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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 1)*
PVC Container Corporation
- -------------------------------------------------------------------------------
(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 Number)
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)
January 6, 1997
-------------------------------------------------
(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.
- ----------------
*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 2 OF 4 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 4,467,415
NUMBER OF --------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY Common Stock 0
EACH --------------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON WITH
Common Stock 4,467,415
--------------------------------------------------
10 SHARED DISPOSITIVE POWER
Common Stock 0
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
Common Stock 4,467,415
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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)
63.77 %
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14 TYPE OF REPORTING PERSON*
CO
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
CUSIP NO. 458134 10 3
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SCHEDULE 13D
The Schedule 13D filed on December 23, 1996 (the "Schedule 13D") on
behalf of Kirtland Capital Corporation ("Kirtland") is hereby amended as
follows:
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
-------------------------------------------------
Item 3 of the Schedule 13D is amended by inserting a new second
paragraph in such Item to read as follows:
The aggregate amount of funds required by Kirtland to purchase 100,000
shares of Common Stock from the previous holder, Phillip Friedman, the
current President of the Company, was $400,000. $368,060 of the funds
used to purchase the Common Stock was obtained from KCP II, and $31,940
of the funds used to purchase the Common Stock was obtained from KCC
II. No part of such purchase price for the Common Stock consisted of
borrowed funds.
ITEM 4. PURPOSE OF TRANSACTION
----------------------
Item 4 of the Schedule 13D is amended by deleting the second sentence
of the third paragraph thereof and inserting in its stead the following:
On January 6, 1997, Kirtland purchased 100,000 shares of Common Stock
from Phillip Friedman.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
-------------------------------------
The first paragraph of Item 5 of the Schedule 13D is amended by
deleting it in its entirety and inserting in its stead the following:
(a) - (b) At the date hereof, Kirtland has the sole power to vote and
dispose of 4,467,415 shares of the Common Stock. The Common Stock held
by Kirtland represents approximately 63.77% of the 7,004,705 shares of
Common Stock outstanding as of December 3, 1996, based on information
provided by the Company.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
---------------------------------------------------------------------
TO SECURITIES OF THE ISSUER.
- ----------------------------
The first paragraph of Item 6 of the Schedule 13D is amended by adding
the following sentence at the end of that paragraph:
The Registration Rights Agreement has been corrected to include the
shares described in this Amendment No. 1. A copy of the corrected
version of the Registration Rights Agreement is filed as an exhibit
hereto and incorporated herein by reference.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
--------------------------------
EXHIBIT 99.3 -- Registration Rights Agreement
Page 3 of 4 Pages
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After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth herein is true, complete and correct.
Date: January 13, 1997 KIRTLAND CAPITAL CORPORATION
By: /s/ Raymond A. Lancaster
------------------------
Name: Raymond A. Lancaster
Title: Executive Vice President
Page 4 of 4 Pages
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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
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Company; (iv) any other shares of capital stock issued by the Company to the
Shareholders at any time hereafter; and (v) all of the Shares acquired by KCP
pursuant to that certain Stock Purchase Agreement, dated as of December 12,
1996, by and between KCP and Phillip Friedman.
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
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such Underwriters and who are referred to herein as "Managing Underwriter(s)."
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
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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 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.
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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 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.
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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 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
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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 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
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information as the Underwriter reasonably requests for marketing reasons,
whether or not such information is required to be included.
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.
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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 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
9
<PAGE> 10
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.
9.2 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
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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.
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
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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
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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.
ARTICLE XI
MISCELLANEOUS
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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:
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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 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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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: KIRTLAND CAPITAL CORPORATION
Its General Partner
By: /s/ RAYMOND A. LANCASTER
--------------------------------
Name: Raymond A. Lancaster
Title: Executive Vice President
PVC CONTAINER CORPORATION
By: /s/ PHILLIP L. FRIEDMAN
-------------------------------
Name: Phillip L. Friedman
Title: President
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