knowledge
of the Seller, threatened Proceeding by or before any
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Governmental Body under any Environmental Law. Except for
matters disclosed in Schedule 4.25, (a) the properties,
operations and activities of the Acquired Companies are, and have
at all time been, in compliance in all material respects with all
applicable Environmental Laws; (b) all notices, permits,
licenses, or similar Governmental Authorizations, if any,
required to be obtained or filed by any Acquired Company under
any Environmental Law in connection with any aspect of the
Industrial Container Business of the Acquired Company, including
without limitation those relating to the treatment, storage, or
Release of a Contaminant, have been duly obtained or filed, and
each Acquired Company is in compliance in all material respects
with the terms and conditions of all such notices, permits,
licenses and similar Governmental Authorizations; (c) there are
no physical or environmental conditions existing on any Company
Property or resulting from the Acquired Company's operations or
activities, past or present, at any location, that would give
rise to any material on-site or off-site remedial obligations
imposed on an Acquired Company under any Environmental Laws;
(d) to the Knowledge of the Seller , since the effective date of
the relevant requirements of applicable Environmental Laws and to
the extent required by such applicable Environmental Laws, all
Contaminants generated by an Acquired Company have been
transported only by carriers authorized under Environmental Laws
to transport such Contaminants, and disposed of only at
treatment, storage, and disposal facilities authorized under
Environmental Laws to treat, store or dispose of such
Contaminants; (e) to the Knowledge of Seller there has neither
been any exposure of any Person or property to any Contaminant
released by an Acquired Company, nor to the Knowledge of Seller
has there been any Release of any Contaminant into the
Environment by an Acquired Company or in connection with its
properties or operations that could reasonably be expected to
give rise to any claim against an Acquired Company for damages or
compensation; (f) there is not now, nor to the Knowledge of the
Seller has there ever been, on or in any Company Property, any
treatment, recycling, storage or disposal of any hazardous waste,
as that term is defined under Section 40 CFR Part 261 or any
state equivalent, that requires or required a Governmental Permit
pursuant to Section 3005 of RCRA or any underground storage tank
or surface impoundment or landfill or waste pile; and (g) Seller
has made, or will within thirty days after the execution of this
Agreement make, available to Buyer all internal and external
environmental audits and studies and all correspondence on
substantial environmental matters in the possession of Seller or
any Acquired Company relating to any of Company Property or the
current or former operations of the Acquired Companies.
Section 4.26. Certain Payments. To the Knowledge of Seller,
neither an Acquired Company nor any director, officer, agent, or
employee of an Acquired Company has directly or indirectly (a)
made any contribution, gift, bribe, rebate, payoff, influence
payment, kickback, or other payment to any Person, private or
public, regardless of form, whether in money, property, or
services (i) to obtain favorable treatment in securing business,
(ii) to pay for favorable treatment for business secured, (iii)
to obtain special concessions or for special concessions already
obtained, for or in respect of the Acquired Company, or (iv) in
violation of any Legal Requirement, or (b) established or
maintained any fund or asset that has not been recorded in an
Acquired Company's books and records.
Section 4.27. Related Person Services. Schedule 4.27 sets
forth (a) a description of all material services provided during
or after the Most Recent Fiscal Year End to an Acquired Company
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by Seller or any affiliate of Seller(other than an Acquired
Company) utilizing either (i) assets not owned or leased by an
Acquired Company or (ii) employees not employed by an Acquired
Company and (b) the manner in which the costs of providing such
services have been allocated to the Acquired Company and the
amounts of such allocations. On or before the Closing Date, the
Trademark License Agreement between SPC Resources, Inc. and one
or more of the Acquired Companies has been terminated by such
parties, and none of the Acquired Companies has any Liability
under such agreement.
Section 4.28. Brokers' Fees. Neither Seller nor any
Acquired Company has any Liability or obligation to pay any fees
or commissions to any broker, finder or agent with respect to the
Contemplated Transactions.
Section 4.29. Financial Projections. Seller has made
available to Buyer certain financial projections with respect to
the Industrial Container Business and the IBC Business, which
projections were prepared for internal use only. Seller makes no
representation or warranty regarding the accuracy of such
projections or as to whether such projections will be achieved or
otherwise, except that Seller represents and warrants that such
projections were prepared in good faith and are based on
assumptions believed by Seller to be reasonable.
Section 4.30. Disclosure. The representations and
warranties of the Seller in this Agreement do not contain any
untrue statement or omit to state a material fact necessary to
make the statements herein, in light of the circumstances in
which they were made, not misleading.
ARTICLE 5. REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller as follows:
Section 5.1. Organization and Good Standing. Buyer is a
corporation duly organized, validly existing, and in good
standing under the laws of the State of Delaware. Buyer has full
corporate power and authority to conduct its business as it is
now being conducted.
Section 5.2. Authority; No Conflict.
(a) Buyer has full corporate power and authority to
execute, deliver and perform this Agreement and each Buyer
Ancillary Agreement to which it is a party. This Agreement and
each Buyer Ancillary Agreement has been duly approved and
authorized by all requisite corporate action. This Agreement
constitutes the valid and legally binding obligation of Buyer,
enforceable against Buyer in accordance with its terms. Upon the
execution and delivery of the Buyer Ancillary Agreements, such
agreements will constitute the valid and legally binding
obligations of Buyer, enforceable against Buyer in accordance
with their respective terms.
(b) Except as set forth in Schedule 5.2(b), neither
the execution and delivery of this Agreement or any of the Buyer
Ancillary Agreements nor the consummation or performance of this
Agreement, any of the Buyer Ancillary Agreements or any of the
Contemplated Transactions will, directly or indirectly (with or
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without notice or lapse of time): (i) contravene, conflict with,
or result in a violation of (A) any provision of the
Organizational Documents of Buyer, or (B) any resolution adopted
by the board of directors or the shareholder(s) of Buyer; (ii)
contravene, conflict with, or result in a violation of, or give
any Governmental Body or other Person the right to challenge any
of the Contemplated Transactions or to exercise any remedy or
obtain any relief under, any Legal Requirement or any Order to
which Buyer may be subject; or (iii) contravene, conflict with,
or result in a violation or breach of any provision of, or give
any Person the right to declare a default or exercise any remedy
under, or to accelerate the maturity or performance of, or to
cancel, terminate, or modify, any Contract to which Buyer is a
party. Except as provided under the HSR Act and except as set
forth in Schedule 5.2(b), Buyer is not and will not be required
to give any notice to or obtain any Consent from any Person
(including from any Governmental Body) in connection with the
execution and delivery of this Agreement, any of the Buyer
Ancillary Agreements or the consummation or performance of any of
the Contemplated Transactions.
Section 5.3. Certain Proceedings. There is no pending
Proceeding that has been commenced against Buyer and that
challenges, or may have the effect of preventing, delaying,
making illegal, or otherwise interfering with, any of the
Contemplated Transactions. To Buyer's Knowledge, no such
Proceeding has been Threatened.
Section 5.4. Brokers' Fees. Buyer has no Liability or
obligation to pay any fees or commissions to any broker, finder
or agent with respect to the Contemplated Transactions for which
Seller could become liable or obligated.
Section 5.5. Investment. Buyer is not purchasing the Shares
with a view to or for sale in connection with any distribution
thereof within the meaning of the Securities Act of 1933, as
amended.
Section 5.6 No Default. No event of default or default, or
event which with the giving of notice, lapse of time or both,
would constitute a default or event of default under any Contract
to which Buyer is a party or by which it or its properties are
bound, exists, the effect of which would be to materially
interfere with or prevent the consummation of the Contemplated
Transactions.
Section 5.7 Available Funds. Buyer has or will have at
Closing sufficient funds to consummate the Contemplated
Transactions.
ARTICLE 6. CERTAIN AGREEMENTS
Buyer and Seller covenant and agree as follows:
Section 6.1. Investigation of the Acquired Companies
by Buyer. Seller shall afford and cause the Acquired Companies
to afford to the Representatives of Buyer complete access during
normal business hours to the offices, properties (including for
subsurface testing), employees and business and financial records
(including computer files, retrieval programs and similar
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documentation and such access and information that may be
necessary in connection with an environmental audit) of Seller
and the Acquired Companies relating to the Industrial Container
Business to the extent Buyer shall deem necessary or desirable.
Seller shall furnish, and shall cause the Acquired Companies to
furnish, to Buyer or its Representatives such information
concerning the Assets, business and the operations of the
Acquired Companies as shall be requested, including all such
information as shall be necessary to enable Buyer or its
Representatives to verify the accuracy of the representations and
warranties contained in this Agreement, to verify that the
covenants of Seller contained in this Agreement have been
complied with and to determine whether the conditions set forth
herein have been satisfied. Buyer agrees that such investigation
shall be conducted in such a manner as not to interfere
unreasonably with the operations of Seller or the Acquired
Companies. No investigation made by Buyer or its Representatives
hereunder shall affect the representations and warranties of
Seller hereunder.
Section 6.2. Preserve Accuracy of Representations and
Warranties. Each of the parties hereto shall refrain from taking
any action which would render any representation or warranty
contained in Article 4 or 5 of this Agreement inaccurate as of
the Closing Date. Each of Buyer, as a party on the one hand, and
Seller, as a party on the other, shall promptly notify the other
of any Proceeding that shall be instituted or Threatened against
such party to restrain, prohibit or otherwise challenge the
legality of any of the Contemplated Transactions. Seller shall
promptly notify Buyer of (a) any Proceeding that may be
Threatened, brought, asserted or commenced against an Acquired
Company which would have been listed in Schedule 4.9 if such
Proceeding had arisen prior to the date hereof and (b) any other
event or matter which becomes known to Seller or an Acquired
Company that would cause any other representation or warranty
contained in Article 4 to be inaccurate in any material respect.
Section 6.3. Consents of Third Parties; Governmental
Authorizations.
(a) Seller will (and will cause the Acquired Companies
to) act diligently and reasonably to secure the Consent, in form
and substance reasonably satisfactory to Buyer, from any party to
any Applicable Contract required to be obtained to permit the
consummation of the Contemplated Transactions or to otherwise
satisfy the conditions set forth in Article 8; provided that (i)
none of Seller, the Acquired Companies or Buyer shall have any
obligation to offer or pay any consideration in order to obtain
any such Consents and (ii) Seller shall not make (or permit any
Acquired Company to make) any agreement or understanding
affecting the Assets or business of the Acquired Companies as a
condition for obtaining any such Consent except with the prior
written consent of Buyer. During the period prior to the Closing
Date, Buyer shall act diligently and reasonably to cooperate with
Seller and the Acquired Companies to obtain the Consents
contemplated by this Section 6.3(a).
(b) During the period prior to the Closing Date,
Seller and Buyer shall (and Seller shall cause the Acquired
Companies to) act diligently and reasonably, and shall cooperate
with each other, in making any required filing or notification
and in securing any Consents of any Governmental Body required to
be obtained by them in order to permit the consummation of the
Contemplated Transactions, or to otherwise satisfy the conditions
set forth in Article 8; provided that Seller shall not make (or
permit any Acquired Company to make) any agreement or
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understanding affecting the assets or business of the Acquired
Companies as a condition to obtaining any such Consents except
with the prior written consent of Buyer.
(c) Buyer and Seller have made, and will make, such
filings as are required by the HSR Act or any other antitrust law
with respect to the consummation of the Contemplated Transactions
and will file as promptly as practicable any supplemental
information which may be requested. All such filings will comply
in all material respects with Legal Requirements pursuant to
which they are filed.
Buyer has paid the filing fee required under the HSR
Act. Buyer shall be responsible, and Seller shall cooperate, to:
(i) obtain all Governmental Authorizations of any Governmental
Body under, or satisfy the requirements of, the HSR Act or other
applicable antitrust laws that may be or become necessary in
connection with the consummation of the contemplated
transactions; and (ii) resolve any governmental or private
complaint or litigation under antitrust laws that may seek to
prevent, delay or impair consummation of the Contemplated
Transactions.
Section 6.4. Operations Prior to the Closing Date.
(a) Seller shall cause the Acquired Companies to
operate and carry on their business only in the Ordinary Course
of Business and substantially as presently operated. Consistent
with the foregoing, Seller shall maintain the Assets in the same
working order and condition as such Assets are in as of the date
of this Agreement (reasonable wear and tear excepted) and shall
use its best efforts consistent with good business practice to
maintain the business organization of the Acquired Companies
intact and to preserve the goodwill of the suppliers,
contractors, licensors, employees, customers, distributors and
others having business relations with the Acquired Companies.
(b) Except as expressly contemplated by this Agreement
or except with the express written approval of Buyer, Seller
shall not permit any Acquired Company to: (i) amend its
Organizational Documents; (ii) issue, grant, sell or encumber any
shares of its capital stock or other securities; or issue, grant,
sell or encumber any security, option, warrant, put, call,
subscription or other right of any kind, fixed or contingent,
that directly or indirectly calls for the acquisition, issuance,
sale, pledge or other disposition of any shares of its capital
stock or other securities or make any other changes in the equity
capital structure of any Acquired Company; (iii) make any
material change in the business or the operations of the Acquired
Companies; (iv) make any capital expenditure or enter into any
contract or commitment therefor, other than capital expenditures
or commitments for capital expenditures currently budgeted; (v)
enter into any Contract which requires the Consent of any third
party to consummate the Contemplated Transactions; or make any
material modification to any existing Applicable Contract or to
any Governmental Authorization, other than changes made in good
faith to cure document deficiencies; (vi) enter into any Contract
for the purchase, lease (as lessee) or other occupancy of real
property or for the sale of any Owned Real Property or exercise
any option to purchase real property listed in Schedule 4.11(a)
or any option to extend a lease listed in Schedule 4.11(b); (vii)
sell, lease (as lessor), transfer or otherwise dispose of
(including any transfers from any Acquired Company to Seller or
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any affiliates of Seller), or mortgage or pledge, or impose or
suffer to be imposed any Encumbrance (other than a Permitted
Encumbrance) on, any of the Assets of any Acquired Company, other
than inventory and minor amounts of personal property sold or
otherwise disposed of for fair value in the Ordinary Course of
Business; (viii) cancel any debts owed to or claims held by any
Acquired Company (including the settlement of any claims or
litigation) other than in the Ordinary Course of Business; (ix)
create, incur or assume, or agree to create, incur or assume, any
indebtedness for borrowed money or enter into, as lessee, any
capitalized lease obligations (as defined in Statement of
Financial Accounting Standards No. 13); (x) accelerate or delay
collection of any notes or accounts receivable in advance of or
beyond their regular due dates or the dates when the same would
have been collected in the Ordinary Course of Business; (xi)
delay or accelerate payment of any account payable or other
Liability beyond or in advance of its due date or the date when
such Liability would have been paid in the Ordinary Course of
Business; (xii) allow the levels of raw materials, supplies,
work-in-process or other materials included in the inventory of
the Acquired Companies to vary in any material respect from the
levels customarily maintained; (xiii) make, or agree to make, any
payment of any dividend or distribution of Assets to Seller or
any affiliate of any Seller other than distributions of cash in
the Ordinary Course of Business; (xiv) institute any increase in
any profit-sharing, bonus, incentive, deferred compensation,
insurance, pension, retirement, medical, hospital, disability,
welfare or other employee benefit plan with respect to employees
of the Acquired Companies; (xv) make any change in the
compensation of the employees of the Acquired Companies, other
than changes made in accordance with normal compensation
practices and consistent with past compensation practices; (xvi)
make any material change in the accounting policies applied in
the preparation of the Financial Statements contained in Schedule
4.5; (xvii) prepare or file any Tax Return inconsistent with past
practice or, on any such Tax Return, take any position, make any
election, or adopt any method that is inconsistent with positions
taken, elections made or methods used in preparing or filing
similar Tax Returns in prior periods (including, without
limitation, positions, elections or methods which would have the
effect of deferring income to periods for which Buyer is liable
pursuant to Section 9.2(b) or accelerating deductions to periods
for which Seller is liable pursuant to Section 9.2(a); or (xviii)
enter into any agreement or take any action that would prohibited
by this Section 6.4.
Section 6.5. Notification by Seller of Certain
Matters. During the period prior to the Closing Date, Seller
will promptly advise Buyer in writing of (a) any material adverse
change in the Acquired Companies or the condition of their
Assets, (b) any notice or other communication from any third
Person alleging that the Consent of such third Person is or may
be required in connection with the Contemplated Transactions and
(c) any material default under any Applicable Contract or event
which, with notice or lapse of time or both, would become such a
default on or prior to the Closing Date and of which Seller has
knowledge.
Section 6.6. Title Abstracts and Surveys. Seller shall
cause to be delivered to Buyer on or prior to the Closing Date,
with respect to each parcel of Owned Real Property, (i) real
estate title abstracts providing that an Acquired Company has
good and marketable title to each such parcel of Owned Real
Property (including all appurtenant easements), free and clear of
all Encumbrances, except for Permitted Encumbrances, and each
such abstract shall be accompanied by legible copies of all
documents referenced in or otherwise forming the basis of the
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abstract (including all Permitted Encumbrances), and (ii) an ALTA
land title survey, acceptable to Buyer, of a recent date with
respect to each such parcel showing no encroachments or other
survey defects with respect to the buildings, structures and
other improvements located on such property. Buyer and Seller
shall share equally the cost and expense of obtaining the title
abstracts and the surveys.
Section 6.7. Compliance with Environmental Property
Transfer Acts. Seller shall provide or cause to be provided
documentation deemed adequate by Buyer demonstrating full
compliance with any applicable Environmental Property Transfer
Act. Buyer shall cooperate with Seller in obtaining such
compliance.
Section 6.8. Change of Corporate Names. On or prior
to the Closing Date, Seller shall change the corporate names of
each Acquired Company to a name acceptable to Buyer and that does
not contain the word "Sonoco". In connection with such name
changes, Seller shall comply with all Legal Requirements and
shall make all filings with Government Bodies as required by
applicable Legal Requirements.
ARTICLE 7. ADDITIONAL AGREEMENTS
Section 7.1. Covenant Not to Compete or Solicit
Business.
(a) In furtherance of the sale of Industrial Container
Business to Buyer and to protect the value and goodwill of the
Industrial Container Business of the Acquired Companies and in
consideration for the Purchase Price, Seller covenants and agrees
that, after the Closing:
(i) for a period ending on the tenth
anniversary of the Closing Date, neither Seller
nor any of Seller's affiliates will directly or
indirectly (whether as principal, agent,
independent contractor, partner or otherwise) own,
manage, operate, control, participate in, or
otherwise carry on, a business that manufactures,
sells or leases plastic drums, fibre drums or
intermediate bulk containers or refurbishes or
reconditions plastic drums anywhere in the world;
provided, however, that Buyer expressly
acknowledges and agrees that Seller or any
affiliate of Seller may manufacture and sell fibre
drums in Indonesia, Singapore and Malaysia (the
"Far East Fibre Drum Operations") without
violating the foregoing covenant; provided,
further, that Buyer expressly acknowledges and
agrees that Seller may conduct the IBC Business
without violating the foregoing covenant; and,
provided further, that nothing set forth in this
Section 7.1 shall prohibit Seller or Seller's
affiliates from owning not in excess of 5% in the
aggregate of any class of capital stock of any
corporation if such stock is publicly traded and
listed on any national or regional stock exchange
or on the NASDAQ national market system;
(ii) for a period ending on the tenth
anniversary of the Closing Date, neither Seller
nor any of Seller's affiliates will directly or
indirectly induce or attempt to persuade any
supplier or customer of an Acquired Company to
terminate or alter such business relationship with
such Acquired Company; or
(iii) except as approved by Buyer for a
period ending on the third anniversary of the
Closing Date, neither Seller nor any of Seller's
affiliates will employ or otherwise retain the
services of any Person (A) who was employed by any
of the Acquired Companies at any time between
December 1, 1997 and the Closing Date except for
those employees actively involved with the IBC
Business who remain as employees of Seller after
the Closing and (B) who was either a salaried
and/or commissioned employee; provided, however,
that Buyer expressly acknowledges and agrees that
Seller or any affiliate of Seller may, without
violating the foregoing covenant, (A) employ Xxxx
Xxxxxxxxxxx at any time or (B) immediately employ
any Person who Buyer or any of the Acquired
Companies voluntarily terminates after the Closing
Date; and provided, further, that Seller expressly
acknowledges and agrees that, upon the closing
contemplated by the IBC Sales Agreement, that the
exception set forth in this paragraph relating to
employees actively involved in the IBC Business
shall no longer be applicable.
(b) In addition, Seller covenants and agrees that
neither Seller nor any affiliate of Seller will divulge or make
use of any Trade Secrets of the Acquired Companies other than (i)
to disclose such secrets and information to Buyer and (ii) to use
such Trade Secrets in connection with the Far East Fibre Drum
Operations.
(c) In the event Seller or any affiliate of Seller
violates any of such Person's obligations under this Section 7.1,
Buyer or any of the Acquired Companies may proceed against such
Person in law or in equity for such damages or other relief as a
court may deem appropriate. Seller acknowledges that a violation
of this Section 7.1 may cause Buyer or the Acquired Companies
irreparable harm which may not be adequately compensated for by
money damages. Seller therefore agrees that in the event of any
actual or threatened violation of this Section 7.1, Buyer or any
of the Acquired Companies shall be entitled, in addition to other
remedies that it may have, to a temporary restraining order and
to preliminary and final injunctive relief against Seller or such
affiliate of Seller to prevent any violations of this Section
7.1, without the necessity of posting a bond. The prevailing
party in any action commenced under this Section 7.1 shall also
be entitled to receive reasonable attorneys' fees and court
costs.
(d) It is the intent and understanding of each party
hereto that if, in any Proceeding before any Governmental Body or
arbitrator legally empowered to enforce this Section 7.1, any
term, restriction, covenant or promise in this Section 7.1 is
found to be unreasonable and for that reason unenforceable, then
such term, restriction, covenant or promise shall be deemed
modified to the extent necessary to make it enforceable by such
Governmental Body or arbitrator.
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Section 7.2. Access to Records after Closing.
(a) For a period of six years after the Closing Date,
Seller and its Representatives shall have reasonable access to
all of the books and records of the Acquired Companies to the
extent that such access may reasonably be required by Seller in
connection with matters relating to or affected by the operations
of the Acquired Companies prior to the Closing Date. Such access
shall be afforded by Buyer upon receipt of reasonable advance
notice and during normal business hours. Seller shall be solely
responsible for any costs or expenses incurred by it pursuant to
this Section 7.2. If Buyer shall desire to dispose of any of
such books and records prior to the expiration of such six-year
period, Buyer shall, prior to such disposition, give Seller a
reasonable opportunity, at Sellers' expense, to segregate and
remove such books and records as Seller may select.
(b) For a period of six years after the Closing Date,
Buyer and its Representatives shall have reasonable access to all
of the books and records relating to the Acquired Companies which
Seller or any of its affiliates may retain after the Closing
Date. Such access shall be afforded by Seller upon receipt of
reasonable advance notice and during normal business hours.
Buyer shall be solely responsible for any costs and expenses
incurred by it pursuant to this Section 7.2. If Seller or any of
its affiliates shall desire to dispose of any of such books and
records prior to the expiration of such six-year period, Seller
shall, prior to such disposition, give Buyer a reasonable
opportunity, at Buyer's expense, to segregate and remove such
books and records as Buyer may select.
Section 7.3. Employees and Employee Benefit Plans.
(a) Defined Benefit Pension Plans.
(i) As of the Closing Date, each salaried
employee of the Industrial Container Business who was actively
employed and eligible, as of the Closing Date, to participate in
the Sonoco Products Company Pension Plan (the "Sonoco Pension
Plan") shall become eligible to participate in the Xxxxx Bros.
Corporation Employees Retirement Income Plan (the "Greif Salaried
Pension Plan") and each hourly paid employee of the Industrial
Container Business who was actively employed and eligible, as of
the Closing Date, to participate in the Sonoco Pension Plan shall
become eligible to participate in the Retirement Plan for Certain
Hourly Employees of Xxxxx Bros. Corporation (the "Greif Hourly
Pension Plan"); provided, however, any such hourly paid employee
who, as of the Closing Date, would be classified by Buyer as an
office or salary employee shall become eligible to participate in
the Greif Salaried Plan. For purposes of the Greif Salaried
Pension Plan and the Greif Hourly Pension Plan, all employees of
the Industrial Container Business shall, for eligibility and
vesting purposes (but not for benefit accrual), receive credit
for all service with Seller or any Subsidiary prior to the
Closing Date. Benefits to be provided to salaried employees of
the Industrial Container Business on and after the Closing Date
under the Greif Salaried Pension Plan shall be substantially
similar to those benefits provided to similarly situated
employees of Buyer under such plan. Benefits to be provided to
non-union hourly paid employees of the Industrial Container
Business under the Greif Hourly Pension Plan on and after the
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Closing Date shall be substantially similar to the benefits
provided to similarly situated employees of Buyer under such
plan. Benefits provided to union hourly paid employees of the
Industrial Container Business under the Greif Hourly Pension Plan
on and after the Closing Date shall be those benefits required
under each respective collective bargaining agreement in effect
with respect to such employees.
(ii) Seller shall retain all liabilities and
obligations under the Sonoco Pension Plan as in effect on the
Closing Date, with respect to benefits accrued thereunder by
employees or former employees of the Industrial Container
Business prior to the Closing Date. No assets of the Sonoco
Pension Plan will be transferred to any plan maintained by Buyer
or the Acquired Companies. No additional benefits shall accrue
under the Sonoco Pension Plan with respect to employees or former
employees of the Industrial Container Business on or after the
Closing Date. The benefits for each employee of the Industrial
Container Business under the Sonoco Pension Plan shall not be
payable prior to such employee's termination of employment with
Buyer or the Acquired Companies. Seller shall provide that, with
respect to all employees of the Industrial Container Business as
of the Closing Date, uninterrupted service on or after the
Closing Date with Buyer, any of the Acquired Companies or any
other affiliate of Buyer shall qualify as service under the
Sonoco Pension Plan solely for purposes of determining vesting
and retirement eligibility credit (but not for the purpose of
calculating benefit accrual) under the Sonoco Pension Plan.
Buyer shall deliver to Seller, from time to time as requested, at
Buyer's expense, the requisite post-Closing Date employee service
information so that Seller may properly fulfill its
responsibilities under this paragraph.
(iii) As of the Closing Date, Seller shall
assign to Buyer all of its rights in the annuity contract
purchased from Metropolitan Life Insurance Company (the
"Annuity") to satisfy benefit obligations to employees of the
Industrial Container Business under the Continental Group, Inc.
Salaried Pension Plan and the Continental Can Company, Inc. Basic
Non-contributory Hourly Pension Plan (collectively, the
"Continental Plans"). Seller shall execute any and all documents
required by Metropolitan Life Insurance Company to effectuate the
assignment of rights under the Annuity. Any and all benefit
obligations under the Continental Plans with respect to employees
of the Industrial Container Business shall be satisfied by the
Annuity. Neither Buyer nor any of the Acquired Companies shall
have any obligation or liability to pay any benefits accrued
under the Continental Plans from either the assets of the Greif
Salaried Pension Plan, the Greif Hourly Pension Plan, the general
assets of Buyer or the general assets of any of the Acquired
Companies, and Seller shall indemnify and hold harmless Buyer,
the Acquired Companies, the Greif Salaried Pension Plan and the
Greif Hourly Pension Plan for any benefit obligations under the
Continental Plans which are not satisfied by the Annuity.
(b) Section 401(k) Plans.
(i) As of the Closing Date, each salaried
employee of the Industrial Container Business who was actively
employed and eligible, as of the Closing Date, to participate in
the Sonoco Savings Plan (the "Sonoco Savings Plan") shall become
eligible to participate in the Xxxxx Bros. Corporation 401(k)
Retirement Plan and Trust (the "Greif Salaried Savings Plan") and
each hourly paid employee of the Industrial Container Business
who was actively employed and eligible, as of the Closing Date,
to participate in the Sonoco Savings Plan shall become eligible
to participate in the Xxxxx Bros. Corporation Production
Associates 401(k) Retirement Plan and Trust (the "Greif Hourly
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Savings Plan"); provided, however, any such hourly paid employee
who, as of the Closing Date, would be classified by Buyer as an
office or salary employee shall become eligible to participate in
the Greif Salaried Savings Plan. For purposes of the Greif
Salaried Savings Plan and the Greif Hourly Savings Plan, all
employees of the Industrial Container Business shall, for
eligibility and vesting purposes, receive credit for all service
with Seller or any Subsidiary prior to the Closing Date.
Benefits to be provided to salaried employees of the Industrial
Container Business on and after the Closing Date under the Greif
Salaried Savings Plan shall be substantially similar to those
benefits provided to similarly situated employees of Buyer under
such plan. Benefits to be provided to non-union hourly paid
employees of the Industrial Container Business under the Greif
Hourly Savings Plan on and after the Closing Date shall be
substantially similar to the benefits provided to similarly
situated employees of Buyer under such plan.
(ii) As soon as administratively feasible
following the Closing Date, Seller shall cause the trustee of the
trust established under the Sonoco Savings Plan to transfer to
the appropriate trust for either the Greif Salaried Savings Plan
or the Greif Hourly Savings Plan, pursuant to the usual
procedures utilized under the Sonoco Savings Plan for such
transfers, and Buyer shall cause the Greif Salaried Savings Plan
and the Greif Hourly Savings Plan to accept, an amount of cash
equal to the value of the account balances of the employees of
the Industrial Container Business under the Sonoco Savings Plan
as of the transfer date. Prior to the transfer required under
this paragraph (b)(ii), (A) the entire account balance of each
employee of the Industrial Container Business shall be fully
vested; (B) all common shares of Seller credited to such account
balances shall be converted to cash at their then fair market
value; and (C) the employees of the Industrial Container Business
shall retain all rights as participants in the Sonoco Savings
Plan, except for the right to receive additional contributions.
Seller and Buyer will make appropriate arrangements for the
payment of benefits which become due and payable under the Sonoco
Savings Plan or either the Greif Salaried Savings Plan or the
Greif Hourly Savings Plan prior to the date such cash transfer is
made.
(c) Multi-employer Plans. As of the Closing Date,
Buyer shall assume all obligations to make contributions to any
multi-employer pension, savings or health and welfare plan
covering any employee of the Industrial Container Business, in
accordance with the terms of each respective collective
bargaining agreement and shall indemnify and hold harmless Seller
for any multi-employer plan withdrawal liability.
(d) Health and Welfare Benefits.
(i) As of April 1, 1998 (or, if applicable, as of
the first day following the end of the Transition Period as
described in paragraph (f)(i) below), each salaried employee of
the Industrial Container Business who is Actively at Work shall
receive health and welfare benefits from Buyer, through its
health and welfare plans (the "Buyer Welfare Plans"). As of
April 1, 1998 (or, if applicable, as of the first day following
the end of the Transition Period, as described in paragraph
(f)(i) below), each non-union hourly paid employee of the
Industrial Container Business who is Actively at Work shall
receive health and welfare benefits from Buyer, through the Buyer
Welfare Plans. As of April 1, 1998 (or, if applicable, as of the
first day following the end of the Transition Period, as
described in paragraph (f)(i) below), each union hourly paid
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employee of the Industrial Container Business shall be provided
by Buyer, through the Buyer Welfare Plans, with those health and
welfare benefits required under each respective collective
bargaining agreement in effect with respect to such employees.
For purposes of this paragraph (d), an employee of the Industrial
Container Business shall be considered to be "Actively at Work"
if such employee is not on disability status (either short term
or long term), layoff status or on leave of absence (either paid
or unpaid). Any employee of the Industrial Container Business
who is not Actively at Work as of April 1, 1998 will not be
eligible to receive health and welfare benefits from Buyer (as
described in this paragraph) until such date such employee
returns to active employment with Buyer or the Acquired
Companies. All such disabled employees shall receive from Seller
full continuation of health and welfare coverage as well as any
disability income benefits to which they would have otherwise
been entitled in the absence of the sale of the Industrial
Container Business.
(ii) From the Closing Date through March 31, 1998,
Seller shall continue to provide all employees of the Industrial
Container Business with all health and welfare benefits that they
were entitled to receive as of the day preceding the Closing
Date. Seller, through its health and welfare plans (the "Seller
Welfare Plans"), shall remain responsible for all claims for
injuries incurred and illnesses suffered prior to April 1, 1998.
In addition, Seller shall provide, through the Seller Welfare
Plans, all continuation of coverage rights required under Section
4980B of the Code with respect to employees and former employees
(and their dependents) of the Industrial Container Business who
are not Actively at Work (as described in subparagraph (i) above)
on April 1, 1998. Buyer, through the Buyer Welfare Plans, will
be responsible for all claims for injuries incurred and illnesses
suffered on and after April 1, 1998. On or before October 31,
1998, Seller shall provide to Buyer a report regarding all
benefits paid under the Seller Welfare Plans to employees of the
Industrial Container Business (and their dependents) arising from
injuries incurred and illnesses suffered prior to April 1, 1998
which had been filed with Seller as of the date of such report.
Except as may be required under the terms of a collective
bargaining agreement, Buyer shall not assume any obligation under
any of the Seller Welfare Plans, including, but not limited to
any obligation under any severance plans maintained by Seller.
(e) Retiree Welfare Benefits.
(i) As of the Closing Date, Seller shall be
responsible for, and shall indemnify and hold harmless Buyer and
the Acquired Companies for, all obligations to provide post-
retirement welfare benefit coverage to (A) all former employees
of the Industrial Container Business who, as of the Closing Date,
were separated from the service of Seller and receiving such
post-retirement coverage under Seller's group welfare plan; and
(B) all employees (salaried, non-union hourly and union hourly)
of the Industrial Container Business who, as of the Closing Date,
have satisfied the age and/or service requirements to receive
such post-retirement coverage had they remained in the employ of
Seller until their retirement. With respect to all former
employees described in (A) above, Seller shall provide such post-
retirement welfare benefit coverage, after the Closing Date, in
accordance with the terms of Seller's welfare benefit plan as
that plan may be amended from time to time. With respect to the
employees described in (B) above, Seller shall provide post-
retirement welfare benefit coverage at the time of their
retirement or other separation from service from Buyer or the
Acquired Companies, in accordance with the terms and conditions
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of Seller's group welfare benefit, or, in the case of union
hourly employees, in accordance with the terms of the relevant
collective bargaining agreement, in effect at such retirement or
separation from service.
(ii) As of the Closing Date, Buyer shall be
responsible for, and shall indemnify and hold harmless Seller
for, all obligations to provide post-retirement welfare benefit
coverage to all union hourly employees of the Industrial
Container Business who, as of the Closing Date, had not satisfied
the age and/or service requirements to receive such post-
retirement coverage under the terms of Seller's welfare benefit
plan. Buyer shall provide the coverage described in the
preceding sentence in accordance with the terms of each
respective collective bargaining agreement in effect at the time
of a union hourly employee's retirement or other separation from
service from Buyer or the Acquired Companies. As of the Closing
Date, (A) Buyer shall have no obligation to provide any post-
retirement welfare benefit coverage to any salaried or non-union
hourly employee of the Industrial Container Business; and such
employees will not, upon their retirement or other separation
from service from Buyer or the Acquired Companies, receive any
post-retirement welfare benefit coverage; and (B) except as
provided in paragraph (e)(iii) below, Buyer shall have no
obligation regarding post-retirement welfare benefit coverage
with respect to any employee or former employee of the Industrial
Container Business described in paragraph (e)(i) above.
(iii) To compensate Seller for its retained
obligations under paragraph (e)(i) above, Buyer shall reimburse
Seller for its actual costs incurred in providing the post-
retirement health insurance coverage described in such paragraph
(e)(i); provided such reimbursement shall not exceed $1,350,000
in any calendar year ($1,012,500 in 1998). Reimbursement
payments contemplated by this paragraph (e)(iii) shall be made by
Buyer to Seller on an annual basis, based upon invoices provided
by Seller to Buyer, which invoices shall include a listing of
each covered individual and the cost assignable to each such
individual as determined by Seller. Buyer shall have the right,
at its own expense, to audit any such invoices received from
Seller. Seller and Buyer agree to cooperate in any audit or
review made by Buyer or its representatives with respect to post-
retirement health insurance expenses.
(f) Transition Period.
(i) To the extent requested by Buyer, in writing
to Seller, within five (5) days of the Closing Date, for the
period beginning on April 1, 1998 and ending on a date determined
by Buyer, not later than December 31, 1998 (hereinafter such time
period shall be referred to as the "Transition Period"), each
employee of the Industrial Container Business (as well as the
eligible dependents of each such employee) who is a participant
in the Seller Welfare Plans and who becomes an employee of Buyer
or the Acquired Companies after the Closing Date shall remain a
participant in the Seller Welfare Plans, subject to the following
conditions:
(A) Buyer shall reimburse Seller (or, if
applicable, the Seller Welfare Plans) for all benefit claims paid
from the Seller Welfare Plans and applicable administrative fees
accrued on behalf of any employee of the Industrial Container
Business, or eligible dependent of any such employee, with
respect to any injury incurred or illness suffered on or after
April 1, 1998 and prior to the end of the Transition Period.
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(B) Subject to the approval of the relevant
insurer, Seller shall continue to pay all insurance premiums on
behalf of each employee of the Industrial Container Business to
continue the provision of any insured health and welfare benefits
for the Transition Period, except for any HMO or similar plans
that have been contracted locally by the Acquired Companies. All
insurance premiums paid by Seller pursuant to this subparagraph
shall be reimbursed to Seller by Buyer.
(C) Subject to the approval of the relevant
insurer, Seller shall continue to pay and/or agree to obtain
individual and/or aggregate stop loss insurance premiums for the
Transition Period, with respect to any self-insured health and
welfare plan of Seller, to retain such stop loss insurance
coverage during the Transition Period with respect to claims paid
on behalf of any employee of the Industrial Container Business
and any dependent of any employee by Buyer pursuant to
subparagraph (A) above. All insurance premiums paid by Seller,
with respect to the employees of the Industrial Container
Business and their eligible dependents, pursuant to this
subparagraph, shall be reimbursed to Seller by Buyer.
(ii) Notwithstanding the provisions of
subparagraph (i) of this paragraph (f), at the close of business
on March 31, 1998 (or at the end of the Transition Period, if
later), all employees of the Industrial Container Business shall
cease to be eligible to make any further deferral contributions
to any flexible spending account plan maintained by Seller
pursuant to Section 125 of the Code (the "Seller Flexible
Spending Plans"). On and after April 1, 1998, neither Buyer nor
any of the Acquired Companies shall provide any salaried employee
or non-union hourly employee with the opportunity to participate
in any flexible spending account plan sponsored by Buyer or any
of the Acquired Companies. On and after April 1, 1998, all union
hourly employees will be provided by Buyer with those flexible
spending account plans required under each respective collective
bargaining agreement in effect with respect to such employees.
With respect to salaried employees and non-union hourly employees
of the Industrial Container Business, Seller shall continue, for
the period beginning on April 1, 1998 and ending on December 31,
1998, to allow such employees to continue to submit claims for
reimbursement under the Seller Flexible Spending Plans for any
occurrence arising at any time during the 1998 calendar year.
The reimbursable claims will not exceed the amount deducted
through March 31, 1998 (or by the end of the Transition Period,
if later). With respect to union hourly employees of the
Industrial Container Business, on April 1, 1998, Seller shall
transfer the account balances of such employees under the Seller
Flexible Spending Plans to Buyer. On and after April 1, 1998,
neither Seller nor the Seller Flexible Spending Plans shall have
any obligations with respect to reimbursements to any union
hourly employee of the Industrial Container Business.
(g) Workers' Compensation, Disability and Employment
Claims. After the Closing Date, Seller shall be responsible for,
and shall indemnify and hold harmless Buyer and the Acquired
Companies for, all Liabilities and Expenses of all workers
compensation claims which arise out of any injury sustained by
any employee of the Industrial Container Business on or prior to
the Closing Date. After the Closing Date, Seller shall be
responsible for, and shall indemnify and hold harmless Buyer and
the Acquired Companies for, all Liabilities and Expenses relating
to any employee of the Industrial Container Business who is on
short or long term disability leave on the Closing Date. After
the Closing Date, Seller shall be responsible for, and shall
indemnify and hold harmless Buyer and the Acquired Companies for,
all Liabilities and Expenses relating to any claim of any
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employee of the Industrial Container Business which claim is
based upon facts occurring on or prior to the Closing Date
relating to the employment of such employee in the Industrial
Container Business.
Section 7.4. Confidential Nature of Information. Each
of Buyer, as a party on the one hand, and Seller, as a party on
the other, agrees that it will treat in confidence all documents,
materials and other information which it shall have obtained
regarding the other party during the course of the negotiations
leading to the consummation of the Contemplated Transactions
(whether obtained before or after the date of this Agreement),
the investigation provided for herein and the preparation of this
Agreement and other related documents, and, in the event the
Contemplated Transactions shall not be consummated, each party
will return to the other party all copies of nonpublic documents
and materials which have been furnished in connection therewith.
Such documents, materials and information shall not be
communicated to any third Person (other than, in the case of
Buyer, to its counsel, accountants, financial advisors or
lenders, and in the case of Seller, to its counsel, accountants
or financial advisors). No Person shall use any confidential
information in any manner whatsoever except solely for the
purpose of evaluating the proposed purchase and sale of the
Shares or the negotiation or enforcement of this Agreement or any
agreement contemplated hereby; provided that after the Closing,
Buyer and the Acquired Companies may use or disclose any
confidential information related to the Acquired Companies or
their Assets or business. The obligation of each party to treat
such documents, materials and other information in confidence
shall not apply to any information which (i) is or becomes
lawfully available to such party from a source other than the
furnishing party, (ii) is or becomes available to the public
other than as a result of disclosure by such party or its agents,
(iii) is required to be disclosed under applicable law or
judicial process, but only to the extent it must be disclosed or
(iv) such party reasonably deems necessary to disclose to obtain
any of the Consents contemplated hereby.
Section 7.5. No Solicitation. After the date hereof
until the termination of this Agreement or Closing, neither
Seller nor any of the Acquired Companies will directly or
indirectly, through any Representative of Seller or any Acquired
Company (i) solicit or initiate the submission of any proposal or
offer from any Person (other than Buyer) with respect to the
acquisition of all or a portion of the outstanding capital stock
of any Acquired Company or the merger, consolidation or sale of
all or a significant portion of the Assets of any Acquired
Company (an "Acquisition Proposal"), or (ii) engage in
negotiations or discussions with, or furnish any information or
data to any third party relating to an Acquisition Proposal
(other than the transactions contemplated hereby). Seller shall
cause the Acquired Companies to comply with the provisions of
this Section 7.5.
Section 7.6. Notes, Accounts and Other Miscellaneous
Receivables. Subject to a bad debt reserve of $700,000 for
accounts receivable, Seller guarantees to Buyer the collection of
all notes, accounts and other miscellaneous receivables that are
reflected on the books and records of any of the Acquired
Companies as of the Closing Date or that otherwise arise out of
sales or transactions occurring on or before the Closing Date
relating to the Industrial Container Business or the IBC Business
(the "Receivables"). From and after the Closing, Buyer shall
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use, or shall cause the applicable Acquired Company to use,
reasonable efforts to collect the Receivables generally in
accordance with Buyer's normal billing and collection practices.
With respect to accounts receivable, if, at any time after ninety
days after the Closing Date, the Acquired Companies shall have
outstanding to be collected more than $700,000 of accounts
receivable, upon the request of Buyer, Seller shall pay to Buyer
(or to one or more of the Acquired Companies as Buyer may direct)
within ten days of such request the difference between the total
amount of such accounts receivables outstanding and $700,000;
provided, however, that concurrently with any such payment by
Seller, Buyer shall cause one or more of the Acquired Companies
to assign to Seller the accounts receivables theretofore not
collected in an amount equal to the amount of the payment by the
Seller. With respect to notes receivable (including, without
limitation, the note receivable in the original principal amount
of $287,464 from Xxxxxx Sales Development Corp.) and other
miscellaneous receivables, if, at any time after the Closing
Date, any obligor under any note receivable or miscellaneous
receivable shall fail to pay when due any amounts owing under the
notes receivable or miscellaneous, upon the request of Buyer,
Seller shall pay to Buyer (or to one or more of the Acquired
Companies as Buyer may direct) within ten days of such request
the entire unpaid amount of the note receivable or miscellaneous
receivable; provided, however, that concurrently with any such
payment by Seller, Buyer shall cause one or more of the Acquired
Companies to assign to Seller the note receivable or
miscellaneous receivable theretofore not collected in an amount
equal to the amount of the payment by the Seller. To the extent
that any accounts receivable relating to the IBC Business is on
the books and records of the Seller as of the Closing Date,
Seller hereby assigns such accounts receivable to the Buyer.
Section 7.7. Environmental Matters. Subject to the
following sentence, Seller shall promptly reimburse Buyer for
one-half (50%) of all costs incurred in connection with
conducting additional environmental investigations to define the
scope and extent of environmental impacts at Seller's facilities
which are identified in Environmental Resource Management's
("ERM's") proposal No. P98-DG-2001 attached hereto as Schedule
7.7. Notwithstanding the foregoing, Buyer and Seller mutually
agree that the environmental investigations set forth in ERM's
proposal for the facilities at Hightstown, New Jersey, Carteret,
New Jersey and Overland, Missouri will not be conducted by ERM
pursuant to this Section 7.7. Buyer and Seller further agree
that, upon the request of Seller, Seller may request another
estimate of the costs of the environmental investigations from
its ERM representative or from another environmental consulting
firm reasonably acceptable to Buyer. In the event such further
estimates result in lower costs for the environmental
investigations and the scope of such work in such estimates is
acceptable to Buyer, Buyer and Seller may agree to use another
environmental consultant to perform such environmental
investigations. Buyer shall have sole authority to direct and
authorize this and future environmental investigations, if
necessary. Seller shall indemnify and hold Buyer harmless
against any and all costs, including expert fees, consultants'
fees, and attorneys' fees, for all necessary and appropriate
additional environmental investigation and remediation required
to demonstrate that environmental conditions at the identified
facilities comply with applicable Environmental Law and to
prevent or xxxxx any threat to human health or the environment at
Seller's facilities identified herein. Seller shall reimburse
Buyer for all costs incurred in connection with those
environmental matters identified on Schedule 4.25, including but
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not limited to costs of investigation, removal actions, remedial
actions, operations and maintenance, government oversight costs,
natural resource damages and claims by third parties for
contribution.
Section 7.8. Financial Statement Consents . In
connection with the delivery of the audited Financial Statements
referenced in Section 7.9 of this Agreement, Seller shall cause
its independent auditors to deliver to Buyer upon reasonable
request of Buyer such consents as may be required under the
Securities Act of 1933, as amended, and the Securities Exchange
Act of 1934, and the rules and regulations promulgated thereunder
in connection with the use of such statements by Buyer.
Section 7.9. Delivery of Audited Financial Statements.
The audited consolidated financial statement for the fiscal
year ended December 31, 1995, December 31, 1996 and December 31,
1997 for the Acquired Companies relating only to the Industrial
Container Business of the Acquired Companies referenced in
Section 4.5 of this Agreement were not completed as of the
Closing Date. Seller shall deliver or cause to be delivered such
audited consolidated financial statements to the Buyer within
thirty days after the Closing Date. Such audited consolidated
financial statements shall be in a form acceptable for Buyer to
file with its Form 8-K with the Securities and Exchange
Commission. For purposes of this Agreement, such audited
financial statements shall be deemed to have been delivered as of
the Closing Date. In addition, in the event that the
transactions contemplated by the IBC Sales Agreement close,
Seller shall deliver or cause to be delivered such audited
consolidated financial statements for such three year period
relating to the IBC Business to the Buyer at such closing or
within thirty days after this Closing Date, whichever is later.
Such audited consolidated financial statements relating to the
IBC Business shall be in a form acceptable for Buyer to file with
its Form 8-K with the Securities and Exchange Commission.
Section 7.10. Certain Contracts in the Name of Seller
Relating to the Industrial Container Business.
(a) Prior to the Closing Date, Seller was a party to
various executory Contracts relating to the Industrial Container
Business. Except as set forth on Schedule 7.10, Seller agrees
that all such executory Contracts have been lawfully assigned to
an Acquired Company (which, as of the Closing Date, is a lawful
party to such Contract) and, to the extent required by any such
Contract, Seller has obtained any Consent required in connection
with such assignment. Seller shall indemnify and hold harmless
Buyer and each Acquired Company from all Damages incurred by
Buyer or an Acquired Company in the event that any required
Consent to such assignment was not obtained or the assignment was
otherwise not lawfully effected or binding. The representations
set forth in Section 4.15(b) are hereby also made with respect to
the Contracts described in this Section 7.10(a).
(b) With respect to the Contracts listed in Schedule
7.10 (including, without limitation, the Supply Contract between
Seller and Merck & Co., Inc. relating to the Industrial Container
Business), Seller shall indemnify and hold harmless Buyer and
each Acquired Company from all Damages incurred by Buyer or an
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Acquired Company arising from or in connection with the failure
of the Seller to lawfully assign such Contract to an Acquired
Company on or prior to the Closing Date or otherwise failing to
obtain any required Consent to such assignment.
(c) In the event that, after the Closing Date, Buyer
or an Acquired Company discovers that Seller is a party to a
Contract relating to the Industrial Container Business that has
not been lawfully assigned to an Acquired Company and that is
not described on Schedule 7.10, upon the request of the Buyer,
after the Closing Date. Seller agrees to use it best efforts to
obtain the lawful assignment of such Contract to an Acquired
Company and, to the extent required by any such Contract, to
obtain any Consent required in connection with such assignment.
Seller shall indemnify and hold harmless Buyer and each Acquired
Company from all Damages incurred by Buyer or an Acquired Company
arising from or in connection with the failure of the Seller to
lawfully assign such Contract to an Acquired Company or otherwise
failing to obtain any required Consent to such assignment.
Section 7.11. Option to Purchase Far East Fibre Drum
Operations.
(a) For a period of ten years after the Closing Date,
Buyer shall have the irrevocable prior right and option to
purchase from Seller (or, if applicable, an affiliate of the
Seller) the Far East Fibre Drum Operations. Buyer may exercise
the option by giving written notice of exercise to Seller of its
intention to purchase the Far East Fibre Drum Operations. Upon
receipt of such notice, Seller and Buyer shall enter into a
mutually satisfactory confidentiality agreement and, subject to
such agreement, Seller shall provide to Buyer all financial and
business information concerning the Far East Fibre Drum
Operations as may be reasonably requested by Buyer. Following
delivery and receipt of such information, Seller and Buyer shall
be required to negotiate reasonably and in good faith for a
period of not less than sixty days such terms and conditions of
the purchase and sale of the Far East Fibre Drum Operations as
may be mutually satisfactory to both Seller and Buyer.
(b) If, at any time during the ten year period after
the Closing Date, Seller or an affiliate of the Seller enters
into, or proposes to enter into, an agreement to sell all or any
part of the Far East Fibre Drum Operations to an unrelated third
Person, Seller shall give written notice to Buyer of such
agreement or proposed agreement (the "Transfer Notice"). The
Transfer Notice shall specify all of the material terms and
conditions of such agreement or proposed agreement. Upon receipt
of such Transfer Notice, Buyer shall have the irrevocable prior
right and option to purchase from Seller (or, if applicable, an
affiliate of the Seller) the Far East Fibre Drum Operations on
the same terms and conditions as set forth in the Transfer Notice
(the "First Right of Refusal"). Upon receipt of such Transfer
Notice, Seller and Buyer shall enter into a mutually satisfactory
confidentiality agreement and, subject to such agreement, Seller
shall provide to Buyer all financial and business information
concerning the Far East Fibre Drum Operations as may be
reasonably requested by Buyer. Buyer may exercise the First
Right of Refusal to purchase the Far East Fibre Drum Operations
on the same terms and conditions as set forth in the Transfer
Notice by giving written notice to the Seller within sixty days
after receipt of the Transfer Notice. If Buyer exercises such
First Right of Refusal, Buyer and Seller shall reasonably and in
good faith negotiate an agreement containing the terms that are
set forth in the Transfer Notice. If the Buyer does not exercise
its First Right of Refusal within sixty days after receipt of the
Transfer Notice, Seller may sell the Far East Fibre Drum
Operations to the unrelated third Person identified in the
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Transfer Notice strictly in accordance with the terms of the
Transfer Notice.
Section 7.12. Post_Closing Real Estate Matters. Buyer
and Seller agree and acknowledge that certain issues relating to
the Owned Real Property and the Leased Real Property may not be
resolved until after the Closing Date. Such issues include the
following:
(a) The transfer and conveyance of certain Owned Real
Property located in Lockport, Illinois from Seller to SPD and the
transfer and conveyance of certain Owned Real Property located in
Saraland, Alabama from the Industrial Development Board of the
City of Mobile, Alabama to SFD (such transfers being referred to
herein collectively as the "Post Closing Transfers"); and
(b) The resolution of certain matters relating to and
arising out of the completion of accurate surveys of the Owned
Real Property, including (i) the encroachment onto property
owned by, or to be owned by, SPD and located in Lockport,
Illinois, of a building which is located on property adjacent to
such SPD property, (ii) the encroachment onto property owned by
SFD and located in Van Wert, Ohio, of an above-ground swimming
pool and a storage shed which is located on property adjacent to
such SFD property, and (iii) the potential encroachment of a
parking lot and fence, owned and utilized by SFD at its
Tonawanda, New York property, onto property located adjacent to
such SFD property (collectively, the "Post Closing Survey
Matters").
Seller agrees to be responsible for and to indemnify Buyer
against all expenses, transfer taxes, documentary stamp charges,
recording fees and similar charges arising out of or in
connection with the Post Closing Transfers. Additionally,
Seller agrees to be responsible for and to indemnify Buyer
against all costs, expenses and charges incurred by Buyer in
resolving the Post Closing Survey Matters; provided, however,
that Buyer agrees that, with respect to the matter set forth in
Section 7.12(b)(i), Buyer shall not seek to be indemnified by the
Seller for the value of the land that is the subject of the
encroachment. The agreements between Seller and Buyer pursuant
to this Section 7.12 shall neither diminish nor limit the
liability of Seller arising out of the breach by Seller of any of
its representations and warranties contained in this Agreement.
Section 7.13. Post_Closing Intellectual Property
Matters.
(a) In connection with Seller's acquisition of part of
the Industrial Container Business from KMI Continental Inc.
pursuant to a Purchase Agreement dated February 25 ,1985, Seller
(or one or its affiliates) had assigned to it certain patents
that are listed on Schedule 7.13, together with all Patent Rights
associated with such patents. The assignment of such patents,
however, was not recorded in the United State Patent and
Trademark Office. Seller represents to Buyer that, although it
or one of its affiliates owns all the Patent Rights associated
with such patents and all such Patent Rights to such patents are
being assigned to GBC Holding Co., the patents listed on
Schedule 7.13 are not currently being used in the Industrial
Container Business. Seller agrees that if Buyer or one of its
affiliates decides to use any such patent prior to the expiration
of such patent, Seller shall, within thirty days of written
notice of Buyer's intent to use such patent obtain, at Seller's
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sole cost and expense, all necessary documentation from any
person as may be necessary to establish that GBC Holding Co. is
the record owner of such patent as reflected upon the records of
the United States Patent and Trademark Office.
(b) Although, as of the Closing Date, Seller and its
affiliates have assigned all of their right, title and interest
in and to all Patent Rights and Trademarks used in connection
with the Industrial Container Business to GBC Holding Co., Seller
has not caused the assignments of all such Patent Rights and
Trademarks that, pursuant to Legal Requirement, should be filed
and recorded with a Governmental Body (including, without
limitation, the United States Patent and Trademark Office).
Seller agrees that, within ninety days after the Closing, Seller
shall, at its sole cost and expense, cause all such assignments
of all such Patent Rights and Trademarks that, pursuant to Legal
Requirement, should be filed and recorded with a Governmental
Body to be properly recorded with the appropriate Governmental
Body. Upon the request of Seller, Buyer agrees that it shall
undertake to file and record, on behalf of the Seller, all such
assignments with the appropriate Governmental Body provided that
Seller shall promptly reimburse Buyer for all costs and expenses
incurred by Buyer in connection with such action (including,
without limitation, all filing fees of the Governmental Body and
reasonable attorneys fees incurred in connection with such
action).
Section 7.14. Patent Litigation Matters. Seller and
Buyer agree that, with respect to the pending patent litigation
referenced in Item 1 and Item 2 of Schedule 4.9 to this
Agreement, Seller agrees to assign all rights (including all
rights to damages in connection with any settlement or judgment)
to such patent litigation to Buyer (or one of its affiliates as
may be designated by Buyer). Seller agrees that it shall be
responsible for all costs and expenses (including attorney fees)
incurred on or prior to the Closing Date relating to such patent
litigation. Buyer agrees that, after the Closing Date, it shall
be responsible for all costs and expenses (including attorney
fees) incurred after the Closing Date relating to such patent
litigation. Buyer and Seller agree to execute such documents as
may be necessary or appropriate in connection with any Legal
Requirement (including local Court Rules) to evidence the
foregoing.
ARTICLE 8. CONDITIONS PRECEDENT TO OBLIGATIONS TO CLOSE
Section 8.1. Conditions Precedent to Buyer's Obligation to
Close. The obligation of Buyer to consummate the transactions to
be performed by it in connection with the Closing is subject to
satisfaction of the following conditions:
(a) The representations and warranties made by Seller
to Buyer in this Agreement or any document or instrument
delivered to Buyer on the Closing Date shall be true and correct
(i) in all material respects when made and (ii) on the Closing
Date with the same force and effect as though such
representations and warranties had been made on and as of such
date (except for changes contemplated by this Agreement or
occurring in the Ordinary Course of Business which do not singly
or in the aggregate have a Material Adverse Effect).
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(b) Seller shall have duly performed all of the
covenants required to be performed by it or any of its affiliates
under this Agreement on or before the Closing Date, and an
authorized officer of Seller shall deliver to Buyer a certificate
dated as of the Closing Date certifying to the fulfillment of
this condition and the condition set forth in Section 8.1(a).
(c) There shall not be pending any Proceeding brought
by any Person before any Governmental Body challenging,
affecting, or seeking material damages in connection with, this
Agreement or any of the Contemplated Transactions.
(d) A favorable opinion of Xxxxxxx & Xxxx, P.A.,
counsel for Seller, shall have been delivered to Buyer dated as
of the Closing Date, in the form agreed to by the parties.
(e) Early termination of or expiration of the waiting
period under the HSR Act shall have occurred on or prior to the
Closing Date.
(f) Consents (including all Governmental
Authorizations and all Consents required to be obtained by Seller
or under any Applicable Contracts to prevent a breach of such
Contract) required of Seller or an Acquired Company shall have
been obtained, on terms and conditions reasonably satisfactory to
Buyer, and Seller and the Acquired Company shall provide evidence
of the receipt of such Consents to Buyer.
(g) Buyer shall have satisfactorily completed its due
diligence review of the Acquired Companies.
Section 8.2. Conditions Precedent to Seller's Obligation to
Close. The obligation of Seller to consummate the transactions
to be performed by them in connection with the Closing is subject
to satisfaction of the following conditions:
(a) The representations and warranties made by Buyer
to Seller in this Agreement or any document or instrument
delivered to Seller on the Closing Date shall be true and correct
(i) in all material respects when made and (ii) on the Closing
Date with the same force and effect as though such
representations and warranties had been made on and as of such
date (except for changes contemplated by this Agreement or which
do not singly or in the aggregate have a material adverse effect
on the ability of Buyer to consummate the Contemplated
Transactions).
(b) Buyer shall have duly performed all of the
covenants required to be performed by it under this Agreement on
or before the Closing Date, and an authorized officer of Buyer
shall deliver to Seller a certificate dated as of the Closing
Date certifying to the fulfillment of this condition and the
condition set forth in Section 8.2(a).
(c) There shall not be pending any Proceeding brought
by any Person before any Governmental Body challenging,
affecting, or seeking material damages in connection with, this
Agreement or any of the Contemplated Transactions.
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(d) A favorable opinion of Vorys, Xxxxx, Xxxxxxx and
Xxxxx LLP, counsel for Buyer, shall have been delivered to Seller
dated as of the Closing Date, in the form agreed to by the
parties.
(e) Early termination of or expiration of the waiting
period under the HSR Act shall have occurred on or prior to the
Closing Date.
(f) Consents (including all Governmental
Authorizations) required of Buyer shall have been obtained, on
terms and conditions reasonably satisfactory to Seller, and Buyer
shall provide evidence of the receipt of such Consents to Seller.
ARTICLE 9. COVENANTS AS TO TAX MATTERS
Section 9.1. Section 338(h)(10) Election .
(a) Buyer and Seller agree to file the election
provided for by IRC Section 338(h)(10) and any comparable
election under state, local or foreign law (collectively and
separately, the "Election") with respect to (i) the acquisition
of the Shares of each Acquired Company pursuant to this Agreement
and (ii) the deemed acquisition of the shares of each Subsidiary
of each Acquired Company. Each party shall provide to the other
all information necessary to permit the Election to be made.
Seller and Buyer shall, within the time periods established by
applicable Legal Requirements, execute and file IRS Form 8023-A
and all other forms, returns, elections, schedules and documents
as may be required to effect and preserve a timely Election.
(b) Seller and Buyer acknowledge and agree that for
federal income tax purposes the acquisition of the Shares
pursuant to the Election will be treated as a sale of the Assets
of each Company and each Subsidiary of each Company followed by a
complete liquidation of each Company and each Subsidiary of each
Company into Seller. In connection with the Election and within
the time periods established by applicable Legal Requirements,
Seller and Buyer shall act together in good faith (i) to
determine and agree upon the amount of the deemed sale price of
the Shares as well as the deemed sale price of the shares of each
Subsidiary (within the meaning of Treasury Regulations
Section 1.338(h)(10)-1(f)) and (ii) to agree upon the proper
allocations (the "Allocations") of the deemed sale price of the
Shares and the shares of each Subsidiary among the Assets of each
Company and each Subsidiary of each Company in accordance with
the IRC and the Treasury Regulations promulgated thereunder.
Neither Seller nor Buyer, nor any of their affiliates, will take
any position inconsistent with the Election, the Allocations or
the amount of the deemed sale prices so determined in any Tax
Return or otherwise. Within the time periods established by
applicable Legal Requirements for making and filing the Election,
the Allocations shall be set forth in Schedule 9.1(b) to this
Agreement. Except as provided below, any Liability for Taxes
resulting from the Election will be borne by Seller, including,
but not limited to, any income, franchise or similar Taxes
imposed by any state, local or foreign taxing authority that does
not allow or respect an election under IRC Section 338(h)(10) (or
any comparable election under state, local or foreign law).
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(c) If Seller breaches any covenant set forth in this
Section 9.1, Seller shall indemnify and hold Buyer, each Acquired
Company and each of their affiliates harmless against any and all
Taxes due from an Acquired Company which result from such breach
for any and all taxable periods beginning after the Closing Date
(including, but not limited to, the portion of all Straddle
Periods allocable to Buyer pursuant to Section 9.2(c) hereof),
together with all Expenses related thereto. For purposes of this
Section 9.1(c), the term "Taxes" shall mean the present value as
of the Closing Date of the step up in the adjusted basis of the
Assets of each Acquired Company that would have resulted from a
valid Election, computed on the following assumptions: (i) the
allocations determined pursuant to paragraph (b) hereof (taking
into account Buyer's transaction costs) are correct; (ii) each
highest marginal rate of tax applied to income of a corporation
as of the Closing Date pursuant to applicable federal, state,
local and foreign law shall apply; and (iii) the discount rate
shall be the rate of interest that Key Bank, N.A., publishes as
its prime rate as of the Closing Date (the "Interest Rate").
Seller shall pay such Taxes and Expenses to Buyer in immediately
available funds within thirty (30) days after written demand
therefor, together with interest from the Closing Date at a rate
per annum equal to the Interest Rate. Buyer shall deliver with
such written demand evidence of such Expenses.
Section 9.2. Liability for Taxes.
(a) Seller shall indemnify and hold Buyer, each of
the Acquired Companies and each of their affiliates harmless
against any and all Taxes due from any Acquired Company for any
taxable period ending on or before the Closing Date in excess of
the aggregate amount reflected as reserves for Taxes of the
Acquired Companies on the balance sheets of the Most Recent
Financial Statements, together with all Expenses related thereto.
Seller shall be entitled to all refunds of Taxes payable with
respect to the Acquired Companies for taxable periods ending on
or before the Closing Date.
(b) Buyer shall indemnify and hold Seller and its
affiliates harmless against any and all Taxes due from any of the
Acquired Companies for any taxable period beginning after the
Closing Date, together with all Expenses related thereto. Buyer
shall be entitled to all refunds of Taxes payable with respect to
the Acquired Companies for such taxable periods.
(c) Buyer and Seller shall allocate any Liability of
the Acquired Companies for Taxes relating to taxable periods that
begin before and end after the Closing Date ("Straddle Periods").
For this purpose, the portion of such Liability allocable to
Seller in accordance with paragraph (a) hereof and the portion of
such Liability allocable to Buyer in accordance with paragraph
(b) hereof shall be determined, in the case of property, ad
valorem or franchise Taxes (other than those measured by, or
based upon, net income), on a per diem basis and, in the case of
other Taxes, on the basis of an interim closing of the books as
of the end of the Closing Date (except that (i) exemptions,
allowances and deductions for any Straddle Period that are
calculated on an annual or periodic basis, such as the deduction
for depreciation, shall be apportioned on a per diem basis and
(ii) real property taxes shall be apportioned in accordance with
IRC Section 164(d)). All refunds of Taxes payable with respect
to the Acquired Companies for a Straddle Period shall be
apportioned between Buyer and Seller on the basis of their
respective Liability for such Straddle Period; provided, however,
that any refunds of Taxes with respect to the Acquired Companies
for any Straddle Period which is related to an item for which
Buyer or Seller was liable and which was paid by Buyer or Seller
shall be refunded to Buyer or Seller, as the case may be.
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(d) Seller shall indemnify, defend and hold Buyer, the
Acquired Companies and their affiliates harmless against any
Losses and Expenses incurred by reason of the breach by Seller of
any representation or warranty set forth in Section 4.10.
Section 9.3. Preparation and Filing of Tax Returns.
(a) Seller shall be solely responsible for preparing
and filing on a timely basis, for all taxable periods ending on
or before the Closing Date, all Tax Returns with respect to the
income, Assets, operations, activities, status or other matters
of any of the Acquired Companies. Seller shall be solely
responsible for and pay on a timely basis all Taxes shown due
thereon.
(b) If for federal, state, local or foreign tax
purposes, the taxable period of any of the Acquired Companies
does not terminate on the Closing Date, Buyer and Seller shall
elect, to the extent permitted by applicable law, with the
relevant taxing authority to treat a portion of any Straddle
Period as a short taxable period ending as of the close of
business on the Closing Date, and such short taxable period shall
be treated as ending on or before the Closing Date for purposes
of this Agreement. Seller and Buyer shall jointly prepare (and
Buyer shall file or cause to be filed on a timely basis), for all
Straddle Periods, all Tax Returns with respect to the income,
Assets, operations, activities, status or other matters of any of
the Acquired Companies. Seller shall be solely responsible for
any Taxes shown due thereon to the extent attributable to the
portion of such taxable period ending on the Closing Date, and
shall pay such amount over to Buyer in immediately available
funds no later than three business days prior to the due date of
such Tax Return. Buyer shall be solely responsible for the
balance of the Taxes shown as due thereon and for payment of all
amounts shown as due thereon to the appropriate Governmental
Body. Notwithstanding the foregoing, to the extent that Seller
has made payments of estimated Taxes with respect to any of the
Acquired Companies for any Straddle Period, Seller shall be
entitled to reduce its payments to Buyer under this Section
9.3(b) by the aggregate amount of such payments and, to the
extent that the aggregate amount of such payments exceeds
Seller's Liability for Taxes for any Straddle Period, Buyer shall
pay over to Seller the amount of such excess in immediately
available funds no later than three Business Days prior to the
due date of the Tax Return with respect to which the estimated
Taxes were payable.
(c) Buyer shall be solely responsible for preparing
and filing all Tax Returns relating to any of the Acquired
Companies for all taxable periods beginning after the Closing
Date and for paying all Taxes shown due thereon.
(d) If Buyer and Seller cannot agree as to the amount of
Taxes due with respect to any Tax Return filed for any Straddle
Period, or as to the portion of such Taxes allocable to each of
Buyer and Seller pursuant to Section 9.2(c) hereof, Buyer and
Seller shall jointly select a nationally recognized accounting
firm (the "Accounting Firm"), the determination of which
regarding the resolution of the item(s) in dispute shall be
binding on Buyer and Seller. If the Accounting Firm is unable to
determine the proper resolution of the items in dispute prior to
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the five business days before the due date (after giving effect
to extensions) of the Tax Return at issue, the Tax Return shall
be filed with the resolution of the item(s) in dispute as
proposed by Buyer, and Seller shall be required to pay to Buyer
in immediately available funds three business days prior to the
due date of the Tax Return the amount determined by Seller to be
due by Seller. Within five business days after the Accounting
Firm has reached its determination, Buyer shall pay to Seller or
Seller shall pay to Buyer, as the case may be, the amount of the
overpayment or underpayment by Seller in immediately available
funds with interest at a rate per annum equal to the Interest
Rate, computed from the due date of the Tax Return.
Section 9.4. Cooperation and Assistance. Buyer and
Seller agree to furnish or cause to be furnished to each other,
upon written request, as promptly as practicable, such
information (including without limitation reasonable access to
books, records, schedules, work papers and other documents
relating thereto during the providing party's regular business
hours) and reasonable assistance relating to the Acquired
Companies necessary for the filing of any Tax Return required to
be filed after the Closing Date, preparation for any audit or
prosecution or defense of any Proceeding relating to any proposed
adjustment, or the verification by any party hereto of an amount
payable under this Article 9 to, or receivable under this Article
9 from, another such party. Buyer and Seller shall cooperate
with each other in the conduct of any audit or other Proceeding
involving any of the Acquired Companies or any Person with which
either of or both of them is consolidated or combined for any
purposes relating to Taxes, and each shall execute and deliver
such documents as are necessary to carry out the intent of this
Section 9.4.
Section 9.5. Transfer Taxes. In the event there shall be
any stock transfer Taxes, sales Taxes, use Taxes, real estate
transfer or gains Taxes, or other similar Taxes, if any, imposed
on the Contemplated Transactions, Seller and Buyer shall share
equally in the payment of such Taxes. Notwithstanding the
foregoing, Seller shall be solely responsible for the payment of
any such Taxes to the extent such Taxes result from the transfer
of the Assets, if any, of the IBC Business to Seller on or prior
to the Closing Date or to the extent such Taxes result from the
transfer of Assets of the IBC Business from Seller to Buyer after
the Closing Date.
Section 9.6. Nonforeign Affidavit. Seller shall furnish
Buyer an affidavit, substantially in the form of Exhibit B
hereto, stating, under penalties of perjury, Seller's United
States taxpayer identification number and that Seller is not a
foreign person, pursuant to Section 1445(b)(2) of the IRC.
ARTICLE 10. INDEMNIFICATION; REMEDIES
Section 10.1. Survival of Representations and Warranties.
All representations, warranties, covenants and agreements set
forth in this Agreement by Buyer and Seller are material and have
been relied on by the other party hereto. All representations,
warranties, covenants and agreements set forth in this Agreement
and the remedies of Buyer and Seller with respect thereto, shall
survive the Closing Date and shall not merge in the performance
of any obligation by any party hereto; provided, however,
(a) that any claim for indemnification relating to the breach by
Buyer of any of its representations and warranties contained in
this Agreement may be made by Seller only if Seller shall notify
Buyer on or before the expiration of the second year after the
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Closing Date and (b) that any claim for indemnification relating
to the breach by the Seller of any of its representations and
warranties contained in this Agreement may be made by Buyer only
if Buyer shall notify Seller (i) on or before the expiration of
the second year after the Closing Date in the case of
indemnification relating to the breach of any of the
representations and warranties contained in Sections 4.1 through
4.2, Sections 4.4 through 4.6, Sections 4.8 through 4.9,
Sections 4.11 through 4.24 and Sections 4.26 through 4.30 , (ii)
on or before the expiration of the tenth year after the Closing
Date in the case of indemnification relating to the breach of any
of the representations and warranties contained in Section 4.7 of
this Agreement and (iii) at any time after the Closing Date in
the case of indemnification relating to the breach of any of the
representations and warranties contained in Sections 4.3, 4.10,
and 4.25 of this Agreement (subject to any applicable statutes of
limitation).
Section 10.2. Indemnification and Payment of Damages by the
Seller. Seller will indemnify and hold harmless Buyer and its
affiliates (collectively, the "Buyer Indemnified Persons") for,
and will pay to the Buyer Indemnified Persons, the amount of, any
loss, liability, claim, damage (including actual, consequential,
multiple, exemplary, punitive and incidental damage), fine,
penalty or Expenses (collectively, "Damages"), incurred by the
Buyer Indemnified Persons arising, directly or indirectly, from
or in connection with:
(a) any breach of any representation or warranty made
by Seller in this Agreement or in any other
certificate or document delivered by Seller
pursuant to this Agreement; or
(b) any breach by the Seller of any covenant or
obligation of Seller in this Agreement or in other
certificate or document delivered by Seller
pursuant to this Agreement.
The remedies provided in this Section 10.2 will not be
exclusive of or limit any other remedies that may be available to
Buyer or the other Buyer Indemnified Persons.
Section 10.3. Indemnification and Payment of Damages by
Buyer. Buyer will indemnify and hold harmless Seller and its
affiliates (the "Seller Indemnified Persons") for, and will pay
to the Seller Indemnified Persons, the amount of any Damages
incurred by the Seller Indemnified Persons arising, directly or
indirectly, from or in connection with:
(a) any breach of any representation or warranty made
by Buyer in this Agreement, or any other
certificate or document delivered by Buyer
pursuant to this Agreement; or
(b) any breach by Buyer of any covenant or obligation
of Buyer in this Agreement or in other certificate
or document delivered by Buyer pursuant to this
Agreement.
The remedies provided in this Section 10.3 will not be
exclusive of or limit any other remedies that may be available to
Seller or the other Seller Indemnified Persons.
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Section 10.4. Limitations on Indemnification
(a) Except for claims for indemnification against
Seller under Section 10.2(b), under the provisions of Article 9
or under a breach of warranty under Sections 4.3 or 4.10 of this
Agreement, no claim shall be made for indemnification against
Seller pursuant to this Agreement unless and until the aggregate
amount of Damages incurred by the Buyer Indemnified Persons under
this Agreement exceeds $1,000,000 (the "Indemnification
Threshold") and then Seller shall be liable for Damages only to
the extent of the excess over the Indemnification Threshold.
(b) Except for claims for indemnification against
Buyer under Section 10.3(b) or under the provisions of Article 9
of this Agreement, no claim shall be made for indemnification
against Buyer pursuant to this Agreement unless and until the
aggregate amount of Damages incurred by the Seller Indemnified
Persons exceeds $1,000,000 (the "Indemnification Threshold") and
then Buyer shall be liable for Damages only to the extent of the
excess over the Indemnification Threshold.
(c) The total Liability of Seller to Buyer under
Section 10.2(a) or of Buyer to Seller under Section 10.3(a)
hereof shall be limited in the aggregate (for each of Sections
10.2(a) and 10.3(a), not combined) to $100,000,000.
Section 10.5. Procedure for Indemnification--Third Party
Claims.
(a) If any Seller Indemnified Person or Buyer
Indemnified Person entitled to indemnification under this
Agreement (an "Indemnitee") receives notice of the commencement
of any Proceeding by any Person who is not a party to this
Agreement or an affiliate of such a party (a "Third Party Claim")
against such Indemnitee for which a party is obligated to provide
indemnification under this Agreement (an "Indemnitor"), the
Indemnitee will give such Indemnitor reasonably prompt written
notice thereof (the "Third Party Claim Notice"), but the failure
to so notify Indemnitor shall not relieve Indemnitor of its
indemnity obligations with respect to such Third Party Claim
unless the Indemnitor establishes that the defense of such Third
Party Claim is actually prejudiced by the Indemnitee's failure to
give such notice. The Third Party Claim Notice will describe the
Third Party Claim in reasonable detail and will indicate the
estimated amount, if reasonably practicable, of the Damages that
have been or may be sustained by the Indemnitee. Except as
otherwise set forth in this Section 10.5, the Indemnitor will
have the right to assume the defense of any Third Party Claim at
the Indemnitor's own expense and with counsel selected by the
Indemnitor (which counsel shall be reasonably satisfactory to the
Indemnitee) by giving to the Indemnitee written notice in which
the Indemnitor acknowledges its responsibility to indemnify the
Indemnitee (the "Assumption Notice") no later than thirty
calendar days after receipt of the Third Party Claim Notice. The
Indemnitor shall not be entitled to assume the defense of, and
the Indemnitee shall be entitled to have sole control over, the
defense or settlement of any Third Party Claim to the extent that
such claim seeks an order, injunction or other equitable relief
against the Indemnitee which, if successful, would be reasonably
likely to materially interfere with the business, operations,
assets, or financial condition of the Indemnitee. In the event
the Indemnitor assumes the defense of a Third Party Claim, the
Indemnitee will cooperate in good faith with the Indemnitor in
such defense and will have the right to participate in the
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defense of any Third Party Claim assisted by counsel of its own
choosing and at its own expense. Notwithstanding the foregoing,
if the named parties to the Third Party Claim (including any
impleaded parties) include both the Indemnitor and the Indemnitee
or if the Indemnitor proposes that the same counsel represent
both the Indemnitee and the Indemnitor and the Indemnitee in good
faith determines that representation of both parties by the same
counsel would be inappropriate due to actual or potential
differing interests between them, then the Indemnitee shall have
the right to retain its own counsel at the cost and expense of
the Indemnitor. If the Indemnitee does not receive the Assumption
Notice within the thirty calendar day period set forth above or
if the Indemnitor is not entitled to assume the defense of the
Third Party Claim, the Indemnitee shall have sole control over
the defense and settlement of the Third Party Claim, and the
Indemnitor will be liable for all Damages paid or incurred in
connection therewith
(b) If the Indemnitor assumes the defense of the Third
Party Claim, the Indemnitor shall not compromise or settle such
claim without the Indemnitee's consent unless (i) there is no
finding or admission of any violation of Legal Requirements or
any violation of the rights of any Person and no effect on any
other claims that may be made against the Indemnitee, (ii) the
sole relief provided is monetary damages that are paid in full by
the Indemnitor and (iii) the settlement includes as an
unconditional term a complete release of each Indemnitee from all
liability in respect of such claim.
(c) Each Indemnitor who assumes the defense of a Third
Party Claim shall use reasonable efforts to diligently defend
such claim.
Section 10.6. Procedure for Indemnification--Direct Claims.
Except for Direct Environmental Claims (as defined in Section
10.7 of this Agreement), any claim by an Indemnitee for
indemnification under this Agreement other than indemnification
against a Third Party Claim (a "Direct Claim") will be asserted
by the Indemnitee giving the Indemnitor written notice thereof,
and the Indemnitor will have a period of thirty calendar days
within which to respond in writing to such Direct Claim. If the
Indemnitor does not respond within such thirty calendar day
period, the Indemnitor will be deemed to have rejected such
claim, in which event the Indemnitee will be free to pursue such
remedies as may be available to the Indemnitee under this
Agreement or pursuant to law.
Section 10.7. Procedure for Indemnification--Direct
Environmental Claims.
(a) If the Indemnitee shall assert against the
Indemnitor any Direct Claim for indemnification relating to
Environmental Law (a "Direct Environmental Claim"), Indemnitee
shall give the Indemnitor notice of such Direct Environmental
Claim (the "Environmental Claim Notice"), which notice shall
describe in reasonable detail the claim, the amount thereof (if
known and quantifiable), and a reasonably detailed description of
the facts giving rise to such Direct Environmental Claim.
(b) Indemnitor shall be entitled to assume principal
management of a Direct Environmental Claim which it acknowledges
to be Indemnitor's sole or principal responsibility under this
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Agreement. To assume principal management, Indemnitor must
notify Indemnitee within thirty calendar days (or such other
period as the parties may agree to in writing) of receipt of the
Environmental Claim Notice that it intends to assume principal
management, subject to Indemnitor's right to rescind such
acknowledgment upon its reasonable determination, and upon prompt
written notice to Indemnitee (a "Denial Notice"), that it does
not bear sole or principal liability under this Agreement for the
claim. Provided, however, Indemnitor shall not be entitled to
issue a Denial Notice after Indemnitee has incurred substantial
expenditures, obligations, or exposure in reliance on
Indemnitor's assumption of principal management. In the event
Indemnitor either elects not to undertake principal management or
provides Indemnitee with a Denial Notice, Indemnitee may assume
principal management of the subject matter of the claim, and
reserve whatever rights it may have against Indemnitor. Any
acknowledgment of responsibility for a claim by either the
Indemnitor or Indemnitee shall be without prejudice to any rights
to seek indemnity or contribution from third parties.
(c) The party not exercising principal management with
respect to a particular Direct Environmental Claim shall be
entitled, at its sole cost and expense, to monitor the
satisfaction of the claim. Monitoring shall include (i)
obtaining copies of all reports, work plans and analytical data
submitted to Governmental Bodies, all notices or other letters or
documents received from Governmental Bodies, any other
documentation and correspondence materially bearing on the claim,
and notices of material meetings, (ii) the opportunity to attend
and participate in such material meetings, and (iii) the right of
reasonable consultation with the party exercising principal
management. The party exercising principal management in respect
of a matter, prior to taking any action to satisfy a claim unless
not practicable in view of exigent circumstances, shall prepare a
written plan describing the details of such action (the "Remedial
Plan") and provide the other party with copies of the Remedial
Plan. Within thirty calendar days of the date that the Remedial
Plan is received, the party receiving the Remedial Plan shall
notify the party that provided the Remedial Plan, in writing, if
it believes that the Remedial Plan is not in conformity with the
standards set forth in this Section 10.7 and shall provide a
detailed explanation of the reasons for its conclusions. The
parties shall negotiate in good faith any dispute arising from
the Remedial Plan and attempt to resolve any differences within
twenty calendar days. If the parties are unable to resolve any
dispute arising from the Remedial Plan, the matter shall be
submitted to arbitration as provided in Section 10.7(g).
(d) In the event it undertakes principal management of
any matter, Indemnitor shall, upon notice to Indemnitee, have
access to the Assets necessary to implement the Remedial Plan.
Indemnitor shall use its best efforts to undertake all activities
that it conducts or coordinates hereunder in a manner which does
not unreasonably interfere with the day-to-day operation of the
Industrial Container Business.
(e) The party undertaking principal management
hereunder for any matter shall manage the matter in good faith
and in a responsible manner, and any activities conducted in
connection therewith shall be undertaken promptly and concluded
expeditiously using commercially reasonable efforts.
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(f) The adequacy of any remedial action with respect
to a claim hereunder shall be evaluated using the following
criteria: Remedial action shall be deemed adequate for purposes
of satisfying the obligations hereunder to the extent that it (i)
attains compliance in a cost-effective manner with any applicable
Legal Requirement of Environmental Laws or is otherwise necessary
to prevent or remediate a threat to human health or the
Environment; and (ii) interferes to the least extent reasonably
practicable with the operations of the Industrial Container
Business; provided, that for purposes of this provision, a
determination of what is "reasonably practicable" shall include
an evaluation of the relative costs and benefits of proposed
remedial actions. Remedial action shall not be required to
render the Assets suitable for use beyond use as a commercial or
industrial property; provided, however, that the remedial action
shall meet all Legal Requirements of Environmental Law or
otherwise imposed by the applicable Governmental Body.
(g) If a dispute arises with respect to a remedial
action hereunder, the parties agree to negotiate in good faith in
an attempt to resolve such dispute. In the event such dispute
cannot be resolved within twenty calendar days of written notice
of a dispute (or such shorter period as exigent circumstances may
warrant) the parties shall select within fourteen calendar days
thereafter (or such shorter period as exigent circumstances may
warrant) a mutually satisfactory technical consultant or attorney
(the "Environmental Arbitrator"), who shall review the
information relevant to the dispute provided by the parties and
within thirty calendar days (or such shorter period as exigent
circumstances may warrant) render a decision binding upon the
parties hereto irrespective of whether either party contests or
participates in the dispute resolution. Any fees charged by the
Environmental Arbitrator shall be allocated as determined by the
Environmental Arbitrator between Seller and Buyer. In making its
determination, the Environmental Arbitrator shall be bound by the
standards set forth in this Section 10.7. If an Environmental
Arbitrator cannot be agreed upon within the aforesaid period, the
parties shall direct the New York city office of the American
Arbitration Association Center to immediately provide a list of
six potential arbitrators. From the list provided, each party
shall have the opportunity to strike one name, and the American
Arbitration Association shall appoint the Environmental
Arbitrator from the remaining names. The final determination of
the Environmental Arbitrator shall be final and binding on the
parties and there shall be no appeal from or reexamination of
such final determination, except for fraud, perjury, evident
partiality or misconduct by the Environmental Arbitrator
prejudicing the rights of any party, and to correct manifest
clerical errors. The parties may enforce any final determination
of the Environmental Arbitrator in any court of competent
jurisdiction.
(h) Neither party shall contact any Governmental Body
or third parties, other than such party's own Representatives
regarding a potential Direct Environmental Claim without giving
reasonably prompt notice thereof to the other party, when
reasonably possible within the available time constraints,
provided nothing herein shall require any delay in contacting any
Governmental Body or third party if such delay would violate any
Legal Requirement or Environmental Law. In connection with
either party's assumption of the defense of the other party of a
Third Party Claim relating to environmental matters, the
Indemnifying Party shall promptly provide the Indemnitee with any
material correspondence with Governmental Body enforcing
Environmental Laws and any test results, work plans, reports,
data and other material information relating thereto. Either
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party shall have the right in its sole discretion to participate
in any such contact to the extent reasonably possible.
ARTICLE 11. TERMINATION
Section 11.1. Termination. Anything contained in
this Agreement to the contrary notwithstanding, this Agreement
may be terminated at any time prior to the Closing Date:
(a) by the mutual consent of Buyer and Seller;
(b) by Buyer or Seller if the Closing shall not have
occurred on or before April 30, 1998 (or such later date as may
be mutually agreed to by Buyer and Seller);
(c) by Buyer in the event of any material breach by
Seller of any of Seller's agreements, representations or
warranties contained herein and the failure of Seller to cure
such breach within seven days after receipt of notice from Buyer
requesting such breach to be cured; or
(d) by Seller in the event of any material breach by
Buyer of any of Buyer's agreements, representations or warranties
contained herein and the failure of Buyer to cure such breach
within seven days after receipt of notice from Seller requesting
such breach to be cured.
Section 11.2. Notice of Termination. Any party
desiring to terminate this Agreement pursuant to Section 11.1
shall give notice of such termination to the other party to this
Agreement.
Section 11.3. Effect of Termination. In the event
that this Agreement shall be terminated pursuant to Section
11.1(a), each party shall pay all expenses incurred by it in
connection with this Agreement, and no party shall have any
further obligations or liability for any damages or expenses
under this Agreement. In the event of any other termination, all
further obligations of the parties under this Agreement shall be
terminated without further liability of any party to the other,
but each party shall retain any and all rights incident to a
breach by the other party of any covenant, representation or
warranty under this Agreement.
ARTICLE 12. GENERAL PROVISIONS
Section 12.1. Expenses. Each of Buyer, as a party on
the one hand, and Seller, as a party on the other, will pay all
costs and expenses incident to its negotiation and preparation of
this Agreement and to its performance and compliance with all
agreements and conditions contained herein on its part to be
performed or complied with, including the fees, expenses and
disbursements of its Representatives. All costs and expenses, if
any, incurred by the Acquired Companies in connection with this
Agreement and the Contemplated Transactions, including the fees,
expenses and disbursements of the Acquired Companies'
Representatives, shall be paid by Seller.
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Section 12.2. Public Announcements. Neither Buyer nor
Seller shall, without the approval of the other, make any press
release or other public announcement concerning the Contemplated
Transactions, except as and to the extent that counsel for a
party advises any such party that it is so obligated by Legal
Requirement or the rules of any stock exchange or quotation
system to issue a release or announcement, in which case the
other party shall be advised and the parties shall use their best
efforts to cause a mutually agreeable release or announcement to
be issued. Seller and Buyer will consult with each other
concerning the means by which the Acquired Companies' employees,
customers and suppliers and others having dealings with the
Acquired Companies will be informed of the Contemplated
Transactions, and Buyer will have the right to be present for any
such communication.
Section 12.3. Notices. All notices, consents, waivers, and
other communications under this Agreement must be in writing and
will be deemed to have been duly given when (a) delivered by hand
(with written confirmation of receipt), (b) sent by telecopier
(with written confirmation of receipt), or (c) when received by
the addressee, if sent by certified mail or a nationally
recognized overnight delivery service (receipt requested), in
each case to the appropriate addresses and telecopier numbers set
forth below:
If to Seller :
Sonoco Products Company
0 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attn: President
Telecopier: (000) 000-0000
and to:
Xxxxxxx & Xxxx, P.A.
0000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxxxx, Xxxxx Xxxxxxxx 00000
Attn: Xxxxxxx X. Xxxx, Esq.
Telecopier: (000) 000-0000
If to Buyer:
Xxxxx Bros. Corporation
000 Xxxxxx Xxxx.
Xxxxxxxx, Xxxx 00000
Attn.: Xxxxxxx X. Xxxxxx, Chairman and
Chief Executive Officer
Fax: (000) 000-0000
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with a copy to:
Xxxxx X. Xxxxxxx, Esq.
Vorys, Xxxxx, Xxxxxxx and Xxxxx LLP
00 Xxxx Xxx Xxxxxx
X.X. Xxx 0000
Xxxxxxxx, Xxxx 00000-0000
Fax : (000) 000-0000
Any party hereto may change any of the information specified
above by sending notice to the other party with such changed
information.
Section 12.4. Further Assurances. The parties agree (a) to
furnish upon request to each other such further information,
(b) to execute and deliver to each other such other documents,
and (c) to do such other acts and things, all as the other party
may reasonably request for the purpose of carrying out the intent
of this Agreement and the documents referred to in this
Agreement.
Section 12.5. Waiver. The rights and remedies of the
parties to this Agreement are cumulative and not alternative.
Neither the failure nor any delay by any party in exercising any
right, power, or privilege under this Agreement or the documents
referred to in this Agreement will operate as a waiver of such
right, power, or privilege, and no single or partial exercise of
any such right, power, or privilege will preclude any other or
further exercise of such right, power, or privilege or the
exercise of any other right, power, or privilege. To the maximum
extent permitted by applicable law, (a) no claim or right arising
out of this Agreement or the documents referred to in this
Agreement can be discharged by one party, in whole or in part, by
a waiver or renunciation of the claim or right unless in writing
signed by the other party; (b) no waiver that may be given by a
party will be applicable except in the specific instance for
which it is given; and (c) no notice to or demand on one party
will be deemed to be a waiver of any obligation of such party or
of the right of the party giving such notice or demand to take
further action without notice or demand as provided in this
Agreement or the documents referred to in this Agreement.
Section 12.6. Entire Agreement and Modification. This
Agreement supersedes all prior agreements between the parties
with respect to its subject matter, including the Confidentiality
Agreement between Buyer and Seller dated September 24, 1997 and
the Letter of Intent between Buyer and Seller dated December 10,
1997. This Agreement constitutes a complete and exclusive
statement of the terms of the agreement between the parties with
respect to its subject matter. This Agreement may not be amended
except by a written agreement executed by the party to be charged
with the amendment.
Section 12.7. Assignments, Successors, and No Third-Party
Rights. Neither party may assign any of its rights under this
Agreement without the prior consent of the other party. This
Agreement will apply to, be binding in all respects upon, and
inure to the benefit of, the successors and permitted assigns of
the parties. Nothing expressed or referred to in this Agreement
will be construed to give any Person other than the parties to
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this Agreement any legal or equitable right, remedy, or claim
under or with respect to this Agreement or any provision of this
Agreement. This Agreement and all of its provisions and
conditions are for the sole and exclusive benefit of the parties
to this Agreement and their successors and permitted assigns.
Section 12.8. Severability. If any provision of this
Agreement is held invalid or unenforceable by any court of
competent jurisdiction, the other provisions of this Agreement
will remain in full force and effect. Any provision of this
Agreement held invalid or unenforceable only in part or degree
will remain in full force and effect to the extent not held
invalid or unenforceable.
Section 12.9. Section Headings, Construction. The headings
of the Articles and Sections in this Agreement are provided for
convenience only and will not affect its construction or
interpretation. All references to "Section" or "Sections" refer
to the corresponding Section or Sections of this Agreement. All
words used in this Agreement will be construed to be of such
gender or number as the circumstances require. Unless otherwise
expressly provided, the word "including" does not limit the
preceding words or terms. Unless the context otherwise requires,
references herein (a) to Articles, Sections, Exhibits and
Schedules mean the Articles and Sections of and the Exhibits and
Schedules attached to, this Agreement, (b) to an agreement,
instrument or other document means such agreement, instrument or
other document as amended, supplemented and modified from time to
time to the extent permitted by the provisions thereof and by
this Agreement and (c) to a statute means such statute as amended
from time to time and includes any successor legislation thereto.
Section 12.10. Time of Essence. With regard to all dates
and time periods set forth or referred to in this Agreement, time
is of the essence.
Section 12.11. Governing Law. This Agreement will be
governed by the laws of the State of Ohio without regard to
conflicts of laws principles.
Section 12.12. Counterparts. This Agreement may be
executed in one or more counterparts, each of which will be
deemed to be an original copy of this Agreement and all of which,
when taken together, will be deemed to constitute one and the
same agreement.
Section 12.13. Incorporation of Exhibits and Schedules.
The Exhibits and Schedules identified in this Agreement are
incorporated herein by reference and made a part hereof.
[REMAINDER OF PAGE LEFT INTENTIONALLY BLANK]
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IN WITNESS WHEREOF, the parties have executed and delivered
this Agreement as of the date first written above.
BUYER:
Xxxxx Bros. Corporation
By:
Its:
SELLER
Sonoco Products Company
By:
Its:
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EXHIBITS
A. Transitional Services Agreement
B. Non-Foreign Affidavit
C. Exclusive Distributorship Agreement
D. IBC Sales Agreement
SCHEDULES
Schedule 4.1(b): Conflicts
Schedule 4.2: Name, Organization and Foreign Qualifications of
each Acquired Company
Schedule 4.3: Capitalization
Schedule 4.5: Financial Statements
Schedule 4.6: Changes Outside the Ordinary Course of Business
Schedule 4.7: Undisclosed Liabilities
Schedule 4.8: Legal Requirements and Governmental Authorizations
Schedule 4.9: Legal Proceedings and Orders
Schedule 4.10: Taxes
Schedule 4.11(a): Owned Real Property
Schedule 4.11(b): Leased Real Property
Schedule 4.12: Intellectual Property
Schedule 4.13: Personal Property
Schedule 4.15: Applicable Contracts
Schedule 4.17(a): Bank Accounts
Schedule 4.17(b) Powers of Attorney
Schedule 4.18: Insurance
Schedule 4.19: Product Warranty
Schedule 4.21: Labor Relations and Compliance
Schedule 4.22: Employee Benefits
Schedule 4.23: Customers
Schedule 4.25: Environmental Matters
Schedule 4.27: Related Person Services
Schedule 5.2(b): Conflicts
Schedule 7.7: ERM Proposal
Schedule 7.10: Certain Contracts
Schedule 9.1(b): Allocations
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