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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
(Rule 13d-101)
Under the Securities Exchange Act of 1934
(Amendment No. ) 1
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PVC Container Corporation
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(Name of Issuer)
Common Stock, $.01 par value
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(Title of Class of Securities)
693-651-101
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(CUSIP Numbers)
Raymond A. Lancaster
Kirtland Capital Corporation
2550 SOM Center Road
Suite 105
Willoughby Hills, Ohio 44094
216-585-9010
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(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications)
December 12, 1996
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box / /.
NOTE: Six copies of this statement, including all exhibits, should be filed with
the Commission. See Rule 13d-1(a) for other parties to whom copies are to be
sent.
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(1.) The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which would
alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
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CUSIP NOS. 693-651-101 13D
page of pages
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1 NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
Kirtland Capital Corporation
34-1748480
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) |_|
(b) |X|
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
AF
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) or 2(e) |_|
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Ohio
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7 SOLE VOTING POWER
Common Stock 4,367,415
NUMBER OF --------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY Common Stock 0
OWNED BY --------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING Common Stock 4,367,415
PERSON WITH --------------------------------------------------
SHARED DISPOSITIVE POWER
Common Stock 0
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
Common Stock 4,367,415
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* |_|
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
Common Stock 62.35%
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14 TYPE OF REPORTING PERSON*
CO
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
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ITEM 1. SECURITY AND ISSUER.
The securities to which this statement relates are the Common
Stock, $0.01 par value per share (the "Common Stock"), of PVC Container
Corporation, a Delaware corporation (the "Company"). The principal offices of
the Company are located at 401 Industrial Way West, Eatontown, New Jersey 07724.
ITEM 2. IDENTITY AND BACKGROUND.
(a)-(c) This Schedule 13D is filed by Kirtland Capital
Corporation, an Ohio corporation ("Kirtland"), whose principal business is
searching for, negotiating, structuring, acquiring, holding, selling and
refinancing equity interests in operating businesses on behalf of itself and its
affiliates and performing all things incidental to or growing out of such
activities. Kirtland's principal executive offices are located at 2550 SOM
Center Road, Suite 105, Willoughby Hills, Ohio 44094.
Pursuant to General Instruction "C" for Schedule 13D, set
forth below is certain information concerning the executive officers and
directors of Kirtland.
<TABLE>
<CAPTION>
Present Principal
Name Title Business Address Occupation
- ---- ----- ---------------- -----------------
<S> <C> <C> <C>
John F. Turben Chief Executive Officer 2550 SOM Center Road, Suite 105, Chief Executive Officer
and Chairman of the Willoughby Hills, OH 44094 and Chairman of Board of
Board of Directors Directors of Kirtland
John G. Nestor President, Chief Operating 2550 SOM Center Road, Suite 105, President, Chief Operating
Officer and Director Willoughby Hills, OH 44094 Officer and Director of
Kirtland
Raymond A. Lancaster Executive Vice President 2550 SOM Center Road, Suite 105, Executive Vice President
and Director Willoughby Hills, OH 44094 and Director
Michael T. DeGrandis Treasurer 2550 SOM Center Road, Suite 105, Treasurer of
Willoughby Hills, OH 44094 Kirtland
Thomas N. Littman Secretary 2550 SOM Center Road, Suite 105, Secretary of
Willoughby Hills, OH 44094 Kirtland
</TABLE>
(d) During the last five years, neither Kirtland nor, to the
best of Kirtland's knowledge, any of the executive officers or directors of
Kirtland has been convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors).
(e) During the last five years, neither Kirtland nor, to the
best of Kirtland's knowledge, any of the executive officers or directors of
Kirtland has been a party to a civil proceeding of a judicial or administrative
body of competent jurisdiction and as a result of such proceeding was or is
subject to a judgment, decree or final order enjoining future violations of, or
prohibiting or mandating activities subject to, federal or state securities laws
or finding any violation with respect to such laws.
(f) All of the individuals identified in this Item 2 are
citizens of the United States.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
The aggregate amount of funds required by Kirtland to
purchase the Common Stock from the the previous holder, Rimer Anstalt, a
Liechtenstein anstalt ("Rimer"), was $17,469,660. $16,074,656 of the funds used
to purchase the Common Stock was obtained from Kirtland Capital Partners II
L.P., an Ohio limited partnership ("KCPII"), and $1,395,004 of the funds used to
purchase the Common Stock was obtained from Kirtland Capital Company II LLC, a
Turks and Caicos Islands limited liability company ("KCC II"). Kirtland is the
general partner of KCP II and has sole voting and investment power over all of
the Common Stock held by
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KCP II. Kirtland is the general partner of Evergreen Partners II L.P., an Ohio
limited partnership ("Evergreen"), which is the managing member of KCC II.
Kirtland has sole voting and investment power over all of the Common Stock held
by KCC II. No part of the purchase price for the Common Stock consisted of
borrowed funds.
ITEM 4. PURPOSE OF TRANSACTION.
Kirtland purchased the Common Stock for general investment
purposes. Kirtland intends to review continuously its equity position in the
Company. Depending upon future evaluations of the business prospects of the
Company and upon other developments, including, without limitation, general
economic and business conditions and stock market conditions, Kirtland may
determine to increase or decrease its equity interest in the Company by
acquiring additional shares of the Common Stock or by disposing of all or a
portion of its holdings of the Common Stock, subject to any applicable legal and
contractual restrictions on its ability to do so.
Kirtland has acquired its interest in the Common Stock as a
result of the Stock Purchase Agreement, dated as of December 3, 1996, by and
among KCP II, the Company and Rimer (the "Purchase Agreement"). Pursuant to the
Purchase Agreement, the Company agreed to (i) increase the size of the Board of
Directors of the Company to up to seven persons, (ii) subject to compliance with
Section 14(f) of the Securities and Exchange Act of 1934, cause up to five
persons designated by KCP II to be nominated to the Company's Board of
Directors. Following the successful completion of the transactions contemplated
by the Purchase Agreement on December 12, 1996, Kirtland acquired its equity
interest in the Company. A copy of the Purchase Agreement is filed as an exhibit
hereto and incorporated herein by reference.
On December 12, 1996, Kirtland entered into a certain Stock
Purchase Agreement with Phillip Friedman (the "Friedman Agreement"). Following
the successful completion of the transactions contemplated by the Friedman
Agreement, Kirtland will purchase 100,000 shares of Common Stock from Phillip
Friedman, the current President of the Company. A copy of the Friedman
Agreement is filed as an exhibit hereto and incorporated herein by reference.
Except as set forth herein, Kirtland does not have any plans
or proposals which would relate to or result in:
(a) The acquisition of additional securities of the
Company, or the disposition of securities of the
Company;
(b) An extraordinary corporate transaction, such as a
merger, reorganization or liquidation, involving the
Company or any of its subsidiaries;
(c) A sale or transfer of a material amount of assets of
the Company or of any of its subsidiaries;
(d) Any change in the present board of directors or
management of the Company, including any plans or
proposals to change the number or term of directors
or to fill any existing vacancies on the board;
(e) Any material change in the present capitalization or
dividend policy of the Company;
(f) Any other material change in the Company's business
or corporate structure;
(g) Changes in the Company's charter, bylaws or
instruments corresponding thereto or other actions
which may impede the acquisition of control of the
Company by any person;
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(h) Causing a class of securities of the Company to be
delisted from a national securities exchange or to
cease to be authorized to be quoted in an
inter-dealer quotation system of a registered
national securities association;
(i) A class of equity securities of the Company becoming
eligible for termination of registration pursuant to
Section 12(g)(4) of the Securities Exchange Act of
1934 (the "Exchange Act"); or
(j) Any action similar to any of those enumerated above.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a) - (b) At the date hereof, Kirtland has the sole power to
vote and dispose of 4,367,415 shares of the Common Stock. The Common Stock held
by Kirtland represents approximately 62.35% of the 7,004,705 shares of Common
Stock outstanding as of December 3, 1996, based on information provided by the
Company.
To the best of Kirtland's knowledge, none of the individuals
named in Item 2 has the sole or shared power to vote or the sole or shared power
to dispose of any shares of the Common Stock.
(c) No transactions in shares of the Common Stock were
effected during the past 60 days by Kirtland, or to the best of Kirtland's
knowledge, by any of the individuals identified in Item 2.
(d) Except as stated herein, to the best of Kirtland's
knowledge, no other person has the right to receive or the power to direct the
receipt of dividends from, or the proceeds from the sale of, the securities
described in response to Item 5(c).
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER.
On December 12, 1996, KCP II and the Company entered into a
Registration Rights Agreement (the "Registration Rights Agreement"). The
following is a brief description of the Registration Rights Agreement and is
qualified in its entirety by reference to such agreement, a copy of which is
filed as an exhibit hereto and incorporated herein by reference. The
Registration Rights Agreement provides Kirtland with certain demand and
"piggy-back" registration rights with respect to each share of Common Stock
purchased by Kirtland pursuant to the Purchase Agreement. Specifically, the
Registration Agreement provides for Kirtland to (i) make up to three written
demands that the Company effect a registration under the Securities Act of 1933,
as amended (a "Registration"), of a specified number of shares of Common Stock,
and (ii) be entitled to "piggyback" on any other Registrations that the Company
intends to effect, so long as such "piggy-back" is done in accordance with the
terms of the Registration Rights Agreement. In addition, the Registration Rights
Agreement provides that the Company shall bear and pay all fees, costs, and
expenses in connection with the Registrations described in the previous sentence
in accordance with the terms of the Registration Rights Agreement.
On December 12, 1996, Kirtland and the Company entered into a
Consulting Agreement (the "Consulting Agreement"). The following is a brief
description of the Consulting Agreement and is qualified in its entirety by
reference to such agreement, a copy of which is filed as an exhibit hereto and
incorporated herein by reference. The Consulting Agreement provides that
Kirtland shall provide such consulting services to the Company as may be agreed
upon by the Company and Kirtland. During the term of the Consulting Agreement,
Kirtland shall receive an annual consulting fee from the Company equal to
$250,000 in accordance with the terms of the Consulting Agreement. The term of
the Consulting Agreement will end upon the later of (i) KCP II (or an affiliate)
ceasing to own at least 40% of the issued and outstanding shares of Common
Stock, and (ii) the Board of Directors of the Company adopting a resolution,
approved by a majority of the Directors, approving the termination of the
Consulting Agreement.
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There are no other contracts, understandings or agreements
with respect to the securities of the Company between Kirtland or the other
persons identified in Item 2 and any other parties.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit 99.1 -- Purchase Agreement
Exhibit 99.2 -- Friedman Agreement
Exhibit 99.3 -- Registration Rights Agreement
Exhibit 99.4 -- Consulting Agreement
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement is true,
complete and correct.
Date: December 20, 1996 KIRTLAND CAPITAL CORPORATION
By: /s/ Raymond A. Lancaster
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Name: Raymond A. Lancaster
Title: Executive Vice President
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EXHIBIT 99.1
STOCK PURCHASE AGREEMENT
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THIS STOCK PURCHASE AGREEMENT (this "Agreement") is entered
into as of this 3rd day of December, 1996, by and among Kirtland Capital
Partners II L.P., an Ohio limited partnership (the "Buyer"), PVC Container
Corporation, a Delaware corporation (the "Company"), and Rimer Anstalt, a
Liechtenstein anstalt (the "Seller").
RECITALS
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A. The Company has 7,004,705 shares of common stock,
par value $.01 per share (the "Shares"), issued and outstanding;
and
B. The Seller is the sole record and beneficial owner
of 4,367,415 Shares (the "Purchase Shares"); and
C. The Seller is willing to sell, and the Buyer is
willing to purchase, all of the Purchase Shares on the terms set
forth herein;
OPERATIVE PROVISIONS
--------------------
NOW, THEREFORE, in consideration of the foregoing and the
respective representations, warranties, covenants, conditions and agreements
herein contained, and intending to be legally bound, the parties hereto hereby
agree as follows:
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ARTICLE I
PURCHASE AND SALE OF THE PURCHASE SHARES
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1.1 SALE OF THE PURCHASE SHARES. At the Closing (as
hereinafter defined), the Seller shall sell, convey, transfer and deliver to the
Buyer and the Buyer shall purchase and acquire from the Seller, the Purchase
Shares free and clear of any and all liens, pledges, charges, proxies, equities,
encumbrances, contracts, commitments, title retention agreements, restrictions
on transfer (except under applicable securities laws), security interests,
warrants, options, rights or adverse claims of others of any nature with respect
thereto (collectively, the "Liens").
1.2 PURCHASE PRICE. At the Closing and in consideration for
the Purchase Shares, the Buyer shall pay to the Seller the aggregate sum of U.S.
$17,469,660 (the "Purchase Price") by wire transfer of immediately available
funds to such account of the Seller as the Seller shall specify in writing to
the Buyer.
ARTICLE II
CLOSING AND CLOSING DATE
------------------------
2.1 THE CLOSING. The closing of the transactions contemplated
by this Agreement (the "Closing") shall take place at the offices of Jones, Day,
Reavis & Pogue, 599 Lexington Avenue, New York, New York on December 12, 1996
subject to the satisfaction or waiver of each of the conditions set forth in
Article IX hereof or such other time and place as the Buyer, the
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Company and the Seller shall agree (such date is referred to in this Agreement
as the "Closing Date").
2.2 DELIVERIES AT THE CLOSING. At the Closing, (a) the Seller
shall deliver to the Buyer the various certificates, instruments and documents
referred to in Section 6.1 hereof, (b) the Company shall deliver to the Buyer
the various certificates, instruments and documents referred to in Section 6.3
hereof, and (c) the Buyer shall deliver to the Seller the Purchase Price as
provided in Section 6.2 hereof.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE SELLER
--------------------------------------------
The Seller hereby represents and warrants to the Buyer
as follows:
3.1 CORPORATE STATUS. The Seller is an anstalt duly organized,
validly existing and in good standing under the laws of Liechtenstein. The
Seller has all requisite power and authority to own, lease and operate its
properties and to carry on its business as now being conducted. The Seller has
heretofore made available to the Buyer true, correct and complete copy of its
Statutes.
3.2 AUTHORITY AND CAPACITY FOR AGREEMENTS. The Seller has all
requisite power, authority and capacity to execute and deliver this Agreement
and to carry out and perform its obligations hereunder. The execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby have been duly authorized by all necessary corporate
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action on the part of the Seller. This Agreement has been duly executed and
delivered by the Seller and constitutes the valid and legally binding obligation
of the Seller enforceable in accordance with its terms except that the
enforcement hereof may be limited by (a) bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect relating to
creditors' rights generally and (b) general principles of equity (regardless of
whether enforceability is considered in a proceeding at law or in equity).
3.3 NONCONTRAVENTION. Neither the execution, delivery and
performance by the Seller of this Agreement and the consummation (in accordance
with the terms hereof) of the transactions contemplated hereby, nor compliance
by the Seller with any of the provisions hereof will violate, conflict with, or
result in (with or without the giving of notice or the lapse of time or both) a
default under or a breach or violation of, any provision of (a) the Statutes of
the Seller, (b) any mortgage, indenture, lease, contract, deed, agreement or
other instrument to which the Seller is a party or by which it is bound or to
which any of its properties or assets is subject, (c) any law, rule or
regulation of any governmental body (whether domestic or foreign), or (d) any
order, judgment or decree of any court or other governmental body (whether
domestic or foreign). Except as otherwise provided in SCHEDULE 3.3 attached
hereto, no consent, approval, authorization, order, filing, registration,
declaration or qualification of or with any court, governmental body (whether
domestic or foreign) or third person is required to be obtained
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by or on behalf of the Seller in connection with the execution and delivery of
this Agreement or the consummation of the transactions contemplated hereby.
3.4 TITLE TO THE PURCHASE SHARES. The Seller is the sole
record and beneficial owner of the Purchase Shares, free and clear of any and
all Liens. The Purchase Shares represent (a) all of the Shares owned, directly
or indirectly, by the Seller or any of its Affiliates (as hereinafter defined),
and (b) 63% of the issued and outstanding Shares. Each of the Purchase Shares
has been duly and validly authorized and issued and is fully paid and
non-assessable. Neither the Seller nor any of its Affiliates has, directly or
indirectly, any outstanding rights, options, warrants, conversion rights, calls,
puts or agreements of any nature to purchase or acquire any Shares from the
Company or any other person or entity. The Seller is not a party to any (a)
voting trust, proxy, or other agreement or understanding with respect to the
voting of any of the Shares, or (b) option, warrant, purchase right or other
contract or commitment that requires the Seller to sell, transfer or otherwise
dispose of any of the Purchase Shares (other than pursuant to this Agreement).
Upon the delivery of and payment for the Purchase Shares as provided in this
Agreement, the Buyer shall acquire good, marketable and valid title to the
Purchase Shares, free and clear of any and all Liens. For purposes of this
Agreement, "Affiliate" of any person or entity means any person or entity
directly or indirectly controlling, controlled by, or under common control with,
any such person or entity.
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3.5 NO BROKERS. Neither the Seller nor any Affiliate of the
Seller has retained or been approached by any broker, finder or agent in
connection with this Agreement or the transactions contemplated hereby.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
---------------------------------------------
The Company hereby represents and warrants to the Buyer as
follows:
4.1 CORPORATE STATUS. The Company is a corporation duly
organized, validly existing and in good standing under the laws of Delaware. The
Company is duly qualified to do business as a foreign corporation and is in good
standing in the jurisdictions set forth on SCHEDULE 4.1 attached hereto, which
are the only jurisdictions in which the Company is required to be so qualified.
The Company has all requisite power and authority to own, lease and operate its
properties and to carry on its business as now being conducted. The Company has
heretofore made available to the Buyer true, correct and complete copies of its
Certificate of Incorporation and By-Laws.
4.2 SUBSIDIARIES. SCHEDULE 4.2 attached hereto identifies each
entity in which the Company owns, directly or indirectly, any shares of capital
stock or other equity securities (collectively, the "Subsidiaries"). SCHEDULE
4.2 includes for each Subsidiary (a) the name of such Subsidiary, (b) the
authorized capital stock of such Subsidiary and the number of shares of such
stock owned, directly or indirectly, by
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the Company, and (c) the jurisdiction of incorporation of such Subsidiary. All
of the issued and outstanding shares of capital stock of each Subsidiary are
duly authorized, validly issued, fully paid and nonassessable. No bonds,
debentures, notes or other instruments or evidence of indebtedness having the
right to vote (or convertible into, or exercisable or exchangeable for,
securities having the right to vote) on any matters on which stockholders of any
Subsidiary may vote ("Subsidiary Voting Debt") are issued or outstanding. Except
as set forth in SCHEDULE 4.2, there are outstanding: (a) no shares of capital
stock, Subsidiary Voting Debt or other voting securities of any Subsidiary; (b)
no securities of any Subsidiary convertible into, or exchangeable or exercisable
for, shares of capital stock of any Subsidiary, Subsidiary Voting Debt or other
voting securities of any Subsidiary, and (c) no options, warrants, calls, puts,
rights (including, without limitation, preemptive rights), commitments or
agreements to which any Subsidiary is a party or by which it is bound, in any
case obligating any Subsidiary to issue, deliver, sell, purchase, redeem or
acquire, or cause to be issued, delivered, sold, purchased, redeemed or
acquired, additional shares of capital stock of any Subsidiary or other voting
securities of any Subsidiary, or obligating any Subsidiary to grant, execute or
enter into any such option, warrant, call, put, right, commitment or agreement.
Except as otherwise disclosed on SCHEDULE 4.2 attached hereto, the Company,
directly or indirectly, has good and marketable title to, and is the sole legal
and beneficial owner of, all of the issued and outstanding
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shares of capital stock of each Subsidiary, free and clear of any and all Liens.
Each Subsidiary is duly incorporated, validly existing and in good standing
under the laws of the jurisdiction of its incorporation as set forth on SCHEDULE
4.2 and is duly qualified to do business as a foreign corporation and is in good
standing in the jurisdictions set forth on SCHEDULE 4.2 attached hereto, which
are the only jurisdictions in which any such Subsidiary is required to be
qualified. Each Subsidiary has all requisite power and authority to own, lease
and operate its properties and to carry on its business as now being conducted.
4.3 AUTHORITY AND CAPACITY FOR AGREEMENT. The Company has all
requisite power, authority and capacity to execute and deliver this Agreement
and to carry out and perform its obligations hereunder. The execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby have been duly authorized by all necessary corporate action on the part
of the Company. This Agreement has been duly executed and delivered by the
Company and constitutes the valid and legally binding obligation of the Company
enforceable in accordance with its terms except that the enforcement hereof may
be limited by (a) bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect relating to creditors' rights generally
and (b) general principles of equity (regardless of whether enforceability is
considered in a proceeding at law or in equity).
4.4 NONCONTRAVENTION. Neither the execution, delivery and
performance by the Company of this Agreement and the
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consummation (in accordance with the terms hereof) of the transactions
contemplated hereby, nor compliance by the Company with any of the provisions
hereof will violate, conflict with, or result in (with or without the giving of
notice or the lapse of time or both) a default under or a breach or violation
of, any provision of (a) the Certificate of Incorporation or By-Laws of the
Company, (b) any mortgage, indenture, lease, contract, deed, agreement or other
instrument to which the Company is a party or by which it is bound or to which
any of its properties or assets is subject, (c) any law, rule or regulation of
any governmental body (whether domestic or foreign), or (d) any order, judgment
or decree of any court or other governmental body (whether domestic or foreign).
Neither the Company nor any of its Subsidiaries is a party to or otherwise bound
by any agreement or other instrument providing for the payment of any benefit as
a result of the consummation of the transactions contemplated hereby. Except as
otherwise provided in SCHEDULE 4.4 attached hereto, no consent, approval,
authorization, order, filing, registration, declaration or qualification of or
with any court, governmental body (whether domestic or foreign) or third person
is required to be obtained by or on behalf of the Company in connection with the
execution and delivery of this Agreement or the consummation of the transactions
contemplated hereby.
4.5 CAPITAL STRUCTURE. The authorized capital stock of the
Company consists solely of (a) 10,000,000 shares of common stock, par value $.01
per share, of which 7,004,705 are issued and outstanding, and (b) 1,000,000
shares of preferred stock, par
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value $1.00 per share, of which none are issued and outstanding. There are no
employment, executive termination or similar agreements providing for the
issuance of any shares of capital stock of the Company. No bonds, debentures,
notes or other instruments or evidence of indebtedness having the right to vote
(or convertible into, or exercisable or exchangeable for, securities having the
right to vote) on any matters on which the Company's stockholders may vote (the
"Company Voting Debt") are issued or outstanding. Except as set forth in this
Section 4.5, there are outstanding: (a) no Shares, Company Voting Debt or other
voting securities of the Company; (b) no securities of the Company convertible
into, or exchangeable or exercisable for, Shares, Company Voting Debt or other
voting securities of the Company; and (c) no options, warrants, calls, puts,
rights (including, without limitation, preemptive rights), commitments or
agreements to which the Company is a party or by which it is bound, in any case
obligating the Company to issue, deliver, sell, purchase, redeem or acquire, or
cause to be issued, delivered, sold, purchased, redeemed or acquired, additional
shares of capital stock or any Company Voting Debt or other voting securities of
the Company, or obligating the Company to grant, extend or enter into any such
option, warrant, call, put, right, commitment or agreement. There are not any
stockholder agreements, voting trusts or other agreements or understandings to
which the Company is a party or by which it is bound relating to the voting of
any Shares that will limit in any way the
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solicitation of proxies by or on behalf of the Company from, or the casting of
votes by, the stockholders of the Company.
4.6 SEC FILINGS. Each report, schedule, registration statement
and definitive proxy statement filed by the Company (the "Company SEC
Documents") with the Securities and Exchange Commission (the "SEC") complied in
all material respects with the requirements of the Securities Act of 1933, as
amended (the "Securities Act"), or the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), as the case may be, and the rules and regulations
of the SEC promulgated thereunder applicable to such Company SEC Documents. None
of the Company SEC Documents contained any untrue statement of material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading. The financial statements of the Company included in the
Company SEC Documents complied as to form in all material respects with the
published rules and regulations of the SEC with respect thereto, were prepared
in accordance with generally accepted accounting principals ("GAAP") applied on
a consistent basis during the periods involved and present fairly, in all
material respects, in accordance with applicable requirements of GAAP the
consolidated financial position of the Company and its consolidated subsidiaries
as of their respective dates and the consolidated results of operations and the
consolidated cash flows of the Company and its consolidated subsidiaries for the
periods presented therein.
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4.7 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as disclosed
in the Company SEC Documents, since September 30, 1996, the business of the
Company has been carried on only in the ordinary and usual course and there has
not been any adverse change in its business, results of operations or financial
condition.
4.8 COMPLIANCE WITH APPLICABLE LAWS. To the knowledge of the
Company, the Company and its Subsidiaries hold all permits, licenses, variances,
exemptions, orders, franchises and approvals of all governmental bodies
necessary for the lawful conduct of their respective businesses (the "Company
Permits"). To the knowledge of the Company and except as disclosed in the
Company SEC Documents, the businesses of the Company and its Subsidiaries are
not being conducted in violation of any law, ordinance or regulation of any
governmental body. To the knowledge of the Company, no investigation or review
by any governmental body with respect to the Company or any of its Subsidiaries
is pending or threatened.
4.9 LITIGATION. To the knowledge of the Company and except as
disclosed in the Company SEC Documents, there is no suit, action or proceeding
pending or threatened against or affecting the Company or any Subsidiary of the
Company, nor is there any written judgement, decree, injunction, rule or order
of any governmental body or arbitrator outstanding against the Company or any
Subsidiary of the Company, which is reasonably likely to result in a material
adverse effect on the Company or its ability to consummate the transactions
contemplated hereby.
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4.10 TAXES. (a) To the knowledge of the Company, except as set
forth in SCHEDULE 4.10(A), (i) all Tax (as hereinafter defined) returns,
statements, reports and forms (including estimated tax or information returns
and reports) required to be filed with any Taxing Authority (as hereinafter
defined) with respect to any Pre-Closing Tax Period (as hereinafter defined) by
or on behalf of the Company or any Subsidiary (collectively, the "Returns")
have, to the extent required to be filed on or before the date hereof, been
filed when due in accordance with all applicable laws; (ii) as of the time of
filing, the Returns correctly reflected the facts regarding the income,
business, assets, operations, activities and status of the Company and its
Subsidiaries; (iii) all Taxes shown as due and payable on the Returns that have
been filed have been timely paid, or withheld and remitted to the appropriate
Taxing Authority; (iv) the reserves established for Taxes with respect to the
Company and its Subsidiaries for any Pre-Closing Tax Period (including any
Pre-Closing Tax Period for which no Return has yet been filed) reflected on the
books of the Company and its Subsidiaries (excluding any provision for deferred
income taxes) are adequate in accordance with GAAP; (v) neither the Company nor
any Subsidiary is delinquent in the payment of any Tax or has requested any
extension of time within which to file any Return except for extensions granted
as a matter of right; (vi) neither the Company nor any Subsidiary (or any member
of any affiliated, consolidated, combined or unitary group of which the Company
or any Subsidiary is or has been a member) has granted
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any extension or waiver of the statute of limitations period applicable to any
Return, which period (after giving effect to such extension or waiver) has not
yet expired; (vii) there is no action, suit or proceeding now pending and no
claim, audit or investigation now pending or any action, suit, claim, audit or
investigation threatened against or with respect to the Company or any
Subsidiary in respect of any Tax; (viii) neither the Company nor any Subsidiary
owns any interest in real property in the State of New York or in any other
jurisdiction in which a Tax is imposed on the transfer of a controlling interest
in an entity that owns any interest in real property; (ix) none of the Company,
any Subsidiary or any other person on behalf of the Company or any Subsidiary
has entered into any agreement or consent pursuant to Section 341(f) of the
Code; (x) there are no Liens for Taxes upon the assets of the Company or any
Subsidiary except Liens for current Taxes not yet due; (xi) neither the Company
nor any Subsidiary will be required to include any adjustment in taxable income
for any Post-Closing Tax Period (as hereinafter defined) under Section 481(c) of
the Code (or any similar provision of the Tax laws of any jurisdiction) as a
result of a change in method of accounting for a Pre-Closing Tax Period or
pursuant to the provisions of any agreement entered into with any Taxing
Authority with regard to the Tax liability of the Company or any Subsidiary for
any Pre-Closing Tax Period; and (xii) neither the Company nor any Subsidiary has
been a member of an affiliated, consolidated, combined or unitary group or
participated in any other arrangement whereby any income,
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revenues, receipts, gain or loss of the Company or any Subsidiary was determined
or taken into account for Tax purposes with reference to or in conjunction with
any income, revenues, receipts, gain, loss, asset or liability of any other
person or entity. To the knowledge of the Company, except as set forth on
SCHEDULE 4.10(A), neither the Company nor any of its Subsidiaries is a party to
or bound by any agreement providing for the allocation or sharing of Taxes with
any entity which is not, either directly or indirectly, a Subsidiary of the
Company (a "Tax Sharing Agreement").
(b) SCHEDULE 4.10(b) contains a list of all jurisdictions
(whether foreign or domestic) to which any Tax imposed on overall net income is
properly payable by the Company or any Subsidiary. The Company has previously
delivered or made available to Buyer true, correct and complete copies of its
federal income tax returns for each of the fiscal years ended December 31, 1990
through December 31, 1995.
(c) For purposes of this Agreement, (i) "Tax" shall mean (a)
any net income, alternative or add-on minimum tax, gross income, gross receipts,
sales, use, ad valorem, value added, transfer, franchise, profits, license,
withholding on amounts paid to or by the Company or any Subsidiary, payroll,
employment, excise, severance, stamp, occupation, premium, property,
environmental or windfall profit tax, custom, duty or other tax, governmental
fee or other like assessment or charge of any kind whatsoever, together with any
interest, penalty, addition to tax or additional amount imposed by any
governmental authority
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(domestic or foreign) responsible for the imposition of any such tax (a "Taxing
Authority"), (b) any liability of the Company or any Subsidiary for the payment
of any amounts of any of the types described in clause (a) above as a result of
being a member of an affiliated, consolidated, combined or unitary group, or
being a party to any agreement or arrangement whereby liability of the Company
or any Subsidiary for payment of such amounts was determined or taken into
account with reference to the liability of any other person, and (c) liability
of the Company or any Subsidiary for the payment of any amounts as a result of
being party to any Tax Sharing Agreement or with respect to the payment of any
amounts of any of the foregoing types as a result of any express or implied
obligation to indemnify any other person; (ii) "Pre-Closing Tax Period" shall
mean any Tax period (or portion thereof) ending on or before the close of
business on the Closing Date; and (iii) "Post-Closing Tax Period" shall mean any
Tax period (or portion thereof) ending after the close of business on the
Closing Date.
4.11 PENSION AND BENEFIT PLANS; ERISA.
To the knowledge of the Company, SCHEDULE 4.11 attached
hereto contains a true and complete list of each "employee benefit plan," as
defined in Section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA"), maintained, contributed to or required to be contributed
to by the Company or any of its Subsidiaries for the benefit of current, former
and retired employees (the "Company ERISA Plans") and each other material plan,
contract, program or arrangement
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maintained, contributed to or required to be contributed to by the Company or
any of its Subsidiaries for the benefit of current, former and retired employees
and directors (the "Company Benefit Arrangements"). To the knowledge of the
Company, each Company ERISA Plan and each Company Benefit Arrangement complies
in all material respects with its terms and all applicable laws, including
ERISA, and no "reportable event," "prohibited transaction" or breach of
fiduciary duty (within the meaning of ERISA) or termination has occurred with
respect to any Company ERISA Plan under circumstances which present a risk of
any material liability to any governmental authority or other person. To the
knowledge of the Company, none of the Company ERISA Plans or Company Benefit
Arrangements is a "multiemployer plan" as defined in Section 4001(a)(3) of ERISA
or a "multiple employee plan" within the meaning of Section 413(c) of the Code
or Section 4063 of ERISA. To the knowledge of the Company, no event has occurred
which would cause the Company to incur (i) any liability to the Pension Benefit
Guaranty Corporation under Section 4069 of ERISA or (ii) any withdrawal
liability to a "multiemployer plan." Copies or descriptions of each Company
ERISA Plan and Company Benefit Arrangement (and, where applicable, the most
recent summary plan description, actuarial report, determination letter, annual
report (Form 5500) and trust agreement relating to such Company ERISA Plan and
Company Benefit Arrangement), and such other information as has been reasonably
requested by Buyer, have been made available to Buyer for review prior to the
date hereof. To the knowledge of the Company, each Company ERISA Plan and each
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Company Benefit Arrangement intended to qualify under section 401(a) of the
Code, is so qualified, and each trust maintained in connection with each such
plan is tax exempt under Code ss. 501(a). To the knowledge of the Company, the
Internal Revenue Service ("IRS") has issued favorable determination letters with
respect to the qualification of each qualified Company ERISA Plan and each
qualified Company Benefit Arrangement and related trust, and the IRS has not
taken any action to revoke any such letter. To the knowledge of the Company, if
and to extent applicable, no Company ERISA Plan and no Company Benefit
Arrangement has or has incurred an accumulated funding deficiency within the
meaning of ERISA section 302 or Code section 412, nor has any waiver of the
minimum funding standards of ERISA section 302 and Code section 412 been
requested of or granted by the IRS with respect to any Company ERISA Plan or
Company Benefit Arrangement, nor has any lien in favor of any such plan arisen
under Code section 412(n) or ERISA section 302(f). To the knowledge of the
Company, with respect to any insurance policy providing funding for benefits
under any Company ERISA Plan or Company Benefit Arrangement, there is no
liability of the Company in the nature of a retroactive rate adjustment, loss
sharing arrangement, or other actual or contingent liability, there will be no
such liability arising wholly or partially out of events occurring prior to the
execution of this Agreement, nor would there be any such liability if the
Company cancelled such policy as of the execution of this Agreement.
4.12 ENVIRONMENTAL MATTERS.
(a) For purposes of this Agreement:
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(i) "Environmental Law" means any applicable law
regulating or prohibiting Releases into any part of the
environment (indoor or outdoor), or pertaining to the
protection of natural resources or the environment including,
without limitation, the Comprehensive Environmental Response,
Compensation, and Liability Act ("CERCLA") (42 U.S.C. section
9601, et seq.), the Hazardous Materials Transportation Act (49
U.S.C. section 1801, et seq.), the Resource Conservation and
Recovery Act (42 U.S.C. section 6901, et seq.), the Clean
Water Act (33 U.S.C. section 1251, et seq.), the Clean Air Act
(33 U.S.C. section 7401, et seq.), the Toxic Substances
Control Act (15 U.S.C. section 7401, et seq.) and the Federal
Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. section
136, et seq.), and the regulations promulgated pursuant
thereto, and any such applicable state or local statutes, and
the regulations promulgated pursuant thereto, as such laws are
in effect on the date hereof;
(ii) "Hazardous Material" means any substance,
material or waste which is regulated by any public or
governmental body in the jurisdictions in which the Company or
any of its Subsidiaries conducts business, or the United
States, including, without limitation, any material or
substance which is defined as a "hazardous waste," "hazardous
material," "hazardous substance," "extremely hazardous waste,"
"restricted hazardous waste," "contaminant," "toxic waste" or
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"toxic substance" under any provision of any Environmental
Law;
(iii) "Release" means any release, spill, effluent,
emission, leaking, pumping, injection, deposit, disposal,
discharge, dispersal, leaching or migration into the indoor or
outdoor environment, including, without limitation, any
property owned, operated or leased by the Company or any of
its Subsidiaries; and
(iv) "Remedial Action" means all actions, including,
without limitation, any capital expenditures, required by a
governmental body or required under any Environmental Law, or
voluntarily undertaken to (a) clean up, remove, treat, or in
any other way ameliorate or address any Hazardous Materials or
other substance in the indoor or outdoor environment; (b)
prevent the Release or threat of Release, or minimize the
further Release of any Hazardous Material so it does not
endanger or threaten to endanger the public health or welfare
of the indoor or outdoor environment; (c) perform preremedial
studies and investigations or post-remedial monitoring and
care pertaining or relating to a Release; or (d) achieve or
maintain compliance with any Environmental Law.
(b) To the knowledge of the Company, the operations of the
Company and its Subsidiaries have complied and currently comply with all
Environmental Laws. Except as set forth in
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SCHEDULE 4.12 attached hereto, neither the Company nor any of its Subsidiaries
has received any notice with respect to any of its facilities of any alleged
violation of any Environmental Law or any possible liability or remediation
obligation arising under any Environmental Law.
(c) To the knowledge of the Company, the Company and its
Subsidiaries are not subject to any outstanding orders, judgments, agreements or
contracts with or issued by any governmental body or other person respecting (i)
Environmental Laws, (ii) Remedial Action or (iii) any Release or threatened
Release of a Hazardous Material except as described in SCHEDULE 4.12 attached
hereto.
4.13 NO BROKERS. Neither the Company nor any Affiliate of the
Company has retained or been approached by any broker, finder or agent in
connection with this Agreement or the transactions contemplated hereby.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE BUYER
-------------------------------------------
The Buyer hereby represents and warrants to the Seller and
the Company as follows:
5.1 CORPORATE STATUS. The Buyer is a limited partnership duly
formed and existing under the laws of the State of Ohio.
5.2 AUTHORITY AND CAPACITY FOR AGREEMENT. The Buyer has all
requisite power, authority and capacity to execute and deliver this Agreement
and to carry out and perform its
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obligations hereunder. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly authorized
by all necessary partnership action on the part of the Buyer. This Agreement has
been duly executed and delivered by the Buyer and constitutes the valid and
legally binding obligation of the Buyer enforceable in accordance with its terms
except that the enforcement hereof may be limited by (a) bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to creditors' rights generally and (b) general principles of equity
(regardless of whether enforceability is considered in a proceeding at law or in
equity).
5.3 NONCONTRAVENTION. Neither the execution, delivery and
performance by the Buyer of this Agreement and the consummation (in accordance
with the terms hereof) of the transactions contemplated hereby, nor compliance
by the Buyer with any of the provisions hereof will violate, conflict with, or
result in (with or without the giving of notice or the lapse of time or both) a
default under or a breach or violation of, any provision of (a) the Buyer's
certificate of limited partnership or agreement of limited partnership, (b) any
mortgage, indenture, lease, contract, deed, agreement or other instrument to
which the Buyer is a party or by which it is bound or to which any of its
properties or assets is subject, (c) any law, rule or regulation of any
governmental body (whether domestic or foreign), or (d) any order, judgment or
decree of any court or other governmental body (whether domestic or foreign).
Except as otherwise provided
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in SCHEDULE 5.3 attached hereto, no consent, approval, authorization, order,
filing, registration, declaration or qualification of or with any court,
governmental body or third person is required to be obtained by or on behalf of
the Buyer in connection with the execution and delivery of this Agreement or the
consummation of the transactions contemplated hereby.
5.4 NO BROKERS. Except for George R. Begley, neither the Buyer
nor any Affiliate of the Buyer has retained or been approached by any broker,
finder or agent in connection with this Agreement or the transactions
contemplated hereby. All of the fees and expenses of George R. Begley due and
payable on account of this Agreement and the transactions contemplated hereby
shall be borne by the Buyer.
5.5 INVESTMENT. The Buyer is purchasing the Purchase Shares
for its own account and not with a view to the distribution thereof in violation
of the Securities Act or the rules and regulations promulgated thereunder.
ARTICLE VI
CLOSING DELIVERIES
------------------
6.1 DELIVERIES BY THE SELLER. At the Closing, the
Seller shall deliver to the Buyer the following documents:
(a) One or more certificates representing the Purchase Shares,
duly endorsed (or with duly executed stock powers attached) for transfer to the
Buyer with all transfer taxes, if any, paid, and free of any restrictive legends
except legends, if any, reflecting the limitations on the transferability of the
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securities represented thereby which result from the fact that such securities
have not been registered under the Securities Act;
(b) A receipt for payment of the Purchase Price duly executed
by the Seller;
(c) A certified copy of the resolutions of a Director of the
Seller authorizing the execution, delivery and performance of this Agreement;
and
(d) An opinion of counsel to the Seller and the Company in a
form mutually acceptable to the Buyer and such counsel.
6.2 DELIVERIES BY THE BUYER. At the Closing, the Buyer shall
deliver to the Seller the Purchase Price in the manner contemplated by Section
1.2 hereof.
6.3 DELIVERIES BY THE COMPANY. At the Closing, the Company
shall deliver to the Buyer the following documents:
(a) Counterpart signature pages to (i) a Registration Rights
Agreement by and between the Buyer and the Company in a form to be agreed upon
between the Buyer and the Company on or prior to the Closing Date (the
"Registration Rights Agreement") and (ii) a Consulting Agreement by and between
Kirtland Capital Corporation, an Affiliate of the Buyer ("KCC"), and the Company
in a form to be agreed upon between the Buyer and the Company on or prior to the
Closing Date (the "Consulting Agreement"), each duly executed by the Company;
(b) A certified copy of the resolutions of the Board of
Directors of the Company authorizing the execution, delivery
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and performance of this Agreement, the Registration Rights Agreement and the
Consulting Agreement; and
(c) A certificate, in form and substance satisfactory to
Buyer, pursuant to Treas. Reg. Section 1.897-2(g)(1)(i)(A) providing that the
Purchase Shares do not constitute equity interests of a United States real
property holding corporation.
ARTICLE VII
PRE-CLOSING COVENANTS
---------------------
Between the date of this Agreement and the Closing Date, the
Buyer, the Seller and the Company shall, as applicable, perform the following:
7.1 GENERAL. Each of the Buyer, the Seller and the Company
shall use their respective reasonable best efforts to take all actions and to do
all things necessary, proper or advisable to consummate and make effective the
transactions contemplated by this Agreement (including satisfying the closing
conditions set forth in Article IX hereof).
7.2 BUSINESS IN ORDINARY COURSE. The Company shall carry on
its operations (and those of its Subsidiaries) substantially in the same manner
as heretofore conducted. The Company shall not make or institute any material
change in the methods of manufacture, management, accounting or operation of the
Company or its Subsidiaries.
7.3 CONTRACTS AND COMMITMENTS. The Company shall not (and
shall not permit any of its Subsidiaries to) enter into any contract or
commitment or engage in any transaction, not in the
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usual and ordinary course of business and consistent with the past operation of
the Company.
7.4 SALE OF CAPITAL ASSETS. Except for the sale or other
disposition of excess or obsolete equipment in the usual and ordinary course of
business consistent with the past operation of the Company and its Subsidiaries,
the Company and its Subsidiaries will not sell or otherwise dispose of any
capital asset relating to the Company and its Subsidiaries.
7.5 NO GENERAL INCREASES. The Company will not (and will
cause each of its Subsidiaries not to) grant any general or uniform increase in
the rates of pay of employees of the Company or any Subsidiary, nor grant any
general or uniform increase in the benefits under any bonus or pension plan or
other employee-related contract or commitment. The Company shall not increase
the compensation payable or to become payable to any officer or other salaried
employee with a base salary in excess of $50,000 per year or increase any bonus,
insurance, pension or other benefit plan, payment or arrangement made to, for or
with any such officer or salaried employee.
7.6 PRESERVATION OF ORGANIZATION. The Company shall (and
shall cause each of its Subsidiaries to) use its reasonable best efforts to
preserve the business organization of the Company and each of its Subsidiaries,
to keep available the present key officers and employees of the Company and its
Subsidiaries and to preserve the present relationships of the Company and its
Subsidiaries with its suppliers and customers and others having business
relations with the Company and its Subsidiaries.
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7.7 FULL ACCESS. The Company shall permit representatives of
the Buyer to have full access at all reasonable times to all of the facilities,
properties, personnel, books and records of the Company and each of its
Subsidiaries to permit the Buyer to complete its due diligence examination of
the Company and each of its Subsidiaries. Without limiting the generality of the
foregoing sentence, (a) the Buyer and its representatives may conduct a Phase I
environmental assessment of any of the facilities maintained by the Company or
any of its Subsidiaries, and (b) the Company shall provide the Buyer with a copy
of its monthly financial statements as promptly as possible following the
preparation of such statements, all of which shall be prepared in accordance
with GAAP applied on a consistent basis during the periods involved and shall
present fairly, in all material respects, in accordance with applicable
requirements of GAAP the consolidated financial position of the Company and its
consolidated subsidiaries as of their respective dates and the consolidated
results of operations and the consolidated cash flows of the Company and its
consolidated subsidiaries for the periods presented therein.
7.8 EXCLUSIVITY. Neither the Seller nor any Affiliate of the
Seller shall solicit, initiate, encourage the submission of, provide any
information in connection with or negotiate any proposal or offer from any
person or entity, or provide any information in connection with or negotiate any
unsolicited offer or proposal, relating to any acquisition or purchase of the
Purchase Shares or similar transaction or business combination
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involving the Purchase Shares or the Company. The Seller shall notify the Buyer
promptly if any person makes any proposal, offer, inquiry or contact with
respect to any of the foregoing.
7.9 TAX MATTERS. The Company shall notify the IRS pursuant to
Treas. Reg. Section 1.897-2(h)(2) informing the IRS that the Company has
provided to the Seller a certificate indicating that the Purchase Shares do not
constitute equity interests of a United States real property holding
corporation.
ARTICLE VIII
POST-CLOSING COVENANTS
----------------------
8.1 CONFIDENTIALITY. From and after the Closing Date, the
Seller shall retain in confidence, and require its directors, officers,
employees, consultants, professional representatives and agents to retain in
confidence, all information, financial or otherwise, which it has received
relating to the Company's business, assets, financial condition, operations or
prospects. The Seller shall deliver promptly to the Company or destroy, at the
request and option of the Company, all tangible embodiments (and all copies) of
confidential information that is in its possession. Notwithstanding the
foregoing provisions of this Section 8.1, the Seller shall not be precluded from
disclosing any information specified in this Section 8.1 to the extent required
by law.
8.2 BOARD OF DIRECTORS. (a) Promptly following the Closing
Date, the Company shall (i) increase the size of the Board of Directors of the
Company to up to seven persons and
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(ii) subject to compliance with Section 14(f) of the Exchange Act, cause up to
five persons designated by the Buyer (the "KCP Directors") to be nominated to
the Company's Board of Directors. Promptly following the Closing Date and
subject to compliance with Section 14(f) of the Exchange Act and any other
applicable law, the Company shall take, at the Company's expense, all lawful
action necessary to effect the nomination and election of the KCP Directors,
including, without limitation, mailing to the Company's stockholders the
information required by Section 14(f) of the Exchange Act and Rule 14f-1
promulgated thereunder (the "Information Statement").
(b) None of the information supplied or to be supplied in
writing by the Company expressly for inclusion or incorporation by reference in
the Information Statement will, at the time the Information Statement is first
published, sent or given to the holders of the Shares, and at any time it is
amended or supplemented, contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they are made,
not misleading.
8.3 ADDITIONAL ASSISTANCE. From time to time after the Closing
Date, the Seller and the Company, at their own expense, shall execute and
deliver, or cause to be executed and delivered, such other instruments,
conveyances and transfers and take, or cause to be taken, such other actions as
the Buyer may reasonably request in order to fully carry out and consummate the
transactions included or provided for in this Agreement.
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ARTICLE IX
CLOSING CONDITIONS
------------------
9.1 CONDITIONS TO OBLIGATIONS OF THE BUYER. The obligation of
the Buyer to consummate the transactions contemplated hereby shall be subject to
satisfaction of each of the following conditions:
(a) the representations and warranties set forth in
Articles III and IV hereof shall be true and correct in all material respects at
and as of the Closing Date;
(b) the Seller and the Company shall have performed and
complied with all of their respective covenants and agreements contained herein
in all material respects;
(c) there shall not be any action, suit or proceeding
pending or threatened before any court or quasijudicial or administrative agency
of any federal, state, local or foreign jurisdiction or before any arbitrator
wherein an unfavorable injunction, judgment, order, decree, ruling or charge
would (i) prevent consummation of any of the transactions contemplated by this
Agreement, (ii) cause any of the transactions contemplated by this Agreement to
be rescinded following consummation, or (iii) affect materially and adversely,
including through the imposition of any divestiture requirement, the right of
the Buyer to own the Purchase Shares or to operate the business of the Company
as presently operated and as presently proposed to be operated (and no such
injunction, judgment, order, decree, ruling or charge shall be in effect);
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(d) the Seller and the Company shall have delivered to
the Buyer a certificate to the effect that each of the conditions specified in
Section 9.1(a), (b) and (c) hereof have been satisfied in all respects;
(e) all applicable waiting periods (and any extensions
thereof) under the Hart-Scott-Rodino Act shall have expired or otherwise been
terminated without the objection of any of the relevant federal authorities;
(f) the Buyer shall have completed and shall be
satisfied, in its sole and absolute discretion, with the results of its due
diligence examination of the Company and each of its Subsidiaries;
(g) there shall not have occurred a material adverse
change in the business, operations, properties or assets, liabilities, financial
condition, results of operations or prospects of the Company and its
Subsidiaries taken as a whole;
(h) the Company shall have received notification from
the New Jersey Department of Environmental Protection and Energy satisfactory to
the Buyer in its sole discretion that the sale of the Purchase Shares may
proceed in compliance with the provisions of the New Jersey Industrial Site
Recovery Act without the imposition of any liability against the Company or the
Buyer on account of the transactions contemplated hereby;
(i) the Company and the Seller shall have obtained the
consents identified on SCHEDULES 3.3 and 4.4 attached hereto;
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(j) the Seller shall have executed and delivered to the
Buyer the documents identified in Section 6.1; and
(k) the Company shall have executed and delivered to
the Buyer the documents identified in Section 6.3. The Buyer may waive any
condition specified in this Section 9.1 if it executes a writing so stating at
or prior to the Closing Date.
9.2 CONDITIONS TO OBLIGATION OF THE SELLER AND THE COMPANY.
The obligation of the Seller and the Company to consummate the transactions
contemplated hereby shall be subject to satisfaction of the following
conditions:
(a) the representations and warranties set forth in
Article V shall be true and correct in all material respects at and as of the
Closing Date;
(b) the Buyer shall have performed and complied with
all of its covenants hereunder in all material respects;
(c) there shall not be any action, suit or proceeding
pending or threatened before any court or quasijudicial or administrative agency
of any federal, state, local or foreign jurisdiction or before any arbitrator
wherein an unfavorable injunction, judgment, order, decree, ruling or charge
would (i) prevent the consummation of any of the transactions contemplated by
this Agreement or (ii) cause any of the transactions contemplated by this
Agreement to be rescinded following consummation (and no such injunction,
judgment, order, decree, ruling or charge shall be in effect);
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(d) the Buyer shall have delivered to the Seller a
certificate to the effect that each of the conditions specified in Section 9.2
(a), (b) and (c) hereof have been satisfied in all respects;
(e) all applicable waiting periods (and any extensions
thereof) under the Hart-Scott-Rodino Act shall have expired or otherwise been
terminated without the objection of any of the relevant federal authorities; and
(f) the Buyer shall have delivered to the Seller the
Purchase Price.
The Seller or the Company may waive any condition specified in
this Section 9.2 if either executes a writing so stating at or prior to the
Closing.
ARTICLE X
TERMINATION
-----------
10.1 TERMINATION OF AGREEMENT. This Agreement may be
terminated as follows:
(a) by the mutual written consent of the Buyer, the
Seller and the Company at any time prior to the Closing Date;
(b) the Buyer may terminate this Agreement by giving
written notice to the Seller and the Company at any time prior to the Closing if
the Closing has not occurred on or before December 15, 1996, by reason of the
failure of any closing condition contained in Section 9.1 hereof (unless the
failure results primarily from the Buyer itself breaching any of its
representations, warranties, covenants or agreements contained in
33
<PAGE> 34
this Agreement); provided, however, that the Buyer may not terminate this
Agreement under this Section 10.1(b) on account of the failure of the conditions
specified in Sections 9.1(e) or (h) until after December 31, 1996;
(c) the Seller may terminate this Agreement by giving
written notice to the Buyer any time prior to the Closing if the Closing has not
occurred on or before December 15, 1996, by reason of the failure of any closing
condition contained in Section 9.2 hereof (unless the failure results primarily
from the Seller or the Company breaching any of their respective
representations, warranties, covenants or agreements contained in this
Agreement); provided, however, that the Seller may not terminate this Agreement
under this Section 10.1(c) on account of the failure of the condition specified
in Section 9.2(e) until after December 31, 1996;
(d) the Buyer may terminate this Agreement if either
the Seller or the Company commits a material breach of any of their respective
representations, warranties, covenants or agreements contained herein; or
(e) the Seller may terminate this Agreement if the
Buyer commits a material breach of any of its representations, warranties,
covenants or agreements contained herein.
10.2 EFFECT OF TERMINATION. If the Buyer, the Seller or the
Company terminate this Agreement pursuant to Section 10.1, all obligations
hereunder shall thereupon terminate without liability of any party hereto to any
other party hereto (except
34
<PAGE> 35
for any liability of any party then in breach); provided that the provisions of
(a) Sections 11.2 and 11.3 hereof and (b) that certain Confidentiality
Agreement, dated November 29, 1995, by and between the Company and KCC shall
survive any such termination and shall remain in full force and effect
thereafter.
ARTICLE XI
GENERAL
11.1 NONSURVIVAL OF REPRESENTATIONS AND WARRANTIES. None of
the representations and warranties contained in this Agreement or in any
instrument delivered pursuant to this Agreement shall survive the Closing Date,
except for the representations and warranties contained in Sections 3.4, 3.5,
4.13 and 5.4 hereof, each of which shall survive without limitation as to
duration. The Seller shall indemnify the Buyer from and against any and all
losses, costs, fees and expenses incurred by the Buyer on account of any breach
or violation of the representations and warranties contained in Sections 3.4,
3.5 or 4.13 hereof. The Buyer shall indemnify the Seller and the Company from
and against any and all losses, costs, fees and expenses incurred by the Seller
or the Company on account of any breach or violation of the representation and
warranty contained in Section 5.4 hereof. All of the covenants and agreements
contained in this Agreement shall survive the Closing Date without limitation as
to duration.
35
<PAGE> 36
11.2 EXPENSES. The Seller, the Company and the Buyer shall
each bear their separate expenses incurred in connection with this Agreement and
the transactions contemplated hereby.
11.3 PRESS RELEASES AND PUBLIC ANNOUNCEMENTS. None of the
Buyer, the Seller or the Company shall issue any press release or make any
public announcement relating to the subject matter of this Agreement without the
prior written approval of the Buyer, the Seller and the Company.
11.4 WAIVER. Any failure of any party hereto to comply with
any of its obligations, agreements, conditions or covenants herein contained may
be waived only with the prior written consent of the party which is entitled to
the benefits thereof.
11.5 NOTICES. All notices shall be in writing and shall be
deemed to have been given three days after the registration if sent by
registered mail, postage prepaid, return receipt requested, or upon delivery by
a nationally recognized overnight courier service or upon confirmation of
receipt if sent by electronic facsimile transmission to the following addresses:
If to the Buyer:
Kirtland Capital Partners II L.P.
2550 SOM Center Road
Suite 105
Willoughby Hills, Ohio 44094
Attention: Raymond A. Lancaster
Telecopy No.: (216) 585-9699
with a copy to:
Jones, Day, Reavis & Pogue
901 Lakeside Avenue
Cleveland, Ohio 44114
Attention: Charles W. Hardin, Jr.
Telecopy No.: (216) 579-0212
If to the Seller:
36
<PAGE> 37
Rimer Anstalt
Am Schragen Weg 2
9490 Vaduz, Liechtenstein
Liechtenstein
Attention: Hubert Lampert
Telecopy No.: 011 41 075 23228 37
with a copy to:
Baer Marks & Upham LLP
805 Third Avenue
New York, NY 10022-7513
Attention: Herbert S. Meeker
Telecopy No.: (212) 702-5941
If to the Company:
PVC Container Corporation
401 Industrial Way West
Eatontown, New Jersey 07724
Attention: Phillip L. Friedman
Telecopy No.: (908) 542-7706
with a copy to:
Baer Marks & Upham LLP
805 Third Avenue
New York, NY 10022-7513
Attention: Herbert S. Meeker
Telecopy No.: (212) 702-5941
11.6 CAPTIONS AND PARAGRAPH HEADINGS. Captions and paragraph
headings used herein are for convenience only and are not a part of this
Agreement and shall not be used in construing it.
11.7 ENTIRE AGREEMENT AND AMENDMENT. This Agreement embodies
the entire understanding of the Buyer, the Seller and the Company, and there are
no other agreements or understandings, written or oral, in effect among the
Buyer, the Seller and the Company, relating to the subject matter hereof, unless
expressly referred to by reference herein. This Agreement may be amended or
modified only by an instrument of equal formality signed by
37
<PAGE> 38
the Buyer, the Seller and the Company, or their duly authorized agents.
11.8 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of Ohio without
regard to the conflicts of law principles thereof.
11.9 SUBMISSION TO JURISDICTION. Any legal action or
proceedings arising out of this Agreement may be brought only in the courts of
the State of Ohio, or in the courts of the United States of America sitting in
the State of Ohio and each of the Buyer, the Seller and the Company, hereto
irrevocably submits to the exclusive jurisdiction of each such court, together
with courts having appellate jurisdiction therefrom, and waives all requirements
of personal jurisdiction or venue with respect thereto, and any writ, judgment
or other notice of legal process shall be sufficiently served on it if delivered
pursuant to Section 11.5 hereof.
11.10 COUNTERPARTS. This Agreement may be executed
simultaneously in two or more counterparts, each of which shall be deemed an
original but all of which together shall constitute one and the same instrument.
11.11 BENEFIT AND ASSIGNMENT. This Agreement shall be binding
upon and inure to the benefit of the Buyer, the Seller and the Company and their
respective successors and assigns. The rights and obligations of the Buyer, the
Seller and the Company hereunder may not be assigned, provided that the Buyer
may assign its right (but not its obligation to pay the Purchase Price) to
38
<PAGE> 39
acquire some or all of the Purchase Shares to one or more Affiliates of the
Buyer.
11.12 SEVERABILITY. Any term or provision of this Agreement
that is invalid or unenforceable in any situation in any jurisdiction shall not
affect the validity or enforceability of the remaining terms and provisions
hereof or the validity or enforceability of the offending term or provision in
any other situation or in any other jurisdiction.
11.13 INCORPORATION OF EXHIBITS AND SCHEDULES. The Exhibits
and Schedules identified in this Agreement are incorporated herein by reference
and made a part hereof.
39
<PAGE> 40
IN WITNESS WHEREOF, the Buyer, the Seller and the Company have
duly executed this Agreement on the date first above written.
KIRTLAND CAPITAL PARTNERS II L.P.
By: KIRTLAND CAPITAL CORPORATION,
Its General Partner
By: /s/ Raymond A. Lancaster
---------------------------
Name: Raymond A. Lancaster
Title: President
RIMER ANSTALT
By: /s/ Hubert Lampert
---------------------------
Name: Hubert Lampert
Title: Director
PVC CONTAINER CORPORATION
By: /s/ Phillip L. Friedman
---------------------------
Name: Phillip L. Friedman
Title: President
40
<PAGE> 41
Schedule 3.3 of Stock Purchase Agreement by
and among Kirtland Capital Partners II, L.P.,
PVC Container Corporation and Rimer Anstalt
Fleet Bank, N.A.
Hart-Scott-Rodino Act Clearance
New Jersey Department of Environmental Protection
and Energy Clearance
<PAGE> 42
Schedule 4.1 of Stock Purchase Agreement by and
among Kirtland Capital Partners II, L.P.,
PVC Container Corporation and Rimer Anstalt
Delaware
New Jersey
Pennsylvania
Illinois
South Carolina
<PAGE> 43
Schedule 4.2 of Stock Purchase Agreement by and
among Kirtland Capital Partners II, L.P.,
PVC Container Corporation and Rimer Anstalt
<TABLE>
<CAPTION>
Authorized Shares Owned
Name Capital Stock by PVC Jurisdiction
---- ------------- ------------- ------------
<S> <C> <C> <C>
Airopak 1,500 Common 100** Delaware
Corporation Stock, no par
Novatec 1,000 Common 1,000 Delaware
Plastics Stock, no par
Chemicals
Co, Inc.
Edge Craft 1,000 Common 100* Delaware
USA, Inc. Stock, $1 par
PVC Container 1,000 Ordinary 1000 U.S.Virgin
International Shares, $1 par Islands
Sales Corp.
</TABLE>
Airopak Corporation is authorized to do business in the States of
Pennsylvania and New Jersey.
Novatec Plastics & Chemicals Co., Inc. is authorized to do business in the
State of New Jersey.
Edge Craft USA, Inc. is authorized to do business in the State of New
Jersey.
* 100 shares owned by Edge Craft Ltd.
** only shares issued and outstanding
<PAGE> 44
Schedule 4.4 of Stock Purchase Agreement by and
among Kirtland Capital Partners II, L.P.,
PVC Container Corporation and Rimer Anstalt
Fleet Bank, N.A.
Hart-Scott-Rodino Act Clearance
New Jersey Department of Environmental Protection
and Energy Clearance
<PAGE> 45
Schedule 4.10(a) of Stock Purchase Agreement by and
among Kirtland Capital Partners II, L.P.,
PVC Container Corporation and Rimer Anstalt
None
<PAGE> 46
Schedule 4.10(b) of Stock Purchase Agreement by and
among Kirtland Capital Partners II, L.P.,
PVC Container Corporation and Rimer Anstalt
Delaware
New Jersey
Pennsylvania
Illinois
South Carolina
<PAGE> 47
Schedule 4.11 of Stock Purchase Agreement by and
among Kirtland Capital Partners II, L.P.,
PVC Container Corporation and Rimer Anstalt
PVC Pension Plan for Union Employees
PVC Profit Sharing Savings Plan 401-K
PVC Employee Stock Option Trust Plan
PVC Executive Deferred Compensation Plan
PVC 1996 Incentive Stock Option Plan
<PAGE> 48
Schedule 4.12 of Stock Purchase Agreement by and
among Kirtland Capital Partners II, L.P.,
PVC Container Corporation and Rimer Anstalt
None
<PAGE> 1
Exhibit 99.2
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (the "AGREEMENT") is dated as of
December 12, 1996 by and between Phillip L. Friedman (the "SELLER"), having an
address at 12 Laird Road, Middletown, New Jersey 07748, and Kirtland Capital
Partners II, L.P. (the "Purchaser"), an Ohio limited partnership, having an
address at 2550 SOM Center Road, Suite 150, Willoughby Hills, Ohio 44094 -
Attention: Raymond A. Lancaster:
W I T N E S S E T H:
--------------------
WHEREAS, the Seller owns an aggregate of 496,666 shares of Common
Stock, $.O1 par value of PVC Container Corporation's issued and outstanding
Common Stock ("PVC"); and
The Purchaser and the Seller have agreed on the terms upon which the
Seller shall sell 100,000 shares of the Common Stock of PVC (the "PURCHASED
SHARES") and Purchaser shall purchase the Purchased Shares.
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants contained herein, the parties hereto agree as follows:
1. PURCHASE AND SALE. Subject to the terms, provisions and conditions
contained in this Agreement, the Seller agrees to sell, assign, transfer and
deliver to Purchaser at the Closing and Purchaser agrees to purchase the
Purchased Shares.
2. CONSIDERATION. In consideration for the Purchased Shares, the
Purchaser shall pay to the Seller the aggregate principal sum of $400,000 (the
"PURCHASE
<PAGE> 2
PRICE"). Such Purchase Price shall be payable subject to paragraph 3 hereof to
the Seller on January 3, 1997 by wiring the Purchase Price to the Seller's
account at:
Summit Bank
---------------------------------
Bank
977104737
---------------------------------
Acct. No.
Hackensack, New Jersey
---------------------------------
Address of Bank
021202162
---------------------------------
ABA Routing No. of Bank
3. CLOSING. The closing of the transactions contemplated hereby
("Closing") shall occur subject to and only in the event of the closing of a
transaction by and among the Purchaser, PVC and Rimer Anstalt pursuant to the
terms and conditions of a Stock Purchase Agreement dated December 3, 1996 among
the Purchaser, PVC and Rimer Anstalt.
4. DOCUMENTS DELIVERED AT CLOSING. At the Closing, the Seller will
deliver, or cause to be delivered to Purchaser a certificate or certificates
representing the Purchased Shares, with all necessary stock transfer tax stamps
attached, duly endorsed or accompanied by stock powers duly executed in blank
and the Purchaser will wire to the Seller's account the Purchase Price as
provided for in paragraph 2 hereof. The Purchaser may, at is option, allocate a
portion of the Purchased Shares to an affiliate thereof.
5. AUTHORITY RELATIVE TO THIS AGREEMENT. Each party hereto represents
to the other that they have full power and authority to execute and deliver this
Agreement and each agreement and instrument executed and/or delivered in
connection herewith and to consummate the transactions contemplated hereby.
-2-
<PAGE> 3
6. TITLE TO PURCHASED SHARES. The Seller covenants and represents to
Purchaser that, he now has, and at the Closing will have good title to the
Purchased Shares free and clear of all pledges, security interests, liens,
charges, encumbrances, equities, claims and options of whatever nature
(collectively, "Liens"). The Seller additionally covenants that he shall take
such further actions as may be necessary (or refrain from the taking of action)
to ensure that at Closing there will be vested in Purchaser good title to the
Purchased Shares free and clear of all Liens.
7. GOVERNING LAW. This Agreement shall be governed by the laws of the
State of Ohio (regardless of the laws that might otherwise govern under
applicable New York principles of conflicts of law).
8. ENTIRE AGREEMENT. This Agreement embodies the entire agreement and
understanding of the parties hereto in respect of the subject matter contained
herein, and this Agreement supersedes all prior agreements and the
understandings between the parties with respect to such subject matter.
9. WAIVER. Waiver by any party of any breach of this Agreement or
failure to exercise any right hereunder shall not be deemed to be a waiver of
any other breach or right. Failure of any party to take action by reason of any
such breach or exercise any such right shall not deprive such party of the right
to take action at any time while such breach or condition giving rise to such
right to continues.
10. ASSIGNMENT. This Agreement shall be binding upon and inure to the
benefit of the respective heirs, executors, administrators, successors and
assigns of the parties hereto.
-3-
<PAGE> 4
11. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, and all of which
together shall constitute one and the same instrument.
12. SPECIFIC PERFORMANCE. The parties hereto agree and declare that
remedies for monetary damages will be inadequate as a remedy for the breach of
any provision of this Agreement and that equitable relief, including specific
performance and injunctive relief, may be used to enforce the provisions of the
Agreement.
13. NOTICES. All notices shall be in writing and shall be deemed to
have been given three days after the registration if sent by registered mail,
postage prepaid, return receipt requested, or upon delivery by courier or upon
transmission by telecopy to the following addresses:
If to Purchaser:
Kirtland Capital Partners II, L.P.
2550 SOM Center Road
Suite 105
Willoughby Hills, Ohio 44094
Attention: Raymond A. Lancaster
Telecopy No. (216) 585-9699
with a copy to:
Jones, Day, Reavis & Pogue
901 Lakeside Avenue
Cleveland, Ohio 44114
Attention: Charles W. Hardin, Jr.
Telecopy No. (216) 579-0212
-4-
<PAGE> 5
If to Seller:
Phillip L. Friedman
12 Laird Road
Middletown, New Jersey 07748
with a copy to:
Baer Marks & Upham LLP
805 Third Avenue
New York, NY 10022-7513
Attention: Herbert S. Meeker
Telecopy No. (212) 802-5941
IN WITNESS WHEREOF, each of the parties hereto have signed this Stock
Purchase Agreement on the date first above written.
/s/ Phillip L. Friedman
------------------------------
Phillip L. Friedman, Seller
Kirtland Capital Partners II, L.P.
by: Kirtland Capital Corporation
Its General Partner
BY: /s/ Michael DeGrandis
----------------------------
Name: Michael DeGrandis
Title: Treasurer
-5-
<PAGE> 1
EXHIBIT 99.3
REGISTRATION RIGHTS AGREEMENT
-----------------------------
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is
entered into this 12th day of December, 1996, by and among Kirtland Capital
Partners II L.P., an Ohio limited partnership ("KCP"), Kirtland Capital Company
II LLC, a Turks and Caicos Islands limited liability company ("KCC"), and PVC
Container Corporation, a Delaware corporation (the "Company").
RECITALS
--------
WHEREAS, KCP, the Company and Rimer Anstalt have entered into
a Stock Purchase Agreement, dated as of December 3, 1996 (the "Stock Purchase
Agreement"), pursuant to which KCP and KCC will, subject to the satisfaction of
various conditions, purchase an aggregate of 4,367,415 shares (the "Purchase
Shares") of common stock, par value $.01 per share of the Company.
WHEREAS, as a condition to the consummation of the
transactions contemplated by the Stock Purchase Agreement, the Company has
agreed to provide Demand Registration Rights and Piggyback Registration Rights
(each as hereinafter defined) to KCP and KCC.
OPERATIVE PROVISIONS
--------------------
NOW, THEREFORE, in consideration of the foregoing and the
mutual covenants and agreements herein contained and intending to be legally
bound, KCP, KCC and the Company hereto hereby agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
-------------------
As used in this Agreement, the following terms shall
have the following meanings:
1.1 "SHARES" shall mean the common stock of the
Company, par value $.01 per share.
1.2 "COVERED SHARES" shall mean, collectively, (i) the
Purchase Shares and any and all equity securities of the Company into which the
Purchase Shares may be converted; (ii) any and all equity securities which are
distributed by the Company to holders of the Purchase Shares by reason of their
ownership of the Purchase Shares; (iii) any and all equity securities received
by holders of the Purchase Shares pursuant to a recapitalization,
reclassification, stock split, merger, consolidation or other business
combination or other similar transaction involving the
<PAGE> 2
Company; and (iv) any other shares of capital stock issued by the Company to the
Shareholders at any time hereafter.
1.3 "DEMAND REGISTRATION RIGHTS" shall mean the rights
of the Shareholders to have a registration statement filed by the Company with
respect to the Covered Shares in accordance with the provisions of Section 3
hereof.
1.4 "DEMANDING SHAREHOLDERS" shall have the meaning
set forth in Section 3.1 hereof.
1.5 "PIGGYBACK REGISTRATION RIGHTS" shall mean the
rights of the Shareholders to have their Covered Shares included in any
registration statement filed by the Company with respect to the sale of equity
or debt securities by the Company or by any other shareholders of the Company in
accordance with the provisions of Section 2 hereof.
1.6 "REGISTRATION PERIOD" shall mean the period
commencing on the date hereof and ending at such time as the Shareholders own
less than 10% of the Covered Shares, PROVIDED, HOWEVER, that, on such date, the
provisions of Rule 144(k) shall be available to the Shareholders in respect of
all of the remaining Covered Shares.
1.7 "SEC" shall mean the Securities and Exchange
Commission.
1.8 "SECURITIES ACT" shall mean the Securities Act of
1933, as amended.
1.9 "SELLING SHAREHOLDERS" when used with respect to a
registration statement, shall mean those Shareholders whose Covered Shares are
included in such registration statement pursuant to an exercise by such
Shareholders of their Piggyback Registration Rights or their Demand Registration
Rights.
1.10 "SHAREHOLDERS" shall mean KCP and KCC, and their
successors and assigns, including any person who acquires the Covered Shares
from any of such persons (or any transferee of such persons), other than the
Covered Shares sold pursuant to the Piggyback and Demand Registration Rights but
in each case only so long as such person holds any Covered Shares.
1.11 "UNDERWRITER(S)" shall mean any one or more
investment banking or brokerage firms to or through whom the Shareholders or the
Company, as the case may be, may offer and sell Shares pursuant to a transaction
requiring the filing of a registration statement under the Securities Act,
including one or more of such firms who shall manage such public offering
through such Underwriters and who are referred to herein as "Managing
Underwriter(s)."
2
<PAGE> 3
ARTICLE II
PIGGYBACK REGISTRATION RIGHTS
-----------------------------
2.1 If, at any time during the Registration Period,
the Company proposes to file a registration statement under the Securities Act
with respect to any proposed public offering by the Company or by any holders of
any class of securities of the Company, the Company shall, not later than 60
days prior to the proposed date of filing of such registration statement with
the SEC under the Securities Act, give written notice of the proposed filing to
each of the Shareholders, which notice shall describe in detail the proposed
registration and distribution (including those jurisdictions where registration
under the securities or blue sky laws is intended). During the Registration
Period, each Shareholder may elect, by written notice to the Company (which
notice shall specify the aggregate number of the Covered Shares proposed to be
offered and sold by such Shareholder pursuant to such registration statement,
the identity of the proposed seller thereof, and a general description of the
manner in which such person intends to offer and sell such Shares) given at
least 30 days before the registration statement's anticipated effective date, to
have any or all of the Covered Shares owned by it included in such registration
statement, and the Company shall include such Covered Shares in such
registration statement. If the Managing Underwriter(s) or the Underwriters (in
the case of an underwritten registration) should reasonably object to the
exercise of the Piggyback Registration Rights with respect to such registration
statement, then in the discretion of the Company, either:
(i) the Covered Shares owned by the Selling
Shareholders shall nevertheless be included in such registration statement
subject to the condition that the Selling Shareholders may not offer or sell
their Covered Shares included therein for a period of at least 90 days after the
initial effective date of such registration statement, whereupon the Company
shall be obligated to file one or more post-effective amendments to such
registration statement to permit the lawful offer and sale of such Covered
Shares for a reasonable period thereafter; or
(ii) if the Company, upon insistence of the
Underwriter, should reasonably determine that the inclusion of such Covered
Shares, notwithstanding the provisions of the preceding clause (i), would
materially adversely affect the offering contemplated in such registration
statement, and based on such determination recommends inclusion in such
registration statement of fewer or none of the Covered Shares owned by the
Shareholders, then the number of the Covered Shares of the Shareholders included
in such registration statement shall be reduced pro-rata (based upon the number
of Covered Shares requested to be included in the registration), if the Company
recommends the inclusion of fewer Shares; PROVIDED, HOWEVER, that
3
<PAGE> 4
if securities are being offered for the account of other persons or entities as
well as the Company, such reduction shall not represent a greater fraction of
the number of securities intended to be offered by holders of the Covered Shares
than the fraction of similar reductions imposed on such other persons or
entities (other than the Company); PROVIDED ALSO that the Company shall register
those Covered Shares excluded from the offering on a Form S-3 or any similar
short form registration statement then in effect on behalf of the Shareholders
at the request of the Shareholders 90 days after the completion of the
underwritten offering.
2.2 Unless otherwise required by law, rule or
regulation, if the Covered Shares owned by the Shareholders who have made the
election provided in Section 2.1 are included in such registration statement,
the Company shall bear and pay all fees, costs, and expenses incident to such
inclusion, including, without limitation, registration fees, blue sky
qualification fees and expenses, exchange listing fees and expenses, legal fees
and expenses (including the legal fees and expenses of one law firm selected by
the Shareholders), printing costs and costs of any special audits or accounting
fees, but excluding the Selling Shareholder's pro rata share of underwriting
discounts and commissions with respect to its Covered Shares included therein.
2.3 Once the registration process has been commenced,
the Company shall complete the registration process. The Company shall take all
necessary action (including, if required, the filing of any supplements or
post-effective amendments to such registration statement) to keep such
registration statement effective for one year after it first becomes effective.
2.4 The Shareholders shall have the right to exercise
their Piggyback Registration Rights pursuant to the provisions of this Section 2
on any number of occasions that the Company shall determine to file any
registration statement.
2.5 The Piggyback Registration Rights granted pursuant
to this Section 2 shall apply to any registration statement except such rights
shall not apply to (a) a registration relating solely to employee stock option,
purchase or other employee plans, or (b) a registration on Form S-4.
ARTICLE III
DEMAND REGISTRATION RIGHTS
--------------------------
3.1 In addition to, and not in lieu of, the Piggyback
Registration Rights set forth under Section 2, at any time during the
Registration Period the Shareholders may deliver to the Company a written
request (a "Demand Registration Request") that the Company register any or all
of the Covered
4
<PAGE> 5
Shares owned by such Demanding Shareholders (as hereinafter defined). The
requisite Shareholders making such demand are hereinafter referred to from time
to time as the "Demanding Shareholders." The Company shall, as soon as
practicable following the Demand Registration Request, prepare and file a
registration statement (on the then appropriate form or, if more than one form
is available, on the appropriate form selected by the Shareholders) with the SEC
under the Securities Act, covering such number of the Covered Shares as the
Demanding Shareholders request to be included in such registration statement and
to take all necessary steps to have such Covered Shares qualified for sale under
state securities or blue sky laws. Further, the Company shall use its best
efforts to have such registration statement declared effective by the SEC
(within the meaning of the Securities Act) as soon as practicable thereafter and
shall take all necessary action (including, if required, the filing of any
supplements or post-effective amendments to such registration statement) to keep
such registration statement effective to permit the lawful sale of such Covered
Shares included thereunder for the period set forth in Section 5 hereof,
subject, however, to the further terms and conditions set forth in Sections 3.3,
3.4, 3.5, 3.6, 3.7 and 3.8 hereof.
3.2 No later than 10 days after the receipt of the
Demand Registration Request, the Company shall notify all the Shareholders who
have not joined in such request of the proposed filing, and such Shareholders
may, if they desire to sell any of the Covered Shares owned by them, by notice
in writing to the Company given within 30 days after receipt of such notice from
the Company, elect to have all or any portion of their Covered Shares included
in the registration statement.
3.3 The Shareholders, in the aggregate, may exercise
the Demand Registration Rights in this Section 3 three times.
3.4 In the event that preparation of a registration
statement is commenced by the Company in response to the exercise by the
Demanding Shareholders of the Demand Registration Right, but such registration
statement is not filed with the SEC, either at the instance or request of the
Company or at the request of the Demanding Shareholders for any reason, the
Demanding Shareholders shall not be deemed to have exercised the Demand
Registration Right pursuant to this Section 3.
3.5 In the event that any registration statement filed
by the Company with the SEC pursuant to the provisions of this Section 3 is
withdrawn prior to the completion of the sale or other disposition of the
Covered Shares included thereunder, then the following provisions, whichever
applicable, shall govern:
(a) If such withdrawal is effected at the
instance or upon the request of the Company for any reason other
5
<PAGE> 6
than the failure of all of the Demanding Shareholders to comply with their
obligations hereunder with respect to such registration, then the filing thereof
by the Company shall be excluded in determining whether the Shareholders have
exercised any of their Demand Registration Rights hereunder with respect to the
filing of such registration statement.
(b) If such withdrawal is effected at the
instance or upon the request of the Demanding Shareholders, then the filing
thereof by the Company shall be deemed an exercise of the Demand Registration
Right with respect to the filing of such registration statement.
3.6 The Company shall bear and pay all fees, costs and
expenses incident to such registration statement and incident to keeping it
effective and in compliance with all federal and state securities laws, rules
and regulations for the period set forth in Section 5 hereof (including, without
limitation, registration fees, blue sky qualification fees and expenses,
exchange listing fees and expenses, legal fees and expenses (including the legal
fees and expenses of one law firm selected by the Selling Shareholders),
printing costs, costs of any special audits or accounting fees), but excluding
the Selling Shareholder's pro rata share of underwriting discounts and
commissions with respect to its Covered Shares included therein. The Selling
Shareholders shall have the right to select the Underwriter and selling agents
in connection with such registration.
3.7 In the event of the exercise by the Shareholders
of their Demand Registration Right, if the Company after receipt of the Demand
Registration Request determines to include other securities of the Company for
offer and sale by the Company, for its own account, in the registration
statement to be filed pursuant to the exercise by the Shareholders of their
Demand Registration Right, then the filing of such registration statement by the
Company with the SEC shall be deemed an exercise by the Shareholders of their
Piggyback Registration Rights under Section 2 of this Agreement and not an
exercise of their Demand Registration Right under this Section 3.
3.8 Whenever a decision or election is required to be
made hereunder by the Demanding Shareholders or the Selling Shareholders, such
decision or election shall be made by a majority vote of the Covered Shares
owned by such Demanding Shareholders or the Selling Shareholders, as the case
may be.
ARTICLE IV
INFORMATION TO BE FURNISHED
---------------------------
In the event any of the Covered Shares are to be
included in a registration statement under Section 2 or 3, the
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<PAGE> 7
Selling Shareholders and the Company shall furnish the following information and
documents:
4.1 The Selling Shareholders will furnish to the
Company all information required by the Securities Act to be furnished by
sellers of securities for inclusion in the registration statement, together with
all such information that the Selling Shareholders have or can reasonably obtain
and that may reasonably be required by the Company in order to have such
registration statement become effective and such Covered Shares qualified for
sale under applicable state securities laws.
4.2 The Company, before filing a registration
statement, amendment or supplement thereto, shall furnish, within a reasonable
time before filing, copies of such documents to legal counsel selected by the
Selling Shareholders. In addition, the Company shall make available for
inspection by any Selling Shareholder or by any Underwriter, attorney or other
agent of any Selling Shareholder or Underwriter all information requested by
such persons.
4.3 The Company shall promptly notify each
Selling Shareholder of the occurrence of any event which renders any prospectus
then being circulated among prospective purchasers misleading because such
prospectus contains an untrue statement of a material fact or omits to state a
material fact necessary to make the statements made, in light of the
circumstances under which they were made, not misleading, and the Company will
amend the prospectus so that it does not contain any material misstatements or
omissions and deliver the number of copies of such amendments to each Selling
Shareholder as each Selling Shareholder may require.
4.4 The Company shall obtain all legal opinions,
auditors' consents, comfort letters and expert cooperation necessary or
desirable by the Shareholders to complete the registration process.
4.5 The Company shall, at the Shareholders' or
the Underwriter's request, participate in a road show or similar marketing
efforts to further the registration process.
4.6 The Company shall, at the Underwriter's
request, include in a Form S-3 registration statement such information as the
Underwriter reasonably requests for marketing reasons, whether or not such
information is required to be included.
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<PAGE> 8
ARTICLE V
REGISTRATION TO BE KEPT EFFECTIVE
---------------------------------
5.1 In connection with any registration of the Covered
Shares pursuant to this Agreement, the Company shall, at its sole expense, keep
effective and maintain such registration and any related qualifications of the
Covered Shares under state securities laws for such period as may be necessary
for the Selling Shareholders, the Underwriters and selling agents to dispose of
such shares, from time to time to amend or supplement the prospectus used in
connection therewith to the extent necessary to comply with applicable laws, and
to furnish to such Selling Shareholders such number of copies of the
registration statement, the prospectus constituting a part thereof, and any
amendment or supplement thereto as such Selling Shareholders request in order to
facilitate the disposition of the registered Covered Shares.
ARTICLE VI
CONDITIONS TO THE COMPANY'S OBLIGATIONS
---------------------------------------
6.1 The obligations of the Company to cause the
Covered Shares owned by the Shareholders to be registered under the Act are
subject to each of the following limitations, conditions and qualifications:
(a) The Company may require, as a condition to
fulfilling its obligations to register the Covered Shares under Sections 2 or 3
hereof, that the Shareholders execute reasonable and customary indemnification
agreements for the benefit of the Underwriters of the registration; PROVIDED,
HOWEVER, that a Shareholder may not be required as such a condition to indemnify
the Underwriters except with respect to information relating to such Shareholder
furnished by such Shareholder for use in such registration statement.
(b) The Company shall not be required to fulfill
any registration obligations under this Agreement if the Company provides the
Shareholders with an opinion of counsel acceptable to the Shareholders stating
that the Shareholders are free to sell in the manner proposed by them the
Covered Shares that they desired to register without registering such Covered
Shares.
ARTICLE VII
EXCHANGE LISTING
----------------
7.1 In the event any Covered Shares are included
in a registration statement under Section 2 or 3 hereof, the Company shall use
its best efforts to cause all such shares to be
8
<PAGE> 9
listed on any exchange or admitted to trading on the NASDAQ Small Capital Market
where the Shares of the Company are then listed or traded.
ARTICLE VIII
REGISTRATION UNDER STATE SECURITIES LAWS
----------------------------------------
8.1 The Company shall use its best efforts to register
or qualify any Covered Shares included in a registration statement pursuant to
Section 2 or 3 hereof under state "blue sky" or similar securities laws in such
jurisdictions as the Selling Shareholders reasonably request and to take such
other action as may be reasonably necessary to enable the Selling Shareholders
to sell their Covered Shares in the jurisdiction where such registration or
qualification was made, PROVIDED, HOWEVER, that the Company will not be required
to qualify to do business in any jurisdiction in which it is not so qualified or
to execute a general consent to service of process in any jurisdiction in which
it has not executed such a consent.
ARTICLE IX
INDEMNIFICATION
---------------
9.1 The Company will indemnify and hold each Selling
Shareholder, its officers, directors and agents (including sales agents and the
Underwriters) and each person, if any, who controls (within the meaning of the
Securities Act or the Securities Exchange Act of 1934, as amended (the "Exchange
Act")) the Selling Shareholder or any of the foregoing, harmless to the maximum
extent permitted by law, from and against any loss, claim, liability, damage or
expense (including attorneys' fees) resulting from a claim that any registration
statement, prospectus or amendment thereof or supplement thereto, which includes
the Covered Shares to be sold by such Selling Shareholder, contains a material
misstatement or omission, unless such claim is based upon information furnished
by and with respect to such Selling Shareholder in writing for use in the
registration statement or the prospectus; and each such Selling Shareholder will
indemnify and hold harmless the Company, its directors, officers and agents and
each person, if any, who controls (within the meaning of the Securities Act or
the Exchange Act) the Company against any loss, claim, liability, damage or
expense (including attorneys' fees) resulting from any such claim relating to
information furnished in writing by or on behalf of such Selling Shareholder for
use in the registration statement or prospectus, PROVIDED, HOWEVER, that a
Selling Shareholder's liability under this Section 9 with respect to a
registration statement shall be limited to the total proceeds (less commissions)
from the sale of such Selling Shareholder's Covered Shares included in such
registration statement.
9
<PAGE> 10
9.2 Promptly after receipt by an indemnified party
under this Section 9 of notice of the commencement of any action, such
indemnified party will, if a claim in respect thereof is to be made against the
indemnifying party under this Section 9, notify the indemnifying party in
writing of the commencement thereof; but the failure to so notify the
indemnifying party will not relieve it from any liability which it may have to
any indemnified party under this Section 9 or otherwise to the extent such
failure did not materially prejudice the indemnifying party. In case any such
action is brought against any indemnified party, and it notifies the
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate therein, and to the extent that it may elect by written
notice delivered to the indemnified party promptly after receiving the aforesaid
notice from such indemnified party, to assume the defense thereof, with counsel
reasonably satisfactory to such indemnified party; PROVIDED, HOWEVER, if the
defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there exists a conflict of interest between the indemnifying party and any
indemnified party or that there may be legal defenses available to it and/or
other indemnified parties which are different from or additional to, and
inconsistent or in conflict with, those available to the indemnifying party, the
indemnified party or parties shall have the right to select separate counsel to
assert such legal defenses and to otherwise participate in the defense of such
action on behalf of such indemnified party or parties. Upon receipt of notice
from the indemnifying party to such indemnified party of its election so to
assume the defense of such action and approval by the indemnified party of
counsel, the indemnifying party will not be liable to such indemnified party
under this Section 9 for any legal or other expenses subsequently incurred by
such indemnified party in connection with the defense of thereof unless (i) the
indemnified party shall have employed separate counsel in accordance with the
provisions of the preceding sentence, (ii) the indemnifying party shall not have
employed counsel reasonably satisfactory to the indemnified party to represent
the indemnified party within a reasonable time after notice of commencement of
the action, or (iii) the indemnifying party has authorized the employment of
counsel for the indemnified party at the expense of the indemnifying party; and
except that, if clause (i) or (iii) is applicable, such liability shall be only
in respect of the counsel referred to in such clause (i) or (iii). No settlement
of an action against any party under this Section 9 shall bind the other party
unless such other party agrees in writing to the terms of such settlement (which
agreement will not be unreasonably withheld).
9.3 The obligation of the indemnifying party to
indemnify the indemnified party under this Section 9 shall, in each case, be in
addition to any liability which the indemnifying party may otherwise have
hereunder or otherwise at law or in equity.
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<PAGE> 11
9.4 If the indemnification provided for in this
Section 9 from the indemnifying party is applicable in accordance with its terms
but for any reason is held to be unavailable to an indemnified party hereunder
in respect of any losses, claims, damages, liabilities or expenses referred to
therein, then the indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages, liabilities or expenses in such
proportion as is appropriate to reflect the relative faults of the indemnifying
party and indemnified party in connection with the actions which resulted in
such losses, claims, damages, liabilities or expenses, as well as any other
relevant equitable considerations. The relative faults of such indemnifying
party and indemnified party shall be determined by reference to, among other
things, whether any action in question, including any untrue or alleged untrue
statement of a material fact has been made by, or relates to information
supplied by, such indemnifying party or indemnified party, and the parties'
relevant intent, knowledge, access to information and opportunity to correct or
prevent such action. The amount paid or payable by a party as a result of the
losses, claims, damages, liabilities and expenses referred to above shall be
deemed to include, subject to the limitations set forth in Sections 9.1 and 9.2
hereof, any legal or other fees or expenses reasonably incurred by such party in
connection with any investigation or proceeding.
The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 9.4 were determined by PRO
RATA allocation or by any other method of allocation which does not take account
of the equitable considerations referred to in the immediately preceding
paragraph. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person.
ARTICLE X
RULE 144
--------
10.1 The Company covenants that it shall file any and
all reports required to be filed by it under the Exchange Act and the rules and
regulations adopted by the SEC thereunder, and that it shall take such further
action as any holder of the Covered Shares may request, all to the extent
required from time to time to enable such holder to sell the Covered Shares
without registration under the Securities Act within the limitation of the
exemptions provided by (a) Rule 144 under the Securities Act, as such rule may
be amended from time to time, or (b) any similar rule or regulation hereafter
adopted by the SEC. The Company shall, upon the request of any holder of the
Covered Shares, deliver to such holder a written statement as to whether it has
complied with such requirements.
11
<PAGE> 12
ARTICLE XI
MISCELLANEOUS
-------------
11.1 ENTIRE AGREEMENT AND AMENDMENT. This Agreement
embodies the entire understanding of KCC, KCP and the Company, and there are no
other agreements or understandings, written or oral, in effect among KCC, KCP
and the Company, relating to the subject matter hereof. This Agreement may be
amended or modified only by an instrument signed by KCC, KCP and the Company.
11.2 WAIVER. Any failure of KCC, KCP or the Company
hereto to comply with any of its obligations, agreements, conditions or
covenants herein contained may be waived only with the prior written consent of
the party which is entitled to the benefits thereof.
11.3 SURVIVAL OF AGREEMENTS. All agreements,
representations and warranties contained herein or made in writing by or on
behalf of the Company in connection with the transactions contemplated hereby
shall survive the execution and delivery of this Agreement.
11.4 BINDING EFFECT AND BENEFITS. This Agreement shall
be binding upon and shall inure to the benefit of KCC, KCP and the Company and
their respective successors and assigns.
11.5 SEVERABILITY. Any term or provision of this
Agreement that is invalid or unenforceable in any situation in any jurisdiction
shall not affect the validity or enforceability of the remaining terms and
provisions hereof or the validity or enforceability of the offending term or
provision in any other situation or in any other jurisdiction.
11.6 NOTICES. All notices shall be in writing and
shall be deemed to have been given three days after the registration if sent by
registered mail, postage prepaid, return receipt requested, or upon delivery by
a nationally recognized overnight courier service or upon transmission by
telecopy to the following addresses:
If to KCP or KCC:
Kirtland Capital Partners II L.P.
2550 SOM Center Road
Suite 105
Willoughby Hills, Ohio 44094
Attention: Raymond A. Lancaster
Telecopy No. (216) 585-9699
with a copy to:
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<PAGE> 13
Jones, Day, Reavis & Pogue
901 Lakeside Avenue
Cleveland, Ohio 44114
Attention: Charles W. Hardin, Jr.
Telecopy No. (216) 579-0212
If to the Company:
PVC Container Corporation
401 Industrial Way West
Eatontown, New Jersey 07724
Attention: Phillip L. Friedman
Telecopy No. (908) 542-7706
with a copy to:
Baer Marks & Upham LLP
805 Third Avenue
New York, NY 10022-7513
Attention: Herbert S. Meeker
Telecopy No. (212) 702-5941
11.7 GOVERNING LAW. This Agreement shall be governed
by and construed in accordance with the internal laws of the State of Ohio
without regard to the conflicts of law principles thereof.
11.8 ASSIGNMENT. Except as otherwise provided in
Section 1.10 hereof, the rights of KCP, KCC and the Company hereunder may not be
assigned without the prior written consent of the other parties hereto.
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<PAGE> 14
IN WITNESS WHEREOF, KCP, KCC and the Company have duly
executed this Agreement as of the day and year first above written.
KIRTLAND CAPITAL PARTNERS II L.P.
By: KIRTLAND CAPITAL CORPORATION
Its General Partner
By: /s/ Raymond A. Lancaster
----------------------------------
Name: Raymond A. Lancaster
Title: Executive Vice President
KIRTLAND CAPITAL COMPANY II LLC
By: EVERGREEN PARTNERS II L.P.
Its Managing Member
By: /s/ Raymond A. Lancaster
----------------------------------
Name: Raymond A. Lancaster
Title:
PVC CONTAINER CORPORATION
By: /s/ Phillip L. Friedman
----------------------------------
Name: Phillip L. Friedman
Title:
14
<PAGE> 1
EXHIBIT 99.4
CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT (this "Agreement") is made as of
December 12th, 1996, by and between PVC Container Corporation, a Delaware
corporation ("Company"), and Kirtland Capital Corporation, an Ohio corporation
("KCC").
RECITALS
--------
WHEREAS, Kirtland Capital Partners II L.P., the Company and
Rimer Anstalt, have entered into a Stock Purchase Agreement, dated as of
December 3, 1996 (the "Stock Purchase Agreement"), pursuant to which KCP will,
subject to the satisfaction of various conditions, purchase 4,367,415 shares of
common stock, par value $.01 per share, of the Company (the "Common Stock").
WHEREAS, as a condition to the consummation of the
transactions contemplated by the Stock Purchase Agreement, KCC has agreed to
provide consulting services to the Company.
AGREEMENTS
----------
NOW, THEREFORE, in consideration of the mutual covenants in
this Agreement, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
1. TERM OF SERVICE. During the Term (as hereinafter defined), KCC shall
provide such consulting services to the Company from time to time as may be
agreed upon by the Company and KCC. This Agreement shall remain in full force
and effect for a period (the "Term") beginning on the date hereof and ending on
the later of (a) the date that Kirtland Capital Partners II L.P. or any
Affiliate (as defined in the Stock Purchase Agreement) or partner thereof shall
cease to own, directly or indirectly, at least 40% of the issued and outstanding
shares of Common Stock, and (b) the Board of Directors of the Company (the
"Board") shall adopt a resolution approved by a majority of the entire Board
authorizing the termination of this Agreement.
2. COMPENSATION. (a) During the Term, the Company shall pay KCC an
annual consulting fee equal to Two Hundred Fifty Thousand Dollars ($250,000.00)
(the "Consulting Fee") in accordance with the terms of Section 2(b) of this
Agreement.
<PAGE> 2
(b) The Company shall pay the Consulting Fee on a monthly
basis in arrears by the 10th day following the end of each calendar month
beginning February 10, 1997.
3. MISCELLANEOUS.
(a) ENTIRE AGREEMENT AND AMENDMENT. This Agreement embodies
the entire understanding of KCC and the Company, and there are no other
agreements or understandings, written or oral, in effect between KCC and the
Company, relating to the subject matter hereof. This Agreement may be amended or
modified only by an instrument signed by KCC and the Company.
(b) GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of Ohio without
regard to the conflicts of law principles thereof.
(c) WAIVERS. Any waiver by either KCC or the Company of any
violation of, breach of or default under any provision of this Agreement by the
other party hereto shall not be construed as, or constitute, a continuing waiver
of such provision, or waiver of any other violation of, breach of or default
under any other provision of this Agreement.
(d) COUNTERPARTS. This Agreement may be executed
simultaneously in two or more counterparts, each of which shall be deemed an
original but all of which together shall constitute one and the same instrument.
(e) ASSIGNMENT. The rights and obligations of KCC and the
Company hereunder shall not be assigned.
IN WITNESS WHEREOF, each of KCC and the Company has duly
executed and delivered this Agreement as of the date first written above.
PVC CONTAINER CORPORATION
By: /s/ Phillip Friedman
------------------------------
Name: Phillip Friedman
Title: President
KIRTLAND CAPITAL CORPORATION
By: /s/ Raymond A. Lancaster
------------------------------
Name: Raymond A. Lancaster
Title: President
2
