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): November 13, 1998
(November 1, 1998)
GREIF BROS. CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 1-566 31-4388903
(State or other jurisdiction of (Commission (IRS Employer
incorporation) File Number) Identification No.)
425 Winter Road, Delaware, Ohio 43015
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (740) 549-6000
Not Applicable
(Former name or former address, if changed since last report)
Item 2. Acquisition or Disposition of Assets.
On November 1, 1998, Greif Bros. Corporation, a Delaware
corporation ("Greif"), CorrChoice, Inc., an Ohio corporation
("CorrChoice"), Geoffrey A. Jollay and R. Dean Jollay, Jr. (the
"Jollays"), and John J. McLaughlin ("Mr. McLaughlin") entered
into a Joint Venture Agreement dated November 1, 1998 (the
"Joint Venture Agreement"). The Joint Venture Agreement
provides for the consolidation of the business operations of
Michigan Packaging Company, a Delaware corporation ("MPC"), and
Ohio Packaging Corporation, an Ohio corporation ("OPC"), under
CorrChoice.
Prior to the joint venture transaction, Greif owned all of
the issued and outstanding capital stock of MPC. Greif also
owned all of the issued and outstanding Class B nonvoting common
shares of OPC.
Prior to the joint venture transaction, the Jollays owned
all of the issued and outstanding capital stock of RDJ Holdings
Inc., an Ohio corporation ("RDJ Holdings"), which in turn owned
all of the issued and outstanding Class A voting common shares
of OPC. OPC and Mr. McLaughlin owned 80% and 20%, respectively,
of the issued and outstanding capital stock of Combined
Containerboard Inc., a Delaware corporation ("CCI").
Pursuant to the terms of the Joint Venture Agreement, Greif
contributed all of its stock in MPC and OPC in exchange for
receiving a 63.24% ownership interest in CorrChoice, the Jollays
contributed all of their stock in RDJ Holdings in exchange for
each receiving a 17.33% ownership interest in CorrChoice, and
Mr. McLaughlin contributed all of his stock in CCI in exchange
for receiving a 2.1% ownership interest in CorrChoice. The
ownership percentages of Greif, the Jollays, and Mr. McLaughlin
in CorrChoice were determined by an appraisal of OPC and MPC
performed by an independent third party.
Prior to the joint venture transaction, OPC manufactured
corrugated sheets for sale to producers of corrugated boxes and
operated, directly and through its subsidiaries, sheet feeder
plants in Massillon, Ohio, Cincinnati, Ohio, and Louisville,
Kentucky, and MPC manufactured corrugated sheets for sale to
producers of corrugated boxes and operates sheet feeder plants
in Mason, Michigan, Grand Rapids, Michigan, and Concord, North
Carolina. After the consummation of the joint venture
transaction, CorrChoice intends to continue to manufacture
corrugated sheets for sale to producers of corrugated boxes and
to operate the sheet feeder plants formerly operated by OPC and
MPC. In addition, CorrChoice anticipates that another sheet
feeder operation, Heritage Packaging Corporation, will soon open
in the Atlanta, Georgia area.
Except as described above, prior to the joint venture
transaction, there was no material relationship between the
Jollays, RDJ Holdings, or Mr. McLaughlin and Greif, any of
Greif's affiliates, any director or officer of Greif, or any
associate of any such officer or director.
The description contained herein of the Joint Venture
Agreement is qualified in its entirety by reference to the Joint
Venture Agreement, which is attached hereto as Exhibit 2 and
incorporated herein by reference.
This joint venture transaction was previously publicly
announced by Greif, and a copy of the press release issued by
Greif on November 3, 1998, is included with the Form 8-K as
Exhibit 99.
Item 7. Financial Statements and Exhibits.
(a) Financial Statements of Businesses Acquired.
No financial statements are required to be filed.
(b) Pro Forma Financial Information.
No pro forma financial information is required to
be filed.
(c) Exhibits.
The following documents related to the
CorrChoice joint venture transaction are being
filed as exhibits to this Form 8-K:
Exhibit No. Description of Exhibit
2 Joint Venture Agreement dated as of
November 1, 1998, among CorrChoice,
Inc., an Ohio corporation, Greif Bros.
Corporation, a Delaware corporation,
Geoffrey A. Jollay and R. Dean Jollay,
Jr., and John J. McLaughlin.
99 Press release issued by Greif Bros.
Corporation on November 3, 1998.
Schedules and exhibits to the Joint Venture
Agreement have not been filed because Greif does
not believe that they contain information
material to an investment decision which is not
otherwise disclosed in the Joint Venture
Agreement. A list has been attached to the Joint
Venture Agreement briefly identifying the
contents of the omitted schedules and exhibits.
Greif hereby agrees to furnish supplementally a
copy of any omitted schedule or exhibit to the
Securities and Exchange Commission upon its
request.
SIGNATURES
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.
GREIF BROS. CORPORATION
Date: November 13, 1998 By /s/ Michael J. Gasser
Michael J. Gasser
Chairman and Chief Executive Officer
EXHIBIT INDEX
Exhibit No. Description of Exhibit
2 Joint Venture Agreement dated as of November 1, 1998,
among CorrChoice, Inc., an Ohio corporation, Greif
Bros. Corporation, a Delaware corporation, Geoffrey A.
Jollay and R. Dean Jollay, Jr., and John J.
McLaughlin.
99 Press release issued by Greif Bros. Corporation on
November 3, 1998
EXHIBIT 2
JOINT VENTURE AGREEMENT
AMONG
CORRCHOICE, INC.,
GREIF BROS. CORPORATION,
GEOFFREY A. JOLLAY,
R. DEAN JOLLAY, JR.,
AND
JOHN J. MCLAUGHLIN
NOVEMBER 1, 1998
TABLE OF CONTENTS
Page
Background Information 1
Statement of Agreement 2
Article I Definitions 2
Section 1.1 Definitions 2
Article II Contribution of Stock; Corporate Restructuring 3
Section 2.1 Contribution of Greif 3
Section 2.2 Contribution of the Jollays 3
Section 2.3 Contribution of Mr. McLaughlin 3
Section 2.4 Reserved 3
Article III Representations of Jollays 3
Section 3.1 Organization and Standing 3
Section 3.2 Capitalization and Security Holders 4
Section 3.3 Subsidiaries 5
Section 3.4 Business of RDJ Holdings 5
Section 3.5 Business of OPC and OPC Subsidiaries 5
Section 3.6 Power and Authority; Capacity 6
Section 3.7 Consents and Approvals; No Conflict or Default 6
Section 3.8 Financial Statements 6
Section 3.9 Undisclosed Liabilities 6
Section 3.10 Absence of Certain Changes 7
Section 3.11 Taxes 7
Section 3.12 Compliance with Law 8
Section 3.13 Proprietary Rights 9
Section 3.14 Reserved 9
Section 3.15 Insurance 9
Section 3.16 Reserved 9
Section 3.17 Title to of Properties 9
Section 3.18 Brokers, Finders 9
Section 3.19 Legal Proceedings and Claims 9
Section 3.20 ERISA 10
Section 3.21 Contracts 13
Section 3.22 OPC Receivables 13
Section 3.23 Reserved 13
Section 3.24 Books of Account; Records 13
Section 3.25 Reserved 13
Section 3.26 Reserved 13
Section 3.27 Reserved 13
Section 3.28 Reserved 14
Section 3.29 Investment Intent 14
Section 3.30 Complete Disclosure 14
Article IV Representations of Greif 15
Section 4.1 Organization and Standing 15
Section 4.2 Capitalization and Security Holders 15
Section 4.3 Subsidiaries 16
Section 4.4 Business of MPC 16
Section 4.5 Power and Authority; Capacity 16
Section 4.6 Consents and Approvals; No Conflict or Default 16
Section 4.7 Financial Statements 16
Section 4.8 Undisclosed Liabilities 17
Section 4.9 Absence of Certain Changes 17
Section 4.10 Taxes 18
Section 4.11 Compliance with Law 18
Section 4.12 Proprietary Rights 19
Section 4.13 Reserved 19
Section 4.14 Insurance 19
Section 4.15 Reserved 19
Section 4.16 Title to Properties 19
Section 4.17 Brokers, Finders 19
Section 4.18 Legal Proceedings and Claims 19
Section 4.19 ERISA 20
Section 4.20 Contracts 22
Section 4.21 MPC Receivables 23
Section 4.22 Reserved 23
Section 4.23 Books of Account; Records 23
Section 4.24 Reserved 23
Section 4.25 Reserved 23
Section 4.26 Reserved 23
Section 4.27 Reserved 23
Section 4.28 Investment Intent 23
Section 4.29 Complete Disclosure 24
Article V Representations of Mr. McLaughlin 24
Section 5.1 Stock Ownership; No Liens 24
Section 5.2 Power and Authority; Capacity 24
Section 5.3 Consents and Approvals; No Conflict or Default 25
Section 5.4 Reserved 25
Section 5.5 Brokers, Finders 25
Section 5.6 Legal Proceedings and Claims 25
Section 5.7 Reserved 25
Section 5.8 CCI Matters 25
Section 5.9 Investment Intent 25
Section 5.10 Complete Disclosure 26
Article VI Reserved 26
Article VII Closing 26
Section 7.1 The Closing 26
Section 7.2 Deliveries of Greif at Closing 26
Section 7.3 Deliveries of the Jollays at Closing 27
Section 7.4 Deliveries of Mr. McLaughlin at Closing 29
Section 7.5 Deliveries of the Company at Closing 29
Article VIII Covenants of the Parties 30
Section 8.1 Mutual Covenants 30
Section 8.2 Covenants of Greif 31
Section 8.3 Covenants of the Jollays 31
Article IX Remedies; Post-Closing Share Adjustments 32
Section 9.1 Survival of Representations 32
Section 9.2 Exclusive Remedy 32
Section 9.3 Resolution Procedures 33
Section 9.4 Departing Shareholder 35
Section 9.5 Specific Performance 36
Article X Reserved 36
Article XI Miscellaneous 36
Section 11.1 Notices 37
Section 11.2 Non-Waiver 38
Section 11.3 Genders and Numbers 38
Section 11.4 Headings 38
Section 11.5 Counterparts 38
Section 11.6 Entire Agreement 38
Section 11.7 Amendment 39
Section 11.8 No Third Party Beneficiaries 39
Section 11.9 Governing Law 39
Section 11.10 Successors; Assignment 39
Section 11.11 Expenses 39
Section 11.12 Announcements 39
Section 11.13 Severability 40
ANNEX A-Index of Defined Terms
EXHIBIT A-Shareholders Voting Agreement
EXHIBIT B-Greif/Jollays Buy-Sell Agreement
EXHIBIT C-Greif/McLaughlin Buy-Sell Agreement
EXHIBIT D-Geoffrey Jollay Employment Agreement
EXHIBIT E-Dean Jollay Employment Agreement
EXHIBIT F-CorrChoice Cash Retention and Dividend Formula
EXHIBIT G-Legal Opinion from Critchfield, Critchfield & Johnston, Ltd.
EXHIBIT H-Legal Opinion from Baker & Hostetler LLP
EXHIBIT I-Form of Notice of Claim
EXHIBIT J-Dispute Resolution Procedure
EXHIBIT K-Form of Escrow Agreement
EXHIBIT L-John J. McLaughlin Employment Agreement
JOLLAYS/OPC SCHEDULES
Schedule 3.1--Organization and Good Standing
Schedule 3.2--Capitalization and Security Holders
Schedule 3.3--Subsidiaries
Schedule 3.4--Business of RDJ Holdings
Schedule 3.7--Consents and Approvals; No Conflict or Default
Schedule 3.9--Undisclosed Liabilities
Schedule 3.10--Absence of Certain Changes
Schedule 3.11--Taxes
Schedule 3.17--Title to Properties
Schedule 3.19--Legal Proceedings and Claims
Schedule 3.20--ERISA
Schedule 3.22--OPC Receivables
GREIF/MPC SCHEDULES
Schedule 4.1--Organization and Good Standing
Schedule 4.2--Capitalization and Security Holders
Schedule 4.6--Consents and Approvals; No Conflict or Default
Schedule 4.8--Undisclosed Liabilities
Schedule 4.9--Absence of Certain Changes
Schedule 4.10--Taxes
Schedule 4.16--Title to Properties
Schedule 4.18--Legal Proceedings and Claims
Schedule 4.19--ERISA
Schedule 4.21--MPC Receivables
MCLAUGHLIN SCHEDULES
Schedule 5.1--Stock Ownership; No Liens
Schedule 5.3--Consents and Approvals; No Conflict or Default
JOINT VENTURE AGREEMENT
This Joint Venture Agreement (this "Agreement") is made as
of November 1, 1998, among CorrChoice, Inc., an Ohio corporation
(the "Company"), Greif Bros. Corporation, a Delaware corporation
("Greif"), Geoffrey A. Jollay and R. Dean Jollay, Jr.
(collectively, the "Jollays"), and John J. McLaughlin ("Mr.
McLaughlin"). Greif, the Jollays, and Mr. McLaughlin are
sometimes hereinafter referred to collectively as the
"Shareholders" and separately as a "Shareholder."
Background Information
Ohio Packaging Corporation, an Ohio corporation
("OPC"), manufactures corrugated sheets for sale to producers of
corrugated boxes and operates, directly and through its
subsidiaries, sheet feeder plants in Massillon and Cincinnati,
Ohio, and in Louisville, Kentucky. OPC has 2,000 Class A Common
Shares, without par value (the "Class A Shares"), and 2,000
Class B Common Shares, without par value (the "Class B Shares"),
issued and outstanding. RDJ Holdings Inc., an Ohio corporation
("RDJ Holdings"), owns all of the issued and outstanding Class A
Shares, and Greif owns all of the issued and outstanding Class B
Shares. The Jollays own all of the issued and outstanding
capital stock of RDJ Holdings (the "RDJ Stock").
Combined Containerboard Inc., a Delaware corporation
("CCI"), has 15,001 shares of Common Stock, no par value (the
"CCI Shares"), issued and outstanding. OPC owns 12,001 CCI
Shares, and Mr. McLaughlin owns 3,000 CCI Shares (the
"McLaughlin CCI Shares"). Additionally, CCI has 10,000 shares,
8% Cumulative Preferred Stock outstanding (the "CCI Preferred
Shares"). OPC owns 8,000 CCI Preferred Shares and Mr.
McLaughlin owns 2,000 CCI Preferred Shares.
Michigan Packaging Company, a Delaware corporation
("MPC"), manufactures corrugated sheets for sale to producers of
corrugated boxes and operates sheet feeder plants in Mason and
Grand Rapids, Michigan, and in Concord, North Carolina. MPC
operates the Concord, North Carolina sheet feeder plant under
the dba Southeastern Packaging Corporation. MPC has 400 shares
of stock, without par value (the "MPC Stock"), issued and
outstanding. Greif owns all of the issued and outstanding
shares of MPC Stock.
The Shareholders desire to consolidate the business
operations of MPC and OPC and their respective subsidiaries,
including without limitation the sheet feeder plants operated by
MPC and OPC and their respective subsidiaries (the "Sheet Feeder
Facilities"), into the Company in order to create a more
efficient and unified method of operations (the
"Consolidation"). The Shareholders desire to complete the
Consolidation in a transaction intended to qualify as a tax free
exchange under Section 351 of the Internal Revenue Code of 1986, as
amended (the "Code"), pursuant to which, among other things, (i)
Greif will contribute to the Company the Class B Shares and the
MPC Stock, (ii) the Jollays will contribute to the Company the
RDJ Stock, and (iii) Mr. McLaughlin will contribute to the
Company the McLaughlin CCI Shares and Mr. McLaughlin's 2,000 CCI
Preferred Shares, all in exchange for Common Shares, without par
value, of the Company (the "CorrChoice Shares").
The Company was formed on October 2, 1998, by the
filing of its articles of incorporation with the Ohio Secretary
of State. Concurrently with the Closing (as defined in Section
7.1, below), the Shareholders will adopt a code of regulations
for the Company and take such other actions and execute and
deliver, or arrange for the execution and delivery, of such
other documents as may be necessary or appropriate for the
organization of the Company, all as further described in this
Agreement. Thereafter, the Shareholders will take such actions
and execute and deliver, or arrange for the execution and
delivery, of such documents as may be necessary to merge RDJ
Holdings into the Company, all as further described in this
Agreement.
Concurrently with the Closing, the Company, OPC, and
Ralph Stoner, Sr. ("Mr. Stoner, Sr."), Ralph Stoner, Jr. ("Mr.
Stoner, Jr."), and John Cahill ("Mr. Cahill") will take such
actions and execute and deliver, or arrange for the execution
and delivery, of such documents as may be necessary or
appropriate for Heritage Packaging Corporation, a Delaware
corporation ("Heritage Packaging"), to become owned 93.33% by
the Company and 6.67% by Stonehill Group, LLC, a North Carolina
limited liability company ("Stonehill Group") (rather than owned
50% by each of OPC and Stonehill Group), all as further
described in this Agreement.
For the purpose of determining the value of the
respective contributions of Greif, the Jollays, and Mr.
McLaughlin to the joint venture in exchange for CorrChoice
Shares, Greif and the Jollays entered into an agreement with
Houlihan, Lokey, Howard & Zukin Financial Advisors, Inc.
("HLH&Z") of Chicago, Illinois whereby HLH&Z determined the fair
market value of OPC, MPC and CCI ("Valuation"). The Valuation
was based, in part, upon information supplied to HLH&Z by Greif
and the Jollays. The information supplied by Greif is
hereinafter referred to as the "Greif Valuation Information."
The information supplied by Jollays is hereinafter referred to
as the "Jollays' Valuation Information."
Statement of Agreement
The parties to this Agreement (the "Parties") hereby
acknowledge the accuracy of the foregoing Background Information
and hereby agree as follows:
Definitions.
Definitions. Capitalized terms used in this
Agreement shall have the meanings respectively assigned to them
in the various provisions of this Agreement. Annex A to this
Agreement contains an index of all defined terms.
Contribution of Stock; Corporate Restructuring
Contribution of Greif. Upon the terms and
subject to the conditions described in this Agreement, at the
Closing, Greif shall assign and transfer to the Company the
Class B Shares and the MPC Stock. In exchange for such
assignment and transfer, the Company shall issue to Greif a
total of 6,324 CorrChoice Shares.
Contribution of the Jollays. Upon the terms
and subject to the conditions described in this Agreement, at
the Closing, the Jollays shall assign and transfer to the
Company the RDJ Stock. In exchange for such assignment and
transfer, the Company shall issue to the Jollays in the
aggregate a total of 3,466 CorrChoice Shares, with each Jollay
receiving 1,733 CorrChoice Shares.
Contribution of Mr. McLaughlin. Upon the
terms and subject to the conditions described in this Agreement,
at the Closing, Mr. McLaughlin shall assign and transfer to the
Company the McLaughlin CCI Shares and Mr. McLaughlin's 2,000 CCI
Preferred Shares. In exchange for such assignment and transfer,
the Company shall issue to Mr. McLaughlin a total of 210
CorrChoice Shares.
Reserved.
Representations of Jollays
The Jollays, jointly and severally, hereby represent to
each of Greif and Mr. McLaughlin as follows:
Organization and Standing. RDJ Holdings,
OPC, and each OPC Subsidiary (as defined in Section 3.3, below)
are corporations duly organized, validly existing, and in good
standing under the laws of their respective states of
incorporation (as set forth in Schedule 3.1), with full power
and authority to own, lease, use and operate their respective
properties and to conduct their respective businesses as and
where now owned, leased, used, operated and conducted. Neither
the nature of the business conducted by RDJ Holdings nor the
properties it owns, leases, or operates through OPC and its
Subsidiaries requires it to qualify to do business in any other
jurisdiction. OPC and each OPC Subsidiary are duly qualified to
do business in each jurisdiction listed in Schedule 3.1 and, to
the Jollays' knowledge, neither the nature of the business
conducted by each of OPC or each OPC Subsidiary nor the
properties it owns, leases or operates requires it to qualify to
do business in any other jurisdiction, except where a failure to
so qualify would have no material adverse effect on the business
or assets of OPC or such OPC Subsidiary. To the Jollays'
knowledge, neither OPC nor any OPC Subsidiary has received any
written notice or assertion within the last three years from any
governmental official in any jurisdiction to the effect that OPC
or such OPC Subsidiary is required to be qualified or authorized
to do business in any such jurisdiction in which OPC or such OPC
Subsidiary is not so qualified or has not obtained such
authorization. To the Jollays' knowledge, neither OPC nor any
OPC Subsidiary is in default in the performance, observation or
fulfillment of any provision of its certificate or articles of
incorporation, bylaws or code of regulations, or other
organizational documents.
Capitalization and Security Holders.
Stock. The authorized capital stock of RDJ
Holdings consists solely of 250 Common shares, without par
value, and 1,000 shares of 10% Cumulative Preferred, with a
par value of $1,000 per share. There are 100 Common shares
issued and outstanding, and 1,000 shares of 10% Cumulative
Preferred outstanding. The authorized capital stock of OPC
consists solely of 2,000 Class A Common Shares, without par
value, of which 2,000 are issued and outstanding, and 6,000
Class B Common Shares, without par value, of which 2,000
are issued and outstanding. The authorized capital stock
of the OPC Subsidiaries consists solely of the following:
(i) 20,000 Common Shares, without par value, and 10,000
Preferred Shares with a par value of $100 per share, of
CCI. There are 15,001 Common Shares issued and
outstanding, and 10,000 Preferred Shares issued and
outstanding; (ii) 750 Common Shares, no par value, of
Multicorr Corporation, a Kentucky corporation
("Multicorr"), of which 750 are issued and outstanding;
(iii) 1,000 Common Shares, $.01 par value, of OPC Leasing
Corporation, a Delaware corporation ("OPC Leasing"), of
which 1,000 shares are issued and outstanding; (iv) 750
Common Shares, no par value, of ReCorr Realty Corporation,
an Ohio corporation ("ReCorr"), of which 500 shares are
issued and outstanding; and (v) 100 shares of Common Stock,
$.01 par value, of Heritage Packaging, a Delaware
corporation of which 100 shares are issued and outstanding
(and after the consummation of the transaction contemplated
by this Agreement, 1,000 shares of Common Stock, $.01 par
value shall be authorized, and 750 shares will be issued
and outstanding).
Stock Ownership. The Jollays own beneficially
and of record all of the RDJ Stock, with each Jollay owning
50 Common Shares and 500 Preferred Shares of RDJ Stock.
RDJ Holdings owns beneficially and of record all of the
Class A Shares. Except as set forth on Schedule 3.2, OPC
owns beneficially and of record all of the issued and
outstanding capital stock of the OPC Subsidiaries.
Schedule 3.2 sets forth the stock ownership of the OPC
Subsidiaries.
Due Authorization and Issuance. Each outstanding
share of the RDJ Stock and each outstanding share of the
capital stock of OPC and each OPC Subsidiary has been duly
authorized and validly issued, is fully paid and non-
assessable, and has not been issued in violation of any
preemptive or similar rights.
No Other Commitment. Except as set out on
Schedule 3.2, there are no outstanding subscriptions,
options, warrants, puts, calls, agreements, understandings,
claims or other commitments or rights of any type relating
to the issuance, sale or transfer by either RDJ Holdings,
OPC, any OPC Subsidiary, or either Jollay of any capital
stock, other equity interests, or other securities of RDJ
Holdings, OPC, or the OPC Subsidiaries, nor are there
outstanding any securities which are convertible into or
exchangeable for any shares of capital stock or other
equity interests of RDJ Holdings, OPC, or the OPC
Subsidiaries, and neither RDJ Holdings, OPC, nor any OPC
Subsidiary has any obligation of any kind to issue any
additional securities.
Compliance with Laws; No Liens. To the Jollays'
knowledge, the issuance and sale of all of the RDJ Stock
and the outstanding capital stock of OPC and each OPC
Subsidiary have been in full compliance with all applicable
federal and state securities laws and other laws. Except
for the Class B Shares, the McLaughlin CCI Shares, and the
capital stock of Heritage Packaging issued to Stonehill
Group, for which no representation is given by the Jollays,
and except as set out on Schedule 3.2, all of the RDJ
Stock and the outstanding capital stock of OPC and each OPC
Subsidiary is free and clear of all liens, security
interests, encumbrances, pledges, charges, claims, voting
trusts and restrictions on transfer of any nature
whatsoever, except restrictions on transfer imposed by or
pursuant to federal and state securities laws. Neither RDJ
Holdings, OPC, nor any OPC Subsidiary has agreed to
register any securities under the Securities Act of 1933,
as amended (the "Securities Act"), and the rules and
regulations thereunder or under any state securities law.
Subsidiaries. Except for OPC, RDJ Holdings
does not own any subsidiary corporations or, directly or
indirectly, any equity or other ownership interest in any
corporation, general or limited partnership, limited liability
company, joint venture, firm, association, or other legal entity
(an "Entity"). Except for the subsidiaries described on
Schedule 3.3 (individually, an "OPC Subsidiary" and
collectively, the "OPC Subsidiaries"), OPC does not own any
subsidiary corporations or, directly or indirectly, any equity
or other ownership interest in any other Entity. Except for
this Agreement or as otherwise described on Schedule 3.3,
neither RDJ Holdings, OPC, nor any OPC Subsidiary is subject to
any obligation or requirement to provide funds to or make any
investment (in the form of a loan, capital contribution or
otherwise) in any Entity.
Business of RDJ Holdings. RDJ Holdings is
not, and has not been at any time in the past, engaged in any
business whatsoever other than the ownership of the Class A
Shares. RDJ Holdings does not own or possess any assets other
than the Class A Shares, except cash and cash equivalents and
accrued and unpaid dividends on the Class A Shares. Except for
accrued and unpaid dividends on the RDJ Holdings Preferred
Shares and except as set forth in Schedule 3.4, RDJ Holdings has
no liabilities or obligations of any nature (whether liquidated,
unliquidated, accrued, absolute, contingent or otherwise and
whether due or to become due).
Business of OPC and OPC Subsidiaries. OPC,
CCI, and Multicorr are and have been engaged in the business of
manufacturing and selling corrugated sheets to producers of
corrugated boxes and operating sheet feeder plants in Massillon
and Cincinnati, Ohio, and in Louisville, Kentucky, and are
engaged in no other business whatsoever except as may be
incidental to the foregoing. OPC Leasing is and has been
engaged in the business of leasing land, building, and equipment
to Heritage Packaging and is engaged in no other business
whatsoever except as may be incidental to the foregoing. ReCorr
is and has been engaged in the business of real estate
development, construction, and lease of manufacturing and
warehouse facilities, and is engaged in no other business
whatsoever except as may be incidental to the foregoing.
Heritage Packaging has been engaged in the sale of corrugated
sheets and arranging the construction of manufacturing
facilities in Michigan and North Carolina and is engaged in no
other business whatsoever except as may be incidental to the
foregoing.
Power and Authority; Capacity. Each Jollay
has full legal capacity, power, and authority to enter into this
Agreement and perform his respective obligations under this
Agreement. This Agreement has been duly executed and delivered
by each Jollay and constitutes the legal, valid and binding
obligation of each Jollay enforceable against each of them,
respectively, in accordance with its terms. No other action or
proceeding by or in respect of either Jollay is or was necessary
to authorize this Agreement or the consummation of the
transactions contemplated by this Agreement.
Consents and Approvals; No Conflict or
Default. To the knowledge of the Jollays, except for the
consents described in Schedule 3.7, all of which shall be
obtained prior to the Closing, neither the execution and
delivery of this Agreement by either Jollay nor their
consummation of the transactions contemplated by this Agreement
(a) requires or will require any action, consent, or approval
of, or review by, or registration with, any third party, court
or governmental body or other agency, instrumentality or
authority, (b) violates or will violate in any material respect
any laws, statutes, orders, rules, and regulations applicable to
OPC or to any OPC Subsidiary, (c) conflicts with or will result
in the breach of the certificate or articles of incorporation,
bylaws or code of regulations, or other organizational documents
of OPC or any OPC Subsidiary, or (d) breaches or will result in
the breach of any agreement or legal obligation to which OPC,
any OPC Subsidiary, or either of the Jollays is a party or by
which such party or such party's assets are or may be bound or
affected, or constitute a default (or an event which, with the
giving of notice, the passage of time, or otherwise, would
constitute a default) thereunder, or result in the creation or
imposition of any lien, security interest, charge or
encumbrance, or restriction of any nature whatsoever with
respect to any assets of OPC or any OPC Subsidiary.
Financial Statements. OPC has furnished to
Greif the consolidated balance sheets for OPC and the OPC
Subsidiaries as of June 30, 1998 and June 30, 1997, and the
related consolidated statements of income, shareholders' equity,
and cash flows for each of the years in the two-year period
ended June 30, 1998, including, in each case, the related notes,
all of which have been prepared for OPC and have been examined
by and are accompanied by the unqualified audit report of Ernst
& Young LLP (collectively, the "OPC Financial Statements"). The
OPC Financial Statements are in accordance with the books and
records of OPC, have been prepared in conformity with generally
accepted accounting principles applied on a consistent basis,
and fairly present the financial condition of OPC and the OPC
Subsidiaries as of the dates stated and the results of
operations of OPC and the OPC Subsidiaries for the periods then
ended in accordance with such practices.
Undisclosed Liabilities. Except as set
forth in Schedule 3.9, neither OPC nor any OPC Subsidiary has
any liability or obligation of any nature (whether liquidated,
unliquidated, accrued, absolute, contingent or otherwise and
whether due or to become due) except:
Those set forth in the OPC Financial Statements
which have not been paid or discharged since the date
thereof;
Those arising from and after the date of this
Agreement under agreements or other commitments
specifically identified in Schedule 3.9;
Current liabilities (determined in accordance
with generally accepted accounting principles) incurred
since June 30, 1998, in transactions in the ordinary course
of business consistent with past practices which are
properly reflected on OPC's or the applicable OPC
Subsidiary's books and records and are not inconsistent
with the other representations and agreements of the
Jollays set forth in this Agreement; and
Those arising under and as a result of this
Agreement.
Absence of Certain Changes. Except as set
forth in Schedule 3.10, since the date of the Jollays' Valuation
Information, RDJ Holdings, OPC, and each OPC Subsidiary have
conducted their business only in the ordinary course consistent
with past practices and, to the knowledge of the Jollays, there
has not been: any material adverse change to either OPC or
any OPC Subsidiary; any dividend or distribution to any
shareholder of RDJ Holdings, OPC, or any OPC Subsidiary, other
than in amounts consistent with past practices as shown in prior
financial statements; any increase in compensation or
employment benefits payable or provided to either Jollay from
either RDJ Holdings, OPC or any OPC Subsidiary; any
transaction entered into or carried out by either RDJ Holdings,
OPC or any OPC Subsidiary other than in the ordinary and usual
course of its business; any borrowing or guaranty, any loan
or advance, or any agreement relating to the foregoing by either
RDJ Holdings, OPC or any OPC Subsidiary or any incurring by
either RDJ Holdings, OPC or any OPC Subsidiary of any other
obligation or liability, except current liabilities incurred in
the usual and ordinary course of business and consistent with
past practices; any change in OPC accounting principles or
practices or its method of application of such principles or
practices; any mortgage, pledge, lien, security interest,
hypothecation, charge or other encumbrance imposed or agreed to
be imposed on or with respect to the property or assets of
either OPC or any OPC Subsidiary; any purchase of or any
agreement to purchase assets (other than inventory purchased in
the ordinary course of business consistent with past practices)
for an amount in excess of $250,000 for any one purchase made by
either OPC or any OPC Subsidiary or $1,000,000 for all such
purchases made by OPC and the OPC Subsidiaries combined or any
lease or any agreement to lease, as lessee, any capital assets
with payments over the term thereof to be made by either OPC or
any OPC Subsidiary exceeding an aggregate of $250,000; or
any labor dispute or disturbance adversely affecting the
business operations or condition (financial or otherwise) of
either OPC or any OPC Subsidiary, including without limitation
efforts to effect a union representation election, actual or
threatened employee strike, work stoppage or slow down.
Taxes.
Except as described on Schedule 3.11, to the
Jollays' knowledge, RDJ Holdings, OPC and each OPC
Subsidiary have duly, properly, and timely filed all
federal, state, local and foreign tax returns and tax
reports required to be filed by such entity, all such
returns and reports are true, correct and complete, none of
such returns and reports has been amended, and any and all
taxes, assessments, fees and other governmental charges due
from such entity, including without limitation those
arising under such returns and reports, have been fully
paid or are fully accrued as liabilities in the OPC
Financial Statements and will be timely paid. To the
Jollays' knowledge, no claim has been made by authorities
in any jurisdiction where either RDJ Holdings, OPC or any
OPC Subsidiary did not file tax returns that it is or may
be subject to taxation or to reporting therein.
RDJ Holdings, OPC and each OPC Subsidiary have
delivered to Greif copies of all federal, state, local, and
foreign income tax returns filed for taxable periods ended
on or after December 31, 1993. Schedule 3.11 sets forth
the dates and results of any and all audits conducted by
taxing authorities against either RDJ Holdings, OPC, or any
OPC Subsidiary within the last five years or otherwise with
respect to any tax year for which assessment is not barred
by any applicable statute of limitations. No waivers of
any applicable statute of limitations for the filing of any
tax returns or payment of any taxes or assessments of any
deficient or unpaid taxes are outstanding. Except as set
forth in Schedule 3.11, all deficiencies resulting from any
audits have been paid or settled. Except as set out on
Schedule 3.11, there are no pending or, to the best of each
Jollay's knowledge, threatened federal, state, local or
foreign tax audits or assessments affecting either RDJ
Holdings, OPC, or any OPC Subsidiary and there is no
agreement with any federal, state, local or foreign taxing
authority that may affect the subsequent tax liabilities of
either RDJ Holdings, OPC or any OPC Subsidiary.
Except as described on Schedule 3.11, to the
Jollays' knowledge, neither RDJ Holdings, OPC nor any OPC
Subsidiary is, on the date of this Agreement, nor will RDJ
Holdings, OPC or any OPC Subsidiary be as of the Closing,
liable for taxes, assessments, fees or governmental charges
for which it has not made adequate provision, including
setting aside a sufficient reserve to cover that potential
liability in full in the RDJ Holdings' financial statements
(which consist solely of a balance sheet) and the OPC
Financial Statements.
Except for the obligation to withhold income
taxes from salaries and wages, there exists no tax-sharing
agreement or arrangement pursuant to which either RDJ
Holdings, OPC or any OPC Subsidiary is obligated to pay the
tax liability of either Jollay or any other Person, or to
indemnify any other Person with respect to any tax.
Schedule 3.11 includes a list of all states,
territories and jurisdictions to which any tax is properly
payable by either RDJ Holdings, OPC or any OPC Subsidiary
or in which, to the Jollays' knowledge, a tax report must
be filed.
Compliance with Law. To the knowledge of
the Jollays, OPC and each OPC Subsidiary have complied and are
in compliance in all material respects with all laws, statutes,
orders, rules, and regulations applicable to OPC and each OPC
Subsidiary and all judgments, decisions and orders entered by
any federal, state, local or foreign court or governmental
authority or agency relating to OPC or such OPC Subsidiary, or
its business or properties, as well as all licenses, permits,
and similar approvals which are material to OPC and each OPC
Subsidiary to carry on their businesses as presently conducted.
The Jollays have caused OPC to deliver to Greif copies of all
licenses, permits, and similar approvals which are material to
OPC and each OPC Subsidiary to carry on their businesses as
presently conducted, each of which currently is valid and in
full force and effect.
Proprietary Rights. The Jollays have caused
OPC to deliver to Greif copies of all patents, trademarks, trade
names, service marks, and other similar proprietary property
rights which are material to OPC and each OPC Subsidiary to
carry on their businesses as presently conducted, each of which
is owned by OPC or an OPC Subsidiary, as applicable. To the
knowledge of the Jollays, no business of OPC or any OPC
Subsidiary has been or is now being conducted in contravention
or infringement of any proprietary right of any third party.
Reserved.
Insurance. To the knowledge of the Jollays,
OPC and each OPC Subsidiary has been and is insured with
respect to its property and the conduct of its business in such
amounts and against such risks as are adequate to protect the
properties and businesses of OPC or each OPC Subsidiary in
accordance with normal industry practice, and to the knowledge
of the Jollays all such policies are currently in full force and
effect and no notice of cancellation or termination has been
received by OPC or any OPC Subsidiary with respect to any such
policy.
Reserved.
Title to Properties. Except as set forth in
Schedule 3.17, to the Jollays' knowledge, OPC and each OPC
Subsidiary has good, valid and marketable title to all of its
assets (except for those assets which are held pursuant to valid
leases) of every kind, nature and description, tangible or
intangible, wherever located, which constitute all of the
property now used in and necessary for the conduct of its
business as presently conducted (including without limitation
all assets shown or reflected on the OPC Financial Statements).
To the knowledge of the Jollays, the UCC-11 lien searches and
the real estate title lien searches provided to the Jollays by
Baker & Hostetler LLP set forth all mortgages, pledges, liens,
security interests, and encumbrances relating to the assets of
OPC and each OPC Subsidiary. Such real estate title lien
searches reference all real property owned by OPC or any OPC
Subsidiary. Except as set forth in Schedule 3.17, neither OPC
nor any OPC Subsidiary leases any real property as a lessee.
Brokers, Finders. The transactions
contemplated by this Agreement were not submitted to by any
broker or other Person entitled to a commission, finder's fee or
like payment thereon, and were not, with the consent of either
Jollay, submitted to Greif by any broker or other Person, and
none of the actions of either Jollay has given rise to any claim
by any Person for a commission, finder's fee or like payment
against any of the Parties.
Legal Proceedings and Claims Except as
listed and described in Schedule 3.19, there are no (and over
the last five years there have been no) claims, proceedings,
suits or investigations pending or, to the knowledge of the
Jollays, threatened against or relating to either RDJ Holdings,
OPC or any OPC Subsidiary or any of their employees (but only in
their capacity as employees of such Entity and not personally)
or, to the knowledge if the Jollays without independent
investigation, independent contractors of such Entity in
connection with the business or affairs of such Entity, by or
before any federal, state, local or foreign court or
governmental body, agency, or authority. There are no such
claims, proceedings, suits or investigations pending or, to the
knowledge of the Jollays, threatened for the purpose of
enjoining or preventing the consummation of any transaction
contemplated by this Agreement or otherwise challenging the
validity or propriety of the transactions contemplated by this
Agreement. Except as disclosed in Schedule 3.19, to the
knowledge of the Jollays, neither RDJ Holdings, OPC, nor any OPC
Subsidiary is subject to any judgment, order or decree, or any
governmental restriction applicable to it, which has a
reasonable probability of causing a material adverse change, or
which may materially adversely affect the ability of OPC or any
OPC Subsidiary to acquire any property or conduct business as it
is currently being conducted. Except as listed and described in
Schedule 3.19 and to the knowledge of the Jollays, there are no
facts, circumstances, or occurrences which may give rise to any
claims, proceedings, or suits against RDJ Holdings, OPC, any OPC
Subsidiary, or any of their employees (but only in their
capacity as employees of such Entity and not personally) or, to
the knowledge of the Jollays without independent investigation,
independent contractors of such Entity which could cause a
material adverse change to RDJ Holdings, OPC, or any OPC
Subsidiary, or to the business or assets of such Entity.
ERISA.
Schedule 3.20 identifies each "employee benefit
plan," as defined in Section 3(3) of the Employee
Retirement Income Security Act of 1974 ("ERISA") which (i)
is subject to any provision of ERISA and (ii) is or was at
any time during the last five years maintained,
administered or contributed to by OPC or any OPC Subsidiary
or any of their respective ERISA Affiliates (as defined
below) and covers any employee or former employee of OPC or
any OPC Subsidiary or any of their respective ERISA
Affiliates or under which OPC or any OPC Subsidiary or any
ERISA Affiliate has any liability. Copies of such plans
(and, if applicable, related trust agreements) and all
amendments thereto and written interpretations thereof have
been furnished to Greif together with the three most recent
annual reports (Form 5500) prepared in connection with any
such plan. Such plans are referred to collectively herein
as the "OPC Employee Plans." For purposes of this section,
"ERISA Affiliate" of any Person means any other Person
which, together with such Person, would be treated as a
single employer under Section 414 of the Code or is an
"affiliate," whether or not incorporated, as defined in
Section 407(d)(7) of ERISA of such Person. The only OPC
Employee Plans which individually or collectively would
constitute an "employee pension benefit plan" as defined in
Section 3(2) of ERISA (the "OPC Pension Plans") are
identified as on Schedule 3.20.
Except as set forth in Schedule 3.20, no OPC
Employee Plan constitutes a "multiemployer plan," as
defined in Section 3(37) of ERISA, or a "defined benefit
plan," as defined in Section 3(35) and subject to Title IV
of ERISA, and no OPC Employee Plan is maintained in
connection with any trust described in Section 501(c)(9) of
the Code. No "accumulated funding deficiency," as defined
in Section 412 of the Code, has been incurred with respect
to any OPC Pension Plan, whether or not waived. Full
payment has been made of all amounts which OPC or any OPC
Subsidiary or any of their respective ERISA Affiliates is
required to have paid as contributions to or benefits under
any OPC Employee Plan as of the end of the most recent plan
year thereof and there are no unfunded obligations under
any OPC Employee Plan that have not been disclosed to Greif
in writing. Neither OPC, nor any OPC Subsidiary, nor
either Jollay knows of any "reportable event," within the
meaning of Section 4043 of ERISA, and no event described in
Section 4041, 4042, 4062 or 4063 of ERISA has occurred in
connection with any OPC Employee Plan. No condition exists
and no event has occurred that could constitute grounds for
termination of any OPC Retirement Plan, and neither OPC nor
any of the OPC Subsidiaries nor any of their respective
ERISA Affiliates has incurred any material liability under
Title IV of ERISA arising in connection with the
termination of, or complete or partial withdrawal from, any
plan covered or previously covered by Title IV of ERISA.
Nothing done or omitted to be done and no transaction or
holding of any asset under or in connection with any OPC
Employee Plan has or will make OPC, any OPC Subsidiary, or
either Jollay subject to any liability under Title I of
ERISA or liable for any tax pursuant to Section 4975 of the
Code. There is no pending or, to the best of each Jollay's
knowledge, threatened litigation, arbitration, disputed
claim, adjudication, audit, examination or other proceeding
with respect to any OPC Employee Plan or any fiduciary or
administrator thereof in their capacities as such.
Each OPC Employee Plan which is intended to be
qualified under Section 401(a) of the Code is so qualified
and has been so qualified during the period from its
adoption to date, and each trust forming a part thereof is
exempt from tax pursuant to Section 501(a) of the Code. OPC
and each OPC Subsidiary has furnished to Greif copies of
the most recent Internal Revenue Service determination
letters with respect to each such OPC Employee Plan. Each
OPC Employee Plan has been maintained, from the time of
such Plan's inception up to and including the performance
of any or all transactions contemplated in this Agreement,
in material compliance with its terms and the requirements
and fiduciary standards prescribed by any and all statutes,
orders, rules and regulations, including but not limited to
ERISA and the Code, which are applicable to such OPC
Employee Plan.
To the knowledge of Jollays, there is no
contract, agreement, plan or arrangement covering any
employee or former employee, any Jollay or shareholder or
former shareholder of OPC or any OPC Subsidiary or any of
their respective ERISA Affiliates that, individually or
collectively, could give rise to the payment of any amount
that would not be deductible pursuant to the terms of the
Code.
Schedule 3.20 identifies each employment,
severance or other similar contract, arrangement or policy
and each plan or arrangement (written or oral) providing
for insurance coverage (including any self-insured
arrangements), workers' compensation, disability benefits,
supplemental unemployment benefits, vacation benefits,
retirement benefits or for deferred compensation, profit-
sharing, bonuses, stock options, stock appreciation or
other forms of incentive compensation or post-retirement
insurance, compensation or benefits which (i) is not an OPC
Employee Plan, (ii) is entered into, maintained or
contributed to, as the case may be, by either of OPC or any
of the OPC Subsidiaries or any of their respective ERISA
Affiliates, and (iii) covers any employee or former
employee, any Jollay or former shareholder of either of OPC
or any of the OPC Subsidiaries or any of their respective
ERISA Affiliates. Such contracts, plans and arrangements
as are described above, copies or descriptions of all of
which have been furnished previously to Greif, are referred
to collectively herein as the "OPC Benefit Arrangements."
To the knowledge of Jollays, each OPC Benefit Arrangement
has been maintained in substantial compliance with its
terms and with requirements prescribed by any and all
statutes, orders, rules and regulations that are applicable
to such OPC Benefit Arrangement.
Except as set forth in Schedule 3.20, there is no
liability in respect of post-retirement health and medical
benefits for retired employees of either OPC or any of the
OPC Subsidiaries or any of their respective ERISA
Affiliates, determined using assumptions that are
reasonable in the aggregate, over the fair market value of
any fund, reserve or other assets segregated for the
purpose of satisfying such liability (including for such
purposes any fund established pursuant to Section 401(h) of
the Code). Except as provided otherwise by law, to the
knowledge of Jollays, OPC and each OPC Subsidiary has
reserved its right to amend or terminate any OPC Employee
Plan or OPC Benefit Arrangement providing health or medical
benefits in respect of any active employee of OPC or such
OPC Subsidiary under the terms of any such plan and
descriptions thereof given to employees. With respect to
any of OPC's and OPC Subsidiaries' respective OPC Employee
Plans which are "group health plans" under Section 4980B of
the Code and Section 607(1) of ERISA, to the knowledge of
Jollays, there has been timely compliance in all material
respects with all requirements imposed thereunder so that
OPC and each of the OPC Subsidiaries and their respective
ERISA Affiliates have no (and will not incur any) loss,
assessment, tax penalty, or other sanction with respect to
any such plan.
Except as set forth in Schedule 3.20, to the
Jollays' knowledge, there has been no amendment to, written
interpretation or announcement (whether or not written) by
either OPC or any of the OPC Subsidiaries or any of their
respective ERISA Affiliates relating to, or change in
employee participation or coverage under, any OPC Employee
Plan or OPC Benefit Arrangement which would increase the
expense of maintaining such OPC Employee Plan or OPC
Benefit Arrangement above the level of the expense incurred
in respect thereof for the plan year ended immediately
prior to the Closing.
Except as set forth in Schedule 3.20, neither OPC
nor any OPC Subsidiary is a party or subject to any union
contract or any employment contract or arrangement
providing for annual future compensation to any employee or
independent contractor of OPC or any OPC Subsidiary.
To the Jollays' knowledge, the execution and
consummation of the transactions contemplated by this
agreement will not constitute a triggering event under any
OPC Employee Plan, whether or not legally enforceable,
which (either alone or upon the occurrence of any
additional or subsequent event) will or may result in any
payment of severance pay or otherwise, or acceleration,
increase in vesting, or increase in benefits to any current
or former participant, employee or director of OPC or any
OPC Subsidiary that has not been specifically disclosed on
Schedule 3.20 or which is not material to the financial
condition or business of OPC or any OPC Subsidiary.
Any reference to ERISA or the Code or any section
thereof in this Section shall be construed to include all
amendments thereto and applicable regulations and
administrative rulings issued thereunder.
Contracts. The Jollays have caused OPC to
make available to Greif copies of all contracts, agreements,
leases, commitments, or other legal obligations which are
material to the condition, operations, assets, or business of
OPC or any OPC Subsidiary, each of which is valid and binding on
OPC or such OPC Subsidiary, as the case may be, and none of
which have been modified, changed, or amended in any respect.
To the knowledge of the Jollays, neither OPC nor any OPC
Subsidiary is in violation of or in default in respect of, nor
has there occurred an event or condition which, with the passage
of time or giving of notice (or both), would constitute a
default of, any contract, agreement, lease, commitment, or other
legal obligation which is material to the condition, operations,
assets, or business of OPC or any OPC Subsidiary.
OPC Receivables To the knowledge of
Jollays, all notes, accounts, and other miscellaneous
receivables of OPC or any OPC Subsidiary are reflected properly
on its books and records, are valid receivables subject to no
setoffs or counterclaims, and are collectible (subject only to
the reserve for bad debts for accounts receivable set forth in
the OPC Financial Statements as adjusted for the passage of time
through the Closing in accordance with the past custom and
practices of OPC and the OPC Subsidiaries).
Schedule 3.22 includes a list of all amounts payable to OPC
or any OPC Subsidiary by any Affiliate of OPC or OPC Subsidiary
(the "OPC Related Party Receivables") and all amounts payable by
OPC or any such OPC Subsidiary to any Affiliate of OPC or OPC
Subsidiary (the "OPC Related Party Payables") as of June 30,
1998, specifying the payor, payee, and amount of each OPC
Related Party Receivable and OPC Related Party Payable.
Reserved.
Books of Account; Records. To the knowledge
of Jollays, OPC's and each OPC Subsidiary's general ledgers,
corporate record book and other records relating to the material
assets, contracts and outstanding legal obligations of OPC or
such OPC Subsidiary are, in all material respects, complete and
correct, and have been maintained in accordance with good
business practices, and the matters contained therein are
appropriate and accurately reflected in the Financial
Statements.
Reserved.
Reserved.
Reserved.
Reserved.
Investment Intent. Each Jollay: (a) is an
"accredited investor," as that term is defined in Regulation D
promulgated under the Securities Act; (b) by reason of his
business and financial experience, has such knowledge,
sophistication, and experience in business and financial matters
so as to be able to evaluate the merits and risks of his
investment in the CorrChoice Shares to be issued to him; (c) to
his satisfaction, has been provided the opportunity to ask
questions, receive answers, and obtain information from Greif
concerning MPC and its business, has had all such questions
answered, and has been supplied all additional information
deemed necessary by him to verify the accuracy of all
information provided; (d) is acquiring the CorrChoice Shares to
be issued to him for his own account for investment purposes
only and without any view towards resale or other distribution;
(e) except for the representations of Greif set forth in Article
IV of this Agreement, no representations have been made to him
by or on behalf of Greif or MPC in connection with the
transactions contemplated by this Agreement; (f) has determined
that he can bear the economic risks of his investment in the
CorrChoice Shares to be issued to him for an indefinite period
of time; (g) understands that the issuance of the CorrChoice
Shares as a result of this Agreement is intended to be exempt
from registration under the Securities Act and applicable state
law and that the CorrChoice Shares are not and will not be
registered under the Securities Act or any state securities
laws, and that there will be no public market for the CorrChoice
Shares; (h) agrees that any certificates evidencing the
CorrChoice Shares shall contain a legend to the effect that such
shares have not been registered under the Securities Act or any
state securities laws and may not be sold without registration
as required by the Securities Act and applicable state
securities laws or exemptions therefrom, and in the case of such
an exemption, requiring delivery to CorrChoice of a legal
opinion of or satisfactory to CorrChoice's legal counsel that
such exemption is applicable; (i) agrees that CorrChoice can
issue stop transfer instructions to its transfer agent
prohibiting transfer of the CorrChoice Shares to be issued to
him except in compliance with the provisions of the Securities
Act, applicable state securities laws, this Agreement, and the
Greif/Jollays Buy-Sell Agreement; and (j) understands that the
CorrChoice Shares to be issued to him will be subject to
additional transfer, voting, and other restrictions pursuant to
the Greif/Jollay Buy-Sell Agreement and the Shareholders Voting
Agreement.
Complete Disclosure.
(a) The Jollays' Valuation Information, to their
knowledge, did not and does not contain any untrue statement of
a material fact and did not and does not omit a material fact.
(b) To their knowledge, no representation by the Jollays
in this Agreement or the OPC Schedules contains, or will contain
as of the Closing, any untrue statement of a material fact or
omits, or will omit as of the Closing, a material fact To the
knowledge of the Jollays, they have made full disclosure to
Greif of all material facts relating to OPC and the OPC
Subsidiaries necessary to make the Valuation.
Representations of Greif
Greif hereby represents to each of the Jollays and Mr.
McLaughlin as follows:
Organization and Standing. Greif and MPC are
each corporations duly organized, validly existing, and in good
standing under the laws of their respective states of
incorporation, with full power and authority to own, lease, use
and operate their respective properties and to conduct their
respective businesses as and where now owned, leased, used,
operated and conducted. MPC is duly qualified to do business in
the jurisdictions listed in Schedule 4.1, and to Greif's
knowledge, neither the nature of the business conducted by MPC
nor the properties it owns, leases or operates requires it to
qualify to do business in any other jurisdiction, except where a
failure to so qualify would have no material adverse effect on
the business or assets of MPC. To Greif's knowledge, neither
Greif nor MPC has received any written notice or assertion
within the last three years from any governmental official in
any jurisdiction to the effect that MPC is required to be
qualified or authorized to do business in any such jurisdiction,
in which MPC is not so qualified or has not obtained such
authorization. To the knowledge of Greif, neither Greif nor MPC
is in default in the performance, observation or fulfillment of
any provision of their respective certificate or articles of
incorporation, bylaws or code of regulations, or other
organizational documents.
As used in this Article IV, "to the knowledge of Greif" or
"to Greif's knowledge" shall mean to the actual knowledge of the
executive officers of Greif.
Capitalization and Security Holders.
Stock. The authorized capital stock of MPC
consists solely of 1,000 shares of stock, without par
value, of which 400 are issued and outstanding.
Stock Ownership. Greif owns beneficially and
of record all of the issued and outstanding capital stock
of MPC. Greif owns beneficially and of record all of the
Class B Shares.
Due Authorization and Issuance. Each outstanding
share of capital stock of MPC has been duly authorized and
validly issued, is fully paid and non-assessable, and has
not been issued in violation of any preemptive or similar
rights.
No Other Commitment. Except as set forth on
Schedule 4.2, there are no outstanding subscriptions,
options, warrants, puts, calls, agreements, understandings,
claims or other commitments or rights of any type relating
to the issuance, sale or transfer by either Greif or MPC of
any capital stock, other equity interests, or other
securities of MPC, nor are there outstanding any securities
which are convertible into or exchangeable for any shares
of capital stock or other equity interests of MPC, and MPC
has no obligation of any kind to issue any additional
securities.
Compliance with Laws; No Liens. To the knowledge
of Greif, the issuance and sale of all of the outstanding
capital stock of MPC has been in full compliance with all
applicable federal and state securities laws and other
laws. Except as set forth on Schedule 4.2, the outstanding
capital stock of MPC and the Class B Shares are free and
clear of all liens, security interests, encumbrances,
pledges, charges, claims, voting trusts and restrictions on
transfer of any nature whatsoever, except restrictions on
transfer imposed by or pursuant to federal and state
securities laws. Neither Greif nor MPC has agreed to
register any securities of MPC under the Securities Act and
the rules and regulations thereunder or under any state
securities law.
Subsidiaries. MPC does not own subsidiary
corporations or, directly or indirectly, any equity or other
ownership interest in any other Entity. Except for this
Agreement, MPC is not subject to any obligation or requirement
to provide funds to or make any investment (in the form of a
loan, capital contribution or otherwise) in any Entity.
Business of MPC. MPC is and has been engaged
in the business of manufacturing and selling corrugated sheets
to producers of corrugated boxes and operating sheet feeder
plants in Mason and Grand Rapids, Michigan, and in Concord,
North Carolina, and is engaged in no other business whatsoever
except as may be incidental to the foregoing.
Power and Authority; Capacity. Greif has
the requisite corporate power and authority to enter into this
Agreement and to perform its obligations under this Agreement.
This Agreement and the transactions contemplated by this
Agreement have been duly and validly authorized by all necessary
corporate action on the part of Greif. This Agreement has been
duly executed and delivered by Greif and, to Greif's knowledge,
constitutes the legal, valid, and binding obligation of Greif
enforceable against it in accordance with its terms. No other
action or proceeding by or in respect of Greif is or was
necessary to authorize this Agreement or the consummation of the
transactions contemplated by this Agreement.
Consents and Approvals; No Conflict or
Default. Except for the consents described in Schedule 4.6, all
of which shall be obtained prior to the Closing, neither the
execution and delivery of this Agreement by Greif nor the
consummation of the transactions contemplated by this Agreement
(a) requires or will require any action, consent, or approval
of, or review by, or registration with, any third party, court
or governmental body or other agency, instrumentality or
authority, (b) violates or will violate in any material respect
any laws, statutes, orders, rules, and regulations applicable to
MPC, (c) conflicts with or will result in the breach of the
certificate or articles of incorporation, bylaws or code of
regulations, or other organizational documents of either Greif
or MPC, (d) breaches or will result in the breach of any
agreement or legal obligation to which either Greif or MPC is a
party or by which such party or such party's assets are or may
be bound or affected, or constitute a default (or an event
which, with the giving of notice, the passage of time, or
otherwise, would constitute a default) thereunder, or result in
the creation or imposition of any lien, security interest,
charge or encumbrance, or restriction of any nature whatsoever
with respect to any assets of MPC.
Financial Statements. Greif has furnished
to the Jollays the balance sheets for MPC as of October 31,
1997, and October 31, 1996, and the related statements of
income, shareholders' equity, and cash flows for each of the
years in the two-year period ended October 31, 1997, all of
which have been prepared by Greif (collectively, the "1997 MPC
Financial Statements"). In addition, Greif has furnished to the
Jollays the balance sheet for MPC as of June 30, 1998, and the
related income statement for the eight-month period ended June
30, 1998 (the "1998 MPC Financial Statements"). The 1997 MPC
Financial Statements and the 1998 MPC Financial Statements are
hereinafter collectively referred to as the "MPC Financial
Statements." The MPC Financial Statements are in accordance
with the books and records of MPC, have been prepared in
conformity with generally accepted accounting principles applied
on a consistent basis, and fairly present the financial
condition of MPC as of the dates stated and the results of
operations of MPC for the periods then ended in accordance with
such practices.
Undisclosed Liabilities. Except as set
forth in Schedule 4.8, MPC has no any liability or obligation of
any nature (whether liquidated, unliquidated, accrued, absolute,
contingent or otherwise and whether due or to become due)
except:
Those set forth in the MPC Financial Statements
which have not been paid or discharged since the date
thereof;
Those arising from and after the date of this
Agreement under agreements or other commitments
specifically identified in Schedule 4.8;
Current liabilities (determined in accordance
with generally accepted accounting principles) incurred
since June 30, 1998, in transactions in the ordinary course
of business consistent with past practices which are
properly reflected on MPC's books and records and are not
inconsistent with the other representations and agreements
of Greif set forth in this Agreement; and
Those arising under and as a result of this
Agreement.
Absence of Certain Changes. Except as set
forth in Schedule 4.9, since the date of the Greif Valuation
Information, MPC has conducted its business only in the ordinary
course of business consistent with past practices and, to the
knowledge of the Greif, there has not been: any material
adverse change to MPC; any dividend or distribution to any
shareholder of MPC, other than in amounts consistent with past
practices as shown in prior financial statements; any
transaction entered into or carried out by MPC other than in the
ordinary and usual course of its business; any borrowing or
guaranty, any loan or advance, or any agreement relating to the
foregoing by MPC or any incurring by MPC of any other obligation
or liability, except current liabilities incurred in the usual
and ordinary course of business and consistent with past
practices; any change in MPC accounting principles or
practices or its method of application of such principles or
practices; any mortgage, pledge, lien, security interest,
hypothecation, charge or other encumbrance imposed or agreed to
be imposed on or with respect to the property or assets of MPC;
any purchase of or any agreement to purchase assets (other
than inventory purchased in the ordinary course of business
consistent with past practices) for an amount in excess of
$250,000 for any one purchase made by MPC or $1,000,000 for all
such purchases made by MPC or any lease or any agreement to
lease, as lessee, any capital assets with payments over the term
thereof to be made by MPC exceeding an aggregate of $250,000; or
any labor dispute or disturbance adversely affecting the
business operations or condition (financial or otherwise) of
MPC, including without limitation efforts to effect a union
representation election, actual or threatened employee strike,
work stoppage or slow down.
Taxes.
Except as described on Schedule 4.10, to Greif's
knowledge, MPC has duly, properly, and timely filed all
federal, state, local and foreign tax returns and tax
reports required to be filed by it, all such returns and
reports are true, correct and complete, none of such
returns and reports has been amended, and any and all
taxes, assessments, fees and other governmental charges due
from MPC, including without limitation those arising under
such returns and reports, have been fully paid or are fully
accrued as liabilities in the MPC Financial Statements and
will be timely paid. To Greif's knowledge, no claim has
been made by authorities in any jurisdiction where MPC did
not file tax returns that it is or may be subject to
taxation or to reporting therein.
MPC has delivered to the Jollays copies of all
federal, state, local, and foreign income tax returns filed
for taxable periods ended on or after December 31, 1993.
Schedule 4.10 sets forth the dates and results of any and
all audits conducted by taxing authorities against MPC
within the last five years or otherwise with respect to any
tax year for which assessment is not barred by any
applicable statute of limitations. No waivers of any
applicable statute of limitations for the filing of any tax
returns or payment of any taxes or assessments of any
deficient or unpaid taxes are outstanding. Except as set
forth in Schedule 4.10, all deficiencies resulting from any
audits have been paid or settled. There are no pending or,
to the best of Greif's knowledge, threatened federal,
state, local or foreign tax audits or assessments affecting
MPC, and there is no agreement with any federal, state,
local or foreign taxing authority that may affect the
subsequent tax liabilities of MPC.
Except as described on Schedule 4.10, to Greif's
knowledge, MPC is not, on the date of this Agreement, and
MPC will not be as of the Closing, liable for taxes,
assessments, fees or governmental charges for which it has
not made adequate provision, including setting aside a
sufficient reserve to cover that potential liability in
full in the MPC Financial Statements.
Except for the obligation to withhold income
taxes from salaries and wages, there exists no tax-sharing
agreement or arrangement pursuant to which MPC is obligated
to pay the tax liability of Greif or any other Person, or
to indemnify any other Person with respect to any tax.
Schedule 4.10 includes a list of all states,
territories and jurisdictions to which any tax is properly
payable by MPC or, to Greif's knowledge, in which a tax
report must be filed.
Compliance with Law. To the knowledge of
Greif, MPC has complied and is in compliance in all material
respects with all laws, statutes, orders, rules, and regulations
applicable to MPC and all judgments, decisions and orders
entered by any federal, state, local or foreign court or
governmental authority or agency relating to MPC or its business
or properties, as well as all licenses, permits, and similar
approvals which are material to MPC to carry on its business as
presently conducted. Greif has caused MPC to deliver to the
Jollays copies of all licenses, permits, and similar approvals
which are material to MPC to carry on its business as presently
conducted, each of which currently is valid and in full force
and effect.
Proprietary Rights. Greif has caused MPC to
deliver to the Jollays copies of all patents, trademarks, trade
names, service marks, and other similar proprietary property
rights which are material to MPC to carry on its business as
presently conducted, each of which is owned by MPC. To the
knowledge of Greif, no business of MPC has been or is now being
conducted in contravention or infringement of any proprietary
right of any third party.
Reserved.
Insurance. To the knowledge of Greif, MPC
has been and is insured with respect to its property and the
conduct of its business in such amounts and against such risks
as are adequate to protect the properties and businesses of MPC
in accordance with normal industry practice, and to the
knowledge of Greif all such policies are currently in full force
and effect and no notice of cancellation or termination has been
received by MPC with respect to any such policy.
Reserved.
Title to Properties. Except as set forth in
Schedule 4.16, to Greif's knowledge, MPC has good, valid and
marketable title to all of its assets (except for those assets
which are held pursuant to valid leases) of every kind, nature
and description, tangible or intangible, wherever located, which
constitute all of the property now used in and necessary for the
conduct of its business as presently conducted (including
without limitation all assets shown or reflected on the MPC
Financial Statements). To the knowledge of Greif, the UCC-11
lien searches and the real estate title lien searches provided
to Greif by Critchfield, Critchfield & Johnston, Ltd. set forth
all mortgages, pledges, liens, security interests, and
encumbrances relating to the assets of MPC. Such real estate
title lien searches reference all real property owned by MPC.
Except as set forth in Schedule 4.16, MPC does not lease any
real property as a lessee.
Brokers, Finders. The transactions
contemplated by this Agreement were not submitted to by any
broker or other Person entitled to a commission, finder's fee or
like payment thereon, and were not, with the consent of Greif,
submitted to the Jollays by any broker or other Person, and none
of the actions of Greif has given rise to any claim by any
Person for a commission, finder's fee or like payment against
any of the Parties.
Legal Proceedings and Claims. Except as
listed and described in Schedule 4.18, there are no (and over
the last five years there have been no) claims, proceedings,
suits or investigations pending or, to the knowledge of Greif,,
threatened against or relating to MPC or any of the employees of
MPC (but only in their capacity as employees of MPC and not
personally) or, to the knowledge of Greif without independent
investigation, independent contractors of MPC in connection with
the business or affairs of MPC, by or before any federal, state,
local or foreign court or governmental body, agency, or
authority. There are no such claims, proceedings, suits or
investigations pending or, to the knowledge of Greif, threatened
for the purpose of enjoining or preventing the consummation of
any transaction contemplated by this Agreement or otherwise
challenging the validity or propriety of the transactions
contemplated by this Agreement. Except as disclosed in Schedule
4.18, to the knowledge of Greif, MPC is not subject to any
judgment, order or decree, or any governmental restriction
applicable to it, which has a reasonable probability of causing
a material adverse change, or which may materially adversely
affect the ability of MPC to acquire any property or conduct
business as it is currently being conducted. Except as listed
and described in Schedule 4.18 and to the knowledge of Greif,
there are no facts, circumstances, or occurrences which may give
rise to any claims, proceedings, or suits against MPC or any of
the employees of MPC (but only in their capacity as employees of
MPC and not personally) or, to the knowledge of Greif without
independent investigation, independent contractors of MPC which
could cause a material adverse change to MPC or to the business
or assets of MPC.
ERISA.
Schedule 4.19 identifies each "employee benefit
plan," as defined in Section 3(3) of ERISA which (i) is
subject to any provision of ERISA and (ii) is or was at any
time during the last five years maintained, administered or
contributed to by MPC or any of its ERISA Affiliates and
covers any employee or former employee of MPC or any of its
ERISA Affiliates or under which MPC or any of its ERISA
Affiliates has any liability. Copies of such plans (and,
if applicable, related trust agreements) and all amendments
thereto and written interpretations thereof have been
furnished to the Jollays together with the three most
recent annual reports (Form 5500) prepared in connection
with any such plan. Such plans are referred to
collectively herein as the "MPC Employee Plans." The only
MPC Employee Plans which individually or collectively would
constitute an "employee pension benefit plan" as defined in
Section 3(2) of ERISA (the "MPC Pension Plans") are
identified on Schedule 4.19.
Except as set forth in Schedule 4.19, no MPC
Employee Plan constitutes a "multiemployer plan," as
defined in Section 3(37) of ERISA, or a "defined benefit
plan," as defined in Section 3(35) and subject to Title IV
of ERISA, and no MPC Employee Plan is maintained in
connection with any trust described in Section 501(c)(9) of
the Code. No "accumulated funding deficiency," as defined
in Section 412 of the Code, has been incurred with respect
to any MPC Pension Plan, whether or not waived. Full
payment has been made of all amounts which MPC or any of
its ERISA Affiliates is required to have paid as
contributions to or benefits under any MPC Employee Plan as
of the end of the most recent plan year thereof and there
are no unfunded obligations under any MPC Employee Plan
that have not been disclosed to the Jollays in writing.
Neither MPC nor Greif knows of any "reportable event,"
within the meaning of Section 4043 of ERISA, and no event
described in Section 4041, 4042, 4062 or 4063 of ERISA has
occurred in connection with any MPC Employee Plan. No
condition exists and no event has occurred that could
constitute grounds for termination of any MPC Retirement
Plan, and neither MPC nor any of its ERISA Affiliates has
incurred any material liability under Title IV of ERISA
arising in connection with the termination of, or complete
or partial withdrawal from, any plan covered or previously
covered by Title IV of ERISA. Nothing done or omitted to
be done and no transaction or holding of any asset under or
in connection with any MPC Employee Plan has or will make
either MPC or Greif subject to any liability under Title I
of ERISA or liable for any tax pursuant to Section 4975 of
the Code. There is no pending or, to the best of Greif's
knowledge, threatened litigation, arbitration, disputed
claim, adjudication, audit, examination or other proceeding
with respect to any MPC Employee Plan or any fiduciary or
administrator thereof in their capacities as such.
Each MPC Employee Plan which is intended to be
qualified under Section 401(a) of the Code is so qualified
and has been so qualified during the period from its
adoption to date, and each trust forming a part thereof is
exempt from tax pursuant to Section 501(a) of the Code.
Greif has furnished to the Jollays copies of the most
recent Internal Revenue Service determination letters with
respect to each such MPC Employee Plan. Each MPC Employee
Plan has been maintained, from the time of such Plan's
inception up to and including the performance of any or all
transactions contemplated in this Agreement, in material
compliance with its terms and the requirements and
fiduciary standards prescribed by any and all statutes,
orders, rules and regulations, including but not limited to
ERISA and the Code, which are applicable to such MPC
Employee Plan.
To Greif's knowledge, there is no contract,
agreement, plan or arrangement covering any employee or
former employee, Greif or former shareholder of MPC or any
of its ERISA Affiliates that, individually or collectively,
could give rise to the payment of any amount that would not
be deductible pursuant to the terms of the Code.
Schedule 4.19 identifies each employment,
severance or other similar contract, arrangement or policy
and each plan or arrangement (written or oral) providing
for insurance coverage (including any self-insured
arrangements), workers' compensation, disability benefits,
supplemental unemployment benefits, vacation benefits,
retirement benefits or for deferred compensation, profit-
sharing, bonuses, stock options, stock appreciation or
other forms of incentive compensation or post-retirement
insurance, compensation or benefits which (i) is not a MPC
Employee Plan, (ii) is entered into, maintained or
contributed to, as the case may be, by MPC or any of its
ERISA Affiliates, and (iii) covers any employee or former
employee, Greif or former shareholder of MPC or any of its
ERISA Affiliates. Such contracts, plans and arrangements
as are described above, copies or descriptions of all of
which have been furnished previously to the Jollays, are
referred to collectively herein as the "MPC Benefit
Arrangements." To Greif's knowledge, each MPC Benefit
Arrangement has been maintained in substantial compliance
with its terms and with requirements prescribed by any and
all statutes, orders, rules and regulations that are
applicable to such MPC Benefit Arrangement.
Except as set forth in Schedule 4.19, there is no
liability in respect of post-retirement health and medical
benefits for retired employees of MPC or any of its ERISA
Affiliates, determined using assumptions that are
reasonable in the aggregate, over the fair market value of
any fund, reserve or other assets segregated for the
purpose of satisfying such liability (including for such
purposes any fund established pursuant to Section 401(h) of
the Code). Except as provided otherwise below, to the
knowledge of Greif MPC has reserved its right to amend or
terminate any MPC Employee Plan or MPC Benefit Arrangement
providing health or medical benefits in respect of any
active employee of MPC, respectively, under the terms of
any such plan and descriptions thereof given to employees.
With respect to any of the MPC Employee Plans which are
"group health plans" under Section 4980B of the Code and
Section 607(1) of ERISA, to the knowledge of Greif, there
has been timely compliance in all material respects with
all requirements imposed thereunder so that MPC and its
ERISA Affiliates have no (and will not incur any) loss,
assessment, tax penalty, or other sanction with respect to
any such plan.
Except as set forth in Schedule 4.19, to Greif's
knowledge there has been no amendment to, written
interpretation or announcement (whether or not written) by
MPC or any of its ERISA Affiliates relating to, or change
in employee participation or coverage under, any MPC
Employee Plan or MPC Benefit Arrangement which would
increase the expense of maintaining such MPC Employee Plan
or MPC Benefit Arrangement above the level of the expense
incurred in respect thereof for the plan year ended
immediately prior to the Closing.
Except as set forth in Schedule 4.19, MPC is not
a party or subject to any union contract or any employment
contract or arrangement providing for annual future
compensation to any employee or independent contractor of
MPC.
To Greif's knowledge, the execution and
consummation of the transactions contemplated by this
Agreement will not constitute a triggering event under any
MPC Employee Plan, whether or not legally enforceable,
which (either alone or upon the occurrence of any
additional or subsequent event) will or may result in any
payment of severance pay or otherwise, or acceleration,
increase in vesting, or increase in benefits to any current
or former participant, employee or director of MPC that has
not been specifically disclosed on Schedule 4.19 or which
is not material to the financial condition or business of
MPC.
Any reference to ERISA or the Code or any section
thereof in this Section 4.19 shall be construed to include
all amendments thereto and applicable regulations and
administrative rulings issued thereunder.
Contracts. Greif has caused MPC to make
available to the Jollays copies of all contracts, agreements,
leases, commitments, or other legal obligations which are
material to the condition, operations, assets, or business of
MPC, each of which is valid and binding on MPC and none of which
have been modified, changed, or amended in any respect. To the
knowledge of Greif, MPC is not in violation of or in default in
respect of, nor has there occurred an event or condition which,
with the passage of time or giving of notice (or both), would
constitute a default of, any contract, agreement, lease,
commitment, or other legal obligation which is material to the
condition, operations, assets, or business of MPC.
MPC Receivables To Greif's knowledge, all
notes, accounts, and other miscellaneous receivables of MPC are
reflected properly in its books and records, are valid
receivables subject to no setoffs or counterclaims, and are
collectible (subject only to the reserve for bad debts for
accounts receivable set forth in the MPC Financial Statements as
adjusted for the passage of time through the Closing in
accordance with the past custom and practices of MPC).
Schedule 4.21 includes a list of all amounts payable to MPC
by any Affiliate of MPC (the "MPC Related Party Receivables")
and all amounts payable by MPC to any Affiliate of MPC (the "MPC
Related Party Payables") as of June 30, 1998, specifying the
payor, payee, and amount of each MPC Related Party Receivable
and MPC Related Party Payable.
Reserved.
Books of Account; Records. To Greif's
knowledge, MPC's general ledgers, corporate record book and
other records relating to the material assets, contracts and
outstanding legal obligations of MPC are, in all material
respects, complete and correct, and have been maintained in
accordance with good business practices, and the matters
contained therein are appropriate and accurately reflected in
the MPC Financial Statements.
Reserved.
Reserved.
Reserved.
Reserved.
Investment Intent. Greif: (a) is an
"accredited investor," as that term is defined in Regulation D
promulgated under the Securities Act; (b) by reason of the
business and financial experience of its representatives, has
such knowledge, sophistication, and experience in business and
financial matters so as to be able to evaluate the merits and
risks of its investment in the CorrChoice Shares to be issued to
it; (c) to its satisfaction, has been provided the opportunity
to ask questions, receive answers, and obtain information from
the Jollays concerning RDJ Holdings, OPC, and the OPC
Subsidiaries and their respective businesses, has had all such
questions answered, and has been supplied all additional
information deemed necessary by it to verify the accuracy of all
information provided; (d) is acquiring the CorrChoice Shares to
be issued to it for its own account for investment purposes only
and without any view towards resale or other distribution; (e)
except for the representations of the Jollays and Mr. McLaughlin
set forth in Articles III and V of this Agreement, no
representations have been made to it by or on behalf of the
Jollays, RDJ Holdings, OPC, or the OPC Subsidiaries in
connection with the transactions contemplated by this Agreement;
(f) has determined, through its representatives, that it can
bear the economic risks of its investment in the CorrChoice
Shares to be issued to it for an indefinite period of time; (g)
understands that the issuance of the CorrChoice Shares as a
result of this Agreement is intended to be exempt from
registration under the Securities Act and applicable state law
and that the CorrChoice Shares are not and will not be
registered under the Securities Act or any state securities
laws, and that there will be no public market for the CorrChoice
Shares; (h) agrees that any certificates evidencing the
CorrChoice Shares shall contain a legend to the effect that such
shares have not been registered under the Securities Act or any
state securities laws and may not be sold without registration
as required by the Securities Act and applicable state
securities laws or exemptions therefrom, and in the case of such
an exemption, requiring delivery to CorrChoice of a legal
opinion of or satisfactory to CorrChoice's legal counsel that
such exemption is applicable; (i) agrees that CorrChoice can
issue stop transfer instructions to its transfer agent
prohibiting transfer of the CorrChoice Shares to be issued to it
except in compliance with the provisions of the Securities Act,
applicable state securities laws, this Agreement, and the
Greif/Jollays Buy-Sell Agreement; and (j) understands that the
CorrChoice Shares to be issued to it will be subject to
additional transfer, voting, and other restrictions pursuant to
the Greif/Jollay Buy-Sell Agreement and the Shareholders Voting
Agreement.
Complete Disclosure.
The Greif Valuation Information, to its
knowledge, did not and does not contain any untrue
statement of a material fact and did not and does not omit
a material fact.
To Greif's knowledge, no representation by Greif
in this Agreement or the Greif Schedules contains or will
contain as of the Closing any untrue statement of a
material fact or omits or will omit as of the Closing a
material fact. To the knowledge of Greif, it has made full
disclosure to the Jollays of all material facts relating to
MPC necessary to make the Valuation.
Representations of Mr. McLaughlin
Mr. McLaughlin hereby represents to each of the Jollays and
Greif as follows:
Stock Ownership; No Liens. Mr. McLaughlin
owns beneficially and of record all of the McLaughlin CCI
Shares. Except as set forth in Schedule 5.1, the McLaughlin CCI
Shares are free and clear of all liens, security interests,
encumbrances, pledges, charges, claims, voting trusts and
restrictions on transfer of any nature whatsoever, except
restrictions on transfer imposed by or pursuant to federal and
state securities laws.
Power and Authority; Capacity. Mr.
McLaughlin has full legal capacity, power, and authority to
enter into this Agreement and perform his obligations under this
Agreement. This Agreement has been duly executed and delivered
by Mr. McLaughlin and constitutes the legal, valid and binding
obligation of him enforceable against him in accordance with its
terms. No other action or proceeding by or in respect of Mr.
McLaughlin is or was necessary to authorize this Agreement or
the consummation of the transactions contemplated by this
Agreement.
Consents and Approvals; No Conflict or
Default. To the knowledge of Mr. McLaughlin, except for the
consents described in Schedule 5.3, all of which shall be
obtained prior to the Closing, neither the execution and
delivery of this Agreement by Mr. McLaughlin nor the
consummation of the transactions contemplated by this Agreement
(a) requires or will require any action, consent, or approval
of, or review by, or registration with, any third party, court
or governmental body or other agency, instrumentality or
authority, (b) violates or will violate in any material respect
any laws, statutes, orders, rules, and regulations applicable to
Mr. McLaughlin, or (c) breaches or will result in the breach of
any agreement or legal obligation to which Mr. McLaughlin is a
party or by which Mr. McLaughlin or his assets are or may be
bound or affected, or constitute a default (or an event which,
with the giving of notice, the passage of time, or otherwise,
would constitute a default) thereunder.
Reserved.
Brokers, Finders. None of the actions of
Mr. McLaughlin has given rise to any claim by any Person for a
commission, finder's fee or like payment against any of the
Parties.
Legal Proceedings and Claims. There are no
claims, proceedings, suits or investigations pending or, to Mr.
McLaughlin's knowledge, threatened for the purpose of enjoining
or preventing the consummation of any transaction contemplated
by this Agreement or otherwise challenging the validity or
propriety of the transactions contemplated by this Agreement.
Reserved.
CCI Matters. Based upon Mr. McLaughlin's
review of the representations of the Jollays set forth in
Article III relating or pertaining to the OPC Subsidiaries, to
Mr. McLaughlin's knowledge, such representations are true,
complete, and correct with respect to CCI as an OPC Subsidiary.
Investment Intent. Mr. McLaughlin: (a) is
an "accredited investor," as that term is defined in
Regulation D promulgated under the Securities Act; (b) by reason
of his business and financial experience, has such knowledge,
sophistication, and experience in business and financial matters
so as to be able to evaluate the merits and risks of his
investment in the CorrChoice Shares to be issued to him; (c) to
his satisfaction, has been provided the opportunity to ask
questions, receive answers, and obtain information from the
Jollays and Greif concerning RDJ Holdings, OPC, the OPC
Subsidiaries, MPC and their respective businesses, has had all
such questions answered, and has been supplied all additional
information deemed necessary by him to verify the accuracy of
all information provided; (d) is acquiring the CorrChoice Shares
to be issued to him for his own account for investment purposes
only and without any view towards resale or other distribution;
(e) except for the representations of the Jollays and Greif set
forth in Articles III and IV of this Agreement, no
representations have been made to him by or on behalf of the
Jollays, RDJ Holdings, OPC, the OPC Subsidiaries, Greif or MPC
in connection with the transactions contemplated by this
Agreement; (f) has determined that he can bear the economic
risks of his investment in the CorrChoice Shares to be issued to
him for an indefinite period of time; (g) understands that the
issuance of the CorrChoice Shares as a result of this Agreement
is intended to be exempt from registration under the Securities
Act and applicable state law and that the CorrChoice Shares are
not and will not be registered under the Securities Act or any
state securities laws, and that there will be no public market
for the CorrChoice Shares; (h) agrees that any certificates
evidencing the CorrChoice Shares shall contain a legend to the
effect that such shares have not been registered under the
Securities Act or any state securities laws and may not be sold
without registration as required by the Securities Act and
applicable state securities laws or exemptions therefrom, and in
the case of such an exemption, requiring delivery to CorrChoice
of a legal opinion of or satisfactory to CorrChoice's legal
counsel that such exemption is applicable; (i) agrees that
CorrChoice can issue stop transfer instructions to its transfer
agent prohibiting transfer of the CorrChoice Shares to be issued
to him except in compliance with the provisions of the
Securities Act, applicable state securities laws, this
Agreement, and the Greif/McLaughlin Buy-Sell Agreement; and (j)
understands that the CorrChoice Shares to be issued to him will
be subject to additional transfer, voting, and other
restrictions pursuant to the Greif/McLaughlin Buy-Sell Agreement
and the Shareholders Voting Agreement.
Complete Disclosure.
The Valuation Information supplied by Mr.
McLaughlin, to his knowledge, did not and does not contain
any untrue statement of a material fact and did not and
does not omit a material fact.
To his knowledge, no representation by Mr.
McLaughlin in this Agreement or with respect to information
contained in the Schedules contains or will contain, as of
the Closing, any untrue statement of a material fact or
omits or will omit, as of the Closing, a material fact. To
the knowledge of Mr. McLaughlin, he has made full
disclosure to Greif of all material facts relating to CCI
necessary to make the Valuation.
Reserved
Closing
The Closing. The closing of the
transactions contemplated by this Agreement (the "Closing")
shall take place immediately after the execution of this
Agreement at the offices of Baker & Hostetler LLP in Columbus,
Ohio, or on such other date or at such other place as the
Parties may agree. The date of the Closing is sometimes
referred to in this Agreement as the "Closing Date."
Deliveries of Greif at Closing. At the
Closing, Greif shall deliver, or cause to be delivered, to the
other Parties, as appropriate, the following:
Stock Certificates for MPC Stock and Class B
Shares. Stock certificates evidencing the MPC Stock and
Class B Shares, in each case duly endorsed for transfer to
Company.
Company Formation Documents. Executed
counterparts of the following documents: (i) written
actions by shareholders to (A) adopt a Code of Regulations
for the Company (in form and content reasonably
satisfactory to Greif), (B) elect Michael J. Gasser,
Charles R. Chandler, Michael H. Dempsey, the Jollays, and
Mr. McLaughlin as the initial board of directors of the
Company, and (C) ratify all actions taken by the any Person
on behalf of the Company in connection with the execution
and delivery of this Agreement and the consummation of the
transactions contemplated by this Agreement; (ii) written
actions by directors (executed by Messrs. Gasser, Chandler,
and Dempsey) to (A) adopt resolutions related to the
organization of the Company, (B) elect Geoffrey A. Jollay
as chairman and chief executive officer of the Company and
R. Dean Jollay, Jr. as vice chairman and chief financial
officer of the Company, and (C) ratify all actions taken by
any Person on behalf of the Company in connection with the
execution and delivery of this Agreement and the
consummation of the transactions contemplated by this
Agreement.
Shareholders Voting Agreement. Executed
counterparts of the Shareholders Voting Agreement in the
form attached to this Agreement as Exhibit A (the
"Shareholders Voting Agreement").
Greif/Jollays Buy-Sell Agreement. Executed
counterparts of the Greif/Jollays Buy-Sell Agreement in the
form attached to this Agreement as Exhibit B (the
"Greif/Jollays Buy-Sell Agreement").
Greif/McLaughlin Buy-Sell Agreement. Executed
counterparts of the Greif/McLaughlin Buy-Sell Agreement in
the form attached to this Agreement as Exhibit C (the
"Greif/McLaughlin Buy-Sell Agreement")
Certified Resolutions. Certified copies of
resolutions adopted by the board of directors of Greif
authorizing the execution and delivery of this Agreement
and the consummation of the transactions contemplated by
this Agreement.
Reserved.
Opinion of Counsel . A legal opinion from the
law firm of Baker & Hostetler LLP, counsel to Greif and
MPC, in substantially the form attached to this Agreement
as Exhibit H.
Deliveries of the Jollays at Closing. At
the Closing, the Jollays shall deliver, or cause to be
delivered, to the other Parties, as appropriate, the following:
Stock Certificates for RDJ Stock. Stock
certificates evidencing all of the RDJ Stock duly endorsed
for transfer to the Company.
Company Formation Documents. Executed
counterparts of the following documents: (i) written
actions by shareholders to (A) adopt a Code of Regulations
for the Company (in form and content reasonably
satisfactory to the Jollays), (B) elect Michael J. Gasser,
Charles R. Chandler, Michael H. Dempsey, the Jollays, and
Mr. McLaughlin as the initial board of directors of the
Company, and (C) ratify all actions taken by the any Person
on behalf of the Company in connection with the execution
and delivery of this Agreement and the consummation of the
transactions contemplated by this Agreement; (ii) written
actions by directors to (A) adopt resolutions related to
the organization of the Company, (B) elect Geoffrey A.
Jollay as chairman and chief executive officer of the
Company and R. Dean Jollay, Jr. as vice chairman and chief
financial officer of the Company, and (C) ratify all
actions taken by any Person on behalf of the Company in
connection with the execution and delivery of this
Agreement and the consummation of the transactions
contemplated by this Agreement.
Employment Agreements. Executed counterparts of
the Geoffrey Jollay Employment Agreement in the form
attached to this Agreement as Exhibit D (the "Geoffrey
Jollay Employment Agreement") and the Dean Jollay
Employment Agreement in the form attached to this Agreement
as Exhibit E (the "Dean Jollay Employment Agreement").
Shareholders Voting Agreement. Executed
counterparts of the Shareholders Voting Agreement.
Greif/Jollays Buy-Sell Agreement. Executed
counterparts of the Greif/Jollays Buy-Sell Agreement.
OPC Stock Transfer Restrictions. Executed waiver
of the restrictions on the transfer of Class B Shares
contained in Article VII, Section 2 of the OPC Code of
Regulations.
CCI Buy-Sell Agreement. Executed agreement
terminating the Buy-Sell Agreement between OPC and Mr.
McLaughlin pertaining to the CCI Shares.
RDJ Holdings Buy-Sell Agreement. Executed
agreement terminating the Buy-Sell Agreement between R.
Dean Jollay, Jr. and Geoffrey A. Jollay pertaining to the
RDJ Holdings Shares.
Opinion of Counsel . A legal opinion from the
law firm of Critchfield, Critchfield & Johnston, Ltd.,
counsel to the Jollays, RDJ Holdings, and OPC, in
substantially the form attached to this Agreement as
Exhibit G.
Deliveries of Mr. McLaughlin at Closing. At
the Closing, Mr. McLaughlin shall deliver, or cause to be
delivered, to the other Parties, as appropriate, the following:
Stock Certificates for McLaughlin CCI Stock.
Stock certificates evidencing the McLaughlin CCI Shares and
Mr. McLaughlin's 2,000 CCI Preferred Shares, in each case
duly endorsed for transfer to the Company.
Company Formation Documents. Executed
counterparts of the following documents: (i) written
actions by shareholders to (A) adopt a Code of Regulations
for the Company (in form and content reasonably satisfactory
to Mr. McLaughlin), (B) elect Michael J. Gasser, Charles R.
Chandler, Michael H. Dempsey, the Jollays, and Mr.
McLaughlin as the initial board of directors of the Company,
and (C) ratify all actions taken by the any Person on behalf
of the Company in connection with the execution and delivery
of this Agreement and the consummation of the transactions
contemplated by this Agreement; (ii) written actions by
directors to (A) adopt resolutions related to the
organization of the Company, (B) elect Geoffrey A. Jollay as
chairman and chief executive officer of the Company and R.
Dean Jollay, Jr. as vice chairman and chief financial
officer of the Company, and (C) ratify all actions taken by
any Person on behalf of the Company in connection with the
execution and delivery of this Agreement and the
consummation of the transactions contemplated by this
Agreement.
Shareholders Voting Agreement. Executed
counterparts of the Shareholders Voting Agreement.
Greif/McLaughlin Buy-Sell Agreement. Executed
counterparts of the Greif/McLaughlin Buy-Sell Agreement.
CCI Buy-Sell Agreement. Executed agreement
terminating the Buy-Sell Agreement between OPC and Mr.
McLaughlin pertaining to the CCI Shares.
Employment Agreement. Executed counterpart of
the John J. McLaughlin Employment Agreement in the form
attached to this Agreement as Exhibit L (the "John J.
McLaughlin Employment Agreement").
Deliveries of the Company at Closing. At
the Closing, the Company shall deliver, or cause to be
delivered, to the other Parties, as appropriate, the following:
Stock Certificates for CorrChoice Shares. Stock
certificates representing CorrChoice Shares, executed by
the appropriate officers of the Company, in the following
denominations and in the following names: (i) a stock
certificate for 6,324 CorrChoice Shares issued in the name
of Greif; (ii) a stock certificate for 1,733 CorrChoice
Shares issued in the name of Geoffrey A. Jollay; (iii) a
stock certificate for 1,733 CorrChoice Shares issued in the
name of R. Dean Jollay, Jr.; and (iv) a stock certificate
for 210 CorrChoice Shares issued in the name of Mr.
McLaughlin.
Employment Agreements. Executed counterparts of
the Geoffrey Jollay Employment Agreement, the Dean Jollay
Employment Agreement, and the John J. McLaughlin Employment
Agreement.
Covenants of the Parties
Mutual Covenants.
Payment of Dividends. On and after the Closing,
each Shareholder shall take such action (either
individually or as a shareholder, director, or officer of
the Company) as may be necessary or appropriate to cause
the Company to retain cash and make dividend distributions
in accordance with the CorrChoice Cash Retention and
Dividend Distribution Formula attached to this Agreement as
Exhibit F.
Prohibition on Operation of Sheet and Box Plants.
On and after the Closing, no Shareholder shall take any
action (either individually or as a shareholder, director,
or officer of the Company) to cause the Company to acquire,
construct, or operate any sheet plants or box plants (as
such terms are used in the corrugated paper manufacturing
industry) in the United States or anywhere outside the
United States, and, if necessary, each Shareholder shall
take such reasonable action as may be necessary or
appropriate to prevent the Company from acquiring,
constructing, or operating any sheet plants or box plants
in the United States or anywhere outside the United States.
Purchase of Paper Tonnage from Greif. The
Shareholders acknowledge and agree that the Company shall
control its own supply of paper and that efforts will be
made to continue or combine contracts or trades for paper
currently in place at each of the Sheet Feeder Facilities
with adherence to historical focus on quality, commitment,
and competitive prices. Notwithstanding the foregoing, on
and after the Closing, each Shareholder shall take such
action (either individually or as a shareholder, director,
or officer of the Company) as may be necessary or
appropriate to cause the Company to (i) purchase from
Greif, on an annual basis, paper tonnage at least equal to
the tonnage the Sheet Feeder Facilities purchased from
Greif during the 12-month period ended June 30, 1998, (ii)
give Greif the first opportunity to sell more paper to the
Company, and (iii) give Greif the last look at selling such
additional paper to the Company at competitive market
prices.
Location of the Company's Headquarters. On and
after the Closing, each Shareholder shall take such action
(either individually or as a shareholder, director, or
officer of the Company) as may be necessary or appropriate
to cause the Company's headquarters to be located in
Massillon, Ohio. Any subsequent relocation of such
headquarters shall require the approval of a majority of
the Company's directors and shall be carried out in a way
that shall minimize overhead.
Confidentiality of Company Information. On and
after the Closing, to the extent permitted by law, each
Shareholder shall take such action (either individually or
as a shareholder, director, or officer of the Company) as
may be necessary or appropriate to maintain the
confidentiality of information pertaining to the Company.
To the extent permitted by law, matters pertaining to the
Company will not be disclosed in Greif's annual reports,
proxy statements, or other publicly available documents.
Covenants of Greif.
Prohibition on Sheet Feeder Operations. On and
after the Closing, Greif shall not take any action to
acquire, construct, or operate any sheet feeder plants (as
such term is used in the corrugated paper manufacturing
industry) or sell corrugated sheets to non-Affiliates in
the United States or anywhere outside the United States.
Notwithstanding the foregoing, Greif may proceed on its own
behalf with any sheet feeder plant project outside the
United States if, after having been presented with the
opportunity to undertake such project, the Company declines
to undertake such project.
Consultation Regarding Acquisition/Construction
of Sheet and Box Plants. On and after the Closing, Greif
shall cause its management to consult with the Company's
management before Greif acquires or constructs new sheet
plants or box plants (as such terms are used in the
corrugated paper manufacturing industry), so as to maximize
the synergies between the Company and Greif.
Notwithstanding the foregoing, Greif, in its sole
discretion, may acquire or construct new sheet plants or
box plants after such consultation with the Company's
management.
Purchase of Sheet Tonnage from the Company. On
and after the Closing, Greif shall (i) purchase from the
Company, on an annual basis, sheet tonnage at least equal
to the tonnage Greif's sheet plants and box plants
purchased from OPC and MPC and the OPC Subsidiaries during
the 12-month period ended June 30, 1998, (ii) encourage its
sheet plants and box plants to purchase from the Company
additional sheets at competitive market prices whenever
possible, and (iii) give the Company the last look at
selling outside sheets to such plants.
Consideration of Jollay Representative for Board
Vacancies. On and after the Closing, in the event a seat
on the board of directors of Greif becomes vacant, which
vacancy Greif intends to fill, Greif shall give due
consideration to recommending the appointment of a
representative of the Jollays to fill such vacancy.
Eaton Rapids, Michigan Facility. In connection
with MPC's transfer of certain property related to its
Eaton Rapids, Michigan facility, all as further described
on Schedule 4.9, Greif acknowledges that it shall be
responsible for all costs related to the underground
storage tank system at such facility described on Schedule
4.18, including all remedial costs.
Covenants of the Jollays.
Termination of Sheet Feeder Plant Construction.
As soon as practicable following the Closing, the Jollays
shall take such action as may be necessary or appropriate
to cause the termination of construction of the new sheet
feeder plants which are proposed to be constructed by OPC
and/or its Affiliates in Salisbury, North Carolina, and
Charlotte, Michigan. Furthermore, all new equipment
purchased for the Salisbury, North Carolina project will
become the property of Company and may subsequently be
leased to Heritage Packaging. All remaining payments on
such equipment shall become the obligation of the Company.
Remedies; Post-Closing Share Adjustments
Survival of Representations.
(a) Subject to the limitation set forth in this
Article and notwithstanding any investigation conducted at
any time by or on behalf of any Shareholder, all
representations of the Shareholders contained in this
Agreement shall survive the execution, delivery and
performance of this Agreement for a period of five years
from the date of Closing. All representations of the
Shareholders set forth in this Agreement shall be deemed to
have been made at and as of the Closing.
(b) As used in this Article, any reference to a
representation contained in any section of this Agreement
shall include the Schedule relating to such section.
Exclusive Remedy. The procedures set forth
in this Article shall be the sole and exclusive procedures to be
followed by a Party (a "Claiming Party") seeking a remedy for
any of the following types of claims (a "Claim"): (a) any claim
relating to an inaccuracy or omission in any representation set
forth in this Agreement; and (b) any claim relating to an
allegation that the Valuation (not the method of determining the
Valuation) did not reflect the fair market value of OPC, MPC, or
CCI as of the Closing because of an error with respect to a fact
disclosed to HLH&Z or the omission of any fact that would have
an effect on the Valuation. The amount of any Claim or the
aggregation of Claims by one Party must be at least $1,000,000
in order for such Claim or Claims to be processed pursuant to
the provisions of this Article.
A Claim must be based upon facts and circumstances that
existed as of the Closing but, except as otherwise set forth in
this Section 9.2, were not known by the Claiming Party as of the
Closing. For purposes of the preceding sentence, a Claiming
Party shall have known facts and circumstances only if such
Party or its legal counsel had actual knowledge of such facts
and circumstances. In the case of Greif, one of its officers or
employees involved in the due diligence process must have actual
knowledge of such facts and circumstances. All matters
disclosed on the schedules to this Agreement shall constitute
actual knowledge of the Parties. The knowledge or lack of
knowledge of the Party against whom a Claim is brought (the
"Responding Party") shall be irrelevant in determining the
validity of such Claim.
Notwithstanding any language in this Section 9.2 to the
contrary: (i) a Claim may be brought against Greif relating to
the tax audit currently being conducted by the Internal Revenue
Service with respect to MPC; (ii) a Claim may be brought against
the Jollays relating to the tax audit currently being conducted
by the Internal Revenue Service with respect to OPC and the OPC
Subsidiaries; and (iii) a Claim may be brought against Mr.
McLaughlin relating to the tax audit currently being conducted
by the Internal Revenue Service with respect to OPC and the OPC
Subsidiaries to the extent such Claim relates to CCI.
Except as set forth in Section 9.4 of this Agreement, all
Claims must be initiated on or prior to the fifth anniversary of
the Closing. The foregoing period is hereinafter referred to as
the "Claim Period."
A Claiming Party who wishes to initiate a Claim or Claims
against a Responding Party pursuant to this Article shall
deliver to the Responding Party and all other Parties a Notice
of Claim in the form and substance as set forth in Exhibit I
(the "Notice of Claim"). Any Notice of Claim issued by a
Claiming Party shall set forth in reasonable detail the basis of
the Claim. Each Party may only submit a single Notice of Claim
which may contain an unlimited number of Claims during the Claim
Period; provided that a Notice of Claim filed during the
Accelerated Claim Period (as defined in Section 9.4) against a
Departing Shareholder (as defined in Section 9.4) in accordance
with Section 9.4 shall not be subject to this limitation.
Resolution Procedures.
(a) Procedures for Resolution by Parties. After
receipt of a Notice of Claim, the Claiming Party and the
Responding Party shall attempt in good faith to resolve the
Claim by mutual agreement. If for any Claim the Claiming
Party and the Responding Party are able to reach agreement
as to (i) a finding against the Responding Party in favor
of the Claiming Party, and (ii) the value (expressed in
dollars) of such Claim, then such Claim shall be deemed a
"Valid Claim."
If by their own efforts the Parties are unable to
agree as to whether or not a Claim is a Valid Claim within
30 business days after receipt of a Notice of Claim, then
such Claim shall be deemed an "Unresolved Claim." All
Unresolved Claims shall be held in abeyance until submitted
to Resolute Systems (the "Dispute Resolver") in accordance
with the provisions of this Article.
(b) Procedures For Resolution by Third Party. Unless
an earlier date is agreed upon by the Parties, on the
expiration date of the Claim Period a Claiming Party shall
have the right, but not the obligation, to submit any
Unresolved Claims to the Dispute Resolver; provided that
the aggregate of the disputed amount of all Unresolved
Claims submitted by a Claiming Party to the Dispute
Resolver plus all Valid Claims of such Claiming Party must
equal or exceed $1,000,000.
The Dispute Resolver shall render a finding with
respect to all Unresolved Claims submitted to it at the
same time in accordance with the procedures described on
the attached Exhibit J. If the Dispute Resolver renders a
finding against a Claiming Party with respect to an
Unresolved Claim, then such Claim shall be deemed an
"Invalid Claim." If the Dispute Resolver renders a finding
against a Responding Party in favor of the Claiming Party
with respect to an Unresolved Claim, then such Claim shall
be deemed a "Valid Claim." The Dispute Resolver shall then
make a determination as to the value (expressed in dollars)
of such Valid Claim. The Dispute Resolver's finding and,
if applicable, determination will be made and written
notice thereof given to the Parties within 90 business days
after the submission of the matter to the Dispute Resolver.
Such notice shall include a narrative description of the
Dispute Resolver's findings with respect to each Claim and,
if applicable, determination of value of each Claim. The
finding of and determination by the Dispute Resolver shall
be final, binding and conclusive upon all Parties. The
scope of the Dispute Resolver's engagement shall be limited
to the resolution of all Unresolved Claims submitted to it.
Except as otherwise provided in this Article, the fees,
costs and expenses of the Dispute Resolver and HLH&Z (or
its successor or another mutually agreed-upon appraisal
firm) shall be shared equally by the Claiming Party and the
Responding Party.
In the event the Dispute Resolver renders a finding of
Invalid Claims for all Unresolved Claims submitted to it by
a Party, or renders a finding for a Party of a Valid
Claim(s) but the aggregate value of all Valid Claims
(expressed in dollars) is less than $1,000,000, then the
Claiming Party shall be responsible for all fees, costs,
and expenses incurred by the other Parties thereto as a
result of such Claim or Claims, including the reasonable
expenses of the Dispute Resolver and legal and accounting
fees. In no event shall the payment of such fees, costs,
or expenses come from any funds of the Company or any of
its subsidiaries (including OPC or MPC).
(c) Procedures for Adjustment to Ownership
Percentages. In the event a Party's Valid Claims (whether
determined by the agreement of the Parties under subsection
(a), above, or the Dispute Resolver under subsection (b),
above), have an aggregate value (expressed in dollars)
equal to or greater than $1,000,000, then the Parties shall
attempt in good faith to resolve the change in their
respective ownership percentages in the Company retroactive
to the Closing Date. In resolving such change, the Parties
shall apply the methodology used to determine the initial
Valuation and the respective values of the Contributions of
each Party within 30 business days following the submission
of the information to it.
If the Parties are unable to resolve the change in
their ownership percentages within 30 business days, then
HLH&Z (or its successor or another mutually agreed-upon
appraisal firm) shall be retained by the Claiming Party and
the Responding Party. Taking into account no other
additional information other than the Valid Claims, HLH&Z
shall apply the methodology used to determine the initial
Valuation and the respective values of the Contributions of
each Party within 30 business days following the submission
of the information to it and adjust the Valuation and the
Contributions of each Party and issue an amended Valuation
report (the "Amended Report") setting forth the respective
values of the Contributions of each Party and their revised
ownership percentages in the Company. No facts or
circumstances occurring after the Closing Date shall be
considered by HLH&Z, it being the intention of the Parties
that the Valuation will only be changed to reflect the
impact of a Party's Valid Claims which equal or exceed
$1,000,000.
In the event the agreement of the Parties (under the
first paragraph of this subsection (c)) or the Amended
Report (under the second paragraph of this subsection (c))
results in a change in the respective ownership percentages
in the Company by the Parties, the Company and each
Shareholder shall take all action necessary to cause the
return of such CorrChoice Shares (and any dividends or
distributions received with respect to such CorrChoice
Shares, net of taxes paid by such Shareholder on such
dividends and distributions) to Company in order to achieve
the ownership percentages agreed to by the Parties or set
forth in the Amended Report, it being the intent of the
Parties to place themselves into such revised ownership
percentages retroactive to the Closing Date.
Notwithstanding the foregoing, no adjustment in the
ownership percentages shall be made unless such adjustment
would result in an incremental increase or decrease of no
less than 0.1% in the ownership percentage of a Party.
Departing Shareholder. If a Party will
cease to be a shareholder of the Company (a "Departing
Shareholder") for any reason during the Claim Period, then the
Claim Period with respect to the Departing Shareholder shall
expire 180 days following the date of a termination event or 180
days following the Departing Shareholder giving or receiving
notice of intent to purchase such Departing Shareholder's
CorrChoice Shares under the Greif/Jollays Buy-Sell Agreement or
the Greif/McLaughlin Buy-Sell Agreement, as the case may be (the
"Accelerated Claim Period"). A Notice of Claim, if any, must be
filed by a Claiming Party against the Departing Shareholder or
by the Departing Shareholder against a Responding Party during
the Accelerated Claim Period. As to all other Parties, the
Claim Period shall continue except as to Claims addressed
through a Notice of Claim issued during the Accelerated Claim
Period.
If on a date 20 days prior to the closing for the purchase
and sale of the Departing Shareholder's CorrChoice Shares there
exist any Unresolved Claims against the Departing Shareholder
(including any Unresolved Claims which by their nature cannot be
quantified at that time), then the Claiming Party shall attempt
to quantify all such Unresolved Claims by placing a value
(expressed in dollars) on all such Unresolved Claims, which
value shall then be submitted to the Responding Party in
writing. The Claiming Party and the Responding Party shall then
attempt to reach agreement as to the maximum value of all such
Unresolved Claims, the corresponding ownership adjustment, and
the effect such ownership adjustment would have on the amount of
money the Departing Shareholder would receive at the closing of
the buyout. The agreed-upon difference between the amount of
money the Departing Shareholder would receive for the Departing
Shareholder's CorrChoice Shares without the ownership adjustment
and with the estimated or potential ownership adjustment is
hereinafter referred to as the "Agreed Ownership Adjustment
Value" and will be escrowed at closing as provided below.
If by their own efforts they are unable to reach agreement
on the Agreed Ownership Adjustment Value of any or all such
Unresolved Claims prior to 10 days of such closing, then any
Unresolved Claims to which agreement cannot be reached shall be
submitted to HLH&Z (or its successor or another mutually agreed-
upon appraisal firm) to estimate their maximum potential value
for purposes of the escrow described below. On or prior to such
closing, HLH&Z shall place a maximum potential value (expressed
in dollars) on all Unresolved Claims submitted to it (the
"Decided Claim Potential Value"). HLH&Z shall then apply the
methodology used to determine the initial Valuation to calculate
the ownership adjustments that would result from adjustments due
to the Decided Claim Potential Value, if any. After calculating
such ownership adjustments to the Parties, HLH&Z shall place a
value (expressed in dollars) of the effect such ownership
adjustment would have on the amount of money the Departing
Shareholder would receive at the closing of the buyout (the
"Decided Ownership Adjustment Value").
All Unresolved Claims by a Departing Shareholder against a
Responding Party shall be valued in the manner described above
and shall be netted against the Responding Party's Unresolved
Claims in calculating the amount of proceeds to be escrowed.
At the closing, proceeds from the sale of the Departing
Shareholder's CorrChoice Shares in an amount equal to the
aggregate of the Agreed Ownership Adjustment Value and the
Decided Ownership Adjustment Value shall be placed in escrow
(the "Escrowed Funds") pursuant to an escrow agreement in
substantially the form attached hereto as Exhibit K.
Thereafter, all such Unresolved Claims shall be resolved
pursuant to the procedures described in Sections 9.3(b) and
9.3(c), and the Parties shall take all actions required by such
sections. At the conclusion of the procedures described in
Sections 9.3(b) and 9.3(c), the Escrowed Funds shall be
disbursed to the Claiming Party or the Responding Party, as the
case may be, based upon the findings of and determinations by
the Dispute Resolver and HLH&Z, as the case may be, under such
sections.
If a Claim against a Departing Shareholder also involves
other Parties, then the Claiming Party must name all Parties and
the resolution procedure shall proceed as to all Parties
pursuant to Section 9.3 of this Agreement. In the event an
Amended Report is issued as a result of a Valid Claim against a
Departing Shareholder, such Amended Report shall be binding upon
all Parties.
In the event the Departing Shareholder is either of the
Jollays or Mr. McLaughlin, then the other Jollay and Mr.
McLaughlin hereby waive the right of contribution against each
other for Claims brought subsequent to the Accelerated Claim
Period.
When the Unresolved Claims against a Departing Shareholder
are disposed of pursuant to this Article, any remaining Escrowed
Funds shall be disbursed to the Departing Shareholder
Except as set forth in this section, all other provisions
of this Article IX shall apply to any Claims by or against a
Departing Shareholder.
Specific Performance. The CorrChoice Shares
cannot be readily purchased or sold on the open market, and for
that reason, among others, the Parties will be irreparably
damaged in the event this Agreement is not specifically enforced
in a court of equity by a decree of specific performance.
Reserved
Miscellaneous
Notices. All notices and other
communications required or permitted to be given under this
Agreement to any Party shall be in writing and shall be deemed
given when delivered personally, telecopied (which is confirmed)
to that Party at the telecopy number for that Party set forth
below, mailed by certified mail (return receipt requested) to
that Party at the address for that Party (or at such other
address for such Party as such Party shall have specified in
notice to the other Parties), or delivered to Federal Express,
UPS, or any similar express delivery service for delivery to
that Party at that address:
(a) If to the Company:
CorrChoice, Inc.
777 Third Street
Massillon, Ohio 44646
Attention: Geoffrey A. Jollay, Chairman and CEO
Telecopy No.: (330) 833-0109
with a copy to:
Greif, the Jollays, and Mr. McLaughlin
as set forth below
(b) If to Greif:
Greif Bros. Corporation
425 Winter Road
Delaware, Ohio 43015
Attention: Michael J. Gasser, Chairman and CEO
Telecopy No.: (740) 549-6101
with a copy to:
Baker & Hostetler LLP
65 East State Street, Suite 2100
Columbus, Ohio 43215
Attention: Daniel J. Gunsett, Esq.
Telecopy No.: (614) 462-2616
(c) If to the Jollays:
Geoffrey A. Jollay
R. Dean Jollay, Jr.
777 Third Street
Massillon, Ohio 44648
Telecopy No.: (339) 833-0109
with a copy to:
Critchfield, Critchfield & Johnston, Ltd.
225 North Market Street
Wooster, Ohio 44691
Attention: Lincoln P. Oviatt, Esq.
Telecopy No.: (330) 263-9278
(d) If to Mr. McLaughlin:
John J. McLaughlin
7741 School Road
Cincinnati, Ohio 45249
Telecopy No.: (513) 530-5969
Non-Waiver. No failure by any Party to
insist upon strict compliance with any term or provision of this
Agreement, to exercise any option, to enforce any right, or to
seek any remedy upon any default of any other Party shall
affect, or constitute a waiver of, any other Party's right to
insist upon such strict compliance, exercise that option,
enforce that right, or seek that remedy with respect to that
default or any prior, contemporaneous, or subsequent default.
No custom or practice of the Parties at variance with any
provision of this Agreement shall affect or constitute a waiver
of, any Party's right to demand strict compliance with the
provisions of this Agreement.
Genders and Numbers. Where permitted by the
context, each pronoun used in this Agreement includes the same
pronoun in other genders and numbers, and each noun used in this
Agreement includes the same noun in other numbers.
Headings. The headings of the various
articles and sections of this Agreement are not part of the
context of this Agreement, are merely labels to assist in
locating such articles and sections, and shall be ignored in
construing this Agreement.
Counterparts. This Agreement may be
executed in multiple counterparts, each of which shall be deemed
to be an original, but all of which taken together shall
constitute one and the same agreement.
Entire Agreement. This Agreement (including
all exhibits, schedules, and other documents referred to in this
Agreement (the "Incorporated Documents"), all of which are
hereby incorporated by reference) constitutes the entire
agreement between the Parties and supersedes all prior
agreements and understandings, both written and oral, among the
Parties with respect to the subject matter of this Agreement,
including the Letter of Intent between Greif and the Jollays
dated May 7, 1998, as amended (the "Letter of Intent") (which
the Parties agree is not an Incorporated Document). All
obligations of any Party under any Incorporated Document shall
constitute an obligation of such Party under this Agreement.
Any capitalized terms used in any Incorporated Document which
are not otherwise defined therein shall have the respective
meanings given such terms in this Agreement.
Amendment. This Agreement may not be
amended, supplemented, or modified except by an instrument in
writing signed by all of the Parties.
No Third Party Beneficiaries. Nothing
contained in this Agreement, expressed or implied, is intended
or shall be construed to confer upon or give to any Person,
other than the Parties, any rights, remedies or other benefits
under or by reason of this Agreement.
Governing Law. This Agreement shall be
governed by and construed in accordance with the laws of the
State of Ohio.
Successors; Assignment. This Agreement
shall be binding upon, inure to the benefit of and be
enforceable by and against the Parties and their respective
heirs, personal representatives, successors, and assigns.
Neither this Agreement nor any of the rights, interests or
obligations under this Agreement shall be transferred or
assigned by any of the Parties without the prior written consent
of the other Parties.
Expenses. Except as otherwise specifically
provided in this Section, each Party shall be responsible to pay
his or its respective legal, accounting, and other costs and
expenses incurred in connection with the transactions
contemplated by this Agreement. The Jollays and Greif shall
each be responsible to pay one-half of the fees and expenses of
HLH&Z for the performance of its services in connection with the
valuation of the assets contributed by the Shareholders to the
Company and the preparation of the recommended valuation formula
for purposes of the Greif/Jollays Buy-Sell Agreement. The
Jollays and Greif shall each be responsible to pay one-half of
the fees and expenses of Environmental Resources Management,
Inc. ("ERM") for the performance of its environmental services
on behalf of the Parties. The Jollays and Greif shall each be
responsible to pay one-half of the fees and expenses of Baker &
Hostetler LLP for the performance of its services in connection
with the preparation of the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended (the "HSR Act") filing and
all related antitrust matters (each Party shall, however, be
responsible for his or its filing fees related to the HSR Act
filing). Greif shall be responsible to pay any costs and
expenses incurred by the Jollays or OPC solely because Greif is
a publicly held company. Notwithstanding the foregoing, (a) the
Jollays' portion of all fees and expenses incurred in connection
with the transactions contemplated by this Agreement, including
the fees and expenses to be paid to HLH&Z, ERM, Baker &
Hostetler LLP, Ernst & Young LLP, and Critchfield, Critchfield &
Johnston, Ltd. may be paid by OPC, and (b) Greif's portion of
all fees and expenses incurred in connection with the
transactions contemplated by this Agreement, including the fees
and expenses to be paid to HLH&Z, ERM, Price Waterhouse LLP, and
Baker & Hostetler LLP in accordance with this Section may be
paid by MPC.
Announcements. No Party shall, without the
prior consent of Greif and the Jollays, make any public
announcement or any release to trade publications or to the
press or make any statement to any competitor, customer or any
other third party with respect to the transactions contemplated
by this Agreement, except such announcement, release, or
statement necessary, in the opinion of Greif's or the Jollays'
counsel, to comply with applicable requirements of law, the
content of which shall be mutually agreed to by Greif and the
Jollays. The Parties agree that immediately following the
Closing they shall jointly prepare and issue press releases for
appropriate dissemination.
Severability. With respect to any provision
of this Agreement finally determined by a court of competent
jurisdiction to be unenforceable, such court shall have
jurisdiction to reform such provision so that it is enforceable
to the maximum extent permitted by applicable law, and the
Parties shall abide by such court's determination. In the event
that any provision of this Agreement cannot be reformed, such
provision shall be deemed to be severed from this Agreement, but
every other provision of this Agreement shall remain in full
force and effect.
GREIF BROS. CORPORATION
By
(Name) (Title) GEOFFREY A. JOLLAY
JOHN J. MCLAUGHLIN R. DEAN JOLLAY, JR.
ANNEX A
INDEX OF DEFINED TERMS
Term Section
Accelerated Claim Period 9.4
Affiliate 3.10(m)
Agreed Value 9.4
Agreement Introduction
Amended Report 9.3(c)
Mr. Cahill Background Information
CCI Background Information
CCI Preferred Shares Background Information
CCI Shares Background Information
Claim 9.2
Claim Period 9.2
Claiming Party 9.2
Class A Shares Background Information
Class B Shares Background Information
Closing 7.1
Closing Date 7.1
Code Background Information
Company Introduction
Consolidation Background Information
CorrChoice Shares Background Information
Dean Jollay Employment Agreement 7.3(c)
Departing Shareholder 9.4
Dispute Resolver 9.3(a)
Entity 3.3
ERISA 3.20(a)
ERISA Affiliate 3.20(a)
ERM 11.12
Escrowed Funds 9.4
Geoffrey Jollay Employment Agreement 7.3(c)
Greif Introduction
Greif/Jollays Buy-Sell Agreement 7.2(e)
Greif/McLaughlin Buy-Sell Agreement 7.2(f)
Greif Valuation Information Background Information
Heritage Packaging Background Information
HLH&Z Background Information
HSR Act 11.12
Incorporated Documents 11.6
Invalid Claim 9.3(b)
John J. McLaughlin Employment Agreement 7.4(f)
Jollays Introduction
Jollays' Valuation Information Background Information
Letter of Intent 11.6
Maximum Claim Potential Value 9.4
Mr. McLaughlin Introduction
McLaughlin CCI Shares Background Information
MPC Background Information
MPC Benefit Arrangements 4.19(e)
MPC Employee Plans 4.19(a)
MPC Financial Statements 4.7
MPC Pension Plans 4.19(a)
MPC Related Party Receivables 4.21
MPC Related Party Payables 4.21
MPC Stock Background Information
Multicorr 3.2(a)
Notice of Claim 9.2
OPC Background Information
OPC Benefit Arrangements 3.20(e)
OPC Employee Plans 3.20(a)
OPC Financial Statements 3.8
OPC Leasing 3.2(a)
OPC Pension Plans 3.20(a)
OPC Related Party Receivables 3.22
OPC Related Party Payables 3.22
OPC Subsidiary 3.3
OPC Subsidiaries 3.3
Ownership Adjustment Value 9.4
Parties Statement of Agreement
Person 3.10(m)
RDJ Holdings Background Information
RDJ Stock Background Information
ReCorr 3.2(a)
Responding Party 9.2
Securities Act 3.2(e)
Shareholder Introduction
Shareholders Introduction
Shareholders Voting Agreement 7.2(d)
Sheet Feeder Facilities Background Information
Mr. Stoner, Sr. Background Information
Mr. Stoner, Jr. Background Information
Stonehill Group Background Information
Unresolved Claim 9.3(a)
Valid Claim 9.3(a) and 9.3(b)
Valuation Background Information
1997 MPC Financial Statements 4.7
1998 MPC Financial Statements 4.7
EXHIBITS AND SCHEDULES
EXHIBIT A-Shareholders Voting Agreement
EXHIBIT B-Greif/Jollays Buy-Sell Agreement
EXHIBIT C-Greif/McLaughlin Buy-Sell Agreement
EXHIBIT D-Geoffrey Jollay Employment Agreement
EXHIBIT E-Dean Jollay Employment Agreement
EXHIBIT F-CorrChoice Cash Retention and Dividend Formula
EXHIBIT G-Legal Opinion from Critchfield, Critchfield & Johnston, Ltd.
EXHIBIT H-Legal Opinion from Baker & Hostetler LLP
EXHIBIT I-Form of Notice of Claim
EXHIBIT J-Dispute Resolution Procedure
EXHIBIT K-Form of Escrow Agreement
EXHIBIT L-John J. McLaughlin Employment Agreement
JOLLAYS/OPC SCHEDULES
Schedule 3.1--Organization and Good Standing
Schedule 3.2--Capitalization and Security Holders
Schedule 3.3--Subsidiaries
Schedule 3.4--Business of RDJ Holdings
Schedule 3.7--Consents and Approvals; No Conflict or Default
Schedule 3.9--Undisclosed Liabilities
Schedule 3.10--Absence of Certain Changes
Schedule 3.11--Taxes
Schedule 3.17--Title to Properties
Schedule 3.19--Legal Proceedings and Claims
Schedule 3.20--ERISA
Schedule 3.22--OPC Receivables
GREIF/MPC SCHEDULES
Schedule 4.1--Organization and Good Standing
Schedule 4.2--Capitalization and Security Holders
Schedule 4.6--Consents and Approvals; No Conflict or Default
Schedule 4.8--Undisclosed Liabilities
Schedule 4.9--Absence of Certain Changes
Schedule 4.10--Taxes
Schedule 4.16--Title to Properties
Schedule 4.18--Legal Proceedings and Claims
Schedule 4.19--ERISA
Schedule 4.21--MPC Receivables
MCLAUGHLIN SCHEDULES
Schedule 5.1--Stock Ownership; No Liens
Schedule 5.3--Consents and Approvals; No Conflict or Default
EXHIBIT 99
FOR IMMEDIATE RELEASE For additional information contact:
Robert A. Lentz
Robert A. Lentz and Associates
(614) 876-2000
Greif Bros. Corporation Completes
the Formation of CorrChoice
DELAWARE, Ohio -- (November 3, 1998) Greif Bros. Corporation
(Nasdaq: GBCOA; GBCOB) and RDJ Holdings today announced
completion of the previously announced formation of CorrChoice,
a joint venture which will be headquartered in Massillon, Ohio.
CorrChoice will initially have six sheet feeder plants with an
additional sheet feeder operation, Heritage Packaging
Corporation, to be opened soon in the Atlanta area. The 1997
combined corrugated sheet sales of the facilities was $217
million.
CorrChoice also announced that its Chairman, President and CEO
is Geoffrey A. Jollay and R. Dean Jollay, Jr. is the Vice
Chairman and CFO.
CorrChoice Chairman Geoffrey A. Jollay stated, "We are very
excited about the future potential of CorrChoice. The merger of
the two companies, Ohio Packaging and Michigan Packaging, is a
natural because of the past relationship we have enjoyed."
Michael J. Gasser, Chairman and CEO of Greif Bros. Corporation,
stated, "Geoff and Dean are two of the finest sheet plant
operators in the country. Under their leadership, we fully
anticipate setting new standards for quality, dependability and
service."
Statements made in this release which state the Company's or
management's intentions, hopes, beliefs, expectations, or
predictions of the future are forward-looking statements. It is
important to note that the Company's actual results could differ
materially from those projected in such forward-looking
statements. Additional information concerning factors that
could cause actual results to differ materially from those in
the forward-looking statements are contained in the Company's
SEC filings, including but not limited to the Company's report
on Form 10-K and Annual Report for the year ended October 31,
1997.
Greif Bros. Corporation manufactures and markets a broad variety
of superior quality industrial packaging and components
including steel drums, fibre drums, plastic drums and multiwall
bags. The Company is integrated, from its timberlands to
corrugated sheet and box operations, including both virgin and
recycled paper mills. With operations in the United States,
Canada and Mexico, Greif Bros. provides innovative products,
services and solutions to meet the ever changing needs of its
customers.
