<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 31, 2000
HUNTSMAN PACKAGING CORPORATION
(Exact name of registrant as specified in its charter)
Utah 333-40067 87-0496065
(State or other jurisdiction (Commission File (IRS Employer Identification
of incorporation) Number) Number)
500 Huntsman Way
Salt Lake City, Utah 84108
(Address of principal executive offices) (Zip Code)
(801) 584-5700
(Registrant's telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
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ITEM 5. OTHER EVENTS.
On April 1, 2000, Huntsman Packaging Corporation, a Utah corporation
(the "Company"), announced that the Company, Chase Domestic Investments, L.L.C.
("Chase") and the shareholders of the Company have entered into a
Recapitalization Agreement dated as of March 31, 2000 (the "Agreement"),
pursuant to which the parties thereto have agreed to effectuate a
recapitalization of the Company. The recapitalization values the Company at
$1.02 billion (including outstanding indebtedness which is to be refinanced at
closing).
Upon consummation of the transactions contemplated under the Agreement:
(i) Chase will own a majority of the issued and outstanding capital stock of the
Company; (ii) the Company will redeem for cash all of the capital stock of the
Company owned or controlled by Jon M. Huntsman prior to closing; and (iii)
Richard P. Durham, President and Chief Executive Officer of the Company, a trust
established for the benefit of his wife, and other existing management
shareholders of the Company, will continue to own, collectively, a significant
percentage of the Company's outstanding capital stock. Following the closing,
Mr. Durham will be the Chairman, President and Chief Executive Officer of the
Company.
As part of the transactions contemplated by the Agreement, the Company
intends to tender for all of the $125 million principal amount of its 9 1/8%
Senior Subordinated Notes due 2007 and to solicit consents for amendments to the
related indenture. The transactions contemplated by the Agreement will be
financed with (i) borrowings under new or amended and restated credit
facilities, (ii) the proceeds of an issuance by the Company of new senior
subordinated notes (the "New Notes") or the proceeds of senior subordinated bank
loans, (iii) the proceeds of an issuance by the Company of preferred stock and
(iv) the proceeds of an issuance by the Company of common stock. The offering of
the New Notes will not be registered under the Securities Act of 1933, as
amended, and the New Notes may not be offered or sold in the United States
absent registration or an applicable exemption from the registration
requirements.
The consummation of the transaction is subject to customary closing
conditions, including the expiration or termination of any applicable waiting
periods under the federal Hart-Scott-Rodino Antitrust Improvements Act and other
applicable anti-trust laws.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(a) Financial Statements: Not applicable
(b) Pro Forma Financial Information: Not applicable
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(c) Exhibits
<TABLE>
<CAPTION>
Exhibit No. Document
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<S> <C> <C>
2.1 Recapitalization Agreement dated as of March 31, 2000
by and among the Company, Chase and the Company's
shareholders
99.1 Press Release dated April 12, 2000 announcing
commencement of debt tender offer and consent
solicitation
</TABLE>
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
HUNTSMAN PACKAGING CORPORATION
By: /s/ Ronald G. Moffitt
-------------------------------------------
Ronald G. Moffitt
Senior Vice President and General Counsel
April 12, 2000
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EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Document
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<S> <C> <C>
2.1 Recapitalization Agreement dated as of March 31, 2000
by and among the Company, Chase and the Company's
shareholders
99.1 Press Release dated April 12, 2000 announcing
commencement of debt tender offer and consent
solicitation
</TABLE>
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EXHIBIT 2.1
RECAPITALIZATION AGREEMENT
DATED AS OF MARCH 31, 2000
FOR
HUNTSMAN PACKAGING CORPORATION
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C> <C>
ARTICLE I CERTAIN DEFINITIONS.........................................................2
ARTICLE II SALE OF STOCK; CLOSING.....................................................11
2.1 Company Transactions.......................................................11
2.2 Stock Purchase Transactions................................................13
2.3 Time and Place of Closing..................................................13
2.4 The Closing................................................................13
2.5 Consideration Adjustment...................................................14
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY..............................17
3.1 Incorporation; No Conflict; Etc. ..........................................17
3.2 Capitalization; Structure..................................................18
3.3 Financial Statements.......................................................19
3.4 Undisclosed Liabilities....................................................19
3.5 Absence of Certain Changes.................................................19
3.6 Tangible Properties and Necessary Assets...................................20
3.7 Litigation; Orders.........................................................20
3.8 Intellectual Property......................................................21
3.9 Labor Matters..............................................................21
3.10 Compliance with Laws.......................................................21
3.11 Insurance..................................................................21
3.12 Scheduled Contracts........................................................21
3.13 Licenses, Approvals, Other Authorizations, Consents, Reports, Etc. ........22
3.14 Environmental Matters......................................................23
3.15 Tax Returns of the Company and its Subsidiaries............................24
3.16 Employee Benefit Plans.....................................................24
3.17 Real Property - Owned or Leased............................................26
3.18 Affiliate Transactions.....................................................26
3.19 Supplemental Schedules.....................................................26
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF ALL SHAREHOLDERS.........................27
4.1 Authorization; Enforceability..............................................27
4.2 Brokers, Finders, Etc. ....................................................28
4.3 No Implied Representations.................................................28
ARTICLE V REPRESENTATIONS AND WARRANTIES OF BUYER....................................29
5.1 Incorporation; Authorization; Etc. ........................................29
5.2 Brokers, Finders, Etc. ....................................................30
5.3 Acquisition of Shares for Investment.......................................30
5.4 Financial Capability.......................................................30
ARTICLE VI COVENANTS..................................................................31
6.1 Communication and Notification.............................................31
6.2 Reasonable Efforts; Obtaining Consents.....................................31
</TABLE>
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<TABLE>
<CAPTION>
<S> <C> <C>
6.3 Further Assurances.........................................................34
6.4 Conduct of Business........................................................34
6.5 Preservation of Business...................................................36
6.6 Public Announcements.......................................................36
6.7 Non-Solicitation...........................................................36
6.8 No Shop....................................................................37
6.9 Non-Compete; Non-Solicitation..............................................38
6.10 Corporate Names............................................................39
6.11 Collective Bargaining Agreements...........................................40
6.12 Buyer's Obligations for Employee Benefits..................................40
6.13 Employees..................................................................41
6.14 Transfer Taxes.............................................................42
6.15 Covenant to Supply Information.............................................42
6.16 Delivery of Subsequent Financial Information...............................42
6.17 Management Notes...........................................................42
6.18 Additional Agreements......................................................43
ARTICLE VII CONDITIONS TO BUYER'S OBLIGATION TO CLOSE..................................43
7.1 Representations, Warranties and Covenants of Shareholders..................43
7.2 Filings; Consents; Waiting Periods.........................................43
7.3 No Injunction..............................................................43
7.4 Opinion of Counsel.........................................................44
7.5 Payment and Cancellation of Indebtedness...................................44
7.6 Financing Letters..........................................................44
7.7 Cancellation of Stockholders' Agreement....................................44
7.8 Transaction Documents......................................................44
7.9 Resignation of Directors...................................................44
7.10 Transition Services Agreement..............................................44
ARTICLE VIII CONDITIONS TO SHAREHOLDERS' OBLIGATION TO CLOSE............................45
8.1 Representations, Warranties and Covenants of Buyer.........................45
8.2 Filings; Consents; Waiting Periods.........................................45
8.3 No Injunction..............................................................45
8.4 Transaction Documents......................................................45
8.5 Amended Management Notes...................................................46
ARTICLE IX REPRESENTATIVE.............................................................46
9.1 Appointment................................................................46
9.2 Authorization..............................................................46
9.3 Irrevocable Appointment....................................................47
9.4 Resignation................................................................47
9.5 Exculpation and Indemnification............................................48
ARTICLE X INDEMNIFICATION............................................................48
10.1 Survival...................................................................48
10.2 Indemnification Generally; Etc. ...........................................49
10.3 Limitations on Indemnification.............................................50
</TABLE>
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<TABLE>
<CAPTION>
<S> <C> <C>
10.4 Notice and Defense of Third-Party Claims...................................50
ARTICLE XI TERMINATION................................................................52
11.1 Termination................................................................52
11.2 Procedure and Effect of Termination........................................53
11.3 Effect of Closing Over Known Unsatisfied Conditions........................53
ARTICLE XII MISCELLANEOUS..............................................................53
12.1 Counterparts...............................................................53
12.2 Governing Law..............................................................54
12.3 MUTUAL WAIVER OF JURY TRIAL................................................54
12.4 Entire Agreement; Third-Party Beneficiaries................................54
12.5 Expenses...................................................................54
12.6 Notices....................................................................55
12.7 Successors and Assigns.....................................................56
12.8 Headings; Definitions......................................................56
12.9 Amendments and Waivers.....................................................56
12.10 Interpretation.............................................................56
12.11 Chase Capital Partners Guarantee...........................................57
</TABLE>
iii
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Exhibits
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Exhibit A Shareholders' Agreement
Exhibit B Form of Employment Agreements and Selected Terms
Exhibit C Registration Rights Agreement
Exhibit D Transaction Expenses
Exhibit E Transactions Example
Exhibit F Preferred Stock Term Sheet
Exhibit G Employee Option Plan Terms
Schedules
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Schedule 1 Permitted Liens
Schedule 3.1 Subsidiaries
Schedule 3.1(c) Incorporation; No Conflict; Etc.
Schedule 3.2 Capitalization, Structure
Schedule 3.3 Financial Statements
Schedule 3.4 Undisclosed Liabilities
Schedule 3.5 Absence of Certain Changes
Schedule 3.6 Tangible Properties and Necessary Assets
Schedule 3.7 Litigation; Orders
Schedule 3.8 Intellectual Property
Schedule 3.9 Labor Matters
Schedule 3.10 Compliance with Laws
Schedule 3.12-1 Scheduled Contracts
Schedule 3.12-2 Lendings and Borrowings
Schedule 3.13(a) Licenses, Approvals, Other Authorizations, Consents,
Reports, etc.
Schedule 3.13(b) Registrations and Filings
Schedule 3.14 Environmental Matters
Schedule 3.16(a) Employee Benefit Plans
Schedule 3.16(c) Multiemployer Plans
Schedule 3.16(d) Non-Compliance of Foreign Company Plans
Schedule 3.16(e) Post-Retirement Benefits
Schedule 3.17 Real Property
Schedule 3.18 Affiliate Transactions
Schedule 4.1 Authorization; Enforceability
Schedule 6.4 Conduct of Business
Schedule 6.15 Covenants
iv
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RECAPITALIZATION AGREEMENT
THIS RECAPITALIZATION AGREEMENT (this "Agreement"), is made as of
March 31, 2000, by and among Huntsman Packaging Corporation, a Utah corporation
(the "Company"), Chase Domestic Investments, L.L.C. (the "Buyer") and the
Persons listed on the signature pages hereto (collectively referred to herein as
the "Shareholders" and individually as a "Shareholder"). Except as otherwise
indicated herein, capitalized terms used herein are defined in Article I;
WHEREAS, the Company desires to reconstitute its capital
structure through the sale of newly-issued shares of common stock and preferred
stock, the incurrence of new debt obligations, the repayment of certain of its
outstanding debt obligations, the redemption of certain of its outstanding
shares of common stock and the exchange of its remaining outstanding shares of
common stock for newly-issued shares of common stock, on the terms and subject
to the conditions set forth herein;
WHEREAS, (i) Jon M. Huntsman and the Huntsman Cancer Foundation
desire to redeem all of their shares of common stock of the Company and (ii) the
remaining Shareholders desire to exchange their shares of common stock in the
Company for newly-issued shares of common stock of the Company, each on the
terms and subject to the conditions set forth herein;
WHEREAS, the Buyer desires to purchase from the Shareholders
(other than Jon M. Huntsman and the Huntsman Cancer Foundation), and such
Shareholders wish to sell to the Buyer, certain of their newly-issued shares of
common stock of the Company on the terms and subject to the conditions set forth
herein; and
WHEREAS, the Buyer desires to acquire newly-issued shares of
common stock and preferred stock of the Company on the terms and subject to the
conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties to this Agreement
hereby agree as follows:
<PAGE> 7
ARTICLE I
CERTAIN DEFINITIONS
As used in this Agreement the following terms shall have the
following respective meanings:
"Accountants' Determination" shall have the meaning set forth in
Section 2.5(b)(ii) hereof.
"Action" shall mean any actual action, suit, arbitration,
inquiry, proceeding or investigation by or before any court, governmental or
other regulatory or administrative agency or commission or arbitral panel.
"Affiliate" (and, with a correlative meaning, "Affiliated") shall
mean, with respect to any Person, any other Person that directly, or indirectly
through one or more intermediaries, controls, or is controlled by, or is under
common control with, such first Person. As used in this definition, "control"
(including, with correlative meanings, "controlled by" and "under common control
with") shall mean possession, directly or indirectly, of power to direct or
cause the direction of management or policies (whether through ownership of
securities or partnership or other ownership interests, by contract or
otherwise).
"Agreement" shall have the meaning set forth in the preamble
hereto.
"Amended Management Notes" shall have the meaning set forth in
Section 6.17 hereof.
"Antitrust Laws" shall have the meaning set forth in Section
6.2(b) hereof.
"Arbitrating Accountants" shall have the meaning set forth in
Section 2.5(b)(ii) hereof.
"Balance Sheet" shall mean the audited consolidated balance sheet
of the Company as of December 31, 1999 included in the Financial Statements.
"Business" shall mean the production, manufacturing and
distribution of polymer-based, value-added films by the Company and its
Subsidiaries for flexible packaging, personal care, medical, agricultural,
industrial and other applications.
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"Business Day" means (i) any day that is not a Saturday, Sunday,
legal holiday, or Pioneer Day in the State of Utah or (ii) a day on which banks
located in New York, New York are obligated to remain open.
"Buyer" shall have the meaning set forth in the preamble hereto.
"Buyer Group" shall mean the Buyer, its successors and assigns
and their respective Affiliates.
"Closing" shall mean the consummation of the transactions
contemplated by Sections 2.1 through 2.4 hereof.
"Closing Balance Sheet" shall have the meaning set forth in
Section 2.5(a) hereof.
"Closing Date" shall mean the later of (a) the second business
day after expiration or termination of all waiting periods prescribed under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act")
or any other applicable Antitrust Law, and (b) the date on which the conditions
set forth in Articles VII and VIII hereof shall be satisfied or duly waived or,
if the Representative and Buyer mutually agree on a different date, the date
upon which they have mutually agreed.
"Closing Date Indebtedness" shall mean the indebtedness for
borrowed money of the Company and its Subsidiaries on the Closing Date,
calculated on a consolidated basis in accordance with GAAP as set forth on a
certificate delivered by the Representative to the Buyer immediately prior to
the Closing Date; provided that such calculation of Closing Date Indebtedness
shall be reasonably satisfactory to the Buyer.
"Code" shall mean the Internal Revenue Code of 1986, as amended,
and any successor thereto.
"Common Stock" shall have the meaning set forth in Section 2.1(a)
hereof.
"Company" shall have the meaning set forth in the preamble
hereto.
"Company Stock Purchase Price" shall mean $165.3 million minus
the amount paid to purchase shares of Common Stock pursuant to Section 2.2
hereof.
"Company Transactions" shall have the meaning set forth in
Section 2.1 hereof.
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"Company's Best Knowledge" shall have the meaning set forth in
Section 12.10 hereof.
"Competitive Business" shall have the meaning set forth in
Section 6.9(a) hereof.
"Employee Benefit Plans" shall have the meaning set forth in
Section 3.16(a) hereof.
"Environmental Law" shall have the meaning set forth in Section
3.14 hereof.
"Equity Value" shall mean an amount equal to $1,020,000,000 minus
Closing Date Indebtedness.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
"ERISA Affiliate" means, with respect to any Person, any entity
that is a member of a "controlled group of corporations" with, or is under
"common control" with, or is a member of the same "affiliated service group"
with such Person as defined in Section 414(b), 414(c) or 414(m) of the Code;
provided, however, in no event shall Huntsman Corporation, a Utah corporation
(nor its Subsidiaries), be deemed to be an "ERISA Affiliate" with respect to the
Company for purposes of this Agreement.
"Existing Shareholders Agreement" shall have the meaning set
forth in Section 7.7 hereof.
"Existing Senior Subordinated Notes" shall have the meaning set
forth in Section 2.1(i) hereof.
"Final Determination Date" shall have the meaning set forth in
Section 2.5(b)(iii) hereof.
"Final Net Worth" shall have the meaning set forth in Section
2.5(a) hereof.
"Final Net Worth Statement" shall have the meaning set forth in
Section 2.5(a) hereof.
"Financial Statements" shall have the meaning set forth in
Section 3.3 hereof.
"Financing Letters" shall have the meaning set forth in Section
5.4 hereof.
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"Foreign Company Plan" shall have the meaning set forth in
Section 3.16(d) hereof.
"Fundamental Representations and Warranties" shall have the
meaning set forth in Section 10.1 hereof.
"GAAP" shall mean generally accepted accounting principles as
used in the United States applied on a basis consistent with the historical
policies and practices used by the Company and its Subsidiaries.
"Governmental Antitrust Authority" shall have the meaning set
forth in Section 6.2(a) hereof.
"Grossed Up Option Payment" shall equal the sum of (a) (i) the
amount of Income Taxes that Jack Knott is required to pay as a result of
exercising the Knott Option to acquire the Knott Exercised Option Shares
pursuant to Section 2.1(b) in excess of (ii) the amount of Income Taxes that
Jack Knott would have been required to pay had he owned the Knott Exercised
Option Shares on the date of this Agreement and sold each Knott Exercised Option
Share for the Per Share Value plus (b) an amount, so that, after deducting from
the Grossed Up Option Payment all Income Taxes imposed on Jack Knott with
respect to the Grossed Up Option Payment, the net amount shall be equal to the
amount computed under clause (a). For purposes of computing items (a)(i) and
(b), it shall be assumed that all items of Jack Knott's income are subject to
the highest marginal income tax rates applicable to ordinary income of
individuals for federal, state, and local Income Tax purposes. For purposes of
computing item (a)(ii), it shall be assumed that at the time of the hypothetical
sale, each Knott Exercised Option Share was a capital asset (as such term is
defined in Code Section 1221) held by Jack Knott for more than 12 months and
that Jack Knott's adjusted tax basis in each Knott Exercised Option Share was
$100.
"Hazardous Materials" shall have the meaning set forth in Section
3.14 hereof.
"HSR Act" shall have the meaning set forth in the definition of
"Closing Date" in Article I hereof.
"Income Taxes" means any U.S. federal, state or local net income
or franchise taxes or other taxes measured by net income.
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"Indemnified Persons" means the Persons entitled to
indemnification under Article X.
"Indemnifying Persons" means the Persons obligated to indemnify
an Indemnified Person under Article X.
"Indemnity Threshold" shall have the meaning set forth in Section
10.3(a) hereof.
"Intellectual Property" shall mean (a) all patents, patent
rights, trademarks, trademark registrations, trade names, service marks, service
mark registrations, copyrights, inventions, trade secrets and other similar
rights, applications for any of the foregoing, and licenses therefore, in each
case used in the Business and (b) all such items that are acquired or developed
for use in the Business between the date of this Agreement and the Closing Date,
excluding, with respect to clauses (a) and (b), all such items which expire or
are withdrawn, abandoned, canceled, transferred or licensed in the ordinary
course of business on or prior to the Closing Date in accordance with the terms
of this Agreement.
"Knott Exercised Option Shares" shall mean a number of Shares
equal to (i) 17,989 (the number of Shares held by Jack Knott) multiplied by the
Purchased Share Portion minus (ii) 7,500 (the number of Shares held by Jack
Knott not subject to the Knott Option).
"Knott Option" means the option to purchase 10,489 Shares held by
Jack Knott on the date hereof.
"Knott Rollover Option Shares" shall mean a number of Shares
equal to 17,989 (the number of Shares held by Jack Knott) minus the Knott
Exercised Option Shares minus 7,500 (the number of shares held by Jack Knott not
subject to the Knott Option).
"Liability" shall mean any liability or obligation, whether known
or unknown, asserted or unasserted, absolute or contingent, accrued or
unaccrued, liquidated or unliquidated and whether due or to become due,
regardless of when asserted.
"Licenses" shall have the meaning set forth in Section 3.13(a)
hereof.
"Lien" shall mean any security interest, pledge, mortgage, lien,
charge, encumbrance, proxy, voting trust or voting agreement.
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"Losses" shall mean any and all losses, claims, shortages,
damages, liabilities, expenses (including reasonable attorneys' and accountants'
and other professionals' fees), assessments, Tax deficiencies and Taxes incurred
in connection with the receipt of indemnification payments (including interest
or penalties thereon) arising from or in connection with any such matter that is
the subject of indemnification under Section 10.2.
"Material Adverse Effect" shall have the meaning set forth in
Section 3.1(a).
"Names" shall have the meaning set forth in Section 6.10 hereof.
"Net Worth Target" shall mean $85.3 million if the Closing occurs
on or prior to May 31, 2000 and shall increase by $1.5 million on the first day
of each month thereafter (commencing on June 1, 2000) prior to the Closing Date.
"New Knott Option" shall have the meaning set forth in Section
2.1(d) hereof.
"Non-Compete Period" shall have the meaning set forth in Section
6.9(a) hereof.
"Notice of Adjustment" shall have the meaning set forth in
Section 2.5(b)(i) hereof.
"Objection Notice" shall have the meaning set forth in Section
2.5(b)(ii) hereof.
"Operating Shareholders" shall mean each Shareholder other than
the Huntsman Cancer Foundation.
"Overpayment Amount" shall have the meaning set forth in Section
2.5(c)(ii) hereof.
"Overpayment Net Worth Threshold" shall mean the Net Worth Target
minus $10 million.
"Per Share Value" shall mean Equity Value divided by 1,067,000
(the number of Shares).
"Percentage Ownership" means, with respect to each Shareholder,
the quotient obtained by dividing (i) the number of Shares held by such
Shareholder immediately prior to the Closing by (ii) 1,067,000 (the number of
Shares held by all Shareholders).
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"Permitted Liens" shall mean all Liens (a) that are set forth on
Schedule 1 hereto, (b) that are reflected or reserved against in the Balance
Sheet, (c) that arise out of Taxes or general or special assessments not in
default and payable without penalty or interest or the validity of which is
being contested in good faith by appropriate proceedings, (d) of carriers,
warehousemen, mechanics, materialmen and other similar persons or otherwise
imposed by law incurred in the ordinary course of business for sums not yet
delinquent or being contested in good faith, (e) that relate to deposits made in
the ordinary course of business in connection with workers' compensation,
unemployment insurance and other types of social security, or (f) Liens securing
indebtedness or other obligations not to exceed $10 million.
"Person" shall mean any individual, firm, corporation,
partnership or other entity, and shall include any successor (by merger or
otherwise) of such entity.
"Post Closing Percentage Ownership" shall mean with respect to
the Buyer or any Selling/Exchanging Shareholder a percentage equal to the number
of Shares of Common Stock owned by such Person divided by the aggregate number
of Shares of Common Stock outstanding immediately after the Closing (assuming
the New Knott Option is fully exercised but that all other option shares are not
exercised and any "restricted shares" are not outstanding).
"Potential Transaction" shall have the meaning set forth in
Section 6.8 hereof.
"Preferred Stock" shall have the meaning set forth in Section
2.1(a) hereof.
"Proportionate Percentage" shall mean, with respect to each
Operating Shareholder, the quotient obtained by dividing (i) the number of
Shares held by such Operating Shareholder immediately prior to the Closing by
(ii) 1,067,000 (the number of Shares held by the Shareholders); provided, that
for purposes of this definition all Shares held by the Huntsman Cancer
Foundation shall be deemed held by Jon M. Huntsman.
"Purchased Share Amount" shall mean a number of Shares equal to
417,000 (the number of Shares held by the Selling/Exchanging Shareholders) minus
the Rollover Shares.
"Purchased Share Percentage" shall mean, with respect to each
Selling/Exchanging Shareholder, the quotient obtained by dividing the (i) the
number of Shares held by such Selling/Exchanging Shareholder by (ii) 417,000
(the number of Shares held by the Selling/Exchanging Shareholders).
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"Purchased Share Portion" shall mean the quotient obtained by
dividing the Purchased Share Amount by 417,000 (the number of Shares held by the
Selling/Exchanging Shareholders).
"Real Property" shall mean any and all real property owned or
leased by the Company or its Subsidiaries and used in the Business.
"Redeemed Share Percentage" shall mean, with respect to each
Redeeming Shareholder, the quotient obtained by dividing (i) the number of
Shares held by such Redeeming Shareholder by (ii) 650,000 (the number of Shares
held by the Redeeming Shareholders).
"Redeeming Shareholders" shall mean Jon M. Huntsman and the
Huntsman Cancer Foundation.
"Redemption Amount" shall mean an amount equal to the Per Share
Value multiplied by 650,000 (the number of Shares held by the Redeeming
Shareholders).
"Representative" shall have the meaning set forth in Section 9.1
hereof.
"Returns" shall mean returns, reports and forms required to be
filed with any U.S. taxing authority or foreign taxing authority.
"Rollover Shares" shall mean a number of Shares equal to the
number obtained by (i) dividing $99.7 million by the Equity Value and (ii)
multiplying such amount by 1,067,000 (the number of Shares).
"Salomon" shall have the meaning set forth in Section 4.2 hereof.
"Scheduled Contracts" shall have the meaning set forth in Section
3.12 hereof.
"Selling/Exchanging Shareholders" shall mean the Christena Karen
H. Durham Trust; Durham Capital, Ltd.; Jack Knott; Sorensen Capital, LLC;
Moffitt Capital, LLC; and the Ronald G. Moffitt IRA (DLJ Securities Corp.
Custodian).
"Senior Facilities" shall have the meaning set forth in Section
2.1(h) hereof.
"Senior Subordinated Financing" shall have the meaning set forth
in Section 2.1(g) hereof.
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"Settlement Agreement" shall have the meaning set forth in
Section 2.5(b)(ii) hereof.
"Shareholder" or "Shareholders" shall have the meaning set forth
in the preamble hereto.
"Shares" shall mean the shares of class A common stock, class B
common stock and class C common stock of the Company outstanding as of the date
hereof assuming the Knott Option was exercised in full; provided that Jack Knott
shall be deemed to hold such Shares subject to the Knott Option for purposes of
this Agreement.
"Sold Company Common Stock" means a number of shares of Common
Stock equal to the quotient obtained by dividing the Company Stock Purchase
Price by the Per Share Value.
"Stock Purchase Transactions" shall have the meaning set forth in
Section 2.2 hereof.
"Subsidiary" of a corporation or Person shall mean any
corporation or other Person fifty percent (50%) or more of whose outstanding
voting securities or other equity interests are directly or indirectly owned by
the first corporation or Person.
"Surviving Representations and Warranties" shall have the meaning
set forth in Section 10.2(b)(i) hereof.
"Supplemental Schedules" shall have the meaning set forth in
Section 3.19 hereof.
"Taxes" shall mean all Income Taxes and any other tax whatsoever,
including, without limitation, gross receipts, profits, sales, use, occupation,
value-added, ad valorem, transfer, franchise, withholding, payroll, employment,
excise, or property taxes, together with any interest or penalties imposed with
respect thereto.
"Tax Group" shall have the meaning set forth in Section 3.15
hereof.
"Third-Party Claim" shall have the meaning set forth in Section
10.4 hereof.
"30-Day Period" shall have the meaning set forth in Section
2.5(b)(ii) hereof.
"Transaction Documents" shall mean, collectively, (i) this
Agreement, (ii) the Shareholders' Agreement in the form attached as Exhibit A
hereto dated as of the Closing Date
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among the Company and the shareholders of the Company party thereto, (iii) the
Employment Agreements (together with a schedule thereto setting forth certain
employment terms contained therein) in the form attached as Exhibit B hereto
dated as of the Closing Date between the Company and each of Richard P. Durham,
Jack Knott, Scott K. Sorensen, Ronald G. Moffitt and (iv) the Registration
Rights Agreement in the form attached as Exhibit C hereto dated as of the
Closing Date among the Company and the shareholders of the Company party
thereto.
"Transaction Expenses" means those expenses set forth on Exhibit
D hereto.
"Transactions" shall have the meaning set forth in Section 2.2
hereof. Exhibit E hereto sets forth an example of certain of the Transactions to
be consummated pursuant to this Agreement based on certain assumptions contained
therein.
"Transfer Laws" shall have the meaning set forth in Section
6.13(c) hereof.
"Underpayment Amount" shall have the meaning set forth in Section
2.5(c)(i) hereof.
"Underpayment Net Worth Threshold" shall mean the Net Worth
Target at Closing plus $10 million.
"U.S. Company Employees" shall have the meaning set forth in
Section 3.16(b) hereof.
"U.S. Employee Benefit Plans" shall have the meaning set forth in
Section 3.16(b) hereof.
ARTICLE II
SALE OF STOCK; CLOSING
2.1 Company Transactions. On the basis of the representations,
warranties, covenants and agreements, and subject to the satisfaction or waiver
of the conditions, set forth herein, the Company agrees to and will consummate,
and the Shareholders agree to and will cause the Company to consummate,
contemporaneously with the Closing, the following transactions (collectively,
the "Company Transactions"):
(a) The Company shall amend and restate its Articles of
Incorporation to change its common stock into a single class of common stock of
the Company (the "Common
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Stock"), to authorize and designate shares of preferred stock of the Company
(the "Preferred Stock") and to make other changes to effectuate the transactions
contemplated by this Agreement.
(b) Jack Knott shall exercise the Knott Option to purchase the
Knott Exercised Option Shares, and the Company shall pay to Jack Knott the
Grossed Up Option Payment, subject to withholding.
(c) Each of the Selling/Exchanging Shareholders shall exchange,
and the Company shall issue to each Selling/Exchanging Shareholder, one share of
Common Stock for each Share held by such Selling/Exchanging Shareholder
(including the Knott Exercised Option Shares, but excluding the Knott Rollover
Option Shares).
(d) Jack Knott shall exchange that portion of the Knott Option
not exercised pursuant to Section 2.1(b) for an option to purchase a number of
shares of Common Stock which shall equal the number of Knott Rollover Option
Shares, which option shall be fully vested and exercisable (the "New Knott
Option"); and the Company shall issue to Jack Knott the New Knott Option.
(e) The Company shall issue to the Buyer, and the Buyer shall
purchase from the Company, for the Company Stock Purchase Price, the Sold
Company Common Stock.
(f) The Company shall issue to the Buyer, and the Buyer shall
purchase from the Company, upon payment of $100 million, 100,000 shares of
Preferred Stock with an aggregate liquidation preference of $100 million having
the terms set forth on Exhibit F hereto, such purchase to be pursuant to the
terms set forth on Exhibit F.
(g) The Company shall issue senior subordinated notes in an
aggregate principal amount of up to $220 million to certain institutional
investors or incur indebtedness under a senior subordinated credit facility (the
"Senior Subordinated Financing") on the terms set forth in the Financing
Letters.
(h) The Company shall obtain $580 million of senior credit
facilities (the "Senior Facilities") and incur senior indebtedness in amounts
satisfactory to consummate the transactions contemplated hereby and to fund its
ongoing working capital needs on the terms set forth in the Financing Letters.
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(i) The Company shall repay and retire all of the Closing Date
Indebtedness, which repayment shall include the purchase of the Company's
outstanding 9 1/8% Senior Subordinated Notes due 2007 (the "Existing Senior
Subordinated Notes") tendered in a tender offer for such notes.
(j) The Company shall redeem from each of the Redeeming
Shareholders such Redeeming Shareholder's Redeemed Share Percentage of the
650,000 Shares held by the Redeeming Shareholders for such Redeeming
Shareholders Redeemed Share Percentage of the Redemption Amount.
2.2 Stock Purchase Transactions. On the basis of the representations,
warranties, covenants and agreements, and subject to the satisfaction or waiver
of the conditions set forth herein, each Selling/Exchanging Shareholder shall
sell to the Buyer and the Buyer shall purchase from each such Selling/Exchanging
Shareholder, a number of shares of Common Stock (received pursuant to Section
2.1(c)) equal to such Selling/Exchanging Shareholder's Purchased Share
Percentage of the Purchased Share Amount for a purchase price per share equal to
the Per Share Value (the "Stock Purchase Transactions" and, together with the
Company Transactions, the "Transactions").
2.3 Time and Place of Closing. The Closing shall take place on the
Closing Date at 9:00 A.M., Chicago time, at the offices of Winston & Strawn, 35
West Wacker Drive, Chicago, Illinois, 60601.
2.4 The Closing. At the Closing:
(a) The Buyer shall pay the Company Stock Purchase Price to the
Company by wire transfer of immediately available funds to the account
designated by the Company in exchange for the Sold Company Common Stock to be
issued at the Closing pursuant to Section 2.1(e).
(b) The Buyer shall purchase the Preferred Stock on the terms set
forth on Exhibit F for $100 million.
(c) The Company shall incur indebtedness under the Senior
Subordinated Financing in an aggregate principal amount of up to $220 million on
the terms set forth in the Financing Letters.
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(d) The Company shall incur indebtedness under the Senior
Facilities in amounts satisfactory to consummate the transactions contemplated
hereby and to fund its ongoing working capital needs on the terms set forth in
the Financing Letters.
(e) The Company shall issue Common Stock to the
Selling/Exchanging Shareholders in exchange for the Shares held by the
Selling/Exchanging Shareholders pursuant to Section 2.1(c).
(f) The Buyer shall consummate the Stock Purchase Transactions by
paying the amounts due to each Selling/Exchanging Shareholder pursuant to
Section 2.2 by wire transfer of immediately available funds to accounts
designated by the Representative upon delivery to the Buyer of the shares of
Common Stock to be sold in the Stock Purchase Transactions by such
Selling/Exchanging Stockholder pursuant to Section 2.2.
(g) The Company shall pay to each Redeeming Shareholder, by wire
transfer of immediately available funds to an account designated by the
Representative, an amount equal to the portion of the Redemption Amount due to
such Shareholder pursuant to Section 2.1(j) upon delivery to the Company of such
Shareholder's Shares to be redeemed pursuant to Section 2.1(j).
(h) The parties shall consummate the other Company Transactions
contemplated by Section 2.1.
2.5 Consideration Adjustment.
(a) Preparation of Closing Balance Sheet. As promptly as
practicable following the Closing Date, the Buyer shall prepare, and cause
Arthur Andersen LLP, to certify, a balance sheet (the "Closing Balance Sheet")
of the Company reflecting the consolidated financial position of the Company and
its Subsidiaries as of the close of business on the Closing Date prepared in
accordance with GAAP consistently applied with the Financial Statements and a
statement (the "Final Net Worth Statement") setting forth the computation of the
Final Net Worth derived therefrom on the Closing Date, which statement shall be
prepared in accordance with GAAP consistently applied with the Financial
Statements. For purposes of preparing the Final Net Worth Statement, "Final Net
Worth" shall mean the total consolidated assets of the Company minus the total
consolidated liabilities of the Company without giving effect to any
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transactions consummated as a result of the obligations of the parties
hereunder; provided, however, that the Transaction Expenses shall not be taken
into account in preparing the Closing Balance Sheet and computing Final Net
Worth.
(b) Review by the Shareholders.
(i) Within sixty (60) Business Days of the Closing Date, the
Buyer shall deliver the Closing Balance Sheet together with the Final Net Worth
Statement to the Representative with a notice (the "Notice of Adjustment")
setting forth its proposed adjustment, if any, of the amounts paid for Shares
pursuant to this Agreement. During the preparation of and after the completion
of the Closing Balance Sheet until the Final Determination Date, the Buyer shall
provide the Representative and his advisors with timely access to the work
papers, trial balances and similar materials used in connection with the
preparation of the Final Net Worth Statement.
(ii) Following receipt of the Notice of Adjustment, the
Representative will be afforded a period of thirty (30) Business Days (the
"30-Day Period") to review the Notice of Adjustment. At or before the end of the
30-Day Period, the Representative will either (A) accept the Final Net Worth (as
set forth in the Notice of Adjustment) in its entirety, in which case the Final
Net Worth will be as set forth in the Notice of Adjustment or (B) deliver to the
Buyer a written notice (the "Objection Notice") containing a sufficiently
detailed written explanation of those items in the Final Net Worth Statement (as
set forth in the Notice of Adjustment) which the Representative disputes, in
which case the items identified by the Representative shall be deemed to be in
dispute. The failure by the Representative to deliver the Objection Notice
within the 30-Day Period shall constitute the Representatives' acceptance of the
Final Net Worth as set forth in the Notice of Adjustment. If the Representative
delivers the Objection Notice in a timely manner, then, within a further period
of twenty (20) Business Days from the end of the 30-Day Period, the parties and,
if desired, their accountants will attempt to resolve in good faith any disputed
items and reach a written agreement (the "Settlement Agreement") with respect
thereto. Failing such resolution, the unresolved disputed items will be referred
for final binding resolution to KPMG LLP (the "Arbitrating Accountants"), the
fees and expenses of which shall be borne equally by the Operating Shareholders
(in accordance with their respective Proportionate Percentage), on the one hand,
and the Company, on the other hand.
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The Final Net Worth will be deemed to be as determined by the Arbitrating
Accountants. Such determination (the "Accountants' Determination") shall be (A)
in writing, (B) furnished to the Representative and the Buyer as soon as
practicable after the items in dispute have been referred to the Arbitrating
Accountants, (C) made in accordance with GAAP consistently applied with the
Financial Statements and the methods used in calculating the Net Worth Target
and (D) nonappealable and incontestable by the Shareholders, the Company, the
Buyer and each of their respective Affiliates and successors and not subject to
collateral attack for any reason other than manifest error or fraud.
(iii) The "Final Determination Date" shall mean the earliest to
occur of (A) the thirty-first day following the receipt by the Representative of
the Notice of Adjustment if the Representative shall have failed to deliver the
Objection Notice to the Buyer within the 30-Day Period, (B) the date on which
either the Representative or Buyer gives the other a written notice to the
effect that such party has no objection to the other party's determination of
the Final Net Worth, (C) the date on which the Representative and Buyer execute
and deliver a Settlement Agreement and (D) the date as of which the
Representative and Buyer shall have received the Accountants' Determination.
(c) Adjustment.
(i) If the Final Net Worth is greater than the Underpayment Net
Worth Threshold (the amount of such excess being referred to herein as the
"Underpayment Amount"), then, within five Business Days following the Final
Determination Date, the Buyer and each Selling/Exchanging Shareholder shall pay,
or cause to be paid, such Person's Post Closing Percentage Ownership of the
Underpayment Amount to the Shareholders so that each Shareholder shall receive
such Shareholder's respective Percentage Ownership of the Underpayment Amount.
(ii) If the Final Net Worth is less than the Overpayment Net
Worth Threshold (the amount of such shortfall being referred to herein as the
"Overpayment Amount"), then, within five Business Days following the Final
Determination Date, each Shareholder shall pay, or cause to be paid such
Person's Percentage Ownership of the Overpayment Amount to the Buyer and each
Selling/Exchanging Shareholder so that the Buyer and each Selling/Exchanging
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Shareholder receives its respective Post-Closing Percentage Ownership of the
Overpayment Amount.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF THE COMPANY
The Company represents and warrants to Buyer as follows:
3.1 Incorporation; No Conflict; Etc. (a) Each of the Company and its
Subsidiaries is duly organized and validly existing and, with respect to those
corporations organized under the laws of one of the states of the United States
of America (a "U.S. Corporation"), is in good standing under the laws of the
jurisdiction of its organization. Schedule 3.1 sets forth each of the Company's
Subsidiaries, the names of the holders of the capital stock or other equity
interests in such Subsidiary and the percentage of the outstanding equity of
such Subsidiary held by such holder or holders. Each of the Company and its
Subsidiaries (i) has all requisite corporate power and authority to own its
properties and assets and to carry on its business as it is now being conducted;
and (ii) is in good standing and is duly qualified to transact business as a
foreign corporation in each jurisdiction set forth on Schedule 3.1 and where the
nature of property owned or leased by it or the conduct of its business requires
it to be so qualified, except where the failure to be in good standing or to be
duly qualified to transact business, would not, individually or in the
aggregate, have a material adverse effect on the business, results of operations
or financial condition of the Company and its Subsidiaries, taken as a whole (a
"Material Adverse Effect").
(b) The Company has all the requisite corporate power and
authority to enter into this Agreement and any and all instruments necessary or
appropriate in order to effectuate fully the terms and conditions of this
Agreement and all related transactions contemplated hereby and to perform its
obligations thereunder. The execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby have been
duly and validly authorized by all necessary corporate action on the part of the
Company, and this Agreement has been duly and validly executed and delivered by
the Company and this Agreement is the valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms, subject
to the effect of bankruptcy, insolvency, reorganization,
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liquidation, dissolution, moratorium or other similar laws relating to or
affecting the rights of creditors generally and to the effect of the application
of general principles of equity (regardless of whether considered in proceedings
at law or in equity).
(c) The execution, delivery and performance of this Agreement by
the Company and the consummation of the transactions contemplated hereby will
not (i) violate any provision of the Company's articles of incorporation or
by-laws, (ii) violate any provision of any charter or by-laws or similar
organizational instrument of the Company's Subsidiaries, (iii) except as
disclosed on Schedule 3.1(c) hereto, violate any provision of, or be an event
that is (or with the passage of time will result in) a violation of, or result
in the acceleration of or entitle any party to accelerate (whether after the
giving of notice or lapse of time or both) any obligation under, or result in
the imposition of any Lien upon any of the Shares or any of the Company's or any
of its Subsidiaries' assets or properties pursuant to, any Lien, lease,
agreement, instrument, order, arbitration award, judgment or decree to which the
Company or any of its Subsidiaries is a party or by which any of them is bound,
or (iv) violate or conflict with any provision of law, order, judgment or ruling
of any governmental authority or any other restriction of any kind or character
to which the Company or any of its Subsidiaries is subject, that, in the case of
either of clauses (iii) and (iv), would, individually or in the aggregate, have
a Material Adverse Effect or prevent the transactions contemplated hereby.
3.2 Capitalization; Structure. The authorized capital stock of the
Company consists of 1,200,000 shares of class A common stock, no par value, of
which 1,000,001 shares are outstanding; 10,000 shares of class B common stock,
no par value, of which 6,999 shares are outstanding; and 60,000 shares of class
C common stock, no par value, of which 49,511 shares are outstanding and 10,489
shares are reserved for issuance upon exercise of outstanding options. All of
the Shares are validly issued, fully paid and nonassessable and are held by the
persons set forth on Schedule 3.2. Except as set forth on Schedule 3.2 hereto,
(a) all of the outstanding shares of capital stock or other equity interests of
each of the Company's Subsidiaries have been validly issued and are fully paid
and nonassessable and are owned directly or indirectly by the Company free and
clear of any Liens, and (b) there are no outstanding options, warrants or other
rights of any kind to acquire, or obligations to issue, shares of capital stock
of any class of, or other equity interests in, the Company or any of its
directly or indirectly owned Subsidiaries which have been issued, granted or
entered into by the Company or any of its Subsidiaries.
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Other than as set forth on Schedule 3.2, there are no Liens on any shares of
capital stock or other equity interests of the Company's Subsidiaries.
3.3 Financial Statements. The audited consolidated financial statements
of the Company and its Subsidiaries as of December 31, 1999 and 1998 are
attached hereto as Schedule 3.3 (collectively the "Financial Statements"). The
Financial Statements present fairly in all material respects the consolidated
financial position, results of operations and cash flows of the Company and its
Subsidiaries, for the periods, or as of the dates, set forth therein and were
prepared in conformity with GAAP.
3.4 Undisclosed Liabilities. Except as disclosed on Schedule 3.4
hereto, and except to the extent reflected, reserved against or otherwise
disclosed in the Financial Statements or the Closing Balance Sheet, none of the
Company or any of its Subsidiaries has, at the date hereof, any liabilities or
obligations relating to the Business that would be required to be reflected on a
consolidated balance sheet prepared in conformity with GAAP, except for
liabilities or obligations arising in the ordinary course of business and
consistent with past practice.
3.5 Absence of Certain Changes. Except as disclosed on Schedule 3.5
hereto, since December 31, 1999:
(a) there has been no change in the Business which would have a
Material Adverse Effect except for any change resulting from general economic,
financial or market conditions and for any change resulting from conditions or
circumstances generally affecting the industry in which the Business operates;
(b) with respect to the Business, there has been no physical
damage, destruction or loss that would, after taking into account any insurance
recoveries payable in respect thereof, have a Material Adverse Effect;
(c) neither the Company, nor any of its Subsidiaries, has
declared, set aside or paid any dividends on or made any other distribution in
respect of any of its capital stock, or repurchased, redeemed or otherwise
acquired any shares of its capital stock;
(d) neither the Company nor any of its Subsidiaries has sold,
transferred, licensed, pledged, mortgaged or otherwise disposed of tangible or
intangible assets with an
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aggregate fair market value of greater than $10 million other than sales of
inventory and obsolete or worn out equipment in the ordinary course of business
consistent with past practices;
(e) other than as contemplated by this Agreement, neither the
Company nor any of its Subsidiaries has amended its charter or by-laws;
(f) other than as contemplated under this Agreement, neither the
Company nor any of its Subsidiaries has acquired or agreed to acquire by merging
or consolidating with, or by purchasing any material portion of the capital
stock or assets of, or by any other manner, any business or any corporation,
partnership, association or other business organization or division thereof; or
(g) no party (including the Company or any of its Subsidiaries)
has accelerated, terminated, modified or canceled any Scheduled Contract and, to
the Company's Best Knowledge, no party intends to take any such action, and no
material modification has been made to any Scheduled Contract.
3.6 Tangible Properties and Necessary Assets. With the exception of
tangible properties disposed of since the date of the Balance Sheet and except
as set forth on Schedule 3.6 hereto, the Company or one of its Subsidiaries has,
and at the Closing will directly or indirectly have, good title to all tangible
properties necessary for the operation of the Business, or holds such tangible
properties by valid and existing lease or license. All tangible property in
active use by the Business is in good working order, ordinary wear and tear
excepted, except to the extent that any failure would not reasonably be expected
to have a Material Adverse Effect.
3.7 Litigation; Orders. Except as disclosed on Schedule 3.7 hereto as
of the date hereof, there are no Actions pending or, to the Company's Best
Knowledge, threatened against any of the Company or any of its Subsidiaries that
would reasonably be expected to have a Material Adverse Effect. Except as
disclosed on Schedule 3.7 hereto, as of the date hereof there are no judgments
or outstanding orders, injunctions, decrees, stipulations or awards (whether
rendered by a court or administrative agency, or by arbitration) against the
Company or any of its Subsidiaries or any of their respective properties or
businesses that would reasonably be expected to have a Material Adverse Effect
or that would prohibit the transactions contemplated by this Agreement.
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3.8 Intellectual Property. Except as set forth on Schedule 3.8 hereto,
the Company or its Subsidiaries, directly or indirectly, own, possess or license
the Intellectual Property that is presently employed or licensed by them in
connection with the Business, except where the failure to own or possess such
Intellectual Property would not reasonably be expected to have a Material
Adverse Effect. Except as set forth on Schedule 3.8 hereto, to the Company's
Best Knowledge, as of the date hereof, there are no existing claims of any third
party based on the use by, or challenging the ownership of, the Company or any
of its Subsidiaries of any of the Intellectual Property that would reasonably be
expected to have a Material Adverse Effect.
3.9 Labor Matters. Schedule 3.9 hereto sets forth, as of the date
hereof, all agreements with labor unions or associations representing employees
of the Company or its Subsidiaries. As of the date hereof, no work stoppage
against the Company or any of its Subsidiaries is pending or, to the Company's
Best Knowledge, threatened. As of the date hereof, none of the Company or its
Subsidiaries is involved in or, to the Company's Best Knowledge, threatened with
any labor dispute, arbitration, lawsuit or administrative proceeding relating to
labor matters involving the employees of the Company or its Subsidiaries
(excluding routine claims) that would reasonably be expected to have a Material
Adverse Effect. The Company's execution and delivery of, and performance of its
obligations under, this Agreement and the consummation of the transactions
contemplated hereby will not result in any "golden parachute" payment under
Section 280G of the Code.
3.10 Compliance with Laws. Except as set forth in Schedule 3.10 hereto,
the conduct of the business of each of the Company and its Subsidiaries complies
with all statutes, laws, regulations, ordinances, rules, judgments, orders or
decrees applicable thereto, except for violations or failures so to comply, if
any, that would not reasonably be expected to have a Material Adverse Effect.
3.11 Insurance. The Company and its Subsidiaries are covered by valid
and currently effective insurance policies issued in favor of the Company or a
Subsidiary thereof that are customary for companies of similar size and business
as the Company.
3.12 Scheduled Contracts. Except as set forth or described on Schedule
3.12-1 hereto, as of the date hereof, none of the Company or any of its
Subsidiaries is a party to any of the following: (a) a joint venture or similar
contract or agreement; (b) a customer agreement which
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provided revenues in excess of one percent (1%) of the Company's consolidated
net revenues in calendar year 1999; (c) a material resin and raw material supply
agreement; (d) a contract, agreement or arrangement (which is not a customer,
resin or raw material supply agreement) entered into other than in the ordinary
course of business, involving an estimated total future payment or payments in
excess of $1 million annually. As used herein, the term "Scheduled Contracts"
shall collectively mean (a) the contracts required to be listed on Schedule
3.12-1 and (b) all of the following additional agreements or contracts of the
Company or any of its Subsidiaries: (i) agreements with any Affiliates entered
into on terms less favorable to the Company and its Subsidiaries than as would
be obtained from a Person not an Affiliate of such Persons; (ii) contracts with
respect to the lending or investing of funds; and (iii) contracts that prohibit
the Company or any of its Subsidiaries from freely engaging in business anywhere
in the world. With respect to all such Scheduled Contracts, except as set forth
on Schedule 3.12-1 hereto, none of the Company or its Subsidiaries nor, to the
Company's Best Knowledge, any other party to any such Scheduled Contract is, as
of the date hereof, in breach thereof or default thereunder and there does not
exist under any provision thereof, to the Company's Best Knowledge, any event
that, with the giving of notice or the lapse of time or both, would constitute
such a breach or default, except for such breaches, defaults and events as to
which requisite waivers or consents have been or are obtained or which would not
reasonably be expected to have a Material Adverse Effect. Schedule 3.12-2 hereto
lists, as of the date hereof, all notes, mortgages, indentures, guarantees and
other obligations and agreements and other instruments for or relating to any
lending or borrowing (including assumed debt) of $1 million or more effected by
the Company or any of its Subsidiaries to which any properties or assets of any
of the foregoing are subject.
3.13 Licenses, Approvals, Other Authorizations, Consents, Reports, Etc.
(a) Except as set forth in Schedule 3.13(a) hereto, the Company or its
Subsidiaries possess or have been granted all governmental licenses, permits,
franchises and other authorizations of any federal, state, local or foreign
governmental authority, except where the failure to so possess or have been
granted would not reasonably be expected to have a Material Adverse Effect (the
"Licenses"). Except as noted on Schedule 3.13(a) hereto, all such Licenses are
in full force and effect, except for those whose failure to be in full force and
effect would not reasonably be expected to have a Material Adverse Effect.
Except as noted on Schedule 3.13 hereto, as of the
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date hereof, no proceeding is pending or, to the Company's Best Knowledge,
threatened seeking the revocation or limitation of any License the revocation or
limitation of which would reasonably be expected to have a Material Adverse
Effect.
(b) Schedule 3.13(b) hereto contains a list of all registrations,
filings, applications, notices, consents, approvals, orders, qualifications and
waivers required to be made, filed, given or obtained by the Company or any of
its Subsidiaries with, to or from any persons or governmental authorities in
connection with the consummation of the transactions contemplated hereby, except
for those (i) that become applicable solely as a result of the specific
regulatory status of Buyer or its Affiliates, or (ii) the failure to make, file,
give or obtain which would not reasonably be expected to have a Material Adverse
Effect.
3.14 Environmental Matters. Except as set forth on Schedule 3.14
hereto, to the Company's Best Knowledge, (a) neither the conduct nor operation
of the Business, nor any condition of any real property presently or formerly
owned, leased or operated by the Company or its Subsidiaries or their respective
predecessors or Affiliates relating to the Business, violates or has violated in
any material respect, any Environmental Laws, (b) neither the Company nor its
Subsidiaries has received any material written notice from any Person stating
that they or the operation or condition of any real property presently or
formerly owned, leased or operated in connection with the Business are or may be
in violation of or subject to material Liabilities or investigation or
corrective action under any Environmental Law; (c) neither the Company nor its
Subsidiaries nor their respective predecessors or Affiliates has treated,
stored, disposed of, arranged for or permitted the disposal of, transported,
handled, produced, released, or exposed any Person to any Hazardous Material, or
owned or operated the Business or any property or facility (and no such property
or facility is contaminated by any such Hazardous Material) in a manner that
would give rise to material Liabilities or corrective or remedial obligation of
the Company, the Subsidiaries or the Business pursuant to any Environmental
Laws; and (d) the Company has furnished to the Buyer all material environmental
audits, reports and other documents (excluding permits) prepared by or on behalf
of the Company or any governmental entity within the last five (5) years
relating to the Company or its Subsidiaries or their respective Affiliates or
predecessors which are in its possession, other than such audits, reports or
documents which do not disclose matters which could reasonably be expected to
have a Material Adverse Effect. The term "Environmental Law" shall mean all
applicable local, state and federal
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laws, other legal requirements and all common law regulating or relating to the
Resource Conservation and Recovery Act, the Comprehensive Environmental
Response, Compensation, and Liability Act, the Clean Water Act and the Federal
Clean Air Act, each as amended, and the regulations promulgated thereunder. The
term "Hazardous Materials" means any flammable material, explosives, radioactive
materials, gasoline, petroleum products, asbestos, urea formaldehyde,
polychlorinated biphenyls and other hazardous materials, hazardous wastes,
hazardous or other toxic substances, or materials as to which Liabilities or
standards of conduct may be imposed under the Environmental Laws.
3.15 Tax Returns of the Company and its Subsidiaries. The Company and
each other Person included in any consolidated or combined Return of which the
Company is, or has been, a member (hereinafter, the "Tax Group") has filed or
will file on a timely basis (with due regard to all extensions) (a) all Returns
required to be filed for taxable periods ending on or prior to the Closing Date
by, or with respect to any activities or assets of, the Tax Group and all Taxes
shown to be due on such Returns have been or will be timely paid, and (b) all
other Returns required to be filed before the Closing Date by, or with respect
to any activities or assets of, the Tax Group and all Taxes shown as due on such
Returns have been or will be paid (with due regard to all extensions), except,
in the case of (a) and (b), where the failure to file such Returns or pay such
Taxes would not reasonably be expected to have a Material Adverse Effect. All
such Returns were correct and complete in all respects, except for failures that
would not reasonably be expected to have a Material Adverse Effect. The Company
has paid or accrued in the Financial Statements, or will pay or accrue in the
Closing Balance Sheet, all Taxes due on or before the Closing Date, except where
the failure to have paid or accrued, or to pay or accrue, Taxes would not
reasonably be expected to have a Material Adverse Effect.
3.16 Employee Benefit Plans. (a) Schedule 3.16(a) hereto lists all
material compensation and benefit plans, contracts and arrangements maintained
by, sponsored or participated in by the Company or its Subsidiaries (other than
routine administrative procedures or government-required programs) in effect as
of the date hereof including, without limitation, all pension, profit-sharing,
savings and thrift, bonus, incentive or deferred compensation, severance pay and
medical and life insurance plans in which any current or former employees of the
Company or its Subsidiaries participate (collectively, "Employee Benefit
Plans"). Except as
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set forth on Schedule 3.16(a), each Employee Benefit Plan relating to the
Business is solely sponsored or maintained by the Company or one of its
Subsidiaries.
(b) Except as would not reasonably be expected to have a Material
Adverse Effect, all Employee Benefit Plans in which the employees of the Company
or its Subsidiaries in the United States ("U.S. Company Employees") participate
("U.S. Employee Benefit Plans") and which are "employee benefit plans," as
defined in Section 3(3) of ERISA, in all material respects are in compliance
with and have been administered in accordance with their terms and in compliance
with all applicable requirements of law, including, but not limited to, the Code
and ERISA, and all contributions required to be made to each such plan by or on
behalf of the Company or its Subsidiaries under the terms of such plan, ERISA or
the Code prior to the date hereof and the Closing Date have been or will be, as
the case may be, made or accrued.
(c) Except as set forth on Schedule 3.16(c), none of the Company
or its Subsidiaries is required to contribute to, or during the five-year period
ending on the Closing Date will have been required to contribute to, any
"multiemployer plan," as such term is defined in Section 4001(a)(3) of ERISA.
(d) Except as otherwise set forth on Schedule 3.16(d) hereto or
as would not reasonably be expected to have a Material Adverse Effect, each
Employee Benefit Plan which is not a U.S. Employee Benefit Plan (a "Foreign
Company Plan") has been maintained in all material respects in accordance with
its terms and with all legal requirements applicable thereto and is funded
and/or book reserved for in accordance with applicable laws.
(e) Except as set forth in Schedule 3.16:
(i) each Employee Benefit Plan, if intended to be "qualified"
within the meaning of Section 401(a) of the Code, has been determined by the
Internal Revenue Service to be so qualified and the related trusts have been
determined to be exempt from tax under Section 501(a) of the Code and, to the
Company's Best Knowledge, nothing has occurred that has or could reasonably be
expected to affect adversely in a material manner such qualification or
exemption;
(ii) neither the Company nor any of its ERISA Affiliates nor
any other "disqualified Person" or "party in interest" (as such terms are
defined in Section 4975 of the
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Code and Section 3(14) of ERISA, respectively) with respect to an Employee
Benefit Plan has breached the fiduciary rules of ERISA or engaged in a
prohibited transaction that could subject the Company or any of its ERISA
Affiliates to any material Tax or penalty imposed under Section 4975 of the Code
or Section 502(i), (j) or (l) of ERISA; and
(iii) except as set forth on Schedule 3.16(e)(iii) or as may
be required under laws of general application, none of the Employee Benefit
Plans obligate the Company or any of its Subsidiaries to provide any employee or
former employee, or their spouses, family members or beneficiaries, any
post-employment or post-retirement health or life insurance, accident or other
"welfare-type" benefits.
3.17 Real Property - Owned or Leased. With respect to the Real
Property, except as set forth on Schedule 3.17: (i) no portion thereof is
subject to any pending condemnation proceeding or Action by any public or
quasi-public authority and, to the Company's Best Knowledge, there is no
threatened condemnation or Action with respect thereto, in each case which would
affect the use of, or operation of the Business on the Real Property in any
material respect and (ii) with respect to the Leased Property, neither the
Company nor any of its Subsidiaries has sub-leased or assigned its interests
purported to be granted by any such lease and each lease is in full force and
effect and constitutes a valid and binding obligation of the Company or such
Subsidiary, as applicable.
3.18 Affiliate Transactions. Except as set forth on Schedule 3.18,
neither the Company nor any of its Subsidiaries is a party to any contract or
agreement with (a) any of its Affiliates (other than the Company and its
Subsidiaries), (b) any of its respective directors or officers or (c) any
Affiliate (other than the Company and its Subsidiaries) of its respective
officers or directors, except in each case for contracts or agreements entered
into with terms no less favorable to the Company or its Subsidiaries than would
be obtained from a Person not an Affiliate of such Person.
3.19 Supplemental Schedules. The Representative and the Company may
supplement any of the Schedules hereto and deliver such Schedules (as so
supplemented, the "Supplemental Schedules") to the Buyer on or prior to the
Closing Date solely for the purposes of updating disclosures made therein to
reflect matters or transactions permissible hereunder occurring after the date
hereof and on or prior to the Closing Date; provided, however, that the
Representative
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and the Company shall not be entitled to update such schedules to reflect any
matter or transaction which would violate any provision of this Agreement or any
matter or transaction which would have a Material Adverse Effect.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF ALL SHAREHOLDERS
Each Shareholder hereby represents and warrants to Buyer as
follows:
4.1 Authorization; Enforceability. (a) Such Shareholder has the
capacity to execute and deliver this Agreement and to perform its obligations
hereunder and to consummate the transactions contemplated hereby. This Agreement
has been duly executed and delivered by such Shareholder, and, assuming the due
execution hereof by Buyer, this Agreement constitutes the legal, valid and
binding obligation of such Shareholder, enforceable against such Shareholder in
accordance with its terms, subject to the effect of bankruptcy, insolvency,
reorganization, liquidation, dissolution, moratorium or other similar laws
relating to or affecting the rights of creditors generally and to the effect of
the application of general principles of equity (regardless of whether
considered in proceedings at law or in equity). Such Shareholder is (or, in the
case of the Knott Option, will upon exercise at Closing be) the lawful owner, of
record and beneficially, of the Shares being sold, transferred, conveyed and
assigned by him, her or it pursuant to this Agreement and has (or, in the case
of the Knott Option, will upon exercise at Closing have) good and marketable
title to the Shares, free and clear of any Liens whatsoever and with no
restrictions on the voting rights and other incidents of record and beneficial
ownership pertaining thereto, except as set forth in the Existing Shareholders
Agreement which shall be terminated at Closing. Except as set forth on Schedule
4.1, there are no agreements between such Shareholder and any other Person with
respect to voting of, or any other matters pertaining to, the capital stock of
the Company. Upon consummation of the transactions contemplated hereby, such
Shareholder will deliver to Buyer good title to the Shares owned by such
Shareholder free and clear of any Liens except as set forth on Schedule 4.1.
(b) Neither the execution, delivery and performance of this
Agreement by such Shareholder nor the consummation of the transactions
contemplated hereby nor compliance by such Shareholder with any of the
provisions hereof will (i) conflict with, or result in any
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violations of, or cause a default (with or without notice or lapse of time, or
both) under, or give rise to a right of termination, amendment, cancellation or
acceleration of any obligations contained in any contract to which such
Shareholder is a party, or by which such Shareholder or any of his, her or its
properties may be bound or (ii) violate any law applicable to such Shareholder
or any of his, her or its properties which would, individually or in the
aggregate, have a material adverse effect on the ability of such Shareholder to
consummate the transactions contemplated hereby.
(c) Except as specified in Schedule 4.1, no permit, order,
authorization, consent or approval of or by, or any notification of or filing
with, any Person (governmental or private) is required in connection with the
execution, delivery and performance by such Shareholder of this Agreement or the
consummation by such Shareholder of the transactions contemplated hereby.
4.2 Brokers, Finders, Etc. Except for the services of Salomon Smith
Barney, Inc. ("Salomon"), neither such Shareholder nor the Company has employed,
or is subject to any valid claim of, any broker, finder, consultant or other
intermediary in connection with the transactions contemplated by this Agreement
who might be entitled to a fee or commission in connection with such
transactions. The Shareholders are solely responsible for any payment, fee or
commission that may be due Salomon in connection with the transactions
contemplated hereby.
4.3 No Implied Representations. Notwithstanding anything contained in
Article III or Article IV or any other provision of this Agreement, it is the
explicit intent of each party hereto that no Shareholder or the Company is
making any representation or warranty whatsoever, express or implied, beyond
those expressly given in this Agreement, including, but not limited to, any
implied warranty or representation as to the value, condition, merchantability
or suitability as to any of the properties or assets of the Business. In
furtherance and not in limitation of the foregoing, it is expressly understood
by each party hereto that any cost estimates, projections or other predictions
contained or referred to in the Schedules hereto or in the offering materials
that have been provided to Buyer are not and shall not be deemed to be
representations or warranties of any Shareholder or the Company.
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ARTICLE V
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to each Shareholder as
follows:
5.1 Incorporation; Authorization; Etc. (a) Buyer is a limited liability
company duly formed, validly existing and in good standing under the laws of
Delaware. Buyer has full limited liability company power and authority to
execute and deliver this Agreement, to perform its obligations hereunder and to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement, the performance of Buyer's obligations hereunder and the
consummation of the transactions contemplated hereby have been duly and validly
authorized and no other proceedings or actions on the part of Buyer are
necessary therefor. The execution, delivery and performance of this Agreement
will not (i) violate any provision of the organizational documents of Buyer or
any of its Affiliates, (ii) violate any provision of, or be an event that is (or
with the passage of time will result in) a violation of, or result in the
acceleration of or entitle any party to accelerate (whether after the giving of
notice or lapse of time or both) any obligation under, or result in the
imposition of any Lien upon any of Buyer's or any of its Affiliates' assets or
properties pursuant to, any Lien, lease, agreement, instrument, order,
arbitration award, judgment or decree to which Buyer or any of its Affiliates is
a party or by which Buyer or any of its Affiliates is bound, or (iii) violate or
conflict with any other material restriction of any kind or character to which
Buyer or any of its Affiliates is subject, that, in the case of clauses (ii) and
(iii), would, individually or in the aggregate, have a material adverse effect
on the ability of Buyer to consummate the transactions contemplated hereby. This
Agreement has been duly executed and delivered by Buyer, and, assuming the due
execution hereof by each Shareholder, this Agreement constitutes the legal,
valid and binding obligation of Buyer, enforceable against Buyer in accordance
with its terms, subject to the effect of bankruptcy, insolvency, reorganization,
liquidation, dissolution, moratorium or other similar laws relating to or
affecting the rights of creditors generally and to the effect of the application
of general principles of equity (regardless of whether considered in proceedings
at law or in equity).
(b) Except as specified in Schedule 5.1, no permit, order,
authorization, consent or approval of or by, or any notification of or filing
with, any Person (governmental or
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private) is required in connection with the execution, delivery and performance
by the Buyer of this Agreement or the consummation by the Buyer of the
transactions contemplated hereby.
5.2 Brokers, Finders, Etc. Buyer has not employed, and is not subject
to the valid claim of, any broker, finder, consultant or other intermediary in
connection with the transactions contemplated by this Agreement who might be
entitled to a fee or commission from any Shareholder or the Company or any of
their Affiliates in connection with such transactions. Buyer is solely
responsible for any payment, fee or commission that may be due to any broker,
finder, consultant or other intermediary employed by Buyer in connection with
the transactions contemplated hereby.
5.3 Acquisition of Shares for Investment. Buyer has such knowledge and
experience in financial and business matters that it is capable of evaluating
the merits and risks of its purchase of the Common Stock. Buyer confirms that
the Company has made available to Buyer the opportunity to ask questions of the
officers and management employees of the Company and to acquire information
about the business and financial condition of the Business including, without
limitation, all information, data and documentation provided (or otherwise made
available) to Buyer in the "data room" located at Winston & Strawn, Chicago,
Illinois. Buyer agrees that the Preferred Stock and Common Stock hereunder may
not be sold, transferred, offered for sale, pledged, hypothecated or otherwise
disposed of without registration under the Securities Act of 1933, as amended,
except pursuant to an exemption from such registration available thereunder, and
without compliance with foreign securities laws, in each case, to the extent
applicable. This representation and warranty shall not in any manner affect the
representations and warranties of the Company or any Shareholder contained in
the Transaction Documents.
5.4 Financial Capability. The Buyer has delivered to the Company true
and correct copies of fully executed letters entered into by the Buyer with
respect to the third-party financing (collectively, the "Financing Letters")
required for the consummation of the transactions contemplated hereby, including
the Senior Subordinated Financing and the Senior Facilities. Upon the
satisfaction of all applicable conditions set forth in the Financing Letters,
such financing (together with the other financing sources of the Buyer) will
provide sufficient funds to effect the transactions contemplated hereby.
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ARTICLE VI
COVENANTS
6.1 Communication and Notification. (a) Except as provided in Section
6.15(c), it is understood and agreed that prior to the Closing Date neither
Buyer nor its representatives shall contact any of the employees, customers or
suppliers of the Company or its Subsidiaries, in connection with the
transactions contemplated hereby, whether in person or by telephone, mail or
other means of communication, without the specific prior written authorization
of the Representative or his designee, which authorization shall not be
unreasonably withheld.
(b) Any information provided to Buyer or its representatives
pursuant to this Agreement shall be held by Buyer and its representatives in
accordance with, and shall be subject to the terms of, the Confidentiality
Agreement dated March 16, 2000 by and between the Company and Buyer, which is
hereby incorporated in this Agreement as though fully set forth herein.
(c) Buyer agrees to (i) hold all of the books and records of the
Company and its Subsidiaries existing on the Closing Date and not to destroy or
dispose of any thereof for a period of three (3) years from the Closing Date and
thereafter, if it desires to destroy or dispose of such books and records, to
offer first in writing at least ten (10) days prior to such destruction or
disposition to surrender them to the Representative and (ii) for one (1) year
following the Closing Date to afford the Representative and its accountants and
legal counsel, during normal business hours, upon reasonable request, full
access to such books, records and other data and to the employees of the Company
and any of the Subsidiaries to the extent that such access may be requested for
any purpose related to the enforcement of the Shareholder's rights hereunder at
no cost to the Representative or any Shareholder (other than for reasonable
out-of-pocket expenses); provided, however, that nothing herein shall limit the
Representative's or any Shareholder's rights of discovery.
6.2 Reasonable Efforts; Obtaining Consents. (a) Subject to the terms
and conditions herein provided, the Shareholders, the Company (and the Company
shall be deemed to include its Subsidiaries in connection with this Section
6.2(a)) and Buyer each agree to use their reasonable efforts to take, or cause
to be taken, all actions and to do, or cause to be done, all things necessary,
proper or advisable to consummate and make effective, as promptly as
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practicable, the transactions contemplated by this Agreement and to cooperate
with the other in connection with the foregoing, including using their
reasonable efforts (i) to obtain all necessary waivers, consents and approvals
from other parties to material loan agreements, leases and other contracts
(including, in the case of the Shareholders and the Company, to amend and/or
repurchase the Existing Senior Subordinated Notes on terms reasonably
satisfactory to the Buyer), (ii) to obtain all consents, approvals and
authorizations that are required to be obtained under any federal, state, local
or foreign law or regulation, (iii) to lift or rescind any injunction or
restraining order or other order materially adversely affecting the ability of
the parties hereto to consummate the transactions contemplated hereby, (iv) to
effect all necessary registrations and filings including, but not limited to,
filings and submissions of information requested or required by any domestic or
foreign government or governmental or multinational authority, including,
without limitation, the Antitrust Division of the United States Department of
Justice, the Federal Trade Commission, any State Attorney General or the
relevant competition commission or similar body in Mexico, Canada, Australia or
Europe ("Governmental Antitrust Authority"), and (v) to fulfill all conditions
to this Agreement. The Shareholders, the Company and Buyer further covenant and
agree, with respect to a threatened or pending preliminary or permanent
injunction or other order, decree or ruling or statute, rule, regulation or
executive order that would materially adversely affect the ability of the
parties hereto to consummate the transactions contemplated hereby, to use their
respective reasonable efforts to prevent the entry, enactment or promulgation
thereof, as the case may be. In no event, however, shall any Shareholder, the
Company or the Buyer be obligated to pay any money to any Person or to offer or
grant other financial or other accommodations to any person in connection with
its obligations under this Section 6.2 (except payment of filing fees under HSR
and other applicable Antitrust Laws).
(b) In furtherance and not in limitation of the foregoing, Buyer
shall use all reasonable efforts to resolve such objections, if any, as may be
asserted with respect to the transactions contemplated hereby under any
antitrust, competition or trade regulatory laws of any domestic or foreign
government or governmental authority or any multinational authority, or any
regulations issued thereunder ("Antitrust Laws"). Without limiting the
generality of the foregoing, Buyer shall (i) use its reasonable efforts to avoid
the entry of, or to have vacated or terminated, any decree, order, or judgment
that would restrain, prevent, or delay the consummation of the transactions
contemplated hereby and (ii) take any and all steps reasonably
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necessary to avoid (or eliminate) each and every impediment under any Antitrust
Laws that may be asserted by any Governmental Antitrust Authority with respect
to the transactions contemplated hereby so as to enable the consummation of such
transactions to occur as expeditiously as possible. Notwithstanding anything to
the contrary contained herein, nothing herein shall require the Buyer, its
Affiliates, the Company or any of its Subsidiaries to transfer or otherwise
dispose of any of its product lines or assets or pay any money to any Person or
offer to grant other financial or other accommodations to any Person in
connection with matters contemplated by this Section 6.2(b) (except payment of
filing fees under HSR and other applicable Antitrust Laws).
(c) The Representative and Buyer shall each keep the other party
apprised of the status of matters relating to the completion of the transactions
contemplated hereby and work cooperatively in connection with obtaining the
requisite approvals, consents or orders of any Governmental Antitrust Authority,
including, without limitation: (i) cooperating with the other party in
connection with filings under the HSR Act or any other Antitrust Laws,
including, with respect to the party making a filing, (A) providing copies of
all such documents to the non-filing party and its advisors prior to filing
(other than documents containing confidential business information that shall be
shared only with outside counsel to the non-filing party), and (B) if requested,
to accept all reasonable additions, deletions or changes suggested in connection
with any such filing; (ii) furnishing to each other all information required for
any application or other filing to be made pursuant to the HSR Act or any other
Antitrust Laws in connection with the transactions contemplated by this
Agreement; (iii) promptly notifying the other of, and if in writing furnishing
the other with copies of, any communications from or with any Governmental
Antitrust Authority with respect to the transactions contemplated by this
Agreement; (iv)permitting the other party to review in advance and considering
in good faith the views of one another in connection with any proposed
communication with any Governmental Antitrust Authority in connection with
proceedings under or relating to the HSR Act or any other Antitrust Laws; (v)
not agreeing to participate in any meeting or discussion with any Governmental
Antitrust Authority in connection with proceedings under or relating to the HSR
Act or any other Antitrust Laws unless it consults with the other party in
advance, and, to the extent permitted by such Governmental Antitrust Authority,
gives the other party the opportunity to attend and participate thereat; and
(vi) consulting and cooperating with one another in connection with any
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analyses, appearances, presentations, memoranda, briefs, arguments, opinions and
proposals made or submitted by or on behalf of any party hereto in connection
with proceedings under or relating to the HSR Act or any other Antitrust Laws.
If either party or any Affiliate thereof receives a request for additional
information or documentary material from any such Governmental Antitrust
Authority with respect to the transactions contemplated hereby, then such party
will endeavor in good faith to make, or cause to be made, as soon as practicable
and after consultation with the other party, an appropriate response in
compliance with such request. Buyer will advise the Representative promptly in
respect of any understandings, undertakings or agreements (oral or written)
which Buyer proposes to make or enter into with any Governmental Antitrust
Authority in connection with the transactions contemplated hereby.
6.3 Further Assurances. Each Shareholder and Buyer agree that, from
time to time, whether before, at or after the Closing Date, each of them will
execute and deliver such further instruments of conveyance and transfer and take
such other action as may be necessary to carry out the purposes and intents of
this Agreement and the transactions contemplated thereby.
6.4 Conduct of Business. From the date hereof through the Closing,
except as disclosed on Schedule 6.4 hereto, or otherwise provided for in, or
contemplated by, this Agreement, each Shareholder and the Company covenants and
agrees that:
(a) each of the Company and its Subsidiaries shall operate the
Business in the ordinary and usual course in all material respects in accordance
with past practices;
(b) none of the Company or its Subsidiaries shall issue, sell or
agree to issue or sell (i) any shares of its capital stock, or (ii) any
securities convertible into, or options with respect to, or warrants to purchase
or rights to subscribe for, any shares of its capital stock;
(c) except as contemplated by this Agreement, none of the Company
or any of its Subsidiaries shall amend its certificate of incorporation or
by-laws (or other charter documents) in any material respect;
(d) except in the ordinary course of business or as required by
law or by contractual obligations or other understandings or arrangements
existing on the date hereof, none of the Company or any of its Subsidiaries
shall (i) increase in any manner the base compensation of, or enter into any new
bonus or incentive agreement or arrangement with, any of its directors,
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officers or other employees; (ii) pay or agree to pay any new pension,
retirement allowance or other employee benefit to any such director, officer or
employee, whether past or present; (iii) enter into any new employment,
severance, consulting, or other compensation agreement with any director,
officer or employee; or (iv) commit itself to any new pension, profit-sharing,
deferred compensation, group insurance, severance pay, Employee Plan, Foreign
Employee Plan, retirement or other employee benefit plan, fund or similar
arrangement or amend or commit itself to amend any of such plans, funds or
similar arrangements in existence on the date hereof;
(e) none of the Company or its Subsidiaries shall:
(i) sell, transfer or otherwise dispose of any of its assets
having a value in excess of $10 million (other than sales of inventory or
obsolete or worn assets sold in the ordinary course of business consistent with
past practice);
(ii) create any new Lien on its properties or assets (other
than Permitted Liens),
(iii) enter into any joint venture, partnership or other
similar arrangement;
(iv) incur any indebtedness for borrowed money of the Company
or any of its Subsidiaries that would be outstanding immediately subsequent to
the Closing;
(v) purchase any assets or securities of any Person having a
value in excess of $10 million, except in the ordinary course of business
consistent with past practices;
(vi) enter into any contract (or series of related contracts)
other than in the ordinary course of business and consistent with past practice;
(vii) delay or postpone the payment of accounts payable and
other obligations and Liabilities or accelerate the collection of accounts
receivable, other than in the ordinary course of business consistent with past
custom and practice;
(viii) enter into any transaction with any of its officers,
employees or Affiliates (or any directors, officers or employees of such
Affiliate) with terms less favorable to the Company or its Subsidiaries as would
be obtained from a Person not an Affiliate of such Persons; or
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(ix) declare or pay a distribution on any equity interests, or
redeem or otherwise repurchase any of its equity interests, or issue, deliver,
pledge or encumber any additional equity interests or other securities
equivalent to, or exchangeable for, equity interests or enter into any contract
to do any of the foregoing.
(f) none of the Company or its Subsidiaries shall settle any
material Tax audit, make or change any material Tax election or file any amended
Return amending a Return in any material respect; and
(g) none of the Company or its Subsidiaries shall agree to take
any action prohibited by this Section 6.4.
Notwithstanding the provisions of this Section 6.4, nothing in
this Agreement shall be construed or interpreted to prevent any of the Company
or its Subsidiaries from (i) making or accepting inter-company or intra-company
advances to, from or with one another, or (ii) engaging in any transaction
incident to the normal cash management procedures of the Company and its
Subsidiaries including, without limitation, the prepayment of any outstanding
indebtedness.
6.5 Preservation of Business. Subject to the terms and conditions of
this Agreement, each Shareholder shall, and shall cause the Company and its
Subsidiaries to use all reasonable efforts to preserve the Business intact, to
keep available to the Company, the Subsidiaries and Buyer the services of the
employees of the Business, and to preserve its relationship with customers and
others having business relations with the Business, in each case in all material
respects.
6.6 Public Announcements. Except as may otherwise be required by
applicable law, prior to the Closing, the Representative and Buyer will consult
with each other before issuing, or permitting any agent or Affiliate to issue,
any press releases or otherwise making, or permitting any agent or Affiliate to
make, any public statements with respect to this Agreement and the transactions
contemplated hereby.
6.7 Non-Solicitation. If this Agreement is terminated, Buyer will not,
for a period of two (2) years thereafter, without the prior written approval of
the Representative, directly or indirectly, solicit, encourage, entice or induce
any person who is an employee of the Company or
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any of its Subsidiaries at the date hereof or at any time hereafter that
precedes such termination, to terminate his or her employment with the Company
or any of its Subsidiaries; provided, however, that the foregoing restriction
shall not apply to any solicitation made by the Buyer to the public generally.
Buyer agrees that any remedy at law for any breach by it of this Section 6.7
would be inadequate, and Shareholders, the Company and its Subsidiaries would be
entitled to injunctive relief in such a case. If it is ever held that the
restriction placed on Buyer by this Section 6.7 is too onerous and is not
necessary for the protection of Shareholders, the Company and its Subsidiaries,
Buyer agrees that any court of competent jurisdiction may impose lesser
restrictions which such court may consider to be necessary or appropriate to
properly protect Shareholders, the Company and its Subsidiaries.
6.8 No Shop. During the period commencing the date hereof to the
earlier of the termination of this Agreement or the Closing Date, the Company
and the Shareholders shall deal exclusively with the Buyer regarding the
acquisition of or investment in the Company, whether by way of merger, purchase
of capital stock, purchase of assets or otherwise (a "Potential Transaction")
and, without the prior written consent of the Buyer, the Company and the
Shareholders shall not directly or indirectly, (a) solicit, initiate discussions
with or engage in negotiations with any Person (whether such negotiations are
initiated by the Company, the Shareholders, or otherwise), other than the Buyer
relating to a Potential Transaction, (b) provide information or documentation
with respect to the Company or the Business relating to a Potential Transaction
to any Person, other than the Buyer or (c) enter into an agreement with any
Person, other than the Buyer, providing for any Potential Transaction. If the
Company or the Shareholders receive an unsolicited inquiry, offer or proposal
relating to any of the above, the Company shall immediately notify the Buyer
thereof. The Company and the Shareholders represent to the Buyer that they are
not bound to negotiate a Potential Transaction with any other Person and that
the execution of this Agreement does not violate any agreement to which they are
bound or to which any of the assets of the Company are subject. The parties
recognize that a breach by the Company or any Shareholder of this Section 6.8
will cause irreparable and material loss and damage to the Buyer as to which the
Buyer will not have an adequate remedy at law or in damages. Accordingly, each
party acknowledges that the issuance of an injunction or other equitable remedy
is an appropriate remedy for any such breach.
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6.9 Non-Compete; Non-Solicitation. In further consideration of his
share of the Redemption Amount and in order to induce the Buyer to enter into
the transactions contemplated by this Agreement, from and after the Closing
Date, Jon M. Huntsman covenants and agrees for himself and covenants and agrees
to cause his Affiliates, to comply with the terms and provisions set forth
below.
(a) Jon M. Huntsman acknowledges that the Company and its
Subsidiaries currently conduct the Business in the United States, Europe,
Canada, Mexico and Australia. Accordingly, during the period commencing on the
Closing Date and ending on the third anniversary thereof (the "Non-Compete
Period"), such Shareholder shall not, and shall cause his Affiliates not to,
directly or indirectly, enter into, engage in, assist, give or lend funds to or
otherwise finance, be employed by or consult with, or have a financial or other
interest in, any business which obtains a substantial portion of its revenues
from activities directly competitive with the Business as currently conducted
(the portion of the business generating such revenues is referred to herein as a
"Competitive Business"), whether for or by himself or itself or as an
independent contractor, agent, stockholder, partner or joint venturer for any
other Person; provided, however, that the restrictions contained in this Section
6.9 will not prohibit in any way: (A) the acquisition of a controlling interest
or merger with any Person, or a division or business unit thereof, which derives
annual revenues of $100 million or less from a Competitive Business, provided
Jon M. Huntsman will, and will cause his Affiliates to, take all reasonable
steps to dispose, as quickly as practicable after such acquisition or merger, of
the portion of the business of any such Person, division or business that
engages in a Competitive Business; (B) the acquisition, directly or indirectly,
of a non-controlling ownership interest in any Person, or a division or business
unit thereof, or any other entity engaged in a Competitive Business, if the
Competitive Business accounts for less than 15% of the operating revenues of
such Person; (C) the acquisition, directly or indirectly, of less than 5% of the
publicly traded stock of any Person engaged in a Competitive Business; and (D)
any business or activity conducted by any Affiliate of Jon M. Huntsman (other
than the Company or its Subsidiaries) as of the date of this Agreement. To the
extent that the covenant provided for in this Section 6.9 may later be deemed by
a court to be too broad to be enforced with respect to its duration or with
respect to any particular activity or geographic area, the court making such
determination shall have the power
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to reduce the duration or scope of this Section 6.9, and to add or delete
specific words or phrases. This Section 6.9 as modified shall then be enforced.
(b) During the Non-Compete Period, Jon M. Huntsman covenants and
agrees, and will cause his Affiliates, not to, directly or indirectly, either
for himself or for any other Person (i) solicit any employee of the Company or
any of its Subsidiaries to terminate his or her employment with the Company or
any of its Subsidiaries or employ any such individual during his or her
employment with the Company or any of its Subsidiaries; provided, however, that
the foregoing restriction shall not apply to any general solicitation, or (ii)
take any action that may cause injury to the relationships between the Company
or any of its Subsidiaries or any of their employees and any lessor, lessee,
vendor, supplier, customer, distributor, employee, consultant or other business
associate of the Company or any of its Subsidiaries as such relationship relates
to the Company's or any of its Subsidiaries' conduct of their business.
6.10 Corporate Names. (a) The Buyer and the Company acknowledge that,
from and after the Closing Date, Jon M. Huntsman and his Affiliates shall have
the absolute and exclusive proprietary right to all names, marks, trade names
and trademarks (collectively, "Names") incorporating "Huntsman" by itself or in
combination with any other Name, including, without limitation, the corporate
design logo associated with "Huntsman" and with the Company and that none of the
rights thereto or goodwill represented thereby or pertaining thereto are being
transferred hereby or in connection herewith; provided, however, that during the
period commencing on the Closing Date and ending on December 31, 2000, in
consideration of his share of the Redemption Amount, Jon M. Huntsman hereby
grants to the Company a royalty-free, irrevocable world-wide license to use the
Names used by the Company and its Subsidiaries as of the date hereof. The
Company agrees that, from and after December 31, 2000, it will not, nor will it
permit any of its controlled Affiliates to, use any Name, phrase or logo
incorporating "Huntsman" or any such corporate design logo in or on any of its
literature, sales materials or products or otherwise in connection with the sale
of any products or services.
(b) On or prior to December 31, 2000, the Company shall file
amended articles of incorporation for the Company changing the name of the
Company to a name which does not contain "Huntsman." On or prior to December 31,
2000, the Company shall change or shall cause the relevant controlled Affiliates
of the Company to change the name of any of the
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Subsidiaries of the Company that includes the name "Huntsman" to a corporate or
entity name that does not include the name "Huntsman."
6.11 Collective Bargaining Agreements. Anything herein to the contrary
notwithstanding, the obligations of any of the Company or its Subsidiaries to
provide continuing benefits for periods after the Closing Date as required under
collective bargaining agreements shall remain in effect.
6.12 Buyer's Obligations for Employee Benefits. (a) After the Closing
Date, subject to the other provisions of this Section 6.12, the Company agrees
that, for a period of at least two (2) years after the Closing Date, it will (i)
continue in full force and effect the Foreign Company Plans in accordance with
their terms without any reduction of material benefits or other amendment or
modification which would be materially adverse to the employees covered thereby,
taken as a whole (except to the extent necessary to comply with applicable law);
(ii) provide all U.S. Company Employees with severance benefits at least as
favorable in the aggregate as those provided to U.S. Company Employees
immediately prior to the Closing Date; (iii) provide all U.S. Company Employees
with medical and other welfare benefits no less favorable in the aggregate than
those provided to U.S. Company Employees immediately prior to the Closing Date;
(iv) provide all U.S. Company Employees with a wage and salary program no less
favorable in the aggregate than that in place at the Company or its
Subsidiaries, as applicable immediately prior to the Closing Date; and (v)
provide all U.S. Company Employees with other compensation and benefits no less
favorable in the aggregate than the corresponding compensation and benefits
provided to U.S. Company Employees immediately prior to the Closing Date;
provided that the costs of maintaining the benefits in items (i) and (ii) above
will not materially exceed the Company's average annual cost of providing such
benefits during the prior two-year period, and provided further, notwithstanding
the foregoing, the Buyer hereby covenants and agrees that it shall cause the
Company to adopt an employee option plan concurrent with the Closing having the
terms and conditions substantially set forth on Exhibit G hereto. In addition,
the Company agrees to give U.S. Company Employees service credit for all periods
of employment with the Company and its Subsidiaries prior to the Closing Date
for purposes of vesting and eligibility (not for pension benefit accruals) under
any plan adopted or maintained by the Company or any of its Subsidiaries in
which such employees participate. The Company agrees to waive any limitations
regarding preexisting conditions, and to give full credit
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for any copayments made and deductibles fully or partially satisfied prior to
the Closing Date with respect to Employee Benefit Plans, under any welfare or
other employee benefit plans maintained, by the Company or any of its
Subsidiaries in which U.S. Company Employees participate after the Closing. From
and after the Closing Date, the Company and its Subsidiaries shall be solely
responsible for all termination and severance benefits, costs, charges and
liabilities of any nature incurred with respect to the termination of a U.S.
Company Employee on or after the Closing Date, including, without limitation,
any claims arising out of or relating to any plant closing, mass layoff or
similar event under applicable law occurring on or after the Closing Date.
(b) The Company shall be responsible for the administration of
and shall assume any and all obligations arising under the continuation coverage
requirements of Section 4980B of the Code and Part 6 of Title I of ERISA for
those plan participants in, and beneficiaries under, the Employee Benefit Plans
who are eligible to exercise their rights to such coverage as of or following
the Closing Date.
6.13 Employees. (a) The Company shall be responsible for providing any
notice required, pursuant to the United States Federal Worker Adjustment and
Retraining Act of 1988, any successor United States federal law, and any
applicable plant closing notification law with respect to a layoff or plant
closing relating to the Business that occurs as a result of or after the
Closing. The Company shall be responsible for providing any such notice with
respect to a layoff or plant closing occurring prior to the Closing.
(b) The Company will permit U.S. Company Employees to carry over
and take accrued, but unused, vacation days with pay in accordance with the
applicable policies or collective bargaining agreements of the Company and its
Subsidiaries as in effect as of the Closing Date.
(c) To the extent necessary to comply with any applicable laws in
foreign jurisdictions which safeguard the rights of employees in transfers of
undertakings, businesses or parts of businesses (collectively, the "Transfer
Laws"), the Company shall comply with their respective obligations under the
Transfer Laws, including any obligations to maintain certain terms and
conditions of employment of the U.S. Company Employees to the extent the failure
to comply would result in a material obligation being imposed on the
Shareholders.
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6.14 Transfer Taxes. All federal, state, local, foreign, and other
transfer, sales, use, or similar Taxes applicable to or imposed upon or arising
out of the transfer of the Shares or other transactions contemplated by this
Agreement shall be paid by the party incurring such Tax.
6.15 Covenant to Supply Information. From and after the date of this
Agreement until the Closing or the earlier termination of this Agreement, except
as otherwise consented to in writing by the Buyer, the Company shall afford the
Buyer, its financing sources and their respective advisors, representatives and
agents (a) reasonable access to the properties, books, records and executive
personnel of the Company and its Subsidiaries, (b) full access to the audit work
papers and other records of the independent certified public accountants of the
Company, (c) access to the customers of the Company and its Subsidiaries under
mutually agreeable circumstances, (d) upon reasonable notice by the Buyer and at
times and in accordance with procedures to be mutually agreed by the Company and
the Buyer, the opportunity to make such reasonable inspections of the Company
and its Subsidiaries operations and (e) the opportunity to review financial and
operating data and other information with respect to the Business.
6.16 Delivery of Subsequent Financial Information. For each month
during 2000 ending prior to the earlier of (a) the Closing Date and (b) the
termination of this Agreement, the Company shall deliver to the Buyer, as soon
as reasonably practicable consistent with past practices, the unaudited
consolidated monthly balance sheet of the Company, the unaudited consolidated
statement of cash flows of the Company and the unaudited consolidated statement
of income of the Company for the fiscal year-to-date period then ended,
including any and all footnotes thereto.
6.17 Management Notes. Prior to the Closing, the Company will have
executed amendments to those certain Promissory Notes dated February 22, 1999
between the Company and each of Richard P. Durham, Scott K. Sorensen and Ronald
G. Moffitt (collectively, the "Amended Management Notes") extending the "PIK"
period of each such Amended Management Note to the fifth anniversary of the
Closing Date and extending the maturity date of each such Amended Management
Note to the eighth anniversary of the Closing Date, without amendment or
revision to any of the other material terms of such Amended Management Notes.
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6.18 Additional Agreements. At the Closing, the parties hereto shall
execute and deliver any instruments of transfer, assignment or conveyance
necessary or desirable to consummate the transactions contemplated by this
Agreement.
ARTICLE VII
CONDITIONS TO BUYER'S OBLIGATION TO CLOSE
Buyer's obligation to consummate the Transactions shall be
subject to the satisfaction on or prior to the Closing Date of all of the
following conditions:
7.1 Representations, Warranties and Covenants of Shareholders. The
representations and warranties contained in this Agreement shall be true and
correct in all material respects on and as of the Closing Date with the same
effect as though such representations and warranties had been made on and as of
such date except for representations and warranties that speak as of a specific
date or time prior to the date hereof (which need only be true and correct in
all material respects as of such date or time); provided, however, that if such
representation and warranty is already qualified as to materiality or Material
Adverse Effect it shall be true and correct, the covenants and agreements of
each Shareholder or the Representative to be performed on or before the Closing
Date in accordance with this Agreement shall have been duly performed in all
material respects, and Buyer shall have received at the Closing a certificate to
that effect dated the Closing Date and validly executed by the Representative on
behalf of the Company and each Shareholder and a certificate certifying the
organizational documents of the Company and each of its active Subsidiaries and
the Board resolutions of the Company approving this Agreement and the
transactions contemplated hereby.
7.2 Filings; Consents; Waiting Periods. All registrations, filings,
applications, notices, consents, approvals, orders, qualifications and waivers
necessary to consummate the transactions contemplated hereby shall have been
filed, made or obtained, and all waiting periods applicable under the HSR Act
and any other Antitrust Law shall have expired or been terminated.
7.3 No Injunction. At the Closing Date, there shall be no injunction,
restraining order or decree of any nature or any proceeding of any court or
governmental agency or body of
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competent jurisdiction that is in effect that restrains or prohibits or could be
reasonably expected to restrain or prohibit the consummation of the transactions
contemplated hereby.
7.4 Opinion of Counsel. The Buyer shall have obtained, in a form
reasonably acceptable to the Buyer, an opinion of Winston & Strawn or Stoel
Rives LLP opining, with respect to the Company, its domestic Subsidiaries and
the Shareholders, as to certain matters set forth in Sections 3.1, 3.2 and 4.1
to be mutually agreed upon.
7.5 Payment and Cancellation of Indebtedness. The Company and its
Subsidiaries shall have delivered to the Buyer duly executed letter agreements
in form and substance satisfactory to the Buyer, providing for (a) the payment
and cancellation of all indebtedness of the Company and its Subsidiaries (other
than capitalized leases reflected in the Financial Statements) and (b) the
release of any Liens on the assets of the Company and its Subsidiaries.
7.6 Financing Letters. The conditions set forth in the Financing
Letters shall have been satisfied or waived and the funding referred to therein
shall be available to the Buyer on terms not materially less favorable to the
Buyer than are set forth in the term sheets attached to the Financing Letters.
7.7 Cancellation of Stockholders' Agreement. The Shareholders Agreement
dated January 1, 1998, among the Company and the Shareholders (the "Existing
Shareholders Agreement") shall have been terminated executed by the Shareholders
and the Company, as applicable.
7.8 Transaction Documents. The Buyer shall have obtained duly executed
counterparts of each of the Transaction Documents executed by the parties
thereto other than the Buyer.
7.9 Resignation of Directors. The Board of Directors of the Company
shall be reconstituted simultaneously with the Closing as contemplated by the
Stockholders Agreement attached as Exhibit A hereo.
7.10 Transition Services Agreement. The Company and Huntsman
Corporation shall have executed an agreement pursuant to which Huntsman
Corporation shall provide the Company with transition services for a period and
on terms mutually acceptable to the Buyer, the Company and Huntsman Corporation.
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ARTICLE VIII
CONDITIONS TO SHAREHOLDERS' OBLIGATION TO CLOSE
Each Shareholder's obligation to consummate the Transactions is
subject to the satisfaction on or prior to the Closing Date of all of the
following conditions:
8.1 Representations, Warranties and Covenants of Buyer. The
representations and warranties of Buyer in this Agreement shall be true and
correct in all material respects on and as of the Closing Date with the same
effect as though such representations and warranties had been made on and as of
such date except for representations and warranties that speak as of a specific
date or time prior to the date hereof (which need only be true and correct in
all material respects as of such date or time; provided, however, that if such
representation or warranty is already qualified as to materiality or Material
Adverse Effect, it shall be true and correct), the covenants and agreements of
Buyer to be performed on or before the Closing Date in accordance with this
Agreement shall have been duly performed in all material respects, and the
Representative, on behalf of each Shareholder, shall have received at the
Closing a certificate to that effect dated the Closing Date and validly executed
on behalf of Buyer.
8.2 Filings; Consents; Waiting Periods. All registrations, filings,
applications, notices, consents, approvals, orders, qualifications and waivers
necessary to consummate the transactions contemplated hereby shall have been
filed, made or obtained, and all applicable waiting periods under the HSR Act
and any other Antitrust Law shall have expired or been terminated.
8.3 No Injunction. At the Closing Date, there shall be no injunction,
restraining order or decree of any nature or any proceeding of any court or
governmental agency or body of competent jurisdiction that is in effect or is
pending or threatened that restrains or prohibits or could be reasonably
expected to prohibit the consummation of the transactions contemplated hereby.
8.4 Transaction Documents. The Representative shall have obtained duly
executed counterparts of each of the Transaction Documents executed by the
parties thereto other than the Company and the Shareholders.
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8.5 Amended Management Notes. The Representative shall have obtained
duly executed counterparts of each Amended Management Note.
ARTICLE IX
REPRESENTATIVE
9.1 Appointment. Each Shareholder hereby irrevocably makes, constitutes
and appoints Richard P. Durham as his or its agent and representative (the
"Representative") for all purposes under this Agreement. In the event of the
death, resignation or incapacity of the Representative, Shareholders shall
promptly designate another individual to act as their representative under this
Agreement so that at all times there will be a Representative with the authority
provided in this Article IX. Such successor Representative shall be designated
by Shareholders by an instrument in writing signed by Shareholders (or their
successors in interest) holding a majority of the Shares, and such appointment
shall become effective as to the successor Representative when such instrument
shall have been delivered to him or her and a copy thereof delivered to Buyer.
9.2 Authorization. Each Shareholder hereby authorizes the
Representative, on its behalf and in its name, to:
(a) receive all notices or documents given or to be given to such
Shareholder pursuant hereto or in connection herewith and to receive and accept
service of legal process in connection with any suit or proceeding arising under
this Agreement. The Representative shall promptly forward a copy of such notice
of process to such Shareholder;
(b) deliver at the Closing the certificates for the Shares in
exchange for such Shareholder's respective portion of the consideration payable
with respect to such securities;
(c) upon confirmation of the receipt of wire transfers or
certified or official bank check, sign and deliver to Buyer at the Closing a
receipt for such Shareholder's portion of the consideration and forward such
amount to each Shareholder;
(d) deliver to Buyer at the Closing all certificates and
documents to be delivered to Buyer by such Shareholder pursuant to this
Agreement, together with any other certificates and documents executed by such
Shareholder and deposited with the Representative for such purpose;
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(e) engage counsel, and such accountants and other advisors
(including investment bankers) for Shareholders and incur such other expenses on
behalf of Shareholders in connection with this Agreement and the transactions
contemplated hereby as the Representative may deem appropriate; and
(f) take such action on behalf of such Shareholder as the
Representative may deem appropriate in respect of:
(i) waiving any inaccuracies in the representations or
warranties of Buyer contained in this Agreement or in any document delivered by
Buyer pursuant hereto;
(ii) waiving the fulfillment of any of the conditions
precedent to Shareholders' obligations hereunder, except with respect to payment
of the consideration due to Shareholders under Sections 2.1, 2.2 and 2.4;
(iii) taking such other action as the Representative is
authorized to take under this Agreement;
(iv) receiving all documents or certificates and making all
determinations, on behalf of Shareholders, required under this Agreement;
(v) all such other matters as the Representative may deem
necessary or appropriate to consummate this Agreement and the transactions
contemplated hereby; and
(vi) taking all such action as may be necessary after the
Closing Date to carry out any of the transactions contemplated by this
Agreement.
9.3 Irrevocable Appointment. The appointment of the Representative
hereunder is irrevocable and any action taken by the Representative pursuant to
the authority granted in this Article IX shall be effective and absolutely
binding on each Shareholder notwithstanding any contrary action of, or direction
from, a Shareholder, except for actions taken by the Representative which are in
bad faith or grossly negligent. The death or incapacity of a Shareholder shall
not terminate the prior authority and agency of the Representative.
9.4 Resignation. The Representative may resign at any time by giving
notice to each Shareholder, and such resignation shall be effective upon the
appointment and qualification of a successor. The Representative may be
discharged, and replaced by another person to act as his
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or her successor, by an instrument in writing signed by Shareholders (or their
successors in interest) holding a majority of the Shares.
9.5 Exculpation and Indemnification. (a) In performing any of his
duties as Representative under this Agreement, the Representative shall not
incur any liability to any Person, except for liability caused by the
Representative's willful misconduct or gross negligence. Accordingly, the
Representative shall not incur any such liability for (i) any action that is
taken or omitted in good faith regarding any questions relating to the duties
and responsibilities of the Representative under this Agreement, or (ii) any
action taken or omitted to be taken in reliance upon any instrument that the
Representative shall in good faith believe to be genuine, to have been signed or
delivered by a proper person or persons and to conform with the provisions of
this Agreement.
(a) Shareholders, jointly and severally, shall indemnify, defend
and hold harmless the Representative against, from and in respect of any
liability or loss arising out of or resulting from the performance of his or her
duties hereunder or in connection with this Agreement (except for liabilities or
losses arising from the gross negligence or willful misconduct of the
Representative). Buyer shall not be liable to Shareholders for dealing with the
Representative in good faith (other than as a result of the gross negligence or
willful misconduct of Buyer).
ARTICLE X
INDEMNIFICATION
10.1 Survival. All representations, warranties and (except as provided
in the following sentence) covenants of the parties contained in this Agreement
or in any Schedule hereto, or in any certificate, document or other instrument
delivered in connection herewith shall terminate and cease to be of further
force and effect as of the Closing; provided, however, that (i) the
representations and warranties of the Company contained in Sections 3.1, 3.2,
3.3, 3.4, 3.6 (collectively, the "Fundamental Representations and Warranties"),
(ii) the representations and warranties of the Shareholders in Article IV, and
(iii) the representations and warranties of the Company contained in Sections
3.14, 3.15 and 3.16, shall, in each case, survive the Closing Date until March
31, 2001, provided further, however, that the representations and warranties of
the
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Company contained in Section 3.15 shall survive the Closing Date until the
expiration of the respective statute of limitations applicable thereto. Those
covenants that contemplate or may involve actions to be taken or obligations in
effect after the Closing shall survive in accordance with their terms.
10.2 Indemnification Generally; Etc.
From and after the Closing Date:
(a) By the Shareholders in Favor of the Buyer Group. Each
Shareholder severally agrees to indemnify and hold harmless the Buyer Group for
any and all Losses they may suffer, sustain or incur as a result of:
(i) the inaccuracy or breach of any representation or warranty
of such Shareholder contained in Article IV of this Agreement; provided,
however, that for the purposes of this Section 10.2(a)(i) the terms "material"
and "Material Adverse Effect" shall be disregarded in determining the inaccuracy
or breach of any representation or warranty contained in this Agreement; or
(ii) the breach of any agreement or covenant of such
Shareholder contained in this Agreement.
(b) By the Operating Shareholders in Favor of the Buyer Group.
Each Operating Shareholder severally, in accordance with his, hers or its
respective Proportionate Percentage, agrees to indemnify and hold harmless the
Buyer Group for any and all Losses they may suffer, sustain or incur as a result
of:
(i) the inaccuracy or breach of the Fundamental
Representations and Warranties or the representations or warranties of the
Company and/or any of its Subsidiaries in Sections 3.14, 3.15 or 3.16 (together
with the Fundamental Representations and Warranties, hereinafter the "Surviving
Representations and Warranties"); provided, however, that for the purposes of
this Section 10.2(b)(i) the terms "material" and "Material Adverse Effect" shall
be disregarded in determining the inaccuracy or breach of the Surviving
Representations or Warranties contained in this Agreement; or
(ii) the breach of any agreement or covenant of the Company
contained in this Agreement.
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10.3 Limitations on Indemnification.
Anything contained herein to the contrary notwithstanding:
(a) Indemnity Baskets for the Shareholders. The Buyer Group shall
not have the right to be indemnified pursuant to Sections 10.2(a)(i) or
10.2(b)(i) for breaches of representations and warranties unless and until the
Buyer Group shall have incurred on a cumulative basis since the Closing Date
aggregate Losses in an amount exceeding $10,000,000 (the "Indemnity Threshold"),
in which event the right to be indemnified shall apply only to Losses in excess
of such amount; provided, however, that any Loss valued at less than $500,000
shall not be counted towards the Indemnity Threshold.
(b) Indemnity Limitations for the Shareholders. The sum of all
Losses pursuant to which indemnification is payable by the Shareholders pursuant
to Section 10.2(a)(i) or 10.2(b)(i) shall not exceed $25,000,000 in the
aggregate.
10.4 Notice and Defense of Third-Party Claims. The obligations and
Liabilities of the Indemnifying Person with respect to Losses resulting from the
assertion of any Liability by third parties (each, a "Third-Party Claim") shall
be subject to the terms and conditions set forth below.
(a) The Indemnified Persons shall promptly give written notice to
the Indemnifying Persons of any Third-Party Claim which might give rise to any
Loss by the Indemnified Persons, stating the nature and basis of such
Third-Party Claim and the amount thereof to the extent known; provided, however,
that no delay on the part of the Indemnified Person in notifying any
Indemnifying Person shall relieve the Indemnifying Person from any Liability or
obligation hereunder unless (and then solely to the extent) the Indemnifying
Person thereby is prejudiced by the delay. Such notice shall be accompanied by
copies of all relevant documentation with respect to such Third-Party Claim,
including, but not limited to, any summons, complaint or other pleading which
may have been served, any written demand or any other document or instrument.
(b) If the Indemnifying Persons shall acknowledge in a writing
delivered to the Indemnified Persons that the Indemnifying Persons shall be
obligated under the terms of their indemnification obligations hereunder in
connection with such Third-Party Claim, then the Indemnifying Persons shall have
the right to assume the defense of any Third-Party Claim at
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their own expense and by their own counsel, which counsel shall be satisfactory
to the Indemnified Persons; provided, however, that the Indemnifying Persons
shall not have the right to assume the defense of any Third-Party Claim,
notwithstanding the giving of such written acknowledgment, if (i) the
Indemnified Persons shall have one or more legal or equitable defenses available
to them which are different from or in addition to those available to the
Indemnifying Persons, and, in the opinion of the Indemnified Persons, counsel
for the Indemnifying Persons could not adequately represent the interests of the
Indemnified Persons because such interests could be in conflict with those of
the Indemnifying Persons, (ii) such Action is reasonably likely to have an
effect on any other matter beyond the scope of the indemnification obligation of
the Indemnifying Persons or (iii) the Indemnifying Persons shall not have
assumed the defense of the Third-Party Claim in a timely fashion.
(c) If the Indemnifying Persons shall assume the defense of a
Third-Party Claim (under circumstances in which the proviso to Section 10.4(b)
is not applicable), the Indemnifying Persons shall not be responsible for any
legal or other defense costs subsequently incurred by the Indemnified Persons in
connection with the defense thereof. If the Indemnifying Persons do not exercise
their right to assume the defense of a Third-Party Claim by giving the written
acknowledgement referred to in Section 10.4(b), or are otherwise restricted from
so assuming by the proviso to Section 10.4(b), the Indemnifying Persons shall
nevertheless be entitled to participate in such defense with their own counsel
and at their own expense; and in any such case, the Indemnified Persons may
assume the defense of the Third-Party Claim, with counsel which shall be
satisfactory to the Indemnifying Persons, and shall act reasonably and in
accordance with their good faith business judgment and shall not effect any
settlement without the consent of the Indemnifying Persons, which consent shall
not unreasonably be withheld or delayed.
(d) If the Indemnifying Persons exercise their right to assume
the defense of a Third-Party Claim, they shall not make any settlement of any
claims without obtaining in connection therewith a full release of the
Indemnified Persons, in form and substance reasonably satisfactory to the
Indemnified Persons.
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ARTICLE XI
TERMINATION
11.1 Termination. This Agreement may be terminated at any time prior to
the Closing by:
(a) the mutual consent of the Representative and Buyer;
(b) either the Representative or Buyer if the Closing has not
occurred by the close of business on September 30, 2000 and if the failure to
consummate the Transactions on or before such date did not result from the
failure by the party seeking termination of this Agreement to fulfill any
undertaking or commitment provided for herein that is required to be fulfilled
prior to the Closing;
(c) by the Buyer, if any Shareholder or the Company shall have
materially breached any representation, warranty or covenant which is not cured
within ten (10) days after notice from the Buyer of such breach (provided that
such is capable of being cured);
(d) by the Company or the Representative, if the Buyer shall have
materially breached any representation, warranty or covenant which is not cured
within ten (10) days after notice from the Representative of such breach
(provided that such is capable of being cured);
(e) by the Representative, if the Buyer proposes to reduce the
consideration to be received by any Shareholder hereunder as a result of any
alleged failure of a condition to the Buyer's obligations hereunder resulting
from any change in the business, results of operations or condition of the
Company and its Subsidiaries and within 14 days after making such proposal the
Buyer and the Shareholder have failed to reach a mutually agreeable settlement
as a result of the Buyer's proposal; or
(f) either the Representative or Buyer if a United States federal
or state court of competent jurisdiction or United States federal or state
governmental, regulatory or administrative agency or commission shall have
issued an order, decree or ruling or taken any other action permanently
restraining, enjoining or otherwise prohibiting the transactions contemplated
hereby and such order, decree, ruling or other action shall have become final
and non-appealable; provided, however, that the party seeking to terminate this
Agreement pursuant to this Section 11.1(f) shall have complied with Section 6.2
hereof, and with respect to other
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matters not covered by Section 6.2 hereof, shall have used all reasonable
efforts to remove such injunction, order or decree.
11.2 Procedure and Effect of Termination. In the event of termination
of this Agreement by either or both of the Representative and Buyer pursuant to
Section 11.1 hereof, written notice thereof shall forthwith be given by the
terminating party to the other party hereto, and this Agreement shall thereupon
terminate and become void and have no effect, and the transactions contemplated
hereby shall be abandoned without further action by the parties hereto, except
that the provisions of Sections 6.1(b), 6.7 and 12.5 hereof shall survive the
termination of this Agreement; provided, however, that such termination shall
not relieve any party hereto of any liability for any breach of this Agreement.
If this Agreement is terminated as provided herein all filings, applications and
other submissions made pursuant to this Agreement shall, to the extent
practicable, be withdrawn from the agency or other persons to which they were
made.
11.3 Effect of Closing Over Known Unsatisfied Conditions. No party
hereto shall be deemed to have breached any agreement, representation, warranty
or covenant if (i) such party shall have notified the other parties hereto in
writing, on or prior to the Closing Date, of the breach of, or inaccuracy in, or
of any facts or circumstances constituting or resulting in the breach of or
inaccuracy in, or modification to, such agreement, representation, warranty or
covenant, and (ii) such other parties have permitted the Closing to occur; and,
for purposes of this Agreement, such other parties are thereby deemed to have
waived such breach or inaccuracy; provided, however, that a disclosure pursuant
to this Section 11.3 shall not prejudice the rights of the parties pursuant to
Articles VII or VIII hereof not to consummate the transactions contemplated by
this Agreement.
ARTICLE XII
MISCELLANEOUS
12.1 Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement, and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other party.
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12.2 Governing Law. (a) This Agreement shall be governed by and
construed in accordance with the laws of the State of New York without reference
to the choice of law principles thereof.
(b) The parties hereto irrevocably submit to the jurisdiction of
the Courts of the State of New York and the United States District Court for the
Southern District of New York in any Action arising out of or relating to this
Agreement, and hereby irrevocably agrees that all claims in respect of such
Action may be heard and determined in such state or federal court. The parties
hereto irrevocably waive, to the fullest extent they may effectively do so, the
defense of an inconvenient forum to the maintenance of such action or
proceeding. The parties further agree, to the extent permitted by law, that
final and unappealable judgment against any of them in any action or proceeding
contemplated above shall be conclusive and may be enforced in any other
jurisdiction within or outside the United States by suit on the judgment, a
certified copy of which shall be conclusive evidence of the fact and amount of
such judgment.
(c) To the extent that any party hereto has or hereafter may
acquire any immunity from jurisdiction of any court or from any legal process
(whether through service or notice, attachment prior to judgment, attachment in
aid of execution, execution or otherwise) with respect to itself or its
property, each of the parties hereto hereby irrevocably waives such immunity in
respect of its obligations under this Agreement.
12.3 MUTUAL WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION OR COUNTERCLAIM
ARISING OUT OF OR RELATING TO THIS AGREEMENT.
12.4 Entire Agreement; Third-Party Beneficiaries. This Agreement
(including agreements incorporated herein) and the Schedules hereto contain the
entire agreement between the parties with respect to the subject matter hereof
and there are no agreements, understandings, representations or warranties
between the parties other than those set forth or referred to herein. This
Agreement is not intended to confer upon any Person not a party hereto (and
their successors and assigns permitted by Section 12.7 hereof) any rights or
remedies hereunder.
12.5 Expenses. Except as set forth in this Agreement, whether the
Transactions are or are not consummated, all legal and other costs and expenses
incurred in connection with this
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Agreement and the transactions contemplated hereby shall be paid by the party
incurring such costs and expenses. Upon the Closing of the Transaction or
thereafter, the Company shall pay the Transaction Expenses.
12.6 Notices. All notices hereunder shall be sufficiently given for all
purposes hereunder if in writing and delivered personally, sent by documented
overnight delivery service or, to the extent receipt is confirmed, telecopy,
facsimile or other electronic transmission service to the appropriate address or
number as set forth below. Notices to any Shareholder shall be addressed to:
Huntsman Packaging Corporation
500 Huntsman Way
Salt Lake City, Utah 84108
Attn: Richard P. Durham and Ronald G. Moffitt
Facsimile No.: (801) 584-5783
with a copy to:
Winston & Strawn
35 West Wacker Drive
Chicago, Illinois 60601
Attn: John L. MacCarthy, Esq.
Facsimile No.: (312) 558-5700
or at such other address and to the attention of such other
person as Shareholder may designate by written notice to Buyer. Notices to Buyer
shall be addressed to:
Chase Capital Partners
380 Madison Avenue, 12th Floor
New York, New York 10017
Attn: Timothy Walsh
Facsimile No.: (212) 622-3101
with a copy to:
O'Sullivan Graev & Karabell, LLP
30 Rockefeller Plaza
41st Floor
New York, New York 10112
Attn: Ilan Nissan, Esq.
Facsimile No.: (212) 408-2420
or at such other address and to the attention of such other
person as Buyer may designate by written notice to the Representative.
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12.7 Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns; provided, however, that no party hereto shall assign its rights or
delegate its obligations under this Agreement without the express prior written
consent of each other party hereto except that each Shareholder may transfer or
assign any or all of its rights hereunder to any Affiliate of such Shareholder
or any charitable trust, organization group or other entity without the consent
of any other party hereto; and provided, further, (i) that the Buyer, so long as
the Buyer remains liable for its obligations hereunder, may transfer any of its
rights or obligations hereunder to any of its Affiliates or (ii) the Company may
assign as collateral security its rights hereunder to any of its lenders
providing financing for the transactions contemplated hereby, in each case
without the consent of any party hereto. In the case of such a transfer or
assignment to an Affiliate of any Shareholder, such Affiliate shall be the
"Shareholder" for all purposes hereunder.
12.8 Headings; Definitions. The Section and Article headings contained
in this Agreement are inserted for convenience of reference only and shall not
affect the meaning or interpretation of this Agreement. All references to
Sections or Articles contained herein mean Sections or Articles of this
Agreement unless otherwise stated. All defined terms and phrases herein are
equally applicable to both the singular and plural forms of such terms.
12.9 Amendments and Waivers. This Agreement may not be modified or
amended except by an instrument or instruments in writing signed by the party
against whom enforcement of any such modification or amendment is sought. The
Representative on behalf of the Shareholders may waive compliance by Buyer or
Buyer miy waive compliance by the Shareholders with any term or provision of
this Agreement on the part of such party to be performed or complied with, but
only by an instrument in writing. The waiver by any party hereto of a breach of
any term or provision of this Agreement shall not be construed as a waiver of
any subsequent breach.
12.10 Interpretation. As used herein, the term "Company's Best
Knowledge" means (a) the actual knowledge of any of Richard P. Durham, Jack
Knott, Scott K. Sorensen or Ronald G. Moffitt and (b) that knowledge which any
of Richard P. Durham, Jack Knott, Scott K. Sorensen or Ronald G. Moffitt should
have learned in the ordinary course of the prudent management of the business
affairs of the Company and each of its Subsidiaries. It is understood and agreed
that
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the specification of any dollar amount in the representations and warranties
contained in this Agreement or the inclusion of any specific item in the
Schedules is not intended to imply that such amounts or higher or lower amounts,
or the items so included or other items, are or are not material, and neither
party shall use the fact of the setting of such amounts or the fact of the
inclusion of any such item in the Schedule in any dispute or controversy between
the parties as to whether any obligation, item or matter not described herein or
included in a Schedule is or is not material for purposes of this Agreement.
12.11 Chase Capital Partners Guarantee. Chase Capital Partners hereby
guarantees the performance by the Buyer of all of its obligations hereunder.
[signature page follows]
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IN WITNESS WHEREOF, this Recapitalization Agreement has been
signed by or on behalf of each of the parties as of the day first above written.
SHAREHOLDERS:
HUNTSMAN CANCER FOUNDATION
- --------------------------------
Jon M. Huntsman
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
- ---------------------------------
Jack Knott
CHRISTENA KAREN H. DURHAM TRUST SORENSEN CAPITAL, LLC
By: By:
----------------------------- --------------------------------
Name: Name:
--------------------------- ------------------------------
Title: Title:
-------------------------- -----------------------------
DURHAM CAPITAL, LTD. MOFFITT CAPITAL, LLC
By: By:
----------------------------- --------------------------------
Name: Name:
--------------------------- ------------------------------
Title: Title:
-------------------------- -----------------------------
RONALD G. MOFFITT IRA (DLJ Securities Corp. Custodian)
By:
-----------------------------
Name:
---------------------------
Title:
--------------------------
<PAGE> 64
BUYER:
CHASE DOMESTIC INVESTMENTS, L.L.C.
By: Chase Financial Investments L.P.,
its sole Member
By: Chase Capital Partners,
as Investment Manager
By:
-----------------------------
Name:
---------------------------
Title:
--------------------------
Agreed and Accepted for Purposes of Section 12.11 hereof only
CHASE CAPITAL PARTNERS
By:
-----------------------------
Name:
---------------------------
Title:
--------------------------
<PAGE> 65
THE COMPANY:
HUNTSMAN PACKAGING CORPORATION
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
<PAGE> 1
EXHIBIT 99.1
Date: April 12, 2000 Contact:
For Immediate Release Scott K. Sorensen
(801) 584-5700
HUNTSMAN PACKAGING CORPORATION ANNOUNCES
CASH TENDER OFFER FOR 9 1/8% SENIOR SUBORDINATED NOTES DUE 2007
AND RELATED CONSENT SOLICITATION
SALT LAKE CITY, UT - Huntsman Packaging Corporation announces
that it has commenced a cash tender offer to purchase any and all of the $125
million aggregate principal amount of its outstanding 9 1/8% Senior Subordinated
Notes due 2007, as well as a related consent solicitation to solicit consents to
amendments to the Indenture governing the Notes.
The total consideration to be paid for each validly tendered Note
and properly delivered consent will be based upon a fixed spread of 75 basis
points over the yield to maturity on the 5 7/8% U.S. Treasury Note due September
30, 2002, and includes a consent payment of $20.00 per $1,000 principal amount
of the Notes. The yield to maturity of the reference U.S. Treasury Note used in
the fixed spread formula will be set at 2:00 p.m., New York City time, on
Tuesday, April 25, 2000, unless the offer is extended under certain
circumstances.
The tender offer will expire at 12:01 a.m., New York City time,
on Wednesday, May 10, 2000, unless extended. The consent solicitation will
expire at 5:00 p.m., New York City time, on Monday, April 24, 2000, unless
extended, if at least one day prior to such time Huntsman Packaging Corporation
has received duly executed consents from holders representing at least a
majority in principal amount of the Notes and has issued a press release
announcing such fact or the first date thereafter at least one day prior to
which it has received such consents and has issued a press release announcing
such fact. Holders who tender their Notes prior to the consent expiration date
will be required to consent to the proposed amendments, and holders who consent
will be required to tender their Notes. Holders who tender their Notes after the
consent expiration date will not be entitled to receive the consent payment. The
offer is subject to the satisfaction of certain conditions including the valid
tender of at least a majority in aggregate principal amount of the outstanding
Notes and the receipt of consents from the holders thereof.
The purpose of the consent solicitation is to amend the Indenture
governing the Notes to eliminate many of the restrictive covenants contained in
such Indenture. The amendments would allow Huntsman Packaging Corporation, among
other things, to consummate its previously announced sale to Chase Capital
Partners and certain members of Huntsman Packaging's current management in a
recapitalization transaction. The tender offer and consent solicitation are
being conducted in connection with the recapitalization transaction. The tender
offer and the effectiveness of the amendments to the Indenture governing the
Notes are conditioned upon, among other things, the closing of the
recapitalization transaction.
<PAGE> 2
Chase Securities, Inc. is the exclusive Dealer Manager and
Solicitation Agent for the tender offer and the consent solicitation. The tender
offer and consent solicitation are being made pursuant to an Offer to Purchase
and Consent Solicitation Statement, dated April 12, 2000, and related Consent
and Letter of Transmittal, which set forth the complete terms of the tender
offer and consent solicitation. Additional information concerning the terms of
the tender offer and consent solicitation, the tendering of Notes, the
delivering of consents and the conditions to the tender offer and consent
solicitation may be directed to Robert Berk at Chase Securities Inc. at
212-270-1100 (collect). Copies of the Offer to Purchase and Consent Solicitation
Statement and related documents may be obtained from Georgeson Shareholder
Communications Inc., the Information Agent, at (212) 440-9800 (collect) or (800)
223-2064 (toll free).
Huntsman Packaging Corporation was formed in 1992 to acquire
Goodyear Tire and Rubber Company's Film Products Division. Since that time, the
company has acquired and successfully integrated 13 additional film and flexible
packaging businesses. Today, Huntsman Packaging Corporation is a leading
producer of value-added film and flexible packaging products for personal care,
medical, food, industrial and agricultural markets. The company operates 24
manufacturing and research and development facilities around the world, and
employs approximately 3,800 people.
