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EXECUTION COPY AGREEMENT AND PLAN OF MERGER by and among BERRY
PLASTICS CORPORATION, BERRY PLASTICS ACQUISITION CORPORATION IV,
LANDIS PLASTICS, INC. and THE PARTIES LISTED ON THE SIGNATURE PAGE
HERETO Dated as of October 15, 2003 TABLE OF CONTENTS +ADw-/p+AD4-
+ADw-table class+AD0-MsoNormalTable border+AD0-0 cellpadding+AD0-0
style+AD0-'mso-cellspacing:1.5pt+ADs- mso-padding-alt:0in 0in 0in
0in'+AD4- +ADw-tr+AD4- +ADw-td style+AD0-'padding:.75pt .75pt .75pt
.75pt'+AD4- +ADw-p class+AD0-MsoNormal align+AD0-center
style+AD0-'text-align:center'+AD4-PAGE ---- +ADw-s+AD4-ARTICLE I
DEFINITIONS.............................................................................................1
1.1
Definitions...........................................................................................1
ARTICLE II PURCHASE AND SALE OF
BUSINESS.........................................................................14
2.1 The
Merger...........................................................................................14
2.2 Effective
Time.......................................................................................14
2.3 Certificate of Incorporation and
Bylaws..............................................................14
2.4 Directors and Officers of the Surviving
Corporation..................................................15 2.5
Effects of the
Merger................................................................................15
2.6 Subsequent
Actions...................................................................................15
2.7 Purchase and Sale of Transferred Real
Properties.....................................................16
2.8 Payments at
Closing..................................................................................16
2.9 Working Capital
Adjustment...........................................................................16
ARTICLE III
CLOSING..............................................................................................19
3.1 Closing
Date.........................................................................................19
3.2 Payment of Per Share Merger
Consideration............................................................19
3.3 Buyer's and Sub's
Deliveries.........................................................................19
3.4 The Company's and Shareholders'
Deliveries...........................................................20
3.5 Stock Transfer
Books.................................................................................21
ARTICLE IV REPRESENTATIONS AND WARRANTIES REGARDING THE
SHAREHOLDERS............................................22 4.1
Authority of
Shareholder.............................................................................22
4.2 Ownership of Company
Securities......................................................................22
4.3 Consents and Approvals+ADs- No
Violations................................................................22
4.4 No
Finder............................................................................................23
4.5
Insolvency...........................................................................................23
ARTICLE V REPRESENTATIONS AND WARRANTIES REGARDING THE
COMPANY..................................................23 5.1
Organization of the
Company..........................................................................24
5.2 Subsidiaries and
Investments.........................................................................24
5.3 Authority of the
Company.............................................................................24
5.4
Capitalization.......................................................................................25
5.5 Shareholders of the
Company..........................................................................25
5.6
Records..............................................................................................26
5.7 Financial
Statements.................................................................................26
5.8 Company
Debt.........................................................................................26
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style+AD0-'padding:.75pt .75pt .75pt .75pt'+AD4- +ADw-p
class+AD0-MsoNormal+AD4APA-s+AD4-5.9 Operations Since the Balance
Sheet
Date..............................................................26
5.10 No Undisclosed
Liabilities...........................................................................26
5.11
Inventories..........................................................................................27
5.12 Receivables and
Payables.............................................................................27
5.13 Compliance with Laws and Governmental
Permits........................................................27
5.14
Assets...............................................................................................28
5.15 Personal Property
Leases.............................................................................28
5.16 Intellectual
Property................................................................................28
5.17 Real Property and Real Property
Leases...............................................................30
5.18 Employees and Related Agreements+ADs-
ERISA..............................................................31
5.19 Labor and Employment
Matters.........................................................................33
5.20
Insurance............................................................................................34
5.21
Contracts............................................................................................35
5.22
Taxes................................................................................................36
5.23 Litigation or Regulatory
Action......................................................................37
5.24 Environmental and Health/Safety
Matters..............................................................37
5.25 Product Warranty and Product
Liability...............................................................38
5.26 Bank
Accounts........................................................................................39
5.27 Customers and
Suppliers..............................................................................39
5.28
Disclosure...........................................................................................40
5.29 No
Finder............................................................................................40
ARTICLE VI REPRESENTATIONS AND WARRANTIES OF BUYER AND
SUB.......................................................41 6.1
Organization of Buyer and
Sub........................................................................41
6.2 Authority of
Buyer...................................................................................41
6.3 Securities Laws
Representations......................................................................42
6.4 Available
Funds......................................................................................42
6.5
Litigation...........................................................................................42
6.6 No
Finder............................................................................................43
6.7 No
Activities........................................................................................43
ARTICLE VII CONDUCT OF BUSINESS PENDING THE
CLOSING..............................................................43
7.1 Investigation of the Business by
Buyer...............................................................43
7.2 Preserve Accuracy of Representations and
Warranties..................................................43 7.3
Governmental
Approvals...............................................................................44
7.4 Operations Prior to the Closing
Date.................................................................44
7.5 No
Solicitations.....................................................................................47
7.6 Notification of Changes+ADs- Disclosure Schedule
Update..................................................48 7.7
Further
Assurances...................................................................................48
7.8 Antitrust Law
Compliance.............................................................................49
7.9 Transfer of Transferred Real
Properties..............................................................49
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style+AD0-'padding:.75pt .75pt .75pt .75pt'+AD4- +ADw-p
class+AD0-MsoNormal+AD4APA-s+AD4-7.10 Title and Survey Matters,
Title
Commitments..........................................................49
7.11
Leases...............................................................................................50
7.12 Excluded
Assets......................................................................................50
7.13 Monticello Environmental
Permits.....................................................................50
7.14
Financing............................................................................................50
7.15 FIRPTA
Certificate...................................................................................51
7.16
Transfer.............................................................................................51
7.17 Owned Real
Properties................................................................................51
7.18 Shareholder
Approval.................................................................................51
7.19 Plas-Tool
License....................................................................................51
ARTICLE VIII ADDITIONAL
AGREEMENTS...............................................................................52
8.1 Transfer
Taxes.......................................................................................52
8.2 Tax
Matters..........................................................................................52
8.3 WARN
Act.............................................................................................55
8.4
Confidentiality......................................................................................55
8.5 Prohibited
Marks.....................................................................................55
8.6 Appointment of Shareholder
Representative............................................................56
8.7 Severance
Costs......................................................................................56
ARTICLE IX CONDITIONS TO THE OBLIGATIONS OF BUYER AND
SUB........................................................57 9.1
No Misrepresentation or Breach of Covenants and
Warranties...........................................57 9.2 No
Restraint of
Litigation...........................................................................57
9.3 Necessary
Consents...................................................................................57
9.4 Purchase of Transferred Real
Properties..............................................................57
9.5
Documents............................................................................................58
9.6
Funding..............................................................................................58
9.7 Non-Competition
Agreements...........................................................................58
9.8 Related Party
Agreements.............................................................................58
ARTICLE X CONDITIONS PRECEDENT TO OBLIGATIONS OF THE COMPANY AND
SHAREHOLDERS....................................58 10.1 No
Misrepresentation or Breach of Covenants and
Warranties...........................................58 10.2 No
Restraint or
Litigation...........................................................................58
10.3 Purchase of Transferred Real
Properties..............................................................58
10.4
Documents............................................................................................59
ARTICLE XI
INDEMNIFICATION.......................................................................................59
11.1 Indemnification for Company
Matters..................................................................59
11.2 Indemnification for Shareholder
Matters..............................................................61
11.3 Indemnification for Solvay Environmental
Matters.....................................................62 11.4
Indemnification by
Buyer.............................................................................63
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style+AD0-'padding:.75pt .75pt .75pt .75pt'+AD4- +ADw-p
class+AD0-MsoNormal+AD4APA-s+AD4-11.5 Notice of
Claims.....................................................................................63
11.6 Third Party
Claims...................................................................................64
11.7 Exclusivity of
Indemnification.......................................................................65
11.8 Knowledge of
Breach..................................................................................65
ARTICLE XII
TERMINATION..........................................................................................66
12.1
Termination..........................................................................................66
12.2 Notice of
Termination................................................................................67
12.3 Effect of
Termination................................................................................67
ARTICLE XIII GENERAL
PROVISIONS..................................................................................67
13.1 Survival of
Obligations..............................................................................67
13.2 Confidential Nature of
Information...................................................................67
13.3 No Public
Announcement...............................................................................67
13.4
Notices..............................................................................................68
13.5 Successors and
Assigns...............................................................................69
13.6 Entire Agreement+ADs-
Amendments.........................................................................69
13.7
Interpretation.......................................................................................70
13.8
Waivers..............................................................................................70
13.9
Expenses.............................................................................................70
13.10 Partial
Invalidity...................................................................................70
13.11 Execution in
Counterparts............................................................................70
13.12 Specific
Performance.................................................................................71
13.13 Governing
Law........................................................................................71
13.14 Submission to
Jurisdiction...........................................................................71
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style+AD0-'padding:.75pt .75pt .75pt .75pt'+AD4- +ADw-p
class+AD0-MsoNormal+AD4APA-s+AD4-Exhibit A Bridge Financing
Commitment Letter Exhibit B Escrow Agreement Exhibit C
Non-Competition Agreement Exhibit D Shareholders Representative
Agreement Exhibit E-1 Certificate of Incorporation of Surviving
Corporation Exhibit E-2 By-laws of Surviving Corporation Exhibit F
Real Estate Purchase Agreement Exhibit G Transition Lease Exhibit H
Shop Lease Exhibit I Equity Commitment Letters Exhibit J Lease
Termination Agreement +ADw-/s+AD4APA-/p+AD4- +ADw-/td+AD4-
+ADw-/tr+AD4- +ADw-/table+AD4- +ADw-p class+AD0-MsoNormal+AD4--v-
AGREEMENT AND PLAN OF MERGER This Agreement and Plan of Merger (the
+ACY-quot+ADs-AGREEMENT+ACY-quot+ADs-) is entered into effective as
of October 15, 2003, by and among Berry Plastics Corporation, a
Delaware corporation (+ACY-quot+ADs-BUYER+ACY-quot+ADs-), Berry
Plastics Acquisition Corporation IV, a Delaware corporation
(+ACY-quot+ADs-SUB+ACY-quot+ADs-), Landis Plastics, Inc., an
Illinois corporation (the +ACY-quot+ADs-COMPANY+ACY-quot+ADs-), all
of the shareholders of the Company as set forth on the signature
page hereto (collectively the
+ACY-quot+ADs-SHAREHOLDERS,+ACY-quot+ADs- and individually, a
+ACY-quot+ADs-SHAREHOLDER+ACY-quot+ADs-), the Real Estate Sellers
(as defined below) and Gregory J. Landis, as the Shareholder
Representative (as defined below). RECITALS A. The Company is
engaged in the business of manufacturing plastic containers and
lids for yogurt, cultured dairy, margarine and certain other food
products, as well as other industrial purposes (the
+ACY-quot+ADs-BUSINESS+ACY-quot+ADs-)+ADs- B. The Shareholders own,
and until the Closing (as defined herein) will own, all of the
issued and outstanding shares of capital stock of the Company (the
+ACY-quot+ADs-COMPANY SECURITIES+ACY-quot+ADs-)+ADs- C. The Board
of Directors of each of Buyer, Sub and the Company has approved,
and deems it advisable and in the best interests of its
stockholders to consummate, the acquisition of the Company by
Buyer, which acquisition is to be effected by the merger of Sub
with and into the Company, with the Company being the surviving
entity (the +ACY-quot+ADs-MERGER+ACY-quot+ADs-), upon the terms and
subject to the conditions set forth in this Agreement+ADs- and D.
As a condition to the Merger, Buyer shall (or shall cause its
designee to) purchase, and the Real Estate Sellers shall sell,
certain real property containing certain of the Company's operation
facilities currently leased by the Company from such Affiliates.
NOW, THEREFORE, in consideration of the mutual representations,
warranties, covenants and agreements contained herein, it is hereby
agreed among the parties hereto as follows: ARTICLE I DEFINITIONS
1.1 Definitions. In this Agreement, the following terms have the
meanings specified or referred to in this Section 1.1 and such
meanings shall be equally applicable to both the singular and
plural forms. Any agreement referred to below shall mean such
agreement as amended, supplemented and modified from time to time
to the extent permitted by the applicable provisions thereof and by
this Agreement. +ACY-quot+ADs-AFFILIATE+ACY-quot+ADs- means, with
respect to any Person, any other Person which, directly or
indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with, such Person.
+ACY-quot+ADs-AGGREGATE PURCHASE PRICE+ACY-quot+ADs- means the
Total Enterprise Value, less the Funded Obligations as of the
Closing, less the Transaction Costs. As of the Closing, the Company
shall furnish to Buyer a schedule (the +ACY-quot+ADs-FUNDED
OBLIGATIONS SCHEDULE+ACY-quot+ADs-) setting forth the amount of
each component of Funded Obligations (i.e., Funded Indebtedness,
Capital Lease Amount, Related Party Receivable Amount and Unused
Cap Ex Amount) and as of the Closing, the amount of Transaction
Costs and setting forth in reasonable detail the basis for such
amounts. +ACY-quot+ADs-ANTITRUST IMPROVEMENTS ACT+ACY-quot+ADs-
means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended, and the rules and regulations promulgated thereunder.
+ACY-quot+ADs-BALANCE SHEET+ACY-quot+ADs- means the audited balance
sheet of the Company as of December 31, 2002 included in Schedule
5.7. +ACY-quot+ADs-BALANCE SHEET DATE+ACY-quot+ADs- means December
31, 2002. +ACY-quot+ADs-BANK ONE+ACY-quot+ADs- means Bank One,
N.A., a national banking association. +ACY-quot+ADs-BANK ONE
INDEBTEDNESS AMOUNT+ACY-quot+ADs- means the amount, as of the
Closing, necessary to pay off in full and extinguish all loans,
advances, indebtedness, obligations, fees, penalties and
liabilities of the Company owed under the Bank One Loan Documents.
+ACY-quot+ADs-BANK ONE LOAN DOCUMENTS+ACY-quot+ADs- means that
certain Second Amended and Restated Loan Agreement dated March 28,
2001, as amended, by and between the Company and American National
Bank and Trust Company of Chicago (which was subsequently acquired
by Bank One who is the successor-in-interest to the Bank One Loan
Documents) and all other documents relating thereto.
+ACY-quot+ADs-BASIS+ACY-quot+ADs- means any past or present fact,
situation, circumstance, status, condition, activity, practice,
plan, occurrence, event, incidence, action, failure to act, or
transaction that forms or is reasonably likely to form the basis
for any specified consequence. +ACY-quot+ADs-BRIDGE
FINANCING+ACY-quot+ADs- means the financing contemplated by the
Commitment Letter dated as of the date hereof and the term sheet
attached thereto, a copy of which is attached hereto as Exhibit A.
+ACY-quot+ADs-BUSINESS DAY+ACY-quot+ADs- means a day other than
Saturday, Sunday or any day on which the principal commercial banks
located in the State of Illinois are authorized or obligated to
close under the laws of such state. +ACY-quot+ADs-BUYER ANCILLARY
AGREEMENTS+ACY-quot+ADs- means all agreements, instruments, and
documents being or to be executed and delivered by Buyer or its
Affiliates under this Agreement or in connection herewith,
including each Real Estate Purchase Agreement and the Buyer Funding
Documents. -2- +ACY-quot+ADs-BUYER FUNDING DOCUMENTS+ACY-quot+ADs-
means all of the agreements, notes, certificates, instruments, and
other documents being or to be executed and delivered by Buyer or
its Affiliates necessary to effect the Financing contemplated by
the Commitment Letters. +ACY-quot+ADs-CAPITAL LEASE+ACY-quot+ADs-
means a lease of property by the Company which, in conformity with
GAAP, is required to be accounted for as a capital lease.
+ACY-quot+ADs-CAPITAL LEASE AMOUNT+ACY-quot+ADs- means the
aggregate amount required to be accounted for as Capital Leases in
accordance with GAAP as of the Closing. +ACY-quot+ADs-CHICAGO RIDGE
CORPORATE OFFICE+ACY-quot+ADs- means that real property located at
10800 South Central Avenue, Chicago Ridge, Illinois 60415.
+ACY-quot+ADs-CHICAGO RIDGE TOOL SHOP+ACY-quot+ADs- means the real
property located at 5632 Pleasant Boulevard, Chicago Ridge,
Illinois 60415. +ACY-quot+ADs-CODE+ACY-quot+ADs- means the Internal
Revenue Code of 1986, as amended. +ACY-quot+ADs-COMPANY ANCILLARY
AGREEMENTS+ACY-quot+ADs- means all agreements, instruments, and
documents being or to be executed and delivered by the Company
under this Agreement or in connection herewith.
+ACY-quot+ADs-COMPANY ASSETS+ACY-quot+ADs- means all of the
properties and assets of the Company, other than the Leased Assets,
whether personal, real or mixed, tangible or intangible, wherever
located. +ACY-quot+ADs-COMPANY BENEFIT PLAN+ACY-quot+ADs- means
each plan, program, contract, agreement or other arrangement
providing for compensation, severance, termination pay, retirement
benefits, performance awards, stock or stock-related awards, fringe
benefits or other employee benefits of any kind, whether formal or
informal, funded or unfunded, written or oral, including, without
limitation, each +ACY-quot+ADs-employee benefit plan,+ACY-quot+ADs-
within the meaning of Section 3(3) of ERISA (other than an Employee
Agreement) which is now or previously has been sponsored,
maintained, contributed to, or required to be contributed to, by
the Company for the benefit of any Employee, or pursuant to which
the Company has any liability, contingent or otherwise.
+ACY-quot+ADs-COMPANY INTELLECTUAL PROPERTY+ACY-quot+ADs- means all
Intellectual Property that is currently used or has been used in
the Business as presently conducted. +ACY-quot+ADs-CONFIDENTIAL
INFORMATION+ACY-quot+ADs- means all information (whether or not
reduced to written, electronic, magnetic or other tangible form)
acquired by the Company or any Shareholder, concerning the
products, services, projects, activities, business or affairs of
the Company or its customers or suppliers, including (a) all
information concerning Company Intellectual Property, including
computer programs, system documentation, special hardware, product
hardware, related software development, manuals, formulae,
processes, methods, machines, compositions, -3- ideas, improvements
or inventions, (b) all sales and financial information, (c) all
independent contractor, client, customer and supplier lists, (d)
all information concerning services, clients, customers, cases,
projects or marketing plans for any of those services, clients,
customers, cases or projects, and (e) all information relating to
the transactions contemplated by this Agreement, including the
terms and conditions hereof. Notwithstanding the foregoing, the
term Confidential Information shall not include information that is
generally available to the public or becomes generally available to
the public other than as a result of a breach of Section 8.4.
+ACY-quot+ADs-CONFIDENTIALITY AGREEMENT+ACY-quot+ADs- means the
Confidentiality Agreement between Buyer and the Company.
+ACY-quot+ADs-CONTRACT+ACY-quot+ADs- means any contract, agreement,
commitment, undertaking or arrangement (whether written or oral).
+ACY-quot+ADs-COURT ORDER+ACY-quot+ADs- means any judgment, order,
award or decree of any federal, state, local or other court or
tribunal and any award in any arbitration proceeding.
+ACY-quot+ADs-DE MINIMIS LOSSES+ACY-quot+ADs- means any Losses
resulting from a single set of facts and circumstances that do not
exceed +ACQ-50,000 in the aggregate.
+ACY-quot+ADs-DGCL+ACY-quot+ADs- means the General Corporation Law
of the State of Delaware. +ACY-quot+ADs-DROP DEAD
DATE+ACY-quot+ADs- means January 15, 2004.
+ACY-quot+ADs-EMPLOYEE+ACY-quot+ADs- means each current, former, or
retired employee, officer, consultant, independent contractor,
agent or director of the Company. +ACY-quot+ADs-EMPLOYEE
AGREEMENT+ACY-quot+ADs- means each management, employment, bonus,
loan or other extension of credit, change in control, retention,
severance, consulting, non-compete, confidentiality, or similar
agreement or contract between the Company and any Employee pursuant
to which the Company has any liability, contingent or otherwise.
+ACY-quot+ADs-ENCUMBRANCE+ACY-quot+ADs- means any encumbrance,
lien, claim, charge, security interest, mortgage, pledge, easement,
conditional sale or other title retention agreement, defect in
title, covenant, option, proxy, voting trust, voting agreement or
other restriction of any kind. +ACY-quot+ADs-ENVIRONMENTAL
LAW+ACY-quot+ADs- means all Requirements of Law derived from or
relating to the environment, health or safety, including but not
limited to, the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended by the Superfund Amendment
and Reauthorization Act of 1986, 42 U.S.C.Section 9601, et
seq.+ADs- the Solid Waste Disposal Act, as amended by the Resource
Conservation and Recovery Act of 1976 and subsequent Hazardous and
Solid Waste Amendments of 1984, 42 U.S.C.Section 6901 et seq.
(+ACY-quot+ADs-SARA+ACY-quot+ADs-) (hereinafter, collectively
+ACY-quot+ADs-RCRA+ACY-quot+ADs-)+ADs- the Hazardous Materials
Transportation Act, as amended, 49 U.S.C. -4- Section 1801, et
seq.+ADs- the Clean Water Act, as amended, 33 U.S.C.Section 1311,
et seq.+ADs- the Clean Air Act, as amended (42 U.S.C.Section
7401-7642)+ADs- Toxic SubstanceS COntrol Act, as amended, 15
U.S.C.Section 2601 et seq.+ADs- the Federal Insecticide, Fungicide,
and Rodenticide Act as amended, 7 U.S.C.Section 136-136y+ADs- the
Emergency Planning and Community Right-to-Know Act of 1986 as
amended, 42 U.S.C.Section 11001, et seq. (Title III of SARA)+ADs-
THE Occupational Safety and Health Act of 1970, as amended, 29
U.S.C.Section 651, et seq. +ACY-quot+ADs-ERISA+ACY-quot+ADs- means
the Employee Retirement Income Security Act of 1974, as amended.
+ACY-quot+ADs-ESCROW ACCOUNT,+ACY-quot+ADs- +ACY-quot+ADs-ESCROW
AGENT+ACY-quot+ADs- and +ACY-quot+ADs-ESCROW
AGREEMENT+ACY-quot+ADs- have the meanings set forth under the
definition of +ACY-quot+ADs-Holdback Amount.+ACY-quot+ADs-
+ACY-quot+ADs-EXPENSES+ACY-quot+ADs- means any and all reasonable
expenses incurred in connection with investigating, defending or
asserting any claim, action, suit or proceeding incident to any
matter indemnified against hereunder (including, without
limitation, court filing fees, court costs, arbitration fees or
costs, witness fees, and reasonable fees and disbursements of legal
counsel (whether such legal fees and disbursements are incurred in
connection with a claim against a party hereto or in connection
with a Third Party Claim), investigators, expert witnesses,
consultants, accountants and other professionals).
+ACY-quot+ADs-FIRST ESCROW RELEASE DATE+ACY-quot+ADs- means the 10
month anniversary of the Closing Date, on which the amount equal to
(a) fifty percent (50+ACU-) of the Indemnification Holdback Amount
less (b) the sum of (i) the Reserved Amount and (ii) any
indemnification payments previously made to any Buyer Indemnitee
pursuant to Sections 8.2, 11.1 and 11.2 hereof shall be released
(such amount, the +ACY-quot+ADs-FIRST ESCROW RELEASE
AMOUNT+ACY-quot+ADs-). +ACY-quot+ADs-FIRST SOLVAY ENVIRONMENTAL
ESCROW RELEASE DATE+ACY-quot+ADs- means the five year anniversary
of the Closing Date, on which the amount equal to the difference,
if any, between (a) the amount then remaining in the Solvay
Environmental Indemnification Holdback Amount and (b) the sum of
(i) +ACQ-2,000,000 and (ii) the Reserved Solvay Amount shall be
released (such amount, the +ACY-quot+ADs-FIRST SOLVAY ESCROW
RELEASE AMOUNT+ACY-quot+ADs-). +ACY-quot+ADs-FIRST SOLVAY ESCROW
RELEASE AMOUNT+ACY-quot+ADs- has the meaning set forth under the
definition of +ACY-quot+ADs-First Solvay Environmental Escrow
Release Date.+ACY-quot+ADs- +ACY-quot+ADs-FUNDED
INDEBTEDNESS+ACY-quot+ADs- means the amount, as of the Closing,
necessary to pay off in full and extinguish all Indebtedness of the
Company (including, but not limited to, the Bank One Indebtedness
Amount and the Senior Note Indebtedness Amount) and all related
obligations, fees, penalties and liabilities owed by the Company,
as such amount may be reduced by amounts paid by the Company
immediately prior to Closing. -5- +ACY-quot+ADs-FUNDED
OBLIGATIONS+ACY-quot+ADs- means, without duplication, the sum of
the Funded Indebtedness, the Capital Lease Amount, the Related
Party Receivable Amount and the Unused Cap Ex Amount.
+ACY-quot+ADs-GAAP+ACY-quot+ADs- means United States generally
accepted accounting principles as in effect from time to time
applied on a consistent basis. +ACY-quot+ADs-GOVERNMENTAL
BODY+ACY-quot+ADs- means any federal, state, local, foreign or
other governmental authority of any nature (including any
governmental agency, branch, department, official, or entity and
any court or other tribunal) or any body exercising, or entitled to
exercise, any administrative, executive, judicial, legislative,
police, regulatory, or taxing authority power of any nature.
+ACY-quot+ADs-HAZARDOUS SUBSTANCES+ACY-quot+ADs- means any
substance, chemical or waste that is listed, or contains amounts of
one or more components that are defined, designated, classified,
considered or listed, as hazardous, toxic or radioactive or are
otherwise regulated or subject to imposition of liability under any
Environmental Law+ADs- as well as any asbestos or
asbestos-containing material, petroleum, petroleum product or
by-product, crude oil or any fraction thereof, natural gas, natural
gas liquids, liquefied natural gas, synthetic gas usable as fuel,
or polychlorinated biphenyls (+ACY-quot+ADs-PCBS+ACY-quot+ADs-).
+ACY-quot+ADs-HOLDBACK AMOUNT+ACY-quot+ADs- means the sum of the
Working Capital Holdback Amount, the Indemnification Holdback
Amount and the Solvay Environmental Indemnification Holdback
Amount, which shall be deposited into an escrow account (the
+ACY-quot+ADs-ESCROW ACCOUNT+ACY-quot+ADs-) to be established with
Bank One (the +ACY-quot+ADs-ESCROW AGENT+ACY-quot+ADs-) pursuant to
the terms of an escrow agreement in the form attached hereto as
Exhibit B (the +ACY-quot+ADs-ESCROW AGREEMENT+ACY-quot+ADs-).
+ACY-quot+ADs-IBCA+ACY-quot+ADs- means the Illinois Business
Corporation Act. +ACY-quot+ADs-INDEBTEDNESS+ACY-quot+ADs- means (a)
all indebtedness for borrowed money or for the deferred purchase
price of property or services (other than current trade liabilities
incurred in the ordinary course of business and payable in
accordance with customary practices), (b) any other indebtedness
that is evidenced by a note, bond, debenture or similar instrument,
(c) all obligations under financing leases and Capital Leases, (d)
all obligations in respect of acceptances issued or created, (e)
all liabilities secured by any lien on any Company Asset, and (f)
all guarantee obligations. +ACY-quot+ADs-INDEMNIFICATION HOLDBACK
AMOUNT+ACY-quot+ADs- means +ACQ-19,500,000, which will be used to
fund indemnification payments, if any, made pursuant to Sections
8.2, 11.1 and 11.2 hereof and in accordance with the Escrow
Agreement. +ACY-quot+ADs-INTELLECTUAL PROPERTY+ACY-quot+ADs- means
(i) all names, brands, logos and slogans embodying business or
product goodwill or indications of origin, and all trademarks,
corporate names, trade -6- names, service marks, trade dress,
domain names and universal resource locators, together with all
translations, adaptations, derivations and combinations thereof and
all applications, registrations and renewals in connection
therewith, and all of the goodwill associated therewith+ADs- (ii)
all patents, patent applications, patent disclosures, inventions
(whether patentable or unpatentable and whether or not reduced to
practice) and all improvements thereof, including, but not limited
to, any provisional, utility, continuation, continuation-in-part or
divisional applications filed in the U.S. or other jurisdictions
and all reissues, revisions and extensions thereof and all
reexamination certificates issuing therefrom+ADs- (iii) all
websites, copyrights, and copyrightable works both published and
unpublished, including all registrations, applications and renewals
in connection therewith+ADs- (iv) all computer and electronic data
processing programs and software programs (in both source code and
object code form), data, databases and related documentation+ADs-
(v) all inventions, improvements, developments, modifications,
derivative works, know-how, trade secrets, and confidential
information (including research and development, know-how formulas,
compositions, manufacturing and production processes and
techniques, methods, schematics, technology, technical data,
designs, drawings, flowcharts, block diagrams, specifications,
customer and supplier lists, pricing and cost information and
business and marketing plans and proposals)+ADs- (vi) all licenses,
sublicenses, permissions and other agreements relating to any of
the foregoing+ADs- and (vii) all other intellectual property rights
(in whatever form or medium) relating to any of the foregoing
(including remedies and recoveries against infringement hereof and
rights of protection of interest therein under the laws of all
jurisdictions). +ACY-quot+ADs-IRS+ACY-quot+ADs- means the Internal
Revenue Service. +ACY-quot+ADs-KNOWLEDGE,+ACY-quot+ADs-
+ACY-quot+ADs-TO THE COMPANY'S KNOWLEDGE,+ACY-quot+ADs- or words to
that effect as used herein refer to the actual or constructive
knowledge of H. Richard Landis, Gregory J. Landis, William
VanMeter, John Sabey, Bimal Kalvani and Steven Pace after
reasonable inquiry. +ACY-quot+ADs-LEASED ASSETS+ACY-quot+ADs-
collectively refers to the machinery, equipment and other personal
property the Company leases to carry on its operations as set forth
on Schedule 5.15, and the Leased Real Properties.
+ACY-quot+ADs-LOSSES+ACY-quot+ADs- means any loss, cost,
obligation, liability, settlement payment, award, judgment, fine,
penalty, damage, expense, deficiency or other charge, but not
including Expenses. +ACY-quot+ADs-MATERIAL ADVERSE
EFFECT+ACY-quot+ADs- means any condition, circumstance, change in
or effect on the Company that, individually or in the aggregate
with any other condition, circumstance, change in or effect on the
Company, has or would reasonably be expected to have a material
adverse effect on the assets, properties, business, operations,
prospects, financial condition, or results of operations of the
Company+ADs- provided, however, that none of the following, to the
extent arising after the date of this Agreement, shall be deemed to
have a Material Adverse -7- Effect: (i) events affecting the United
States or the economy generally+ADs- or (ii) events affecting the
plastic container industry generally, but, in each case, only to
the extent that the events discussed in (i) and (ii) do not have a
disproportionate adverse effect on the assets, properties,
business, operations, prospects, financial condition, or results of
operations of the Company relative to other companies engaged in
businesses similar to the Business. +ACY-quot+ADs-NON-COMPETITION
AGREEMENT+ACY-quot+ADs- means a non-competition agreement in the
form attached as Exhibit C hereto. +ACY-quot+ADs-NOTE
HOLDERS+ACY-quot+ADs- means with respect to any Senior Note the
Person in whose name such Senior Note is registered and maintained
by the Company pursuant to Section 13.1 of the Note Purchase
Agreement. +ACY-quot+ADs-NOTE PURCHASE AGREEMENT+ACY-quot+ADs-
means that certain Note Purchase Agreement dated as of March 1,
2000, as amended, between the Company and each of the Persons
listed as +ACY-quot+ADs-Purchasers+ACY-quot+ADs- on Schedule A
thereto, providing for, among other things, the sale by the Company
of the Senior Notes. +ACY-quot+ADs-OWNERSHIP
PERCENTAGE+ACY-quot+ADs- of any Shareholder, shall mean the
percentage for such Shareholder set forth on Schedule 5.5.
+ACY-quot+ADs-PCBS+ACY-quot+ADs- has the meaning set forth under
the definition of +ACY-quot+ADs-Hazardous Substances+ACY-quot+ADs-.
+ACY-quot+ADs-PERMITTED ENCUMBRANCES+ACY-quot+ADs- means (i) liens
for taxes and other governmental charges and assessments which are
not yet due and payable, (ii) liens of landlords and liens of
carriers, warehousemen, mechanics and materialmen and other like
liens arising in the ordinary course of business for sums not yet
due and payable and (iii) other liens or imperfections on property
which are not material in amount and do not materially detract from
the value of or materially impair the existing use of the property
affected by such lien or imperfection. +ACY-quot+ADs-PER SHARE
MERGER CONSIDERATION+ACY-quot+ADs- means the quotient obtained by
dividing (i) the Aggregate Purchase Price less the Transferred Real
Property Purchase Price, by (ii) the total number of shares of the
Company's capital stock outstanding on the Closing Date.
+ACY-quot+ADs-PER SHARE PAID OUT MERGER CONSIDERATION+ACY-quot+ADs-
means the quotient obtained by dividing (i) the Aggregate Purchase
Price, less the sum of (a) the Transferred Real Properties Purchase
Price and (b) the Holdback Amount, by (ii) the total number of
shares of the Company's capital stock outstanding on the Closing
Date. +ACY-quot+ADs-PERSON+ACY-quot+ADs- means any individual,
corporation, partnership, limited liability company, joint venture,
association, joint-stock company, trust, unincorporated
organization or Governmental Body. -8-
+ACY-quot+ADs-PROPERTY+ACY-quot+ADs- means any real or personal
property, plant, building, facility, structure, underground storage
tank, equipment, furniture, inventory, building system or unit, or
other asset owned, leased, operated or erected by the Company, any
Shareholder, Real Estate Seller, or any Affiliate thereof, on or
prior to the Closing Date (including any surface water thereon or
adjacent thereto, and any soil minerals, oil and gas rights, air
rights, water or development rights or groundwater thereunder).
+ACY-quot+ADs-RCRA+ACY-quot+ADs- has the meaning set forth under
the definition of +ACY-quot+ADs-Environmental Law.+ACY-quot+ADs-
+ACY-quot+ADs-REAL ESTATE SELLERS+ACY-quot+ADs- means the Persons
designated as such and set forth on the signature page hereto.
+ACY-quot+ADs-REAL PROPERTIES+ACY-quot+ADs- collectively refers to
the parcels of real property, and any and all easements, rights of
way, reservations, privileges, appurtenances, strips, gores and
alleys adjoining or pertaining thereto constituting the Owned Real
Properties and the Leased Real Properties. +ACY-quot+ADs-RELATED
PARTY RECEIVABLE AMOUNT+ACY-quot+ADs- means the aggregate amount of
Indebtedness owed to the Company by any Shareholder, Affiliate of
any Shareholder or Affiliate of the Company.
+ACY-quot+ADs-RELEASE+ACY-quot+ADs- means release, spill, emission,
leaking, pumping, injection, deposit, disposal, discharge,
dispersal, leaching or migration of a Hazardous Substance into the
indoor or outdoor environment or into or out of any Property,
including the movement of Hazardous Substances through or in the
air, soil, surface water, groundwater or Property.
+ACY-quot+ADs-REMEDIAL ACTION+ACY-quot+ADs- means actions to (i)
clean up, remove, treat or in any other way address Hazardous
Substances in the indoor or outdoor environment+ADs- (ii) prevent
the Release or threatened Release or minimize the further Release
of Hazardous Substances+ADs- or (iii) investigate and determine if
a remedial response is needed and to design such a response and
post-remedial investigation, monitoring, operation and maintenance
and care. +ACY-quot+ADs-REPRESENTATIVES+ACY-quot+ADs- means, as to
any Person, such Person's affiliates, partners, officers,
directors, employees, agents, advisors (legal, accounting and
financial), consultants, financing sources and financing sources'
advisors. +ACY-quot+ADs-REQUIREMENTS OF LAWS+ACY-quot+ADs- means
any federal, state and local laws, statutes, regulations,
judgments, writs, orders, injunctions, rules, codes or ordinances
or other legal requirements enacted, adopted, issued or promulgated
by any Governmental Body (including, without limitation, those
pertaining to building, zoning, environmental, Tax and occupational
safety and health requirements) or common law. -9-
+ACY-quot+ADs-RESERVED AMOUNT+ACY-quot+ADs- means, as of each of
the First Escrow Release Date and the Second Escrow Release Date,
the aggregate amount of all unresolved and/or unpaid
indemnification claims made by any Buyer Indemnitee pursuant to
Sections 8.2, 11.1 and 11.2 as of such date. +ACY-quot+ADs-RESERVED
SOLVAY AMOUNT+ACY-quot+ADs- means, as of each of the First Solvay
Environmental Escrow Release Date and the Second Solvay
Environmental Escrow Release Date, the aggregate amount of all
unresolved and/or unpaid indemnification claims made by any Buyer
Indemnitee pursuant to Section 11.3 hereof as of such date.
+ACY-quot+ADs-SARA+ACY-quot+ADs- has the meaning set forth under
the definition of +ACY-quot+ADs-Environmental Law+ACY-quot+ADs-.
+ACY-quot+ADs-SECOND ESCROW RELEASE DATE+ACY-quot+ADs- means the 19
month anniversary of the Closing Date, on which the balance of the
Indemnification Holdback Amount then remaining in the Escrow
Account, less the Reserved Amount, shall be released.
+ACY-quot+ADs-SECOND SOLVAY ENVIRONMENTAL ESCROW RELEASE
DATE+ACY-quot+ADs- means the ten year anniversary of the Closing
Date, on which the balance of the Solvay Environmental
Indemnification Holdback Amount then remaining in the Escrow
Account, less the Reserved Solvay Amount, shall be released.
+ACY-quot+ADs-SECTION 338(H)(10) ELECTION+ACY-quot+ADs- means an
election by the Shareholders and Buyer under Section 338(h)(10) of
the Code (and under any applicable similar provision of state,
local or foreign law) with respect to the acquisition of the
Company Securities pursuant to the Merger. +ACY-quot+ADs-SENIOR
NOTE INDEBTEDNESS AMOUNT+ACY-quot+ADs- means the amount, as of the
Closing Date, necessary to pay off in full and extinguish all
loans, advances, indebtedness, obligations, fees, penalties and
liabilities of the Company owed to the Note Holders under the
Senior Notes. +ACY-quot+ADs-SENIOR NOTES+ACY-quot+ADs- means those
certain 8.8+ACU- Senior Notes in the aggregate original principal
amount of +ACQ-30,000,000 which mature on March 15, 2010 and were
issued by the Company to certain Persons pursuant to terms and
conditions of the Note Purchase Agreement.
+ACY-quot+ADs-SHAREHOLDER ANCILLARY AGREEMENTS+ACY-quot+ADs- means
all agreements, instruments, and documents being or to be executed
and delivered by any Shareholder or his, her or its Affiliate under
this Agreement or in connection herewith, including any Real Estate
Purchase Agreement. +ACY-quot+ADs-SHAREHOLDERS REPRESENTATIVE
AGREEMENT+ACY-quot+ADs- means the Shareholders' Representative
Agreement dated as of the date hereof, attached hereto as Exhibit
D. +ACY-quot+ADs-SOLVAY ENVIRONMENTAL INDEMNIFICATION HOLDBACK
ACCOUNT+ACY-quot+ADs- means the portion of the Escrow Account in
which the Solvay Environmental Indemnification Holdback Amount is
deposited. -10- +ACY-quot+ADs-SOLVAY ENVIRONMENTAL INDEMNIFICATION
HOLDBACK AMOUNT+ACY-quot+ADs- means +ACQ-3,000,000 which will be
used to fund indemnification payments, if any, made pursuant to
Section 11.3 hereof and in accordance with the Escrow Agreement.
+ACY-quot+ADs-SOLVAY FACILITY PROPERTY+ACY-quot+ADs- means the real
property located at 1500 Milton Avenue, Solvay, New York 13209.
+ACY-quot+ADs-TARGET WORKING CAPITAL+ACY-quot+ADs- means
+ACQ-27,016,199, plus the aggregate amount of accrued customer
rebates as of Closing (currently estimated to be +ACQ-2,700,000),
less the aggregate amount of accrued supplier rebates as of the
Closing (currently estimated to be +ACQ-1,200,000). A hypothetical
calculation of (A) Closing Working Capital (using an example
balance sheet as of Closing), (B) Target Working Capital (using
accrued customer and supplier rebates as of Closing from the
example balance sheet) and (C) the Working Capital Shortfall is
attached hereto as Schedule A. +ACY-quot+ADs-TAX+ACY-quot+ADs-
means any tax (including without limitation, income, gross
receipts, license, payroll, employment, excise, severance, stamp,
occupation, premium, windfall profits, environmental (including
taxes under Code Section 59A), capital stock, franchise, profits,
withholding, social security (or similar), unemployment,
disability, real property, personal property, sales, use, transfer,
registration, value added, alternative, estimated or add-on minimum
tax, or other tax of any kind whatsoever, or levies or other like
assessments, customs duties, escheat or unclaimed property taxes,
imposts, charges or fees with respect thereto) and any related
fine, interest, penalty, or addition thereto, whether disputed or
not, imposed, assessed or collected by or under the authority of
any Governmental Body. +ACY-quot+ADs-TAX RETURN+ACY-quot+ADs- means
any return, report, notice, form or similar statement required to
be filed with respect to any Tax (including any attached
schedules), including, without limitation, any information return,
claim for refund, amended return and declaration of estimated Tax.
+ACY-quot+ADs-TITLE COMMITMENTS+ACY-quot+ADs- means the commitment
letters or binders set forth on Schedule B from the Title Company
to issue to Buyer (or its designee) Title Policies insuring good
and marketable fee title to each of the Transferred Real Properties
and the Owned Real Properties. +ACY-quot+ADs-TITLE
COMPANY+ACY-quot+ADs- means Chicago Title Insurance Company and/or
any of its Affiliates, or such other reputable,
nationally-recognized and financially sound title company as shall
be acceptable to the Company and Buyer. +ACY-quot+ADs-TOTAL
ENTERPRISE VALUE+ACY-quot+ADs- means +ACQ-260,000,000.
+ACY-quot+ADs-TRANSACTION COSTS+ACY-quot+ADs- means all the
out-of-pocket costs and expenses of the Shareholders and the
Company relating to the transactions contemplated by this Agreement
and the Real Estate Purchase Agreements, which categories of items
are set forth in Schedule 1.1 of the Company Disclosure Schedules
(which schedules will be updated on the Closing Date), but -11-
specifically excluding any costs and expenses (i) included in the
definition of +ACY-quot+ADs-Funded Obligations,+ACY-quot+ADs- or
(ii) allocated to Buyer pursuant to the terms of this Agreement or
any Real Estate Purchase Agreement+ADs- provided that any item set
forth on such schedule or allocated to Buyer shall not be included
on the Closing Working Capital Statement. +ACY-quot+ADs-TRANSFERRED
REAL PROPERTIES+ACY-quot+ADs- means the real properties located at
the following addresses: (a) 8400 West Washington Street, Tolleson,
Arizona 85353, (b) 5750-5751 118 Street, Alsip, Illinois 60482, (c)
11600 South Central Avenue, Alsip, Illinois 60658 and (d) 1500
Milton Avenue, Solvay, New York 13209. +ACY-quot+ADs-UNUSED CAP EX
AMOUNT+ACY-quot+ADs- means the excess of (i) the budgeted amount of
capital expenditures of the Company and the Real Estate Sellers for
the period from January 1, 2003 to and including the Closing Date
(with budgeted capital expenditures prorated based upon the number
of days in 2003 actually elapsed as of and including the Closing
Date based on a full year budget of +ACQ-14.2 million) over (ii)
the actual capital expenditures of the Company and the Real Estate
Sellers for the period beginning January 1, 2003 and ending on the
Closing Date. In each case, +ACY-quot+ADs-capital
expenditures+ACY-quot+ADs- shall be determined in accordance with
GAAP and consistent with the historical practices of the Company
and the Real Estate Sellers+ADs- provided, however, that the
parties agree that new molds and tooling that have been expensed by
the Company during 2003 have been included in the 2003 budget of
+ACQ-14.2 million and shall be included in the calculation of
actual capital expenditures as of the Closing Date.
+ACY-quot+ADs-WORKING CAPITAL HOLDBACK AMOUNT+ACY-quot+ADs- means
+ACQ-2,000,000, which will be used to fund payments made by the
Shareholders, if any, pursuant to the working capital adjustment
set forth in Section 2.9 hereof and the Escrow Agreement. INDEX OF
TERMS DEFINED IN OTHER SECTIONS +ADw-/p+AD4- +ADw-table
class+AD0-MsoNormalTable border+AD0-0 cellpadding+AD0-0
style+AD0-'mso-cellspacing:1.5pt+ADs- mso-padding-alt:0in 0in 0in
0in'+AD4- +ADw-tr style+AD0-'mso-yfti-lastrow:yes'+AD4- +ADw-td
style+AD0-'padding:.75pt .75pt .75pt .75pt'+AD4- +ADw-p
class+AD0-MsoNormal+AD4APA-s+AD4-1933 Act Section 6.3(a)
Acquisition Transaction Section 7.5 Agreement Preamble Alternative
Financing Section 7.14(a) Articles of Merger Section 2.2 Audited
Financial Statements Section 5.7 Business Recital A Buyer Preamble
Buyer Indemnitees Section 11.1(a) Certificate of Merger Section 2.2
Claim Notice Section 11.5(a) Closing Section 3.1 Closing Date
Section 3.1 +ADw-/s+AD4APA-/p+AD4- +ADw-/td+AD4- +ADw-/tr+AD4-
+ADw-/table+AD4- +ADw-p class+AD0-MsoNormal+AD4--12- +ADw-/p+AD4-
+ADw-table class+AD0-MsoNormalTable border+AD0-0 cellpadding+AD0-0
style+AD0-'mso-cellspacing:1.5pt+ADs- mso-padding-alt:0in 0in 0in
0in'+AD4- +ADw-tr style+AD0-'mso-yfti-lastrow:yes'+AD4- +ADw-td
style+AD0-'padding:.75pt .75pt .75pt .75pt'+AD4- +ADw-p
class+AD0-MsoNormal+AD4APA-s+AD4-Closing Working Capital Section
2.9(a) Closing Working Capital Statement Section 2.9(a) Commitment
Letters Section 6.4 Company Preamble Company Disclosure Schedules
Section 4.2 Company Securities Recital B Compliance Costs Section
7.13 Deductible Section 11.1(b) Designated Contracts Section 5.21
Disclosure Schedule Update Section 7.6(a) Effective Time Section
2.2 Equipment Lease Section 5.15 Equity Commitment Letters Section
6.4 Final Closing Working Capital Section 2.9(c) Financial
Statements Section 5.7 Financing Section 6.4 First Escrow Release
Amount Definition of +ACY-quot+ADs-First Escrow Release
Date+ACY-quot+ADs- Funded Obligations Schedule Definition of
Aggregate Purchase Price Governmental Permits Section 5.13(b)
Indemnified Party Section 11.5(a) Indemnitor Section 11.5(a)
Insurance Contracts Section 5.20 Interim Financial Statements
Section 5.7 Leased Real Properties Section 5.17(a) Lease
Termination Agreement Section 7.11 Licensed Intellectual Property
Rights Section 5.16(b) Material Customer Section 5.27(a) Merger
Recitals Neutral Auditors Section 2.9(c) Owned Intellectual
Property Section 5.16(a) Owned Real Properties Section 5.17(b)
Plas-Tool License Section 7.19 Prohibited Marks Section 8.5 PT
Section 7.19 Real Estate Purchase Agreement Section 2.7 Real
Property Leases Section 5.17(a) Resolution Period Section 2.9(b)
Shareholder Indemnitees Section 11.4 +ADw-/s+AD4APA-/p+AD4-
+ADw-/td+AD4- +ADw-/tr+AD4- +ADw-/table+AD4- +ADw-p
class+AD0-MsoNormal+AD4--13- +ADw-/p+AD4- +ADw-table
class+AD0-MsoNormalTable border+AD0-0 cellpadding+AD0-0
style+AD0-'mso-cellspacing:1.5pt+ADs- mso-padding-alt:0in 0in 0in
0in'+AD4- +ADw-tr style+AD0-'mso-yfti-lastrow:yes'+AD4- +ADw-td
style+AD0-'padding:.75pt .75pt .75pt .75pt'+AD4- +ADw-p
class+AD0-MsoNormal+AD4APA-s+AD4-Shareholder(s) Preamble
Shareholders' Agreement Section 4.2 Shareholder Representative
Section 8.6(a) Shop Lease Section 3.3(e) Surviving Corporation
Section 2.1 Tax Package Section 8.2(a)(v) Third Party Claim Section
11.5(a) Transferred Real Properties Purchase Price Section 2.7
Transition Lease Section 3.3(d) Termination Fee Section 12.1(d)
WARN Act Section 5.19(c) Working Capital Shortfall Section
2.9(d)(ii) +ADw-/s+AD4APA-/p+AD4- +ADw-/td+AD4- +ADw-/tr+AD4-
+ADw-/table+AD4- +ADw-p class+AD0-MsoNormal+AD4-ARTICLE II PURCHASE
AND SALE OF BUSINESS 2.1 The Merger. Upon the terms and subject to
the conditions set forth in this Agreement, and in accordance with
the IBCA and the DGCL, the Merger shall be effected and Sub shall
be merged with and into the Company at the Effective Time with the
separate corporate existence of Sub ceasing and the Company
continuing as the surviving corporation. The surviving corporation
of the Merger shall be herein referred to as the
+ACY-quot+ADs-SURVIVING CORPORATION+ACY-quot+ADs-. The Surviving
Corporation shall become a direct wholly-owned subsidiary of Buyer
and shall succeed to and assume all the rights and obligations of
Sub and the Company in accordance with the IBCA and the DGCL. 2.2
Effective Time. Subject to the provisions of this Agreement, as
soon as practicable on the Closing Date, the parties shall file
concurrently (a) articles of merger (the +ACY-quot+ADs-ARTICLES OF
MERGER+ACY-quot+ADs-) with the Secretary of State of the State of
Illinois in accordance with the relevant provisions of the IBCA and
(b) a certificate of merger (the +ACY-quot+ADs-CERTIFICATE OF
MERGER+ACY-quot+ADs-) with the Secretary of State of the State of
Delaware in accordance with the relevant provisions of the DGCL and
shall make all other filings or recordings required under the IBCA
and the DGCL (the time of such filings, or such later time as may
be agreed in writing by the Company and Buyer and specified in the
Articles of Merger and Certificate of Merger, being the
+ACY-quot+ADs-EFFECTIVE TIME+ACY-quot+ADs-). 2.3 Certificate of
Incorporation and Bylaws. (a) The Certificate of Incorporation set
forth on Exhibit E-1 shall be the Certificate of Incorporation of
the Surviving Corporation until thereafter amended as provided
therein or by applicable law. -14- (b) The Bylaws set forth on
Exhibit E-2, shall be the Bylaws of the Surviving Corporation until
thereafter amended as provided therein or by applicable law. 2.4
Directors and Officers of the Surviving Corporation. (a) The
directors of Sub immediately prior to the Effective Time shall be
the directors of the Surviving Corporation, until the earlier of
their resignation or removal or until their respective successors
are duly elected and qualified, as the case may be. (b) The
officers of Sub immediately prior to the Effective Time shall be
the officers of the Surviving Corporation, until the earlier of
their resignation or removal or until their respective successors
are duly elected and qualified, as the case may be. 2.5 Effects of
the Merger. (a) At and after the Effective Time, the Merger shall
have the effects set forth in the IBCA and DGCL. Without limiting
the generality of the foregoing, and subject thereto, at the
Effective Time all the property, rights, privileges, powers and
franchises of the Company and Sub shall be vested in the Surviving
Corporation, and all debts, liabilities and duties of the Company
and Sub shall become the debts, liabilities and duties of the
Surviving Corporation. (b) As of the Effective Time, by virtue of
the Merger and without any action on the part of the holder of any
Company Securities or any shares of capital stock of Sub: (i) each
issued and outstanding share of capital stock of Sub shall be
converted into and become one validly issued, fully paid and
non-assessable share of common stock of the Surviving
Corporation+ADs- (ii) each Company Security that is owned by the
Company, Buyer or Sub shall automatically be canceled and retired
and shall cease to exist, and no consideration shall be delivered
in exchange therefor+ADs- and (iii) each Company Security issued
and outstanding immediately prior to the Effective Time (other than
Company Securities to be canceled in accordance with Section
2.5(b)(ii)) shall be converted into the right to receive the Per
Share Merger Consideration. 2.6 Subsequent Actions. If, at any time
after the Effective Time, any deeds, bills of sale, assignments,
assurances or any other actions or things are reasonably necessary
to vest, perfect or confirm of record or otherwise in the Surviving
Corporation its right, title or interest in, to or under any of the
rights, properties or assets of either of the Company or Sub
acquired or to be acquired by the Surviving Corporation as a result
of, or in connection with, the Merger, then the officers and
directors of the Surviving Corporation shall be authorized to
execute and -15- deliver, in the name and on behalf of either the
Company or Sub, all such deeds, bills of sale, instruments of
conveyance, assignments and assurances and to take and do, in the
name and on behalf of each such corporation or otherwise, all such
other actions and things as may be necessary or desirable to vest,
perfect or confirm any and all right, title or interest in, to and
under such rights, properties or assets in the Surviving
Corporation. 2.7 Purchase and Sale of Transferred Real Properties.
Subject to the terms and conditions of the Real Estate Purchase
Agreements, each in the form attached hereto as Exhibit F (each, a
+ACY-quot+ADs-REAL ESTATE PURCHASE AGREEMENT+ACY-quot+ADs-), Buyer
(or its designee) agrees to purchase, and the Real Estate Sellers
agree to sell, transfer and convey, the Transferred Real
Properties. In consideration for the Transferred Real Properties,
Buyer (or its designee) shall pay to the Real Estate Sellers U.S.
+ACQ-32,000,000 (the +ACY-quot+ADs-TRANSFERRED REAL PROPERTIES
PURCHASE PRICE+ACY-quot+ADs-), allocated as set forth on Schedule
2.7. 2.8 Payments at Closing. At the Closing: (a) The Company will
deliver to the holders of the Funded Indebtedness an amount
sufficient to repay all Funded Indebtedness, with the result that
following the Closing there will be no further monetary obligations
of the Company with respect to the Funded Indebtedness. On or prior
to the Closing Date, the Company shall provide Buyer with customary
pay-off letters from all holders of such Funded Indebtedness and
make arrangements reasonably satisfactory to Buyer for such holders
to provide Buyer recordable form mortgage and lien releases,
cancelled notes and other documents reasonably requested by Buyer
prior to Closing. If the Closing occurs, Buyer shall provide the
Company with sufficient funds to repay the Funded Indebtedness at
the Closing. (b) Buyer shall pay to each Shareholder an amount
equal to the product of (i) the Per Share Paid Out Merger
Consideration and (ii) the number of shares of capital stock held
by such Shareholder immediately prior to the Effective Time (as set
forth on Schedule 5.5) by wire transfer of immediately available
funds to accounts designated by the Shareholders in writing not
later than two days prior to the Closing Date. (c) The Transferred
Real Properties Purchase Price shall be payable at Closing as
provided for in the Real Estate Purchase Agreements with respect to
each of the Transferred Real Properties. (d) Buyer will deposit the
Holdback Amount in the Escrow Account. 2.9 Working Capital
Adjustment. (a) As soon as practicable, but in no event later than
45 days following the Closing, Buyer shall prepare a calculation of
Closing Working Capital of the Company as of the Closing Date (the
+ACY-quot+ADs-CLOSING WORKING CAPITAL STATEMENT+ACY-quot+ADs-). The
Closing Working Capital -16- Statement shall be prepared in
accordance with GAAP applied consistently with the application
thereof in the Financial Statements (to the extent that such
Financial Statements complied with GAAP). The term
+ACY-quot+ADs-CLOSING WORKING CAPITAL+ACY-quot+ADs- means, as of
the Closing Date, the difference between (A) the Company's current
assets less (i) cash and cash equivalents, (ii) interest
receivables and (iii) current portion of notes, and (B) the
Company's current liabilities less (i) short term notes payable,
(ii) current portion of long term debt, (iii) current portion of
long term leases, (iv) notes payable to Shareholders and (v)
accrued interest. (b) Buyer shall deliver a copy of the Closing
Working Capital Statement to the Shareholder Representative
promptly after it has been prepared. After receipt of the Closing
Working Capital Statement, the Shareholder Representative shall
have 30 days to review the Closing Working Capital Statement,
together with the work papers used in the preparation thereof.
Buyer shall (i) provide the Shareholder Representative and its
Representatives reasonable access during normal business hours to
all relevant work papers, trial balances and other financial
information to the extent necessary or useful to complete their
review of the Closing Working Capital Statement, and (ii) cooperate
with the Shareholder Representative's and its Representatives'
reasonable requests with respect to the review of the Closing
Working Capital Statement, including by providing on a timely basis
all information necessary or useful in reviewing the Closing
Working Capital Statement. Unless the Shareholder Representative
delivers written notice to Buyer on or prior to the 30th day after
the Shareholder Representative's receipt of the Closing Working
Capital Statement specifying in reasonable detail the amount,
nature and basis of all disputed items, the Shareholder
Representative shall be deemed to have accepted and agreed to the
calculation of the Closing Working Capital on behalf of all
Shareholders. If the Shareholder Representative (or one of its
Representatives) notifies Buyer of an objection to the calculation
of the Closing Working Capital, the Shareholder Representative and
Buyer shall, within 20 days (or such longer period as the parties
may agree in writing) following such notice (the
+ACY-quot+ADs-RESOLUTION PERIOD+ACY-quot+ADs-), attempt to resolve
their differences and any resolution by them as to any disputed
amounts shall be final, binding and conclusive (other than as a
result of manifest error or fraud). (c) If, at the conclusion of
the Resolution Period, there are any amounts remaining in dispute,
then such amounts remaining in dispute shall be submitted to the
Chicago, Illinois office of Deloitte +ACY-amp+ADs- Touche or
another nationally recognized public accounting firm agreed by
Buyer and the Shareholder Representative (the +ACY-quot+ADs-NEUTRAL
AUDITORS+ACY-quot+ADs-). Buyer and the Shareholder Representative
(on behalf of all Shareholders) shall execute, if requested by the
Neutral Auditors, a reasonable engagement letter, including
customary indemnities. The Neutral Auditors shall act as an
arbitrator to determine, based solely on the provisions of this
Section 2.9 and the presentations by the Shareholder Representative
and Buyer, and not by independent review, only those issues still
in dispute. The Neutral Auditors' determination shall be made
within 30 days of the dispute being submitted for their
determination, shall be set forth in a written statement delivered
to the Shareholder Representative and Buyer and shall be final,
non- appealable and binding on the parties hereto, absent manifest
error or fraud. A judgment of a -17- court of competent
jurisdiction may be entered upon the Neutral Auditors'
determination. The Neutral Auditors shall have exclusive
jurisdiction over, and resort to the Neutral Auditors as provided
in this Section 2.9(c) shall be the only recourse and remedy of the
parties against one another with respect to, any disputes arising
out of or relating to the adjustments pursuant to this Section
2.9(c). The fees, costs and expenses of the Neutral Auditors shall
be borne by Buyer, on the one hand, and by the Shareholder
Representative, on the other, based upon the percentage which the
portion of the contested amount not awarded to each party bears to
the amount actually contested by such party. For example, if the
Shareholder Representative claims that the Closing Working Capital
is +ACQ-1,000 greater than the amount determined by Buyer, and
Buyer contests only +ACQ-500 of the amount claimed by the
Shareholder Representative, and if the Neutral Auditors ultimately
resolve the dispute by awarding the Shareholders +ACQ-300 of the
+ACQ-500 contested, then the costs and expenses of the Neutral
Auditors will be allocated 60+ACU- (i.e., 300 -- 500) to Buyer and
40+ACU- (i.e., 200 500) to the Shareholders. The term
+ACY-quot+ADs-FINAL CLOSING WORKING CAPITAL+ACY-quot+ADs- shall
mean the definitive Closing Working Capital agreed to (or deemed to
be agreed to) by Buyer and the Shareholder Representative in
accordance with Section 2.9(b) hereof or resulting from the
determinations made by the Neutral Auditors in accordance with this
Section 2.9(c) (in addition to those items theretofore agreed to by
the Shareholder Representative and Buyer). (d) In the event the
Final Closing Working Capital (i) exceeds the Target Working
Capital, the Company shall pay the excess to the Shareholders pro
rata based upon each Shareholder's Ownership Percentage and the
Escrow Agent shall pay the Working Capital Holdback Amount out of
the Escrow Account to the Shareholders pro rata based upon each
Shareholder's Ownership Percentage+ADs- (ii) is less than the
Target Working Capital (the difference between the Target Working
Capital and the Final Closing Working Capital, the
+ACY-quot+ADs-WORKING CAPITAL SHORTFALL+ACY-quot+ADs-) and the
Working Capital Shortfall is less than or equal to the Working
Capital Holdback Amount, the Working Capital Shortfall shall be
paid to the Company by the Escrow Agent out of the Escrow Account
and the balance of the Working Capital Holdback Amount, if any,
shall be paid to the Shareholders, pro rata based on each
Shareholder's Ownership Percentage, by the Escrow Agent out of the
Escrow Account+ADs- or (iii) is less than the Target Working
Capital and the Working Capital Shortfall is greater than the
Working Capital Holdback Amount, the Working Capital Holdback
Amount shall be paid to the Company by the Escrow Agent out of the
Escrow Account and the Shareholders shall pay the difference
between the Working Capital Shortfall and the Working Capital
Holdback Amount to the Company pro rata based upon each
Shareholder's Ownership Percentage. -18- All payments made pursuant
to this Section 2.9 shall be made by wire transfer of immediately
available funds within five (5) days of the determination of the
Final Closing Working Capital to accounts previously designated in
writing by Buyer and the Shareholder Representative, and shall
include interest at a rate equal to the rate at which interest
accrues on the Working Capital Holdback Amount in the Escrow
Account between the Closing Date and the date of payment. In no
event shall any portion of the Indemnification Holdback Amount or
the Solvay Environmental Indemnification Holdback Amount be applied
toward the satisfaction, in whole or in part, of the Working
Capital Shortfall. ARTICLE III CLOSING 3.1 Closing Date. The
closing (the +ACY-quot+ADs-CLOSING+ACY-quot+ADs-) of the
transactions contemplated by this Agreement shall be consummated at
10:00 A.M., local time, two Business Days after the conditions set
forth in Articles IX and X have been satisfied or waived, or such
later time or date as may be agreed upon by Buyer and the
Shareholder Representative, at the offices of Fried, Frank, Harris,
Shriver +ACY-amp+ADs- Jacobson, One New York Plaza, New York, New
York 10004 or at such other place as shall be agreed upon by Buyer
and the Shareholder Representative+ADs- provided, however, that the
parties hereto will use their commercially reasonable efforts to
take, or cause to be taken, all actions necessary to make effective
and consummate the transactions contemplated by this Agreement on
or prior to November 14, 2003+ADs- provided, further, that nothing
in this Agreement shall obligate (x) Buyer to draw down the Bridge
Financing prior to December 23, 2003 or (y) any party to waive any
condition to the obligation of such party under this Agreement. The
time and date on which the Closing is actually held is sometimes
referred to herein as the +ACY-quot+ADs-CLOSING DATE.+ACY-quot+ADs-
3.2 Payment of Per Share Merger Consideration. Subject to
fulfillment or waiver of the conditions set forth in Article IX, at
Closing, Buyer shall pay the Per Share Paid Out Merger
Consideration with respect to all of the Company Securities. 3.3
Buyer's and Sub's Deliveries. Subject to fulfillment or waiver of
the conditions set forth in Article IX, at Closing, each of Buyer
and Sub shall (or, in the case of the Real Estate Purchase
Agreements, shall cause its designees to) deliver to the
Shareholder Representative all the following: (a) A certificate of
good standing for each of Buyer and Sub issued as of a recent date
by the Secretary of State of the State of Delaware+ADs- (b) A
certificate of the secretary of each of Buyer and Sub, dated the
Closing Date, in form and substance reasonably satisfactory to the
Company, as to (i) no amendments to the certificate of
incorporation of Buyer or Sub since a specified date+ADs- (ii) the
bylaws of Buyer and Sub+ADs- (iii) the resolutions of the Board of
Directors of Buyer and Sub authorizing the execution and
performance of this Agreement and the Buyer Ancillary Agreements
and the -19- transactions contemplated hereby and thereby+ADs- and
(iv) incumbency and signatures of the officers of Buyer and Sub
executing this Agreement and any Buyer Ancillary Agreement+ADs- (c)
The certificate contemplated by Section 10.1, duly executed by an
officer of each of Buyer and Sub+ADs- (d) An amendment in the form
attached hereto as Exhibit G, amending the existing lease of the
Chicago Ridge Corporate Office, to extend the term thereunder for a
period of six months after the Closing Date (the
+ACY-quot+ADs-TRANSITION LEASE+ACY-quot+ADs-), duly executed by
Buyer+ADs- (e) A lease in the form attached hereto as Exhibit H
relating to the Chicago Ridge Tool Shop (the +ACY-quot+ADs-SHOP
LEASE+ACY-quot+ADs-), duly executed by Buyer+ADs- (f) A Real Estate
Purchase Agreement with respect to each of the Transferred Real
Properties, duly executed by Buyer (or its designees) as
contemplated by Section 7.9+ADs- (g) The Escrow Agreement, duly
executed by Buyer+ADs- and (h) Such other documents and instruments
as may be required by any other provision of this Agreement or as
may be reasonably requested by counsel to the Shareholders to
consummate the transactions contemplated by this Agreement and any
Buyer Ancillary Agreement. 3.4 The Company's and Shareholders'
Deliveries. Subject to fulfillment or waiver of the conditions set
forth in Article X, at Closing, the Company, the Shareholders and
the Real Estate Sellers, as the case may be, shall deliver to Buyer
and Sub all the following: (a) Stock certificates evidencing the
Company Securities+ADs- (b) A certificate of good standing of the
Company issued as of a recent date by the Secretary of State of the
State of Illinois and each state in which the Company is required
to do business as a foreign corporation+ADs- (c) A certificate of
the secretary of the Company, dated the Closing Date, in form and
substance reasonably satisfactory to Buyer, as to: (i) no
amendments to the articles of incorporation of the Company since a
specified date+ADs- (ii) the bylaws of the Company+ADs- (iii) the
resolutions of the Board of Directors of the Company authorizing
the execution and performance of this Agreement, the Company
Ancillary Agreements, and the transactions contemplated hereby and
thereby+ADs- and (iv) incumbency and signatures of the officers of
the Company executing this Agreement and any Company Ancillary
Agreement+ADs- (d) The certificate contemplated by Section 9.1,
duly executed by the authorized officer of the Company+ADs- -20-
(e) The resignations of all of the directors and officers of the
Company effective as of the Closing Date. (f) The stock books,
stock ledgers, minute books, corporate seal and other books and
records of the Company+ADs- (g) The Transition Lease, duly executed
by the lessor thereunder+ADs- (h) The Shop Lease, duly executed by
the lessor thereunder+ADs- (i) Agreements terminating the leases to
the Leased Real Properties as contemplated by Section 7.11, duly
executed by the Company and the lessor thereunder+ADs- (j) A Real
Estate Purchase Agreement with respect to each Transferred Real
Property as contemplated by Section 7.9 and any and all deeds,
assignments, bills of sale, transfer forms, transfer tax forms and
all other documents in connection with the sales and conveyances as
contemplated by the Real Estate Purchase Agreements executed by the
Real Estate Sellers thereunder+ADs- (k) Pay-off letters with
respect to the Funded Indebtedness as contemplated by Section
2.8(a)+ADs- (l) The Funded Obligations Schedule+ADs- (m) Cancelled
notes with respect to the Related Party Receivable Amount+ADs- (n)
Forms 8023 and 8883 and any other form or document required to give
effect to the Section 338(h)(10) Election, executed by all of the
Shareholders+ADs- (o) The Escrow Agreement, duly executed by the
Shareholder Representative+ADs- and (p) Such other documents and
instruments as may be required by any other provision of this
Agreement or as may reasonably be requested by counsel to Buyer to
consummate the transactions contemplated by this Agreement and any
Company Ancillary Agreement or Shareholder Ancillary Agreement. 3.5
Stock Transfer Books. The stock transfer books of the Company shall
be closed immediately upon the Effective Time and there shall be no
further registration of transfers of Company Securities thereafter
on the records of the Company. -21- ARTICLE IV REPRESENTATIONS AND
WARRANTIES REGARDING THE SHAREHOLDERS As an inducement to Buyer and
Sub to enter into this Agreement and the Real Estate Purchase
Agreements, and to consummate the transactions contemplated hereby
and thereby, each Shareholder, with respect to himself, herself, or
itself only, severally, and not jointly, represents and warrants to
Buyer and Sub that all of the statements contained in this Article
IV are true as of the date of this Agreement and as of the Closing
Date (or, if made as of a specific date, as of such date): 4.1
Authority of Shareholder. Such Shareholder has full legal right,
power, capacity and authority to enter into this Agreement and each
Shareholder Ancillary Agreement to which he, she or it is a party,
and perform his, her or its obligations hereunder and each of the
Shareholder Ancillary Agreements to which he, she or it is a party,
and to consummate the transactions contemplated hereby and thereby.
This Agreement and each of the Shareholder Ancillary Agreements to
which such Shareholder is a party has been, or at Closing will be,
duly executed and delivered by such Shareholder and does
constitute, or at Closing will constitute, a valid and binding
obligation of such Shareholder, enforceable against such
Shareholder in accordance with its terms. The execution and
delivery of this Agreement and each Shareholder Ancillary Agreement
to which such Shareholder is a party will not (i) violate or
conflict with any Requirements of Law or Court Order which is
applicable to, binding upon or enforceable against such Shareholder
or (ii) violate or constitute a default, or require a notice and/or
consent under, any mortgage, lease, contract or agreement to which
such Shareholder is a party or by which such Shareholder's assets
or properties are bound. 4.2 Ownership of Company Securities. The
shares of Company Securities listed on Schedule 5.5 of the
schedules to this Agreement (the +ACY-quot+ADs-COMPANY DISCLOSURE
SCHEDULES+ACY-quot+ADs-) opposite such Shareholder's name: (i) are
owned on the date of this Agreement legally, beneficially and of
record by such Shareholder, and such Shareholder has good and
marketable title to such shares, free and clear of any
Encumbrances, and (ii) will be owned legally, beneficially and of
record immediately prior to the Closing by such Shareholder, free
and clear of any Encumbrance. Except for the Shareholders'
Agreement dated April 1, 2003 (the +ACY-quot+ADs-SHAREHOLDERS'
AGREEMENT+ACY-quot+ADs-), such Shareholder has not granted to any
Person any rights (including without limitation proxy rights or
options with respect to any Company Securities) and such
Shareholder is not a party to any voting trust or other agreement
or understanding with respect to such shares of Company Securities.
Such Shareholder has no claim against the Company or any of its
officers, directors, the other Shareholders or any other Person
with respect to the issuance of any shares of capital stock of the
Company. 4.3 Consents and Approvals+ADs- No Violations. Neither the
execution and delivery of this Agreement by such Shareholder or
each of the Shareholder Ancillary Agreements to which -22- he, she
or it is a party nor delivery and performance of this Agreement or
each of the Shareholder Ancillary Agreements to which he, she or it
is a party, nor the consummation of any of the transactions
contemplated hereby or thereby, nor compliance by such Shareholder
with or fulfillment by such Shareholder of the terms, conditions
and provisions hereof or thereof will conflict with, result in a
breach of the terms, conditions or provisions of, or constitute a
default, an event of default or an event creating rights of
acceleration, termination or cancellation or a loss of rights, or
result in the creation or imposition of any Encumbrance, under (1)
the charter or bylaws or other governing instruments of such
Shareholder, if applicable, (2) any of the terms, conditions or
provisions of any contract, agreement, commitment, undertaking, or
understanding or arrangement (whether written or oral) to which
such Shareholder is a party, (3) any Court Order to which such
Shareholder is a party or by which such Shareholder or any of its
assets or properties are bound, or (4) any Requirements of Laws
affecting such shareholder or any of its assets or properties,
except in the cases of clauses (2)-(4) above as would not have or
be reasonably expected to have a material adverse effect on the
ability of such Shareholder to perform its obligations under this
Agreement and each Shareholder Ancillary Agreement to which such
Shareholder is a party. 4.4 No Finder. Except for Robert W. Baird
+ACY-amp+ADs- Co., whose fees will be paid by the Shareholders,
neither such Shareholder nor any Person acting on its behalf has
paid, become obligated to pay or will become obligated to pay any
fee or commission to any broker, finder or intermediary for or on
account of the transactions contemplated by this Agreement. 4.5
Insolvency. Such Shareholder has not (i) commenced a voluntary
case, or had entered against it a petition for relief under any
federal bankruptcy act or similar petition order or decree under
any federal or state law or statute relative to bankruptcy,
insolvency or other relief for debtors, (ii) caused, suffered or
consented to the appointment of a receiver, trustee, administrator,
conservator, liquidator, or similar official in any federal, state
or foreign judicial or nonjudicial proceeding, to hold, administer
and/or liquidate all or substantially all of its asset, or (iii)
made an assignment for the benefit of creditors. ARTICLE V
REPRESENTATIONS AND WARRANTIES REGARDING THE COMPANY As an
inducement to Buyer and Sub to enter into this Agreement and the
Real Estate Purchase Agreements and to consummate the transactions
contemplated hereby and thereby, the Company, on behalf of the
Shareholders and the Real Estate Sellers, represents and warrants
to Buyer and Sub that all of the statements contained in this
Article V, as modified by the disclosures and exceptions set forth
in the Company Disclosure Schedules, are true as of the date of
this Agreement and as of the Closing Date (or, if made as of a
specific date, as of such date): -23- 5.1 Organization of the
Company. The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of
Illinois. The Company has been duly qualified as a foreign
corporation for the transaction of business in, and is in good
standing in, each jurisdiction in which it owns or leases property
or conducts any business so as to require such qualification,
except where the failure to so qualify has not had and would not
reasonably be expected to have a Material Adverse Effect and the
Company can become so qualified in such jurisdiction without the
occurrence of a Material Adverse Effect. Schedule 5.1 lists all of
the states or other jurisdictions where the Company is qualified or
licensed as a foreign corporation. The Company has full power and
authority to own or lease and to operate its assets and properties
and to carry on its business as now conducted. 5.2 Subsidiaries and
Investments. The Company does not, directly or indirectly, (i) own,
of record or beneficially, any outstanding voting securities or
other equity interests in any corporation, partnership, joint
venture or other entity or (ii) control any corporation,
partnership, joint venture or other entity. 5.3 Authority of the
Company. The Company has full corporate power and authority to
execute, deliver and perform this Agreement and the Company
Ancillary Agreements and to consummate the transactions
contemplated hereby and thereby. The execution, delivery and
performance of this Agreement and the Company Ancillary Agreements
by the Company and the transactions contemplated hereby and thereby
have been duly authorized and approved by all necessary corporate
action of the Company and do not require any further authorization
or consent of the Company or the Shareholders, subject to the
approval of this Agreement by the Shareholders. This Agreement has
been duly authorized, executed and delivered by the Company and is
the legal, valid and binding obligation of the Company enforceable
in accordance with its terms and each of the Company Ancillary
Agreements has been duly authorized by the Company and upon
execution and delivery by the Company will be a legal, valid and
binding obligation of the Company enforceable in accordance with
its terms. Except as set forth in Schedule 5.3 neither the
execution and delivery of this Agreement by the Company or the
Shareholders or any Company Ancillary Agreement by the Company, nor
delivery and performance of this Agreement or any Company Ancillary
Agreement, nor the consummation of any of the transactions
contemplated hereby or thereby, nor compliance by the Company or
Shareholders with or fulfillment by any of them of the terms,
conditions and provisions hereof or thereof will: (a) Conflict
with, result in a breach of the terms, conditions or provisions of,
or constitute a default, an event of default or an event creating
rights of acceleration, termination or cancellation or a loss of
rights under, or result in the creation or imposition of any
Encumbrance, under (1) the charter or bylaws of the Company, (2)
any Designated Contract, (3) any Court Order to which the Company
is a party or by which the Company or any of its assets or
properties are bound, or (4) any Requirements of Laws affecting the
Company or any of its -24- assets or properties, except in the
cases of clauses (2)-(4) above as would not have or be reasonably
expected to have a Material Adverse Effect+ADs- or (b) Except for
any applicable requirements under the Antitrust Improvements Act,
require the approval, consent, authorization or act of, or the
making by the Company of any declaration, filing or registration
with, any Governmental Body, the failure to obtain or make which
would not prevent or materially alter or delay any of the
transactions contemplated by this Agreement. 5.4 Capitalization.
The authorized capital stock of the Company consists of: (i) 50,000
shares of Class A Common Stock, of which 536 shares are issued and
outstanding+ADs- and (ii) 50,000 shares of Class B Common Stock, of
which 5,007.03 shares are issued and outstanding. All of the issued
and outstanding shares of capital stock of the Company (i) have
been duly authorized and validly issued and are fully paid and
non-assessable, (ii) were issued in compliance with all applicable
state and federal securities laws, and (iii) were not issued in
violation of any preemptive rights or rights of first refusal. No
rights of first refusal exist with respect to the shares of capital
stock of the Company, and no such rights arise by virtue of or in
connection with the transactions contemplated hereby. Except as set
forth above, as of the date hereof, (x) there are no shares of
capital stock of the Company authorized, issued or outstanding and
(y) there are no outstanding or authorized rights, options,
warrants, convertible securities, subscription rights, conversion
rights, exchange rights or other agreements or commitments of any
kind that could require the Company to issue or sell any shares of
its capital stock (or securities convertible into or exchangeable
for shares of its capital stock). There are no outstanding stock
appreciation, phantom stock, profit participation or other similar
rights pursuant to any agreement of the Company. Except for the
Shareholders' Agreement and the Restricted Stock Plan dated May 1,
2000, there are no proxies, voting rights or other agreements or
understandings with respect to the voting or transfer of the
capital stock of the Company. The Company is not obligated to
redeem or otherwise acquire any of its outstanding shares of
capital stock. 5.5 Shareholders of the Company. Schedule 5.5 sets
forth, with respect to the Company, (i) the name, address and
federal taxpayer identification number of, and the number of
outstanding shares of each class of its capital stock owned by,
each shareholder of record as of the close of business on the date
of this Agreement+ADs- and (ii) the name, address and federal
taxpayer identification number of, and number of shares of each
class of its capital stock beneficially owned by, each beneficial
owner of outstanding shares of capital stock (to the extent that
record and beneficial ownership of any such shares are different).
The Shareholders are the holders of 100+ACU- of the issued and
outstanding shares of capital stock of the Company. Except as set
forth on Schedule 5.5, such shares are not subject to any voting
trust agreement, proxy or other Contract. -25- 5.6 Records. Copies
of the articles of incorporation and bylaws of the Company have
been provided to Buyer and such copies are true, accurate and
complete and reflect all amendments made through the date of this
Agreement. The stock ledgers of the Company have been provided to
Buyer and contain accurate and complete records of all issuances,
transfers and cancellations of shares of the capital stock of the
Company. 5.7 Financial Statements. Schedule 5.7 contains (i) the
balance sheet of the Company as of December 31, 2001 and December
31, 2002 and the related statements of income and retained earnings
and cash flows for the years then ended audited by the independent
certified public accounting firm regularly engaged by the Company
to prepare its year-end financial statement (the
+ACY-quot+ADs-AUDITED FINANCIAL STATEMENTS+ACY-quot+ADs-)+ADs- and
(ii) the unaudited balance sheet as of August 24, 2003 and the
related statement of income for the fiscal eight months then ended
(the +ACY-quot+ADs-INTERIM FINANCIAL STATEMENTS+ACY-quot+ADs- and
together with the Audited Financial Statements, the
+ACY-quot+ADs-FINANCIAL STATEMENTS+ACY-quot+ADs-). Except as set
for
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