STOCK PURCHASE AGREEMENT
BY AND BETWEEN
CHESAPEAKE CORPORATION
AND
THE XXXXX GROUP, INC.
OCTOBER 13, 1995
TABLE OF CONTENTS
Page
RECITALS.................................................................. 1
ARTICLE I
---------
DEFINITIONS
-----------
1.1 Accounts........................................................... 1
1.2 Affiliate.......................................................... 2
1.3 Agreement.......................................................... 2
1.4 April Balance Sheet................................................ 2
1.5 April Net Investment............................................... 2
1.6 Bank Accounts...................................................... 2
1.7 Buyer.............................................................. 2
1.8 Buyer's Closing Certificate........................................ 3
1.9 C&L................................................................ 3
1.10 Closing............................................................ 3
1.11 Closing Date....................................................... 3
1.12 COBRA.............................................................. 3
1.13 Code............................................................... 3
1.14 Company ...................................................... 3
1.15 Contracts.......................................................... 3
1.16 D&T................................................................ 4
1.17 Effective Time of Closing.......................................... 4
1.18 Employee Benefit Plans............................................. 4
1.19 Equipment.......................................................... 4
1.20 ERISA.............................................................. 4
1.21 ERISA Affiliate.................................................... 4
1.22 ERISA Affiliate Plan............................................... 4
1.23 Estimated Balance Sheet............................................ 5
1.24 Estimated Net Investment........................................... 5
1.25 Final Balance Sheet................................................ 5
1.26 Final Net Investment............................................... 5
1.27 Final Purchase Price............................................... 5
1.28 HSR Act............................................................ 5
1.29 Initial Purchase Price............................................. 6
1.30 Intangibles........................................................ 6
1.31 Intercompany....................................................... 6
1.32 Inventory.......................................................... 7
1.33 IRS................................................................ 7
1.34 Knowledge of Seller................................................ 7
1.35 Law................................................................ 7
1.36 Multiemployer Plan................................................. 7
1.37 Opinion of Buyer's Counsel......................................... 7
1.38 Opinion of Seller's Counsel........................................ 7
1.39 PBGC............................................................... 7
1.40 Pension Plans...................................................... 8
1.41 Permits............................................................ 8
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1.42 Permitted Liens.................................................... 8
1.43 Real Property...................................................... 8
1.44 Scheduled Employees................................................ 8
1.45 Seller............................................................. 8
1.46 Seller's Closing Certificate....................................... 9
1.47 Stock.............................................................. 9
1.48 WARN............................................................... 9
1.49 Welfare Plans...................................................... 9
ARTICLE II
----------
PURCHASE AND SALE
-----------------
2.1 Purchase and Sale.................................................. 9
2.2 Deposit; Estimated Balance Sheet; Payment
of the Initial Purchase Price...................................... 9
2.3 Final Balance Sheet; Settlement of Final
Purchase Price..................................................... 11
ARTICLE III
-----------
REPRESENTATIONS AND WARRANTIES OF SELLER
----------------------------------------
3.1 Organization of Seller............................................. 13
3.2 Authorization; Enforceability...................................... 13
3.3 No Violation or Conflict by Seller................................. 14
3.4 Title to Stock..................................................... 14
3.5 Organization and Authority of Company.............................. 15
3.6 Capitalization..................................................... 15
3.7 No Violation or Conflict by Company................................ 16
3.8 Title to Assets.................................................... 16
3.9 Real Property...................................................... 17
3.10 Bank Accounts...................................................... 18
3.11 No Litigation...................................................... 19
3.12 Condition of Equipment............................................. 19
3.13 Inventory.......................................................... 19
3.14 Intangibles........................................................ 20
3.15 Books and Records.................................................. 20
3.16 Contracts.......................................................... 20
3.17 Accounts........................................................... 21
3.18 Financial Statements............................................... 21
3.19 No Adverse Change.................................................. 23
3.20 Taxes.............................................................. 23
3.21 Employee Benefit Plans............................................. 24
3.22 Compliance with Law................................................ 28
3.23 Transactions With Affiliates....................................... 28
3.24 No Broker.......................................................... 29
3.25 Subsidiaries....................................................... 30
3.26 Environmental Matter............................................... 30
3.27 Insurance.......................................................... 34
3.28 Labor Matters...................................................... 34
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ARTICLE IV
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REPRESENTATIONS AND WARRANTS OF BUYER
-------------------------------------
4.1 Organization....................................................... 36
4.2 Authorization; Enforceability...................................... 36
4.3 No Violation or Conflict........................................... 36
4.4 No Broker.......................................................... 37
4.5 Purchase for Investment............................................ 37
ARTICLE V
---------
CERTAIN MATTERS PENDING THE CLOSING
-----------------------------------
5.1 Carry on in Regular Course......................................... 38
5.2 Indebtedness....................................................... 38
5.3 Issuance of Stock.................................................. 38
5.4 Compensation....................................................... 39
5.5 Compliance with Law................................................ 39
5.6 Access............................................................. 40
5.7 Cooperation........................................................ 40
5.8 Publicity.......................................................... 41
5.9 Confidentiality.................................................... 41
5.10 Articles and Bylaws................................................ 41
5.11 Exclusivity........................................................ 42
5.12 Undated Financial Information...................................... 42
ARTICLE VI
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CONDITIONS PRECEDENT TO THE OBLIGATIONS OF BUYER
------------------------------------------------
6.1 Compliance with Agreement.......................................... 43
6.2 Proceedings and Instruments Satisfactory........................... 43
6.3 No Litigation...................................................... 43
6.4 Representations and Warranties..................................... 44
6.5 Material Damage to Assets.......................................... 44
6.6 Deliveries at Closing.............................................. 44
6.7 Xxxx-Xxxxx-Xxxxxx Filings.......................................... 44
6.8 Lien Waivers and Estoppel Certificates............................. 45
6.9 Title Insurance.................................................... 45
6.10 Financing.......................................................... 45
6.11 Non-Competition Agreement.......................................... 45
ARTICLE VII
-----------
CONDITIONS PRECEDENT TO THE OBLIGATIONS OF SELLER
-------------------------------------------------
7.1 Compliance with Agreement.......................................... 46
7.2 Proceedings and Instruments Satisfactory........................... 46
7.3 No Litigation...................................................... 46
7.4 Representations and Warranties..................................... 47
7.5 Deliveries at Closing.............................................. 47
7.6 Xxxx-Xxxxx-Xxxxxx Filings.......................................... 47
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ARTICLE VIII
------------
INDEMNITIES AND ADDITIONAL COVENANTS
------------------------------------
8.1 Seller's Indemnity................................................. 48
8.2 Buyer's Indemnity.................................................. 50
8.3 Employee Benefit Matters........................................... 53
8.4 Income Tax Matters................................................. 64
8.5 Indemnity Amounts to be Computed
on After-Tax Basis................................................. 72
8.6 Records............................................................ 73
8.7 No Use of Name..................................................... 74
ARTICLE IX
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TERMINATION
-----------
9.1 Termination........................................................ 74
9.2 Rights on Termination; Deposit; Waiver............................. 75
ARTICLE X
---------
MISCELLANEOUS
-------------
10.1 Entire Agreement; Amendment........................................ 77
10.2 Expenses........................................................... 77
10.3 Governing Law...................................................... 78
10.4 Assignment......................................................... 78
10.5 Notices............................................................ 78
10.6 Counterparts; Headings............................................. 79
10.7 Interpretation..................................................... 79
10.8 Severability....................................................... 80
10.9 Specific Performance............................................... 80
10.10 No Reliance........................................................ 80
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EXHIBITS
Exhibit 1.4 April Financial Statements
Exhibit 1.6 Bank Accounts
Exhibit 1.8 Buyer's Closing Certificate
Exhibit 1.30 Intangibles
Exhibit 1.37 Opinion of Buyer's Counsel
Exhibit 1.38 Opinion of Seller's Counsel
Exhibit 1.41 Permits
Exhibit 1.42 Permitted Liens
Exhibit 1.43 Real Property
Exhibit 1.44 Scheduled Employees
Exhibit 1.46 Seller's Closing Certificate
Exhibit 2.2 Permitted Deviations from GAAP Presentation of
Financial Statements
Exhibit 3.5 Foreign Qualifications
Exhibit 3.7 Required Consents
Exhibit 3.11 Litigation
Exhibit 3.16 Contracts
Exhibit 3.19 Adverse Changes
Exhibit 3.20 Taxes
Exhibit 3.21 Employee Benefit Plans
Exhibit 3.23 Transactions with Affiliates
Exhibit 3.25 Subsidiaries and Partnerships
Exhibit 3.26 Environmental Matters
Exhibit 3.27 Insurance
Exhibit 3.28 Labor Matters
Exhibit 6.11 Form of Non-Competition Agreement
Exhibit 8.1 Pending Claims
Exhibit 8.3A Salaried Plan -- Actuarial Assumptions and Methods
Exhibit 8.3B Spinoff Amount -- Actuarial Assumptions and
Methods
Exhibit 8.3C Hourly Plan -- Actuarial Assumptions and Methods
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STOCK PURCHASE AGREEMENT
------------------------
STOCK PURCHASE AGREEMENT, made as of the 13th day of October, 1995, by
and between CHESAPEAKE CORPORATION, a Virginia corporation, and THE XXXXX
GROUP, INC., a Delaware corporation.
RECITALS
--------
WHEREAS, Seller owns the Stock, which constitutes all of the issued
and outstanding capital stock of the Company; and
WHEREAS, Seller desires to sell the Stock to Buyer and Buyer desires
to purchase the Stock from Seller.
NOW, THEREFORE, in consideration of the Recitals and of the mutual
covenants, conditions and agreements set forth herein and for other good and
valuable consideration, the receipt and sufficiency of which hereby are
acknowledged, it hereby is agreed that:
ARTICLE I
---------
DEFINITIONS
-----------
When used in this Agreement, the following terms shall have the
meanings specified:
1.1 Accounts. "Accounts" shall mean all accounts receiv- able, notes
receivable and associated rights owned by the Company.
1.2 Affiliate. "Affiliate" shall mean, with respect to any person,
firm or corporation, any other person, firm or corporation that directly or
indirectly controls, is controlled by or is under common control with such
person, firm or corporation.
1.3 Agreement. "Agreement" shall mean this Stock Purchase Agreement,
together with the Exhibits attached hereto, as the same may be amended from
time to time in accordance with the terms hereof.
1.4 April Balance Sheet. "April Balance Sheet" shall mean the
unaudited summary balance sheet of the Company as of April 30, 1995, attached
as Exhibit 1.4 hereto.
1.5 April Net Investment. "April Net Investment" shall mean the amount
reflected as "Total Shareholder's Equity" on the April Balance Sheet.
1.6 Bank Accounts. "Bank Accounts" shall mean the checking accounts,
savings accounts, custodial accounts, certificates of deposit, safe deposit
boxes and other bank accounts maintained by the Company, all of such Bank
Accounts being listed on Exhibit 1.6 attached hereto.
1.7 Buyer. "Buyer" shall mean The Xxxxx Group, Inc., a Delaware
corporation.
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1.8 Buyer's Closing Certificate. "Buyer's Closing Certificate" shall
mean the certificate of Buyer in the form of Exhibit 1.8 attached hereto.
1.9 C&L. "C&L" shall mean Coopers & Xxxxxxx L.L.P., independent
auditors for Seller and the Company.
1.10 Closing. "Closing" shall mean the conference held at 10:00 a.m.,
local time, on the Closing Date, at the offices of Hunton & Xxxxxxxx,
Riverfront Plaza, East Tower, 000 Xxxx Xxxx Xxxxxx, Xxxxxxxx, Xxxxxxxx.
1.11 Closing Date. "Closing Date" shall mean December 29, 1995, or
such other date as the parties may mutually agree in writing, on which date the
Closing shall occur.
1.12 COBRA. "COBRA" shall mean the Consolidated omnibus Budget
Reconciliation Act of 1985.
1.13 Code. "Code" shall mean the Internal Revenue Code of 1986, as
amended.
1.14 Company. "Company" shall mean Chesapeake Consumer Products
Company, a Virginia corporation.
1.15 Contracts. "Contracts" shall mean all contracts, agreements,
leases, relationships and commitments, written or oral, to which the Company is
a party or by which the Company is bound.
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1.16 D&T. "D&T" shall mean Deloitte & Touche L.L.P., independent
auditors for Buyer.
1.17 Effective Time of Closing. "Effective Time of Closing" shall mean
11:59 p.m., local time, on the Closing Date, being the close of the Company's
business on such date.
1.18 Employee Benefit Plans. "Employee Benefit Plans" shall have the
meaning given in Section 3.21 hereof.
1.19 Equipment. "Equipment" shall mean all machinery, vehicles,
equipment, furniture, fixtures, furnishings, parts, tools, engineering drawings
and other items of tangible personal property that are used in the Company's
business.
1.20 ERISA. "ERISA" shall mean the Employee Retirement Income Security
Act of 1974, as amended.
1.21 ERISA Affiliate. "ERISA Affiliate" shall mean Seller and any
trade or business (whether or not incorporated) which is or has ever been under
common control, or which is or has ever been treated as a single employer, with
Seller under Section 414(b), (c), (m) or (o) of the Code.
1.22 ERISA Affiliate Plan. "ERISA Affiliate Plan" shall mean all
"employee pension plans," as defined in Section 3(2) of ERISA or Section 412 of
the Code, maintained by Seller or any ERISA Affiliate, or to which Seller or
any ERISA Affiliate has
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contributed or has ever been obligated to contribute, other than any Qualified
Plan.
1.23 Estimated Balance Sheet. "Estimated Balance Sheet" shall mean the
unaudited summary estimated balance sheet of the Company as of the Effective
Time of Closing, to be delivered by Seller to Buyer pursuant to Section 2.2
hereof.
1.24 Estimated Net Investment. "Estimated Net Investment" shall mean
the amount reflected as "Total Shareholder's Equity" on the Estimated Balance
Sheet.
1.25 Final Balance Sheet. "Final Balance Sheet" shall mean the audited
balance sheet of the Company as of the Effective Time of Closing, to be
prepared and delivered in accordance with Section 2.3 hereof.
1.26 Final Net Investment. "Final Net Investment" shall mean the
amount reflected as "Total Shareholder's Equity" on the Final Balance Sheet.
1.27 Final Purchase Price. "Final Purchase Price" shall mean the
Initial Purchase Price as adjusted pursuant to Section 2.3 hereof (exclusive of
the interest on such adjustment as contemplated in such Section 2.3).
1.28 HSR Act. "HSR Act" shall mean the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976 (15 U.S.C. ss. 18a), as amended.
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1.29 Initial Purchase Price. "Initial Purchase Price" shall be $25.5
million, increased to the extent the Estimated Net Investment exceeds the April
Net Investment or decreased to the extent the April Net Investment exceeds the
Estimated Net Investment, as the case may be. The parties hereto understand
that the Company's Intercompany debt for money borrowed, which was included in
shareholder's equity for purposes of the April Balance Sheet, will be reflected
as debt on the Estimated and Final Balance Sheets, and that such
reclassification will reduce the Initial and Final Purchase Prices,
respectively, dollar-for-dollar for the amount of debt so reclassified;
provided that such reclassification shall in no event result in the Estimated
or Final Purchase Price being less than zero.
1.30 Intangibles. "Intangibles" shall mean all of those trade names,
trademarks, service marks, trademark and service xxxx registrations, patents
and trademark, service xxxx and patent applications owned or used by the
Company, all of such names, marks, registrations and applications being listed
on Exhibit 1.30 attached hereto.
1.31 Intercompany. "Intercompany" shall mean a transaction, obligation
or account between the Company, on the one hand, and any of Seller or any
Affiliate of Seller, on the other hand.
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1.32 Inventory. "Inventory" shall mean all inventories of raw
materials, stores, supplies, work in process, semi-finished goods and finished
goods owned by the Company.
1.33 IRS. "IRS" shall mean the Internal Revenue Service.
1.34 Knowledge of Seller. "Knowledge of Seller" shall mean actual
knowledge of an executive officer of Seller, after due inquiry of the Scheduled
Employees of the Company.
1.35 Law. "Law" shall mean any federal, state, local or other law or
governmental requirement of any kind, and the rules, regulations and orders
promulgated thereunder.
1.36 Multiemployer Plan. "Multiemployer Plan" shall have the meaning
given in Section 3.21 hereof.
1.37 Opinion of Buyer's Counsel. "Opinion of Buyer's Counsel" shall
mean the opinion of Xxxxxx X. Xxxxxxxx, Esq., counsel to Buyer, in the form of
Exhibit 1.37 attached hereto.
1.38 Opinion of Seller's Counsel. "Opinion of Seller's Counsel" shall
mean the opinion of Hunton & Xxxxxxxx, counsel to Seller, in the form of
Exhibit 1.38 attached hereto.
1.39 PBGC. "PBGC" shall mean the Pension Benefit Guaranty Corporation,
or any entity succeeding to any or all of its functions.
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1.40 Pension Plans. "Pension Plans" shall have the meaning given in
Section 3.21 hereof.
1.41 Permits. "Permits" shall mean all permits, licenses and
governmental authorizations, registrations and approvals required in the
conduct of the Company's business including, but not limited to, those Permits
listed on Exhibit 1.41 attached hereto.
1.42 Permitted Liens. "Permitted Liens" shall mean those liens,
encumbrances, mortgages, charges, claims, restrictions, pledges, security
interests, impositions and other matters affecting the Company or the assets of
the Company that are listed on Exhibit 1.42 attached hereto.
1.43 Real Property. "Real Property" shall mean the real property
described in Exhibit 1.43 attached hereto, together with the improvements and
fixtures located thereon, including all appurtenant rights, claims and
interests, and subject to the Permitted Liens.
1.44 Scheduled Employees. "Scheduled Employees" shall mean certain
salaried employees of the Company whose names are listed on Exhibit 1.44
hereto.
1.45 Seller. "Seller" shall mean Chesapeake Corporation, a Virginia
corporation.
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1.46 Seller's Closing Certificate. "Seller's Closing Certificate"
shall mean the certificate of Seller in the form of Exhibit 1.46 attached
hereto.
1.47 Stock. "Stock" shall mean all of the issued and outstanding
capital stock of the Company, consisting of 100 shares of common stock, $1.00
par value.
1.48 WARN. "WARN" shall mean the Worker's Adjustment and Retraining
Notification Act and any similar state or local "plant closing" Law.
1.49 Welfare Plans. "Welfare Plans" shall have the meaning given in
Section 3.21 hereof.
ARTICLE II
----------
PURCHASE AND SALE
-----------------
2.1 Purchase and Sale. At the Closing, and upon all of the terms and
subject to all of the conditions of this Agreement, Seller hereby agrees to
transfer, assign and convey to Buyer, and Buyer agrees to purchase and accept
from Seller, the Stock.
2.2 Deposit; Estimated Balance Sheet; Payment of the Initial Purchase
Price. (a) No later than December 1, 1995, Buyer shall deliver $1.0 million in
immediately available funds to Seller (together with accrued interest thereon,
calculated at the rate of 6% per annum, the "Deposit"), which Deposit shall be
held by Seller. The Deposit shall either be (i) credited towards
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the Initial Purchase Price at Closing, or (ii) upon any termination of this
Agreement, shall be paid to Seller or Buyer in accordance with Section 2.1
hereof.
(b) At least five (5) days prior to the Closing Date, Seller shall
deliver the Estimated Balance Sheet to Buyer. The Estimated Balance Sheet will
represent Seller's good faith estimate of the financial condition of the
Company as it will be at the Effective Time of Closing and will be prepared (a)
except as set forth in Exhibit 2.2 attached hereto, in accordance with
generally accepted accounting principles applied on a basis consistent with the
Company's past practice, and (b) in a manner consistent with the April Balance
Sheet.
(c) At the Closing, Buyer: (i) shall pay the Initial Purchase
Price (less the Deposit) to Seller by wire transfer of immediately available
funds; and (ii) cause the Company to repay by wire transfer of immediately
available funds all Intercompany debt for money borrowed (which debt shall be
reflected as a liability on the Estimated Balance Sheet and the Final Balance
Sheet). By way of illustration, if no differences exist between the April
Balance Sheet and the Estimated Balance Sheet except the reclassification of
Intercompany debt for money borrowed from shareholder's equity to debt, then
the sum of the Initial Purchase Price plus Intercompany debt for money borrowed
repaid pursuant to the foregoing sentence will equal $25.5 million.
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2.3 Final Balance Sheet; Settlement of Final Purchase Price.
(a) Within thirty (30) days after the Closing Date, C&L shall
prepare and deliver to Buyer a draft Final Balance Sheet, which shall be
prepared (i) except as set forth in Exhibit 2.2 attached hereto, in accordance
with generally accepted accounting principles applied on a basis consistent
with the Company's past practice, and (ii) in a manner consistent with the
April Balance Sheet.
(b) If Buyer has no objections to the draft Final Balance Sheet,
such draft shall be certified by C&L and shall constitute the Final Balance
Sheet. If Buyer has any objections to the draft Final Balance Sheet, it will
deliver a detailed statement describing its objections to C&L and Seller within
ten (10) days after receiving the draft Final Balance Sheet. Buyer, C&L and
Seller will use their reasonable best efforts to resolve any such objections.
If a final resolution is not obtained within thirty (30) days after C&L and
Seller have received the statement of objections, Buyer and Seller will select
a nationally-recognized accounting firm mutually acceptable to them to resolve
any remaining objections. If Buyer and Seller are unable to agree on the choice
of an accounting firm, they will select a nationally-recognized accounting firm
by lot (after excluding C&L and D&T).
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(c) C&L will revise the draft Final Balance Sheet as appropriate
to reflect the resolution of Buyer's objections (as agreed upon by Buyer, C&L
and Seller or as determined by such selected accounting firm) and deliver it to
Buyer and Seller within ten (10) days after the resolution of such objections.
Such revised balance sheet shall be certified by C&L and shall constitute the
Final Balance Sheet.
(d) To the extent that the Final Balance Sheet, as certified by
C&L, shows that the Final Net Investment is less than the Estimated Net
Investment, Seller shall pay such difference to Buyer in immediately available
funds within two (2) business days of C&L's delivery of such Final Balance
Sheet. To the extent that the Final Balance Sheet, as certified by C&L, shows
that the Final Net Investment is greater than the Estimated Net Investment,
Buyer shall pay such excess to Seller in immediately available funds within two
(2) business days of C&L's delivery of such Final Balance Sheet. All payments
pursuant to this Section 2.3(d) shall be accompanied by accrued interest
thereon from the Closing Date at the prevailing prime rate as announced by
Crestar Bank in Richmond, Virginia, from time to time.
(e) If any unresolved objections are submitted to an accounting
firm for resolution as provided above, Buyer and Seller will share equally the
fees and expenses of such accounting firm.
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(f) C&L will make the work papers used in preparing the draft
Final Balance Sheet and the Final Balance Sheet available to Buyer and its
representatives at reasonable times and upon reasonable notice at any time
during the preparation by C&L of the draft Final Balance Sheet and the
resolution of any objections with respect thereto.
ARTICLE III
-----------
REPRESENTATIONS AND WARRANTIES OF SELLER
----------------------------------------
Seller hereby represents and warrants to Buyer that:
3.1 Organization of Seller. Seller is a corporation duly incorporated,
validly existing and in good standing under the laws of Virginia and has full
corporate power to enter into this Agreement and to perform its obligations
hereunder.
3.2 Authorization; Enforceability. The execution, delivery and
performance by Seller of this Agreement and of all of the documents and
instruments required hereby from Seller are within the corporate power of
Seller and have been duly authorized by all necessary corporate action of
Seller. This Agreement is, and the other documents and instruments required
hereby will be, when executed and delivered by the parties hereto, the valid
and binding obligations of Seller, enforceable against Seller in accordance
with their respective terms.
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3.3 No Violation or Conflict by Seller. The execution, delivery and
performance of this Agreement by Seller (a) do not and will not conflict with
or violate any Law, judgment, order or decree binding on Seller or the Articles
of Incorporation or Bylaws of Seller or any contract or agreement to which
Seller is a party or by which it is bound, the breach of which could have a
material adverse effect on Seller's ability to consummate the transactions
contemplated hereby, or on the business, financial condition or results of
operations of the Company, and (b) will not require the consent or approval of
any other party or, except as set forth in Exhibit 3.7 attached hereto, give
any party to any Contract any right of termination, cancellation, acceleration
or modification thereunder. No notice to, filing or registration with, or
authorization, consent or approval of, any governmental, regulatory or
self-regulatory agency is necessary or is required to be made or obtained by
Seller in connection with the execution and delivery of this Agreement by
Seller or the consummation by Seller of the transactions contemplated hereby;
provided, however, that consummation of the transactions contemplated by this
Agreement is subject to the requirements of the HSR Act.
3.4 Title to Stock. Seller owns good, valid and marketable title to
the Stock, free and clear of any and all mortgages, liens, encumbrances,
charges, claims, restrictions, pledges, security interests or impositions and,
upon delivery of the Stock to Buyer at the Closing and upon Buyer's payment of
the Initial
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Purchase Price therefor, good and valid title to the Stock, free and clear of
all mortgages, liens, encumbrances, charges, claims, restrictions, pledges,
security interests or impositions, will pass to Buyer.
3.5 Organization and Authority of Company. The Company is a
corporation duly incorporated, validly existing and in good standing under the
laws of the Commonwealth of Virginia. The Company has full corporate power to
carry on its business as it is now being conducted and to own, operate and hold
under lease its assets and properties as, and in the places where, such
properties and assets now are owned, operated or held. The Company is duly
qualified as a foreign corporation to do business, and is in good standing, in
each jurisdiction where the failure to be so qualified would have a material
adverse effect on the business, financial condition or results of operations of
the Company, all of such jurisdictions being set forth on Exhibit 3.5 attached
hereto.
3.6 Capitalization. The Stock represents all of the issued and
outstanding capital stock of the Company, has been duly and validly issued and
is fully paid and non-assessable. There are no options, warrants or other
rights to subscribe for or purchase any capital stock of the Company or
securities convertible into or exchangeable for, or which otherwise confer on
the holder any right to acquire, any capital stock of the Company, nor is the
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Company or Seller committed to issue any such option, warrant or other right.
3.7 No Violation or Conflict by Company. The execution, delivery and
performance of this Agreement do not and will not conflict with or violate any
Law, judgment, order or decree binding on the Company, or the Articles of
Incorporation or Bylaws of the Company or, except as set forth in Exhibit 3.7
attached hereto, any Contract to which the Company is a party or by which it is
bound. No notice to, filing or registration with, or authorization, consent or
approval of, any governmental, regulatory or self-regulatory agency is
necessary or is required to be made or obtained by the Company in connection
with the consummation of the transactions contemplated in this Agreement.
3.8 Title to Assets. The Company owns good and marketable title to all
assets and properties, real or personal, tangible or intangible, (a) that are
used in the Company's business, or (b) that were reflected in the April Balance
Sheet (except as disposed of in the ordinary course of business since the date
thereof) or that will be reflected in the Final Balance Sheet, free and clear
of any and all mortgages, liens, encumbrances, charges, claims, restrictions,
pledges, security interests or impositions, except the Permitted Liens and
except for assets and properties leased or licensed by the Company pursuant to
Contracts.
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3.9 Real Property. Exhibit 1.43 attached hereto is a true and correct
list of all real property owned or leased by the Company. Such real property
constitutes all of the real property that is used in the Company's business.
With respect to each such parcel of Real Property, except as set forth on
Exhibit 1.43:
(a) there are no pending or, to the Knowledge of Seller,
threatened condemnation proceedings, lawsuits or administrative
actions relating to the parcel;
(b) there are no leases, subleases, licenses, concessions or
other agreements, written or oral, granting to any party or parties
the right of use or occupancy of any portion of the parcel;
(c) with respect to owned parcels of Real Estate, there are no
outstanding options or rights of first refusal to purchase the parcel,
or any portion thereof or interest therein;
(d) there are no parties (other than the Company) in possession
of the parcel, other than tenants under any leases or subleases
disclosed in Exhibit 1.43, who are in possession of space to which
they are entitled; and
(e) to the Knowledge of Seller, no zoning Law or other similar
ordinance or regulation or code is violated by the
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continued use and operation of the improvements located on the parcel
(or their replacement with assets of like kind and function).
Seller will promptly deliver to Buyer true and correct copies of: (i) each deed
by which the Company acquired title to the owned Real Property described on
Exhibit 1.43; (ii) each policy of title insurance in effect and any title
report in the Company's possession with respect to the owned Real Property
described on Exhibit 1.43; (iii) the most recent survey or surveys in the
Company's possession with respect to the Real Property described in Exhibil
1.43; and (iv) all certificates of occupancy and building permits in the
Company's possession for the improvements located on the Real Property
described in Exhibit 1.43. The Permitted Liens, individually and in the
aggregate, do not materially impair the value of, or materially interfere with
the present or continued use in accordance with the Company's past practice of,
any material parcel of Real Property subject thereto or affected thereby, nor
are any Permitted Liens violated in any material respect by any existing
buildings or improvements located on the Real Property.
3.10 Bank Accounts. The Bank Accounts constitute all checking
accounts, savings accounts, custodial accounts, certificates of deposit, safe
deposit boxes or other similar accounts maintained by the Company.
-18-
3.11 No Litigation. Except as listed in Exhibit 3.11, there is no
litigation, arbitration proceeding or governmental or administrative
investigation, complaint, charge, citation or claim of any kind pending or, to
the Knowledge of Seller, proposed or threatened, against the Company or
relating to the business, assets or properties of the Company.
3.12 Condition of Equipment. The Equipment, taken as a whole, is in
good operating condition and repair, subject to ordinary wear and tear, and is
substantially fit for the purposes for which it currently is being utilized.
Seller will promptly provide Buyer with true and correct copies of the most
recent inspection reports of any governmental agencies (including OSHA) in
Seller's or the Company's possession relating to the condition of the
Equipment.
3.13 Inventory. The Inventory is useable or saleable in the ordinary
course of the business of the Company as heretofore conducted subject, as of
the respective dates of the April Balance Sheet and the Final Balance Sheet, to
the reserves and accruals established with respect thereto on such balance
sheets (which reserves and accruals are, and shall be, established in
accordance with generally accepted accounting principles consistently applied),
and is valued at the lower of cost or market value. Cost of Inventory is
calculated on the average cost method, which is consistent with the Company's
past practice.
-19-
3.14 Intangibles. Except for those Intangibles that are owned by
Seller and that are the subject of Section 8.7 hereof, the Company owns the
entire right, title and interest in and to the Intangibles, subject only to the
Permitted Liens. There are no claims, demands or proceedings pending or, to the
Knowledge of Seller, threatened by any third party pertaining to or challenging
the Company's rights to use any of the Intangibles, and there is no trademark,
trade name, patent or copyright owned by a third party (other than Seller)
which the Company is using without a license to do so. Neither Seller nor the
Company owns any patents or patent applications that relate to products sold by
the Company or processes employed by the Company.
3.15 Books and Records. The books and records of the Company are
complete and correct in all material respects.
3.16 Contracts. Exhibit 3.16 attached hereto is a true and complete
list of: (a) all of the written Contracts that constitute: (i) a lease of any
real or personal property with (A) aggregate annual rental payments in excess
of $25,000, or (B) a remaining term in excess of one year and which is
non-cancellable without penalty on notice of 90 days or less; (ii) an agreement
to purchase or sell a capital asset for a price in excess of $25,000; (iii) an
employment agreement that will remain in effect after the Effective Time of
Closing; or (iv) any other agreement involving an amount in excess of $25,000;
and (b) all
-20-
material oral Contracts. The Company has performed each material term, covenant
and condition of each of the Contracts which is to be performed by the Company
at or before the date hereof. No event has occurred that would, with the
passage of time or compliance with any applicable notice requirements,
constitute a default by the Company or, to the Knowledge of Seller, any other
party under any of the Contracts, and, to the Knowledge of Seller, no party to
any of the Contracts intends to cancel, terminate or exercise any option under
any of the Contracts, the result of which would have a material adverse effect
on the business, financial condition or results of operations of the
Company. Except as set forth in Exhibit 3.16 attached hereto, the performance
of the Company's obligations under any of the Contracts has not, directly or
indirectly, been guaranteed by Seller or any Affiliate of Seller.
3.17 Accounts. To the Knowledge of Seller: the Accounts all have
arisen from bona fide transactions in the ordinary course of business; the
Accounts are collectible in accordance with normal trade practice, net of any
reserves for uncollectible accounts reflected on the books of the Company
therefor; and there are no offsets or credits which may be applied against the
Accounts, other than as reflected on the books of the Company.
3.18 Financial Statements. The April Balance Sheet, including the
notes thereto, a copy of which is included in Exhibit 1.4 attached hereto, is
true and correct in all material
-21-
respects, presents fairly the financial condition of the Company as of April
30, 1995, and was prepared, except as set forth in Exhibit 2.2, in accordance
with generally accepted accounting principles applied on a basis consistent
with the Company's past practice. The Company's unaudited income statement for
the year-to-date ended April 30, 1995, which is included in Exhibit 1.4
attached hereto, is true and correct in all material respects, presents fairly
the results of operations for such period, and was prepared, except as set
forth in Exhibit 2.2, in accordance with generally accepted accounting
principles applied on a basis consistent with the Company's past practice. The
Final Balance Sheet, including notes thereto, will be true and correct in all
material respects, will present fairly the financial condition of the Company
at the Effective Time of Closing and will be prepared (i) except as set forth
in Exhibit 2.2, in accordance with generally accepted accounting principles
applied on a basis consistent with the Company's past practice, and (ii) in a
manner consistent with the April Balance Sheet. As of the date of the Final
Balance Sheet, the Company will not be subject to any liability or obligation
of a nature that would be reflected or reserved against on a balance sheet
prepared in accordance with generally accepted accounting principles as of such
date (or in the notes thereto) that is not reflected thereon (or in such notes)
as so required.
-22-
3.19 No Adverse Change. Except as set forth in Exhibit 3.19 attached
hereto, since April 30, 1995, the Company has carried on its business only in
the ordinary course and substantially in the same manner as heretofore carried
on and there has not been: (a) any material adverse change in the business,
financial condition or results of operations of the Company; (b) any loss,
damage, condemnation or destruction to the properties of the Company materially
adversely affecting the Company's business or properties; (c) to the Knowledge
of Seller, any labor dispute or disturbance, litigation or any event or
condition of any character that could materially adversely affect the Company's
business; (d) any borrowings by the Company, other than trade payables arising
in the ordinary course of business and advances from Seller and its Affiliates;
(e) any mortgage, pledge, lien or encumbrance made on any of the properties or
assets of the Company, except for Permitted Liens; or (f) any sale, transfer or
other disposition of assets of the Company other than in the ordinary course of
business.
3.20 Taxes. Except as set forth on Exhibit 3.20 attached hereto:
(a) the Company is a member of the affiliated group, within the
meaning of Section 1504(a) of the Code, of which Seller is the common parent,
and such affiliated group files a consolidated federal income tax return;
-23-
(b) the Company has timely filed or caused to be filed all tax
returns required to have been filed by or for it, and all information set forth
in such tax returns is accurate and complete in all material respects;
(c) the Company has paid or made adequate provision on its books
and records in accordance with generally accepted accounting principles for all
taxes covered by such tax returns; and
(d) the Company has not granted (nor is subject to) any waiver,
which is currently in effect, of the period of limitations for the assessment
of any tax; no unpaid tax deficiency has been assessed or asserted against or
with respect to the Company by any governmental authority; there are no
currently pending administrative or judicial proceedings, or any deficiency or
refund litigation, with respect to taxes of the Company, the adverse outcome of
which would have a material adverse effect on the business or financial
condition of the Company; and any such assertion, assessment, proceeding or
litigation disclosed on Exhibit 3.20 attached hereto is being contested in good
faith through appropriate measures, and its status is described in Exhibit 3.20
attached hereto.
3.21 Employee Benefit Plans. (a) Attached hereto as Exhibit 3.21 is a
true and complete list of all "employee benefit plans" (as defined in Section
3(3) of ERISA) and all other
-24-
employee benefit arrangements or payroll practices, including each severance
pay, bonus, deferred compensation, incentive compensation, stock purchase,
stock option, hospitalization or other medical, life, disability or other
insurance, pension, profit-sharing or retirement program covering present and
former employees of the Company pursuant to which the Company has continuing
obligations (the "Employee Benefit Plans"). Exhibit 3.21 identifies (i) each
"pension plan" (as defined in Section 3(2) of ERISA) (the "Pension Plans"), and
denotes those Pension Plans intended to be qualified under Section 401(a) of
the Code (the "Qualified Plans"), (ii) each Employee Benefit Plan which is a
"multiemployer plan" (as defined in Section 4001(a)(3) of ERISA) (a
"Multiemployer Plan") and (iii) each "welfare plan" (as defined in Section 3(l)
of ERISA) (the "Welfare Plans"), maintained for the benefit of employees of the
Company or to which the Company contributes on behalf of its employees. True,
correct and complete copies of the following documents, with respect to each of
the Employee Benefit Plans, have been made available or delivered to Buyer by
Seller: (i) any plans and related trust documents, and all amendments thereto;
(ii) the most recent Forms 5500 and all schedules thereto; (iii) the last IRS
determination letter; and (iv) summary plan descriptions. To the Knowledge of
Seller, each Employee Benefit Plan is enforceable in accordance with its terms.
-25-
(b) To the Knowledge of Seller, each Qualified Plan complies in
all material respects with applicable Law as of the date hereof, and the IRS
has issued favorable determination letters to the effect that the forms of
Qualified Plans (or predecessor plans) satisfy the requirements of Section
401(a) and related Sections of the Code. To the Knowledge of Seller, there are
no facts or circumstances that would jeopardize or adversely affect in any
material respect the qualification under Code Section 401(a) of any Qualified
Plan.
(c) As of the Closing Date, full payment will be made to each
Employee Benefit Plan of all contributions (including all employer
contributions and employee salary reduction contributions) that are required
under the terms thereof and under ERISA or the Code to be made on or prior to
that date, or any such liabilities will be reflected on the Final Balance
Sheet. No "accumulated funding deficiency" (as defined in ERISA Section 302 or
Code Section 412), whether or not waived, exists with respect to any Pension
Plan. None of Seller, the Company, any ERISA Affiliate or any organization to
which Seller is a successor or parent corporation, within the meaning of
Section 4069(b) of ERISA, has engaged in any transaction, within the meaning of
Section 4069 of ERISA.
(d) To the Knowledge of Seller, each Employee Benefit Plan has
been administered substantially in accordance with its terms. In addition, to
the Knowledge of Seller, each Employee
-26-
Benefit Plan complies, and has been administered substantially in accordance
with, any applicable provisions of ERISA and the rulings and regulations
promulgated thereunder (including the continuation coverage requirements of
group health plans under COBRA), and all other applicable Laws, and all
reports, returns and other documentation that are required to have been filed
with the IRS, the Department of Labor, the PBGC or any other governmental
agency (federal, state or local) have been filed on a timely basis, in each
instance in which the failure to file such reports, returns and other documents
would result in any material liability or obligation to Seller or the Company.
No lawsuits or complaints to or by any person or governmental authority have
been filed or, to the Knowledge of Seller, are contemplated or threatened, with
respect to any Employee Benefit Plan.
(e) Except as described on Exhibit 3.21 attached hereto, neither
the Company nor Seller nor any ERISA Affiliate has received a notice of, or
incurred, any withdrawal liability with respect to a "multiemployer plan" (as
defined in ERISA Section 3(37)).
(f) The Company has not incurred any material liability with
respect to any Welfare Plan or for "welfare benefits" (as defined in Code
Section 419) that was not fully reflected in the April Balance Sheet or that
will not be fully reflected in the Final Balance Sheet. Except as set forth in
Exhibit 3.21 attached hereto, or as required under COBRA or the
-27-
terms of any Pension Plan, the Company is not obligated to provide or to pay
any benefits to former employees or to their dependents or beneficiaries.
3.22 Compliance with Law. To the Knowledge of Seller, the conduct of
the Company's business and its use of its assets does not violate or conflict
with any Law, which violation or conflict would cause a material adverse change
in the business, financial condition or results of operations of the Company.
To the Knowledge of Seller, all Permits required by the Company to conduct its
business have been obtained, are in full force and effect and are being
complied with in all material respects. Except as set forth in Exhibit 1.41
attached hereto, consummation of the transactions contemplated by this
Agreement will not, with respect to any Permit, require the consent or approval
of, or any filing with, any governmental, regulatory or self-regulatory agency,
and all such Permits will continue in full force and effect thereafter in
accordance with their terms.
3.23 Transactions With Affiliates. Except as set forth in Exhibit 3.23
attached hereto, since April 30, 1995, the Company has not, in the ordinary
course of business or otherwise, purchased, leased or otherwise acquired any
material property or assets or obtained any material services from, or sold,
leased or otherwise disposed of any material property or assets or provided any
material services to (except with respect to remuneration for services rendered
as a director, officer or employee of the
-28-
Company), Seller, any employee of the Company or Seller or any Affiliate of the
Company or Seller. Exhibit 3.23 also describes the nature of all transactions
of the type that are the subject of the immediately preceding sentence which
are reflected in the April 30, 1995, financial statements attached hereto as
Exhibit l.4. Except as set forth in Exhibit 3.23, (a) the Contracts do not
include any obligation or commitment between the Company and any Affiliate, (b)
the assets of the Company do not include any receivable or other obligation or
commitment from an Affiliate to the Company and (c) all transactions between
the Company and Affiliates reflected in the April 30, 1995, financial
statements attached hereto as Exhibit 1.4 or effected since the date thereof
were on arms' length terms comparable to those that would have been agreed to
with unaffiliated third parties in similar transactions.
3.24 No Broker. The Company has not had any dealings, negotiations or
communications with any broker or other intermediary in connection with the
transactions contemplated by this Agreement and is not committed to any
liability for any brokers' or finders' fees or any similar fees in connection
with the conveyance of the Stock. Seller has retained no broker or other
intermediary to act on its behalf in connection with the transactions
contemplated by this Agreement except The Toronto-Dominion Bank
("Toronto-Dominion"), and Seller will pay all fees
-29-
due to Toronto-Dominion in connection with the transactions contemplated by
this Agreement.
3.25 Subsidiaries. Except as set forth in Exhibit 3.25 attached
hereto, the Company does not own any capital stock of any corporation or any
interest in any partnership, joint venture, limited liability company or other
business, nor does the Company have the right or obligation to acquire any
ownership interest in any corporation, partnership, joint venture, limited
liability company or other business.
3.26 Environmental Matters. (a) Definitions. When used in this Section
3.26:
(i) "Environmental Laws" shall mean any and all Laws
regulating, relating to or imposing liability or standards of
conduct concerning any Hazardous Materials or Petroleum Products
or environmental protection as in effect at the Effective Time of
Closing or at any time in the past;
(ii) "Governmental Authority" shall mean any federal, state,
municipal or other governmental department, commission, board,
bureau, agency or instrumentality, or any court, in each case
whether of the United States or foreign;
-30-
(iii) "Hazardous Materials" shall mean any hazardous
material, hazardous waste, infectious medical waste, hazardous or
toxic substance defined or regulated as such in or under any
Environmental Law, including, without limitation, materials
exhibiting the characteristics of ignitability, corrosivity,
reactivity or extraction procedure toxicity, as such terms are
defined in connection with hazardous materials or hazardous
wastes or hazardous or toxic substances in any Environmental Law;
and
(iv) "Petroleum Products" shall mean gasoline, diesel fuel,
motor oil, waste or used oil, heating oil, kerosene and any other
petroleum products.
(b) Except as set forth in Exhibit 3.26 attached hereto: (i) the
Company has not used, stored, treated, transported, manufactured,
refined, handled, produced or disposed of any Hazardous Materials or
Petroleum Products on, under, at, from or in any way affecting any of
its properties or assets (including, without limitation, any
properties or assets now or previously owned or operated by the
Company), in any manner which constituted or constitutes a violation
of any Environmental Law governing the use, storage, treatment,
transportation, manufacture, refinement, handling, production or
disposal of Hazardous Materials or Petroleum Products, and (ii) to the
Knowledge of Seller, no
-31-
prior owner of such property or asset or any tenant, subtenant, prior
tenant or prior subtenant thereof has used Hazardous Materials or
Petroleum Products on, under, at, from or in any way affecting any
such property or asset, in any manner which constituted or constitutes
a violation of any Environmental Law governing the use, storage,
treatment, transportation, manufacture, refinement, handling,
production or disposal of Hazardous Materials or Petroleum Products.
(c) Except as set forth in Exhibit 3.26 attached hereto, the
Company has no obligations or liabilities, whether absolute or
contingent, accrued or unaccrued, asserted or unasserted, or
otherwise, that could have a material adverse effect on the
properties, business, financial condition or results of operations of
the Company, and no pending claims have been made against the Company
and no presently outstanding citations or notices have been issued
against the Company, that could have a material adverse effect on the
properties, business, financial condition or results of operations of
the Company and that, in the case of any of the foregoing, have been
or are imposed by reason of or based upon any provision of any
Environmental Laws, including, without limitation, any such
obligations or liabilities relating to or arising out of or
attributable, in whole or in part, to the manufacture,
-32-
processing, distribution, use, treatment, storage, release, disposal,
arranging for disposal, transport or handling of any Hazardous
Materials or Petroleum Products by the Company or, to the Knowledge of
the Company, by any predecessors in interest in connection with or in
any way arising from or relating to the Company or any of its
properties, or relating to or arising from or attributable, in whole
or in part, to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of any such
substance by any other person on, under, at, from or in any way
affecting any of the properties or assets owned or used by the
Company.
(d) Except as set forth in Exhibit 3.26 attached hereto, the
Company has obtained all Permits as may be required of it under
applicable Environmental Laws to conduct its business, and the Company
is in compliance in all material respects with the terms and
conditions of all such Permits. The company has not received any
notices or claims that it is a potentially responsible party in
connection with any claim or notice asserted pursuant to 42 U.S.C.
Section 9601 et seq., or any state superfund law.
(e) No underground storage tanks are present on any of the Real
Property that is owned by the Company in fee, and no asbestos
containing materials remain in place on any of the Real Property that
is owned by the Company in fee.
-33-
3.27 Insurance. Exhibit 3.27 lists all policies of fire, liability,
workers' compensation and other forms of insurance coverage to or for the
benefit of the Company. All of such insurance coverage shall remain in full
force until the Effective Time of Closing but, except as set forth in Exhibit
3.27, shall terminate as of such time. Notwithstanding any such termination,
the Company shall be entitled to receive, and Seller shall pay to the Company,
the proceeds of all insurance claims for damage to property of the Company
occurring prior to the Effective Time of Closing plus the amount of any related
deductible to the extent that such proceeds and deductible have not been
applied to the cost of repairing the damages giving rise to such claims, and
such proceeds shall not be taken into account in calculating the Initial or
Final Purchase Price.
3.28 Labor Matters.
(a) Except as set forth on Exhibit 3.28 attached hereto, the
Company is not party to any labor or collective bargaining agreement with any
labor union or organization pertaining to employees of the Company and, except
as set forth in the collective bargaining agreements listed on Exhibit 3.28,
the Company has not recognized any labor union or organization as the
collective bargaining representative of its employees. To the Knowledge of
Seller, (i) no labor organization has made a pending demand to the Company for
recognition as the bargaining
-34-
representative of any employees of the Company, (ii) there are no
representation petitions pending before the National Labor Relations Board with
respect to employees of the Company and (iii) no union organizing activities
are in progress with respect to employees of the Company. True and complete
copies of all collective bargaining agreements pertaining to employees of the
Company, including any amendments or material side letters thereto, have been
made available or delivered to Buyer by Seller.
(b) Except as set forth on Exhibit 3.28 attached hereto, to the
Knowledge of Seller (i) there are no pending strikes or lockouts involving
employees of the Company, and (ii) there are no pending arbitrations, grievance
proceedings or unfair labor practice charges by or on behalf of any employee or
group of employees of the Company which, if individually or collectively
resolved against the Company, could result in a material liability.
(c) With respect to the Company, there has been no "mass layoff"
or "plant closing," as defined by WARN, within the six months prior to the
Closing Date.
-35-
ARTICLE IV
----------
REPRESENTATIONS AND WARRANTIES OF BUYER
---------------------------------------
Buyer hereby represents and warrants to Seller that:
4.1 Organization. Buyer is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Delaware, and has
full corporate power to enter into this Agreement and to perform its
obligations hereunder.
4.2 Authorization; Enforceability. The execution, delivery and
performance by Buyer of this Agreement and of all of the documents and
instruments required hereby from Buyer are within the corporate power of Buyer
and have been duly authorized by all necessary corporate action of Buyer. This
Agreement is, and the other documents and instruments required hereby will be,
when executed and delivered by the parties hereto, the valid and binding
obligations of Buyer, enforceable against Buyer in accordance with their
respective terms.
4.3 No Violation or Conflict. The execution, delivery and performance
of this Agreement by Buyer do not and will not conflict with or violate any
Law, judgment, order or decree binding on Buyer or the Certificate of
Incorporation or Bylaws of Buyer or any contract or agreement to which Buyer is
a party or by which it is bound, the breach of which could have a material
adverse effect on Buyer's ability to consummate the transactions
-36-
contemplated hereby, or on the business, financial condition or results of
operations of Buyer. No notice to, filing or registration with, or
authorization, consent or approval of, any governmental, regulatory or
self-regulatory agency is necessary or is required to be made or obtained by
Buyer in connection with the execution and delivery of this Agreement by Buyer
or the consummation by Buyer of the transactions contemplated hereby; provided,
however, that the consummation of the transactions contemplated by this
Agreement is subject to the requirements of the HSR Act.
4.4 No Broker. Buyer has not had any dealings, negotiations or
communications with any broker or other intermediary in connection with the
transactions contemplated by this Agreement except Toronto-Dominion, as
representative of Seller.
4.5 Purchase for Investment. Buyer acknowledges that the offer and
sale of the Stock contemplated herein has not been registered under the
Securities Act of 1933, as amended, or under any state securities laws. Buyer
represents that it is purchasing the Stock for investment and not with a view
for the distribution thereof except in accordance with applicable securities
laws.
-37-
ARTICLE V
---------
CERTAIN MATTERS PENDING THE CLOSING
-----------------------------------
Seller and Buyer covenant and agree that from and after the date of
this Agreement and until the Closing Date:
5.1 Carry on in Regular Course. Seller shall cause the Company to
carry on its business, including transactions with its Affiliates, in the
ordinary course and substantially in the same manner as heretofore carried on
and to use its reasonable best efforts to preserve its properties, business and
relationships with its suppliers and customers. Seller will advise Buyer
promptly in writing of any material adverse change in the Company's business,
financial condition or results of operations.
5.2 Indebtedness. Seller shall not permit the Company to (a) create,
incur or assume any indebtedness for borrowed money, except for Intercompany
advances consistent with the Company's past practice, (b) mortgage, pledge or
otherwise encumber any of its properties or assets, except for Permitted Liens
or (c) create or assume any other indebtedness except accounts payable and
other liabilities incurred in the ordinary course of business.
5.3 Issuance of Stock. Seller shall not permit the Company to issue
any shares of capital stock of any class or grant any warrants, options or
rights to subscribe for any shares of capital stock of any class or securities
convertible into or
-38-
exchangeable for, or which otherwise confer on the holder any right to acquire,
any shares of capital stock of any class.
5.4 Compensation. Seller shall not permit the Company to grant any
increases, except for increases in the ordinary course of the Company's
business, in the rate of pay of any of its employees (including, without
limitation, the Scheduled Employees). Without the prior written consent of
Buyer, Seller shall not permit the Company to institute any new Employee
Benefit Plan, amend, alter or terminate, partially or completely, any Employee
Benefit Plan or assume, enter into, amend, alter or terminate any labor or
collective bargaining agreement to which the Company is a party or by which the
Company is affected, except in any such case as required by Law, the terms of
any existing Employee Benefit Plan or as otherwise expressly contemplated by
this Agreement.
5.5 Compliance with Law. Seller shall cause the Company to comply in
all material respects with all applicable Laws, non-compliance with which could
have a material adverse effect upon the business, financial position or results
of operations of the Company, and with all orders of any court or of any
federal, state, municipal or other governmental department binding upon the
Company (except for any such orders which are being contested by the Company in
good faith by appropriate proceedings).
-39-
5.6 Access. At Buyer's expense, Buyer and its authorized agents,
officers and representatives shall have reasonable access to the employees,
properties, books, records, contracts, information and documents of the Company
to conduct such examinations and investigations of the Company as Buyer deems
necessary; provided, however, that such examinations and investigations: (a)
shall be conducted only in the presence of a designated representative of
Seller; (b) shall be conducted during the Company's normal business hours; and
(c) shall not unreasonably interfere with the Company's operations and
activities. Seller shall cause the Company and the Company's employees,
counsel, independent auditors and financial advisors to cooperate in all
reasonable respects with Buyer's examinations and investigations and shall
afford Buyer, upon Buyer's request, joint access (with a representative of
Seller or the Company) to the Company's suppliers, distributors and customers.
5.7 Cooperation. Buyer and Seller will cooperate in all respects in
connection with the giving of any notices to any governmental authority or
securing the permission, approval, determination, consent or waiver of any
governmental authority required by Law in connection with the transfer of the
Stock from Seller to Buyer including, without limitation, the filing of
premerger notification and report forms under the HSR Act. Buyer and Seller
hereby agree to share equally the filing fees associated with such filings
under the HSR Act.
-40-
5.8 Publicity. All general notices, releases, statements and
communications to employees, suppliers, distributors and customers of the
Company and to the general public and the press relating to the transactions
covered by this Agreement shall be made only at such times and in such manner
as may be mutually agreed upon by Buyer and Seller; provided, however, that
either Seller or Buyer shall be entitled to make a public announcement of the
proposed transaction if, in the opinion of its legal counsel, such announcement
is required to comply with Law or the rules and regulations of the New York
Stock Exchange.
5.9 Confidentiality. Notwithstanding any other provision of this
Agreement to the contrary, Buyer agrees that, unless and until the transactions
contemplated herein are consummated, Buyer shall remain subject to all of the
terms and conditions of the Confidentiality Agreement, dated June 23, 1995,
between Toronto-Dominion, as representative of Seller, and Buyer, the terms of
which Confidentiality Agreement are incorporated herein by reference, except
that such Confidentiality Agreement is hereby modified to include all of
Buyer's potential financing sources in the group of persons to whom Buyer may
furnish the "Evaluation Material" pursuant to the terms of such Confidentiality
Agreement.
5.10 Articles and Bylaws. Seller shall not permit the Company to amend
its articles of incorporation or bylaws or merge or consolidate with or into
any other corporation.
-41-
5.11 Exclusivity. Seller will not, and will not permit the Company,
any Affiliate of Seller or the Company or any officer, director, investment
banker or other representative of Seller or the Company to, solicit, initiate
or encourage the submission of any proposal or offer from any person, firm or
corporation, or negotiate or accept any unsolicited offer or proposal, relating
to any (a) merger or consolidation involving the Company, (b) acquisition or
purchase of securities or of all or substantially all of the assets of the
Company or (c) similar transaction or business combination involving the
Company. Seller will promptly notify Buyer if any person, firm or corporation
makes any proposal or offer with respect to any of the foregoing.
5.12 Undated Financial Information. Seller will promptly provide Buyer
with all interim (monthly, quarterly and other) financial statements of the
Company prepared in the ordinary course of business for periods subsequent to
April 30, 1995, and prior to the Closing. All such interim financial statements
shall be prepared on a basis consistent with the Company's past practice.
-42-
ARTICLE VI
----------
CONDITIONS PRECEDENT TO THE OBLIGATIONS OF BUYER
------------------------------------------------
Each and every obligation of Buyer to be performed on the Closing Date
shall be subject to the satisfaction prior to or at the Closing, or waiver by
Buyer, of the following express conditions precedent, and Seller agrees to use
its reasonable best efforts to cause the conditions set forth in Sections 6.1,
6.2, 6.4, 6.6, 6.7, 6.8 and 6.11 to be timely satisfied:
6.1 Compliance with Agreement. Seller and the Company shall have
performed and complied in all material respects with all of their obligations
under this Agreement which are to be performed or complied with by them prior
to or on the Closing Date.
6.2 Proceedings and Instruments Satisfactory. All proceedings,
corporate or other, to be taken by Seller in connection with the transactions
contemplated by this Agreement, and all documents incident thereto, shall be
reasonably satisfactory in form and substance to Buyer, and Seller and the
Company shall have made available to Buyer for examination the originals or
true and correct copies of all documents which Buyer may reasonably request in
connection with the transactions contemplated by this Agreement.
6.3 No Litigation. No investigation, suit, action or other proceeding
shall be pending before any court or governmental
-43-
agency that seeks restraint, prohibition, damages or other relief in connection
with this Agreement or the consummation of the transactions contemplated
hereby.
6.4 Representations and Warranties. The representations and warranties
made by Seller in this Agreement shall be true and correct in all material
respects as of the Closing Date with the same force and effect as though such
representations and warranties had been made on the Closing Date.
6.5 Material Damage to Assets. Between the date of this Agreement and
the Closing Date, the assets and properties of the Company shall not have been
materially and adversely affected by reason of any loss, taking, condemnation,
destruction or physical damage, whether or not insured against.
6.6 Deliveries at Closing. Seller shall have delivered to Buyer the
following documents, each properly executed and dated as of the Closing Date:
(a) the Opinion of Seller's Counsel; (b) executed resignations of those
officers and directors of the Company who are designated by Buyer; (c) Seller's
Closing certificate; and (d) the certificate representing the Stock together
with a duly executed stock power therefor to convey the Stock to Buyer.
6.7 Xxxx-Xxxxx-Xxxxxx Filings. In the reasonable opinion of Buyer, all
necessary requirements of the HSR Act and the regulations promulgated
thereunder shall have been complied with,
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and any "waiting periods" applicable to this transaction which are imposed by
such statute or regulations shall have expired prior to the Closing Date or
shall have been terminated by the appropriate agency.
6.8 Lien Waivers and Estoppel Certificates. Seller shall have caused
the Company to use its best efforts to deliver to Buyer: (a) waivers of any
statutory landlord or lessor liens with respect to any material parcel of
leased Real Property and any material item of leased Equipment; and (b)
estoppel certificates, reasonably satisfactory in form and substance to Buyer,
from the landlord of each parcel of leased Real Property and the lessor of each
material item of leased Equipment.
6.9 Title Insurance. Buyer shall have obtained a commitment for title
insurance insuring the Company's title to all owned Real Property subject only
to the applicable Permitted Liens and on a non-attribution basis.
6.10 Financing. Buyer shall have obtained the financing it requires to
pay the Initial Purchase Price.
6.11 Non-Competition Agreement. Seller shall have executed and
delivered to Buyer a non-competition agreement substantially in the form of
Exhibit 6.11 attached hereto.
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ARTICLE VII
-----------
CONDITIONS PRECEDENT TO THE OBLIGATIONS OF SELLER
-------------------------------------------------
Each and every obligation of Seller to be performed on the Closing
Date shall be subject to the satisfaction prior to or at the Closing, or waiver
by Seller, of the following express conditions precedent, and Buyer agrees to
use its reasonable best efforts to cause the conditions set forth in Sections
6.9, 6.10, 7.1, 7.2, 7.4, 7.5 and 7.6 to be timely satisfied:
7.1 Compliance with Agreement. Buyer shall have performed and complied
in all material respects with all of its obligations under this Agreement which
are to be performed or complied with by it prior to or on the Closing Date.
7.2 Proceedings and Instruments Satisfactory. All proceedings,
corporate or other, to be taken by Buyer in connection with the transactions
contemplated by this Agreement, and all documents incident thereto, shall be
reasonably satisfactory in form and substance to Seller, and Buyer shall have
made available to Seller for examination the originals or true and correct
copies of all documents which Seller may reasonably request in connection with
the transactions contemplated by this Agreement.
7.3 No Litigation. No investigation, suit, action or other proceeding
shall be pending before any court or governmental agency that seeks restraint,
prohibition, damages or other relief
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in connection with this Agreement or the consummation of the transactions
contemplated hereby.
7.4 Representations and Warranties. The representations and warranties
made by Buyer in this Agreement shall be true and correct in all material
respects as of the Closing Date with the same force and effect as though such
representations and warranties had been made on the Closing Date.
7.5 Deliveries at Closing. Buyer shall have delivered to Seller the
following documents, each properly executed and dated as of the Closing Date:
(a) the Opinion of Buyer's Counsel; and (b) Buyer's Closing Certificate. Buyer
shall also have paid the Initial Purchase Price to Seller by wire transfer of
immediately available funds in accordance with Section 2.2(c) hereof.
7.6 Xxxx-Xxxxx-Xxxxxx Filings. In the reasonable opinion of Seller,
all necessary requirements of the HSR Act and the regulations promulgated
thereunder shall have been complied with, and any "waiting periods" applicable
to this transaction which are imposed by such statute or regulations shall have
expired prior to the Closing Date or shall have been terminated by the
appropriate agency.
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ARTICLE VIII
------------
INDEMNITIES AND ADDITIONAL COVENANTS
------------------------------------
8.1 Seller's Indemnity. (a) Seller hereby agrees to indemnify and hold
the Company and Buyer harmless from and against, and agrees to defend promptly
the Company and Buyer from and to reimburse the Company and Buyer for, any and
all losses, damages, costs, expenses, liabilities, obligations and claims of
any kind, including, without limitation, reasonable attorneys' fees and other
legal costs and expenses (hereinafter referred to collectively as "Losses"),
that either Buyer or the Company may at any time suffer or incur, or become
subject to, as a result of or in connection with (i) any breach or inaccuracy
of any of the representations and warranties made by Seller in or pursuant to
this Agreement, (ii) any failure by Seller to perform any of its covenants and
obligations set forth in this Agreement or in any document or instrument
delivered pursuant hereto and (iii) those matters set forth in Exhibit 8.1
attached hereto, to the extent such matters are not reserved against on the
Final Balance Sheet; provided, however, that Seller shall not be required to
indemnify Buyer or the Company pursuant to Section 8.1(a)(i) hereof in respect
of the representations and warranties made by Seller unless such right is
asserted (whether or not such Losses have actually been incurred) by notice to
Seller within two years of the Closing Date (or, in the case of the
representations and warranties set forth (x) in Section 3.4 hereof, without
time
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limitation, (y) in Sections 3.20 and 3.21 hereof, the applicable statute of
limitations with respect to such tax and ERISA matters or (z) in Section 3.26
hereof, within five years of the Closing Date) describing with specificity the
facts giving rise to the asserted right; and provided, further, that Seller
shall not be required to indemnify Buyer or the Company pursuant to Section
8.1(a)(1) in respect of the representations and warranties made by Seller
unless and until the amount of all Losses for which indemnification is sought
hereunder first exceeds $250,000, in which event all Losses shall be subject to
indemnification. Seller's aggregate obligations pursuant to this Section 8.1(a)
shall in no event exceed the Final Purchase Price.
(b) The amounts for which Seller shall be liable under Section
8.ll(a) of this Agreement shall be net of any insurance proceeds received by
Buyer or the Company in connection with the facts giving rise to the right of
indemnification. The amounts for which Seller shall be liable under Section
8.1(a) shall also include all costs and expenses incurred by Buyer or the
Company in enforcing its rights to indemnification hereunder.
(c) In the event a claim against Buyer or the Company arises that
is covered by the indemnity provisions of Section 8.1(a) of this Agreement,
notice shall be promptly given by Buyer or the Company to Seller. Provided that
Seller admits in writing to the party seeking indemnification that such claim
is covered by the indemnity provisions of Section 8.1(a) hereof, Seller
-49-
shall have the right to contest and defend by all appropriate legal proceedings
such claim and to control all settlements (unless Buyer agrees to assume the
cost of settlement and to forgo such indemnity) and to select lead counsel to
defend any and all such claims at the sole cost and expense of Seller;
provided, however, that Seller may not effect any settlement that could result
in any cost, expense or liability to Buyer or the Company or subject Buyer or
the Company to other than monetary damages unless such party consents in
writing to such settlement and Seller agrees to indemnify such party therefor.
Buyer may select counsel to participate in any defense, in which event Buyer's
counsel shall be at the sole cost and expense of Buyer. In connection with any
such claim, action or proceeding, the parties shall cooperate with each other
and provide each other with access to relevant books and records in their
possession.
(d) Except as set forth in Sections 8.3 and 8.4 hereof, this
Section 8.1 shall be the sole remedy of Buyer and the Company against Seller
for any claim arising in connection with the transactions contemplated herein.
Seller's representations and warranties made herein shall survive the Closing,
but only to the extent and for such time as is necessary to enable Buyer to
enforce its rights to indemnification under this Section.
8.2 Buyer's Indemnity. (a) Buyer hereby agrees to indemnify and hold
Seller harmless from and against, and agrees to
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defend promptly Seller from and to reimburse Seller for, any and all Losses
that Seller may at any time suffer or incur, or become subject to, as a result
of or in connection with (i) any breach or inaccuracy of any of the
representations and warranties made by Buyer in or pursuant to this Agreement,
and (ii) any failure by Buyer to perform any of its covenants and obligations
set forth in this Agreement or in any document or instrument delivered pursuant
hereto; provided, however, that Seller shall have no right to be indemnified,
held harmless from, defended or reimbursed pursuant to Section 8.2(a)(i) hereof
in respect of the representations and warranties made by Buyer unless such
right is asserted (whether or not such Losses have actually been incurred) by
notice to Buyer within two years of the Closing Date describing with
specificity the facts giving rise to the asserted right; and provided, further,
that Buyer shall not be required to indemnify Seller under Section 8.2(a)(i)
hereof in respect of the representations and warranties made by Buyer unless
and until the amount of all Losses for which such indemnification is sought
hereunder first exceeds $250,000, in which event all Losses shall be subject to
indemnification.
(b) The amounts for which Buyer shall be liable under Section
8.2(a) of this Agreement shall be net of any insurance proceeds received by
Seller in connection with the facts giving rise to the right of
indemnification. The amounts for which Buyer shall be liable under Section
8.2(a) shall also include all
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costs and expenses incurred by Seller in enforcing its rights to
indemnification hereunder.
(c) In the event a claim against Seller arises that is covered by
the indemnity provisions of Section 8.2(a) of this Agreement, notice shall be
promptly given by Seller to Buyer. Provided that Buyer admits in writing to
Seller that such claim is covered by the indemnity provisions of Section 8.2(a)
hereof, Buyer shall have the right to contest and defend by all appropriate
legal proceedings such claim and to control all settlements (unless Seller
agrees to assume the cost of settlement and to forgo such indemnity) and to
select lead counsel to defend any and all such claims at the sole cost and
expense of Buyer; provided, however, that Buyer may not effect any settlement
that could result in any cost, expense or liability to Seller or subject Seller
to other than monetary damages unless Seller consents in writing to such
settlement and Buyer agrees to indemnify Seller therefor. Seller may select
counsel to participate in any defense, in which event such counsel shall be at
the sole cost and expense of Seller. In connection with any such claim, action
or proceeding, the parties shall cooperate with each other and provide each
other with access to relevant books and records in their possession.
(d) Except as provided in Sections 8.3. 8.4 and 8.7 hereof, this
Section 8.2 shall be the sole remedy of Seller against Buyer for any claim
arising in connection with the
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transactions contemplated herein. Buyer's representations and warranties made
herein shall survive the Closing, but only to the extent and for such time as
is necessary to enable Seller to enforce its rights to indemnification under
this Section.
8.3 Employee Benefit Matters.
(a) Seller and Buyer agree that the obligations of the Company
with respect to the following Employee Benefit Plans and the participation of
its employees and their dependents and beneficiaries therein shall cease at or
prior to the Effective Time of Closing and no employee or former employee,
dependent or beneficiary shall have any claim against the Company arising out
of such plans after the Effective Time of Closing:
(1) Chesapeake corporation 401(k) Savings Plan for Salaried
Employees;
(2) Chesapeake Corporation Retirement Plan for Salaried Employees;
(3) Employee Stock Ownership Plan of Chesapeake Corporation;
(4) Chesapeake Corporation Salaried Employees' Stock Purchase
Plan;
(5) Chesapeake Corporation Group Life, Medical and Dependent Life
Plan for Salaried Employees;
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(6) Chesapeake Corporation Flex Plan for Salaried Employees;
(7) Chesapeake Corporation Travel Accident Plan for Salaried
Employees;
(8) Chesapeake Corporation 1993 Incentive Plan;
(9) Long-Term Disability Plan for Salaried Employees of Chesapeake
Corporation and Designated Subsidiaries; and
(10) any other Employee Benefit Plan of the Company in force as of
the Effective Time of Closing which Seller has failed to list on
Exhibit 3.21.
Buyer (and the Company after the Effective Time of Closing) shall have no
liability, duties or obligations with respect to the above-listed plans to
Seller or to any employee, former employee or beneficiary, dependent other
party enforcing the same or having or claiming an interest thereunder,
including governmental agencies. The parties agree that any liability for the
above-listed plans that is removed from the books of the Company prior to the
Closing Date shall be disregarded for the purpose of determining the Estimated
and Final Purchase Prices under this Agreement.
(b) When used in this Section 8.3, the following terms shall have
the meanings specified;
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(i) "Buyer's Plan" means a defined benefit pension plan that is
qualified under Code Section 401(a) and that is adopted or designated by Buyer
to receive the Spinoff Amount.
(ii) "Continuing Employee" means an individual employed by the
Company at and after the Effective Time of closing.
(iii) "Hourly Employee" means each hourly paid employee of the
Company who is in the active hourly employment of the Company at the Effective
Time of Closing.
(iv) "Salaried Employee" means each salaried employee of the
Company who is in the active salaried employment of the Company at the
Effective Time of Closing.
(v) "Salaried Plan" means the Chesapeake Corporation Retirement
Plan for Salaried Employees.
(vi) "Salaried Plan Benefit" means the total of the present value
of the accrued benefits (whether or not vested) of each Salaried Employee who
is employed by the Company on the day after the Closing Date under the Salaried
Plan, computed as of the Closing Date in accordance with the actuarial
assumptions and methods specified in Exhibit 8.3A attached hereto.
(vii) "Spinoff Amount" means the present value of accrued benefits
(whether or not vested) of all Salaried Employees who are employed by the
Company on the day after the Closing Date, computed as of the Closing Date in
accordance with
-55-
the actuarial assumptions and methods specified in Exhibit 8.3B attached hereto.
(c) (i) Buyer agrees to adopt and maintain welfare benefit plans
(as defined in ERISA section 3(l)) (the "Buyer's Welfare Plans") that, for at
least one year after the Closing Date, provide benefits to Continuing
Employees, to Continuing Employees who retire after the Closing Date and to
their beneficiaries and dependents that, taken as a whole, are comparable to
such benefits provided to such persons under the Welfare Plans immediately
prior to the Closing Date. With respect to the Continuing Employees and their
beneficiaries and dependents, Buyer's Welfare Plans shall not include a waiting
or eligibility period (except to the extent any such Continuing Employees,
beneficiaries or dependents are subject to a waiting or eligibility period
under the Welfare Plans) or a preexisting condition restriction or limitation
and, to the extent that such Continuing Employees or their dependents or
beneficiaries have satisfied any internal limits, deductibles or copayment
requirements of Seller's Welfare Plans for the year that includes the Closing
Date, such amounts will be credited toward the satisfaction of any such
requirements under Buyer's Welfare Plans.
(ii) (1) Seller and the Welfare Plans will remain responsible for
administering and paying claims incurred by employees of the Company prior to
the Effective Time of Closing.
-56-
Seller and the Welfare Plans also will remain responsible for administering and
paying claims incurred by Continuing Employees who are unable to perform
employment duties on the Closing Date by reason of a medical condition or on
account of a medical restriction; provided that such claims are incurred before
the Continuing Employee returns to work for the Company, Buyer or one of
Buyer's Affiliates.
(2) Seller and the Welfare Plans will remain responsible for
claims incurred by the dependents and beneficiaries of employees of the Company
prior to the Effective Time of Closing. If the dependent or beneficiary of a
Continuing Employee is hospitalized on the Closing Date, Seller and the Welfare
Plans will remain responsible for claims incurred by such dependent or
beneficiary after the Effective Time of Closing and before such beneficiary or
dependent is discharged from the hospital.
(3) Seller and the Welfare Plans will remain responsible for
claims incurred by employees of the Company who retire before the Closing Date.
(4) Seller and the Welfare Plans shall be responsible for
any continuation coverage obligations under COBRA with respect to a qualifying
beneficiary (as defined in Code Section 4980B(g)) who has a qualifying event
(as defined in Code Section 4980B(f)) before the Closing Date.
-57-
(iii) (1) Buyer and Buyer's Welfare Plans will be responsible for
administering and paying claims incurred from and after the Effective Time of
Closing by Continuing Employees of the Company who are at work for the Company,
Buyer or an Affiliate of Buyer on the Closing Date. Buyer and Buyer's Welfare
Plans will be responsible for administering and paying claims incurred by
Continuing Employees of the Company who are unable to perform employment duties
on the Closing Date on account of a medical condition or on account of a
medical restriction only with respect to claims incurred on or after the
Continuing Employee returns to work for the Company, Buyer or one of Buyer's
Affiliates.
(2) Buyer and Buyer's Welfare Plans will be responsible for
claims incurred by the dependents and beneficiaries of Continuing Employees
after the Effective Time of Closing. If the dependent or beneficiary of a
Continuing Employee is hospitalized on the Closing Date, Buyer and Buyer's
Welfare Plans will not be responsible for claims incurred by such dependent or
beneficiary after the Effective Time of Closing and before such beneficiary or
dependent is discharged from the hospital.
(3) Buyer and Buyer's Welfare Plans will be responsible for
claims incurred by Continuing Employees of the Company who retire after the
Closing Date.
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(4) Buyer and Buyer's Welfare Plans shall be responsible for
any continuation coverage obligations under COBRA with respect to each
Continuing Employee and each qualifying beneficiary (as defined in Code Section
4980B(g)) of a Continuing Employee who has a qualifying event (as defined in
Code Section 4980B(f)) after the Effective Time of Closing.
(d) (i) Buyer agrees that the Salaried Employees of the
Company shall be eligible to participate in the Buyer's Plan commencing as of
the Closing Date, based on the terms and conditions of the Buyer's Plan.
Employment with the Company, the Seller and Affiliates of the Seller prior to
the Closing Date shall count for eligibility and vesting purposes under the
Buyer's Plan to the extent such service is recognized for such purposes under
the Salaried Plan as of the Closing Date.
(ii) Buyer agrees to cause Buyer's Plan to assume liability for
the Salaried Plan Benefits which accrued prior to the Closing Date and which
commence to be paid to Salaried Employees (or their surviving spouse,
beneficiary or alternate payee) on or after the Closing Date; provided,
however, that the receipt by Buyer's Plan of the Spinoff Amount shall be a
condition precedent to the assumption of such liability. Buyer and Seller agree
to comply with all rules and procedures established by the IRS and the PBGC
with respect to the assumption of such liability.
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(iii) Seller agrees to cause the trust of the Salaried Plan to
transfer assets to Buyer's Plan equal to the Spinoff Amount. Such transfer
shall be made as soon as practicable after the Closing Date and shall include
interest on the Spinoff Amount at the rate of six percent per annum from the
Closing Date until the date of transfer. Buyer and Seller agree to comply with
all rules and procedures established by the IRS and the PBGC with respect to
such transfer. Buyer warrants that as of the date of transfer Buyer's Plan will
be qualified, and its concomitant trust exempt from tax, under Code Sections
401(a) and 501(a), respectively.
If the Spinoff Amount exceeds the Salaried Plan Benefit, then Buyer
shall pay to Seller an amount equal to such excess. If the Spinoff Amount is
less than the Salaried Plan Benefit, then Seller shall pay to Buyer an amount
equal to such deficiency. Any such payments between Buyer and Seller shall be
made in immediately available funds within 10 days of such determination and
shall bear interest at the rate of six percent per annum from the Closing Date
to the date of payment.
(iv) (1) Buyer agrees that as of the Effective Time of Closing,
Buyer shall assume sponsorship of the Chesapeake Consumer Products Company
Retirement Plan for Hourly Employees (the "Hourly Plan"). The Hourly Plan shall
continue to recognize, with respect to any Continuing Employee, service for all
purposes with the Company and its Affiliates prior to the
-60-
Closing Date to the same extent that such service is recognized under the
Hourly Plan as in effect on such date. The Hourly Plan and Buyer shall be
responsible for all liabilities and obligations of the Hourly Plan, including,
without limitation, benefits accrued prior to the Closing Date and benefits
payable to any Hourly Plan participants who retired or separated from service
prior to the Closing Date.
(2) No later than the Effective Time of Closing, Buyer agrees
to establish or designate a trust that is exempt from tax under Section 501(a)
of the Code to receive the assets of the Hourly Plan. Seller agrees to transfer
the Hourly Plan assets to such trust as soon as practicable after the Closing
Date and after the establishment or designation of such trust. To the extent
the assets transferred to Buyer's trust are less than the total of the present
value of the accrued benefits (whether or not vested) of each hourly employee
who is employed by the Company on the day after the Closing Date under the
Hourly Plan, computed as of the Closing Date in accordance with the actuarial
assumptions set forth in Exhibit 8.3C attached hereto, Seller shall pay to
Buyer an amount equal to such deficiency, with interest as provided above.
(v) As soon as practicable after the Closing Date, but in no event
later than 90 days after the Closing Date, Seller shall prepare and deliver to
Buyer the following
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information with respect to each Continuing Employee as of the Closing Date:
(1) name;
(2) Social Security number;
(3) accrued normal retirement benefit amount, payable as a
single life annuity under the Salaried or Hourly Plan;
(4) years (and fractions) of service recognized for benefit
accrual purposes under the Salaried or Hourly Plan; and
(5) years (and fractions) of service recognized for vesting
purposes under the Salaried or Hourly Plan.
(vi) From time to time after the Closing Date, Seller and Buyer
may require information with respect to one or more employees. Seller and Buyer
agree to furnish such information to the other, if available, within thirty
(30) days after receipt of any reasonable and lawful written request from the
other.
(e) Buyer agrees that it will credit (or cause the Company to
credit) Continuing Employees with vacation time that is earned under the terms
of the Company's vacation policy in effect prior to the Effective Time of
Closing but is unused as of the Closing Date, and that Buyer will recognize
(and cause the
-62-
Company to recognize) service with Seller, the Company and their respective
Affiliates for purposes of earning vacation time from and after the Effective
Time of Closing, but only to the extent such vacation time is accrued as a
liability on the Final Balance Sheet.
(f) Buyer agrees to pay or cause the Company to pay severance pay
and other benefits to Continuing Employees under the Company's severance
benefit programs listed on Exhibit 3.21 attached hereto, in accordance with the
terms of such programs as of the Effective Time of Closing.
(g) Seller hereby agrees to indemnify and hold the Company and
Buyer harmless from and against, and agrees to defend promptly the Company and
Buyer from and to reimburse the Company and Buyer for, any Losses resulting
from or relating to each of the following: (i) any ERISA Affiliate Plan; (ii)
any multi-employer plan (within the meaning of Section 4001(a)(3) of ERISA)
which is not an Employee Benefit Plan; and (iii) any "welfare plan" (within the
meaning of Section 3(l) of ERISA) which is not an Employee Benefit Plan with
respect to noncompliance with the notice and benefit continuation requirements
of COBRA.
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8.4 Income Tax Matters.
(a) Federal Income Taxes in General. The income and other tax
items of the Company for periods ending on or before the Closing Date shall be
included in the consolidated federal income tax return of the affiliated group,
within the meaning of Section 1504(a) of the Code, of which Seller is a member.
Except as otherwise provided in this Section 8.4, Seller shall be responsible
for and shall hold Buyer and the Company harmless from any federal income taxes
of the Company not heretofore paid and shall be entitled to any reductions in
taxes or refunds (including interest) not heretofore received for taxable
periods ending on or before the Closing Date. If Buyer or the Company receives
any such refund, Buyer shall promptly pay (or cause the Company to pay) the
entire amount of the refund (including interest) to Seller.
Buyer and the Company shall be responsible for and shall hold
Seller harmless from all federal income taxes of the Company for any taxable
period beginning after the Closing Date and, with respect to prior taxable
periods, for all federal income taxes resulting from any action taken without
Seller's written consent by Buyer or the Company after the Closing (including,
without limitation, actions taken outside the ordinary course of business and
occurring on the Closing Date but excluding operations within the ordinary
course of business on
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the Closing Date). Buyer and the Company shall be entitled to all refunds of
such taxes (including interest).
(b) State Income Taxes in General. For purposes of this Agreement,
the term "state income tax" means any tax, imposed by a state in the United
States, that is based on or measured by net income. Seller shall be responsible
for preparing and filing the state income tax returns of the Company for
taxable periods ending on or before the Closing Date. Except as otherwise
provided in this Section 8.4, Seller shall hold Buyer and the Company harmless
from any state income taxes not heretofore paid and shall be entitled to any
reductions in taxes or refunds (including interest) not heretofore received for
such taxable periods. If Buyer or the Company receives any such refund, Buyer
shall promptly pay (or cause the Company to pay) the entire amount of such
refund (including interest) to Seller.
Buyer and the Company shall be responsible for and shall hold
Seller harmless from all state income taxes of the Company for any taxable
period beginning after the Closing Date and, with respect to prior taxable
periods, for all state income taxes resulting from any action taken without
Seller's written consent by Buyer or the Company after the Closing (including,
without limitation, actions taken outside the ordinary course of business and
occurring on the Closing Date but excluding operations within the ordinary
course of business on the Closing
-65-
Date). Buyer and the Company shall be entitled to all refunds of such taxes
(including interest).
If the Company is required to file any state income tax return for
a taxable period covering days before and after the Closing Date, Buyer shall
cause such return to be filed and shall be responsible for the payment of any
tax for such period. However, Seller shall pay to Buyer, as an adjustment to
the Final Purchase Price, the amount by which the state income tax attributable
to the period through the Closing Date exceeds the sum of the amount of such
tax paid on or before the Closing Date plus the amount of such tax reflected on
the Final Balance Sheet. The tax attributable to the period through the Closing
Date shall be determined (i) as if that period were a separate taxable year,
and (ii) except as otherwise required by Law, by using the tax accounting
methods and tax elections used by the Company before the Effective Time of
Closing. Seller shall compute the amount of the Company's tax attributable to
the period through the Closing Date and shall notify Buyer of such amount in
writing no later than 90 days after the Closing Date. Within 45 days after the
date of such notification, Seller shall pay to Buyer the excess of (i) the
amount of tax determined by Seller as attributable to the portion of the period
through the Closing Date, over (ii) the sum of the amount of the tax for the
taxable period paid on or before the Closing Date plus the amount of such tax
reflected on the Final Balance Sheet, unless, within 30 days
-66-
after such date, Buyer notifies Seller in writing that Buyer disagrees with the
computation of any such amount. In that case, Seller and Buyer shall proceed in
good faith to determine the correct amount, and Seller's payment to Buyer shall
be due the later of (i) the time specified in the immediately preceding
sentence, and (ii) 10 days after Seller and Buyer agree to the amount payable.
(c) Taxes Resulting From Section 338 Elections. An election shall
be made by Buyer and Seller under Section 338(h)(10) of the Code with respect
to the Company. Seller shall prepare and file the returns for, be responsible
for the payment of, indemnify and hold Buyer and the Company harmless from, and
be entitled to any refund of any federal and state income taxes resulting from
that election (and any corresponding election under state law). Buyer and
Seller shall execute IRS Form 8023-A (or any applicable successor form) prior
to or at Closing. Seller shall retain custody of such form, and all required
attachments thereto, and shall file such form with the appropriate office(s) of
the IRS. Promptly after such filing, Seller shall provide a photocopy of the
form (including all attachments) as filed to Buyer. The parties acknowledge
that the effect of such election will be to cause the Company to be treated as
two corporations for federal income tax purposes: (i) an "old" corporation,
which shall be treated (a) as having sold all of its assets in a taxable
transaction as of the Effective
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Time of Closing on the Closing Date while a member of the Seller's affiliated
group, and (b) as having completely liquidated pursuant to Sections 332 and 337
of the Code by distributing the Final Purchase Price to Seller; and (ii) a
"new" corporation, which shall be treated as having purchased (as of the
beginning of the day after the Closing Date) the assets deemed sold by the old
corporation. The parties intend for such election to be effective, if possible,
for state (as well as federal) income tax purposes, and they shall timely
execute and file any documents that may be required under any applicable state
law, rule or regulation for such election (or any corresponding election under
state law, rule or regulation) to be effective for state income tax purposes.
Buyer and Seller shall cooperate as provided herein in determining
the deemed sales prices of the assets of the Company for purposes of Section
338(a)(1) of the Code in accordance with all applicable Treasury Regulations
promulgated under Section 338 of the Code. Buyer initially shall determine such
deemed sales prices and shall notify Seller in writing of the prices so
determined ("Buyer's Deemed Sales Price Notice") within 90 days after the
Closing Date. Seller shall be deemed to have accepted such determination
unless, within 60 days after the date of Buyer's Deemed Sales Price Notice,
Seller notifies Buyer in writing of (i) each proposed deemed sales price with
which Seller disagrees, and (ii) for each such price, the amount that Seller
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proposes as the deemed sales price. If Seller provides such notice to Buyer,
the parties shall proceed in good faith to determine mutually the deemed sales
prices in dispute. Neither Buyer nor Seller shall take, nor shall they permit
any affiliated corporation (including, without limitation, the Company) to
take, any position for income tax purposes that is inconsistent with the deemed
sales prices as finally determined hereunder; provided, however, that the
deemed purchase prices of the assets shall differ from the deemed sales prices
to the extent necessary to reflect the inclusion in the total deemed purchase
price of items (for example, Buyer's capitalized acquisition costs in addition
to the Final Purchase Price) not included in the total deemed sales price.
(d) Cooperation. Buyer agrees to cooperate and to cause the
Company to cooperate with Seller to the extent reasonably required after the
Closing Date in connection with (i) the filing, amendment, preparation and
execution of all federal and state income tax returns and documents with
respect to any taxable period of the Company ending on or before the Closing
Date, (ii) contests concerning the federal or state income tax due for any such
period and (iii) audits and other proceedings conducted by income tax
authorities with respect to any such period. Within a reasonable time (but not
more than 10 days) after Buyer or the Company receives official notice of any
such contest, audit or other proceeding, Buyer shall notify or cause
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the Company to notify Seller in writing of such contest, audit or other
proceeding. In any case where the Company is responsible under applicable Law
for the defense of such contest, audit or other proceeding, Seller shall have
the right to conduct the defense at its expense, whether such contest, audit or
other proceeding commenced before or commences after the Closing.
Notwithstanding Seller's obligations under the preceding provisions of this
Section 8.4, Seller shall have no obligation to pay or to indemnify or hold
Buyer or the Company harmless from any tax imposed or assessed as a result of
(i) the failure of Buyer or the Company to notify Seller as required by this
paragraph, if such failure adversely affects Seller's ability to respond
adequately in a timely manner to the notice of contest, audit or other
proceeding, or (ii) any action taken by Buyer or the Company with respect to
any contest, audit or other proceeding without Seller's written consent. The
amount of any income tax indemnification otherwise payable by Seller under this
Agreement shall be reduced by the amount or, in the case of a tax benefit to be
realized subsequently, the then-present value of any federal or state income
tax benefit to Buyer or the Company resulting from any adjustment to or change
in any tax item relating to the Company for any taxable period ending before or
including the Closing Date. Such present value shall be based on a discount
rate of six percent per annum.
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Seller agrees to make available to Buyer and the Company records
in the custody of Seller or of any member of the Seller's affiliated group, to
furnish other information and otherwise to cooperate to the extent reasonably
required for the filing of federal and state income tax returns and other
documents relating to the Company for any taxable period ending after the
Closing Date. However, no loss, credit or other item of the Company may be
carried back without Seller's written consent, which Seller may withhold in its
sole and absolute discretion, to a taxable period for which the Company and
Seller or any corporation affiliated with Seller filed a consolidated, unitary
or combined return.
Seller agrees to cooperate with Buyer, and Buyer agrees to
cooperate (and cause the Company to cooperate) with Seller, to the extent
necessary in connection with the filing of any information return or similar
document relating to the Buyer's acquisition of the Company.
(d) Payment of Accrued Income Taxes. Seller has the right to
receive from the Company accrued but unpaid federal and state income taxes for
taxable periods ending on or before the Closing Date. If funds for any such
taxes have not been paid by the Company to Seller before Closing, such funds
shall be payable (and Buyer shall cause such funds to be paid) upon Seller's
demand to the extent such taxes are reflected as a liability on the Final
Balance Sheet.
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(e) Taxes to Include Interest, Etc. For purposes of this Section
8.4, the term "tax" or "taxes" includes any addition to tax, interest and
penalty imposed with respect to the tax or taxes. Thus, for example, any
obligation to hold a party harmless from federal income tax for a taxable
period includes the obligation to hold the party harmless from any addition to
tax, interest or penalty imposed with respect to such federal income tax.
(f) Termination of Tax-Sharing Agreement. After the Closing, this
Section 8.4 shall supersede any and all tax-sharing or similar agreements to
which (i) the Company, and (ii) Seller or any corporation affiliated with
Seller are parties. Neither the Company, Seller nor any such affiliated
corporation shall have any obligation or right with respect to each other under
any such prior agreement after the Closing.
(g) Relationship of Section 8.4 to Sections 8.1 and 8.2. Any
conditions or limitations set forth in Section 8.1 or 8.2 with respect to
amount of claims or liability shall not apply to any claim or liability to
which this Section 8.4 applies or relating to any breach of any obligation
under this Section 8.4. In the event of any inconsistency between provisions of
Section 8.1 or 8.2 and Section 8.4, this Section 8.4 shall control.
8.5 Indemnity Amounts to be Computed on After-Tax Basis. The amount of
any indemnification payable under any of the
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provisions of this Article VIII shall be (i) net of any federal or state income
tax benefit realized or the then-present value (based on a discount rate of six
percent) of any such income tax benefit to be realized by the indemnified party
(or, where Buyer is the indemnified party, the Company) by reason of the facts
and circumstances giving rise to the indemnification, and (ii) increased by the
amount of any federal or state income tax required to be paid by the
indemnified party on the accrual or receipt of the indemnification payment. For
purposes of the preceding sentence, the amount of any state income tax benefit
or cost shall take into account the federal income tax effect of such benefit
or cost.
8.6 Records. Buyer shall cause the Company to preserve and keep, free
of charge, all original books, papers and records of the Company relating to
periods prior to the Closing Date for a period of no less than seven years
following the Closing Date. Buyer agrees to permit Seller and its attorneys,
accountants, agents and designees access to such books, papers and records from
and after the Closing Date for all reasonable purposes. Any such examination
shall be at the expense of Seller, shall be performed at the place where such
books, papers and records are regularly maintained and shall not interfere
unreasonably with Buyer's normal business activities. Buyer shall notify Seller
at any time that it intends to destroy any or all of such books, papers and
records, and Seller shall have the right to review and
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remove at Seller's expense any of such books, papers and records. The foregoing
provisions of this Section 8.6 shall apply as well to books, papers and records
of Seller to the extent they relate to periods prior to the Closing Date and
are needed by Buyer or the Company in connection with tax returns of Buyer or
the Company.
8.7 No Use of Name. Buyer agrees that without Seller's consent, it
will not, nor will it permit the Company after the Closing Date to, make any
use of the names "Chesapeake Corporation" or "Chesapeake Consumer Products
Company", the word "Chesapeake" or the "rolling C" logo, or any variation
thereof in any manner; provided, that for up to one year following the Closing
Date, the Company may sell in the ordinary course of its business any Inventory
bearing any of such marks as of the Effective Time of Closing; and provided
further, that Buyer and the Company shall indemnify and hold Seller harmless
for any Losses suffered by Seller that are directly attributable to such use.
ARTICLE IX
----------
TERMINATION
-----------
9.1 Termination. Time is of the essence of this Agreement. This
Agreement may be terminated and the transactions contemplated hereby may be
abandoned as follows: (a) at any time prior to the Closing Date by mutual
written agreement of Seller and
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Buyer; or (b) by Buyer on the Closing Date if any of the conditions set forth
in Article VI of this Agreement shall not have been fulfilled by the Closing
Date; or (c) by Seller at any time on or after December 1, 1995, if Buyer has
not provided Seller with assurances, in form satisfactory to Seller in its sole
discretion, from reputable financial institutions to provide the financing
contemplated in Section 6.10 hereof (subject only to customary, commercially
reasonable conditions to closing), or if Buyer has not made the Deposit
contemplated by Section 2.2(a) hereof; or (d) by Seller on the Closing Date if
any of the conditions set forth in Article VII of this Agreement shall not have
been fulfilled by the Closing Date; or (e) by Seller or Buyer on December 31,
1995, if by that date, despite substantial adherence to the terms of this
Agreement by Seller and Buyer, substantial progress toward Closing has not been
made.
9.2 Rights on Termination; Deposit; Waiver. (a) If this Agreement is
terminated pursuant to Section 9.1, all further obligations of the parties
under or pursuant to this Agreement shall terminate without further liability
of either party to the other, except as otherwise provided in Section 9.2(b)
hereof; provided, that Buyer's obligations contained in Section 5.9 of this
Agreement shall survive any such termination.
(b) In the event this Agreement is terminated as a result of (i)
the failure to satisfy the conditions precedent to Closing set forth in Article
VII of this Agreement (excluding
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Sections 7.3 and 7.6 thereof), or (ii) Buyer's failure to obtain the financing
referred to in Section 6.10 hereof, if such failure is attributable to (A) a
material adverse change in the business, financial condition, results of
operations or prospects of Buyer or its Affiliates, or (B) Buyer's
unwillingness to close such financing notwithstanding the lender(s) willingness
to close, then Seller shall be entitled to retain the Deposit as liquidated
damages (it being understood that the parties have agreed that the actual
damages suffered by Seller upon any such termination of the Agreement would be
difficult or impossible to ascertain, and that the amount of the Deposit is a
reasonable approximation thereof in light of the circumstances). In the event
this Agreement is terminated for any other reason, Seller shall promptly repay
the Deposit to Buyer.
(c) If any of the conditions set forth in Article VI of this
Agreement have not been satisfied, Buyer may nevertheless elect to waive such
conditions and proceed with the consummation of the transactions contemplated
hereby. If any of the conditions set forth in Article VII of this Agreement
have not been satisfied, Seller may nevertheless elect to waive such conditions
and proceed with the consummation of the transactions contemplated hereby.
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ARTICLE X
---------
MISCELLANEOUS
-------------
10.1 Entire Agreement; Amendment. Except as set forth in Section 5.9
hereof, this Agreement and the documents referred to herein and to be delivered
pursuant hereto constitute the entire agreement between the parties pertaining
to the subject matter hereof, and supersede all prior and contemporaneous
agreements, understandings, negotiations and discussions of the parties,
whether oral or written, and there are no warranties, representations or other
agreements between the parties in connection with the subject matter hereof,
except as specifically set forth herein or therein. No amendment, supplement,
modification, waiver or termination of, and no election under, this Agreement
shall be binding unless executed in writing by the party to be bound thereby.
No waiver of any of the provisions of this Agreement shall be deemed or shall
constitute a waiver of any other provision of this Agreement, whether or not
similar, nor shall such waiver constitute a continuing waiver unless otherwise
expressly provided. The representations and warranties of each party hereto
shall be deemed to be material and to have been relied upon by the other party,
notwithstanding any investigation heretofore or hereafter made by the other
party.
10.2 Expenses. Whether or not the transactions contemplated by this
Agreement are consummated, each of the parties hereto shall pay the fees and
expenses of their respective
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counsel, accountants and other experts and the other expenses incident to the
negotiation and preparation of this Agreement and consummation of the
transactions contemplated hereby.
10.3 Governing Law. This Agreement shall be construed and interpreted
according to the laws of the Commonwealth of Virginia, without regard to the
conflicts of law rules thereof.
10.4 Assignment. This Agreement and each party's respective rights
hereunder may not be assigned at any time except as expressly set forth herein
without the prior written consent of the other party.
10.5 Notices. All communications, notices and disclosures required or
permitted by this Agreement shall be in writing and shall be deemed to have
been given when delivered personally or by messenger or by overnight delivery
service, or three days after the date when mailed by registered or certified
United States mail, postage prepaid, return receipt requested, or when received
via telecopy, telex or other electronic transmission, in all cases addressed to
the person for whom it is intended at his address set forth below or to such
other address as a party shall have designated by notice in writing to the
other party in the manner provided by this Section:
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If to Seller: Chesapeake Corporation
0 Xxxxx Xxxxxx, 00xx Xxxxx
0000 Xxxx Xxxx Xxxxxx
X.X. Xxx 0000
Xxxxxxxx, Xxxxxxxx 00000-0000
Attention: X. Xxxxxx Xxx, Chairman &
Chief Executive Officer
With a copy to: Chesapeake Corporation
0 Xxxxx Xxxxxx, 00xx Xxxxx
0000 Xxxx Xxxx Xxxxxx
X.X. Xxx 0000
Xxxxxxxx, Xxxxxxxx 00000-0000
Attention: X.X. Xxxxxx Xx., Esq.,
Senior Vice President,
Secretary & General Counsel
If to Buyer: The Xxxxx Group, Inc.
00 Xxxxx Xxxxxx Xxxxxx
Xx. Xxxxxx, Xxxxxxx 00000
Attention: Xxxxxx Xxxxx
Executive Vice President
With a copy to: The Xxxxx Group, Inc.
000 Xxxxxxx Xxxxxx
Xxxxxxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxxxx, Esq.
General Counsel
10.6 Counterparts; Headings. This Agreement may be executed in several
counterparts, each of which shall be deemed an original, but such counterparts
shall together constitute but one and the same Agreement. The Table of Contents
and Article and Section headings in this Agreement are inserted for convenience
of reference only and shall not constitute a part hereof.
10.7 Interpretation. Unless the context requires otherwise, all words
used in this Agreement in the singular
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number shall extend to and include the plural, all words in the plural number
shall extend to and include the singular and all words in any gender shall
extend to and include all genders. All references to contracts, agreements,
leases, Employee Benefit Plans or other understandings or arrangements shall
refer to oral as well as written matters.
10.8 Severability. If any provision, clause or part of this Agreement,
or the application thereof under certain circumstances, is held invalid, the
remainder of this Agreement, or the application of such provision, clause or
part under other circumstances, shall not be affected thereby.
10.9 Specific Performance. The parties hereto agree that irreparable
damage would occur in the event any of the prov s ons of this Agreement were
not performed in accordance with the terms hereof and that the parties shall be
entitled to specific performance of the terms hereof, in addition to any other
remedy at law or equity.
10.10 No Reliance. No third party is entitled to rely on any of the
representations, warranties and agreements contained in this Agreement. Buyer
and Seller assume no liability to any third party because of any reliance on
the representations, warranties and agreements of Buyer and Seller contained in
this Agreement.
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IN WITNESS WHEREOF, the parties have caused this Stock Purchase
Agreement to be duly executed as of the day and year first above written.
CHESAPEAKE CORPORATION
By: /s/
-------------------------------
Its: Group VP & CFO
------------------------------
THE XXXXX GROUP, INC.
By: /s/ Xxxxxx Xxxxx
-------------------------------
Its: Exec. VP, COO
------------------------------
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