EX 2.2

 

 

 

 

 

 

 

 

ASSET PURCHASE AGREEMENT

BY AND BETWEEN

CORRFLEX GRAPHICS, LLC

AND

CHESAPEAKE DISPLAY AND PACKAGING COMPANY

 

 

 

 

 

 

 

 

 

April 20, 2001

TABLE OF CONTENTS

ARTICLE I DEFINITIONS
Section 1.1. Accounts. 

Section 1.2. Affiliate. 

Section 1.3. Agreement. 

Section 1.4. Assets. 

Section 1.5. Assignment and Assumption Agreement. 

Section 1.6. Assumed Liabilities. 

Section 1.7. Bill of Sale. 

Section 1.8. Books and Records. 

Section 1.9. Business Day. 

Section 1.10. Buyer. 

Section 1.11. Buyer’s Consents. 

Section 1.12. Buyer’s Plan. 

Section 1.13. Closing. 

Section 1.14. Closing Date. 

Section 1.15. Code. 

Section 1.16. Continuing Employee. 

Section 1.17. Contracts. 

Section 1.18. Effective Time of Closing. 

Section 1.19. Employee. 

Section 1.20. Employee Benefit Plans. 

Section 1.21. Environmental Laws. 

Section 1.22. Environmental Permits. 

Section 1.23. ERISA. 

Section 1.24. Equipment. 

Section 1.25. Excluded Assets. 

Section 1.26. Excluded Intangibles. 

Section 1.27. Final Adjusted Working Capital. 

Section 1.28. Final Purchase Price. 

Section 1.29. Final Statement of Adjusted Working Capital. 

Section 1.30. Financial Statements. 

Section 1.31. GAAP. 

Section 1.32. Governmental Authority. 

Section 1.33. Hazardous Substance. 

Section 1.34. HSR Act. 

Section 1.35. Initial Adjusted Working Capital. 

Section 1.36. Initial Purchase Price. 

Section 1.37. Initial Statement of Adjusted Working Capital. 

Section 1.38. Intangibles. 

Section 1.39. Interim Financial Statements. 

Section 1.40. Inventory. 

Section 1.41. Knowledge of Seller. 

Section 1.42. Law. 

Section 1.43. Liens. 

Section 1.44. Material Adverse Effect. 

Section 1.45. Opinion of Buyer’s Counsel. 

Section 1.46. Opinion of Seller’s Counsel. 

Section 1.47. Parent. 

Section 1.48. Parent Guaranty and Non-Competition Agreement. 

Section 1.49. Permits. 

Section 1.50. Permitted Liens. 

Section 1.51. Person. 

Section 1.52. Plant Sites. 

Section 1.53. Real Property. 

Section 1.54. Seller. 

Section 1.55. Seller’s Consents. 

Section 1.56. Seller’s Plan. 

Section 1.57. Software. 

Section 1.58. Special Accounting Principles. 

Section 1.59. Tax or Taxes. 

Section 1.60. Tax Return. 

Section 1.61. Transition Services Agreement. 

Section 1.62. U.S. Display Business. 

Section 1.63. WARN. 

ARTICLE II PURCHASE AND SALE 
Section 2.1. Purchase and Sale; Assignment and Assumption. 

Section 2.2. Payment of the Initial Purchase Price. 

Section 2.3. Final Statement of Adjusted Working Capital; Settlement of Final          Purchase Price. 

Section 2.4. Deliveries at Closing. 

Section 2.5. No Assumption of Other Liabilities. 

Section 2.6. Rebates, Programs and Allowances. 

ARTICLE III REPRESENTATIONS AND WARRANTIES OF SELLER 
Section 3.1. Organization of Seller. 

Section 3.2. Authorization; Enforceability. 

Section 3.3. No Violation or Conflict by Seller. 

Section 3.4. Title to and Sufficiency of Assets. 

Section 3.5. No Litigation. 

Section 3.6. Inventory. 

Section 3.7. Contracts. 

Section 3.8. Accounts. 

Section 3.9. Condition of Equipment and Facilities. 

Section 3.10. Financial Statements; Projections. 

Section 3.11. Compliance with Law. 

Section 3.12. Taxes. 

Section 3.13. Employment Agreements and Benefits. 

Section 3.14. Labor Matters. 

Section 3.15. Intangibles. 

Section 3.16. Fees and Expenses of Brokers and Others. 

Section 3.17. Orders, Commitments and Returns. 

Section 3.18. No Material Adverse Change. 

Section 3.19. Environmental Conditions. 

Section 3.20. Related Party Transactions. 

Section 3.21. Real Property. 

Section 3.22. Customers. 

ARTICLE IV REPRESENTATIONS AND WARRANTIES OF BUYER 
Section 4.1. Organization of Buyer. 

Section 4.2. Authorization; Enforceability. 

Section 4.3. No Violation or Conflict by Buyer. 

Section 4.4. No Litigation. 

Section 4.5. No Broker. 

ARTICLE V CERTAIN MATTERS PENDING THE CLOSING 
Section 5.1. Carry on in Regular Course. 

Section 5.2. Indebtedness. 

Section 5.3. Compensation. 

Section 5.4. Compliance with Law. 

Section 5.5. Access. 

Section 5.6. Cooperation. 

Section 5.7. Publicity. 

Section 5.8. Confidentiality. 

Section 5.9. Environmental Due Diligence. 

Section 5.10. Employment Agreements with Key Employees. 

Section 5.11. Exclusivity. 

Section 5.12. Buyer’s Financing. 

Section 5.13. Interim Financial Statements and Monthly Financial Statements. 

Section 5.14. Post Closing Access and Cooperation. 

ARTICLE VI CONDITIONS PRECEDENT TO THE OBLIGATIONS OF BUYER 
Section 6.1. Compliance with Agreement. 

Section 6.2. Proceedings and Instruments Satisfactory. 

Section 6.3. No Litigation. 

Section 6.4. Representations and Warranties. 

Section 6.5. Antitrust Filings. 

Section 6.6. Seller’s Consents; Material Environmental Permits. 

Section 6.7. Financing. 

Section 6.8. Deliveries at Closing. 

ARTICLE VII CONDITIONS PRECEDENT TO THE OBLIGATIONS OF SELLER 
Section 7.1. Compliance with Agreement. 

Section 7.2. Proceedings and Instruments Satisfactory. 

Section 7.3. No Litigation. 

Section 7.4. Representations and Warranties. 

Section 7.5. Antitrust Filings. 

Section 7.6. Buyer’s Consents. 

Section 7.7. Deliveries at Closing. 

ARTICLE VIII INDEMNITIES AND ADDITIONAL COVENANTS 
Section 8.1. Seller’s Indemnity. 

Section 8.2. Buyer’s Indemnity. 

Section 8.3. Arbitration of Indemnity Claims. 

Section 8.4. Bulk Sales Compliance. 

Section 8.5. Additional Instruments. 

Section 8.6. Employment Matters. 

Section 8.7. Allocation of Purchase Price. 

Section 8.8. Access to Books and Records. 

Section 8.9. Use of Excluded Intangibles. 

Section 8.10. Cinnaminson Facility. 

ARTICLE IX TERMINATION 
Section 9.1. Termination. 

Section 9.2. Rights on Termination; Waiver. 

ARTICLE X MISCELLANEOUS 
Section 10.1. Transfer Taxes and Fees. 

Section 10.2. Entire Agreement; Amendment. 

Section 10.3. Expenses. 

Section 10.4. Governing Law. 

Section 10.5. Assignment. 

Section 10.6. Notices. 

Section 10.7. Counterparts; Headings. 

Section 10.8. Interpretation. 

Section 10.9. Severability. 

Section 10.10. No Reliance. 

Section 10.11. Specific Performance. 
**EXHIBITS**
 

Exhibit 1.5 Assignment and Assumption Agreement

Exhibit 1.6 Assumed Liabilities

Exhibit 1.7 Bill of Sale

Exhibit 1.17 Contracts

Exhibit 1.24 Equipment

Exhibit 1.25 Excluded Assets

Exhibit 1.26 Excluded Intangibles

Exhibit 1.30 Financial Statements

Exhibit 1.37 Initial Statement of Adjusted Working Capital

Exhibit 1.38 Intangibles

Exhibit 1.41 Seller’s Knowledge

Exhibit 1.45 Opinion of Buyer’s Counsel

Exhibit 1.46 Opinion of Seller’s Counsel

Exhibit 1.48 Parent Guaranty and Non-Competition Agreement

Exhibit 1.49 Permits

Exhibit 1.50 Permitted Liens

Exhibit 1.52 Plant Sites

Exhibit 1.53 Real Property

Exhibit 1.58 Special Accounting Principles

Exhibit 1.61 Transition Services Agreement

Exhibit 2.6 Rebates, Programs and Allowances

Exhibit 3.1 Foreign Qualifications

Exhibit 3.3 Seller’s Consents

Exhibit 3.5 Litigation

Exhibit 3.7 Seller’s Contract Consents

Exhibit 3.8 Accounts

Exhibit 3.10 Projections

Exhibit 3.12 Taxes

Exhibit 3.13 Employment and Benefits Agreements

Exhibit 3.14 Labor Matters

Exhibit 3.17 Customer Claims Against Seller

Exhibit 3.18 Material Adverse Change

Exhibit 3.19 Environmental Conditions

Exhibit 3.20 Related Party Transactions

Exhibit 3.22 Customers

Exhibit 4.3 Buyer’s Consents

Exhibit 5.1 Actions not in Regular Course

Exhibit 5.9 Environmental Due Diligence

 
**ASSET PURCHASE AGREEMENT

ASSET PURCHASE AGREEMENT, made as of April 20, 2001, by and between **CORRFLEXGRAPHICS, LLC**, a North Carolina limited liability company, and **CHESAPEAKE DISPLAYAND PACKAGING COMPANY**, an Iowa corporation.
**RECITALS

WHEREAS, Seller owns the Assets, is a party to the Contracts and is subject to theAssumed Liabilities, which Assets, Contracts and Assumed Liabilities are employed bySeller in its U.S. Display Business; and
**WHEREAS, Seller desires to sell the Assets and assign the Contracts and AssumedLiabilities to Buyer, and Buyer desires to purchase the Assets and accept assignment ofthe Contracts and Assumed Liabilities from Seller, all on the terms and subject to theconditions set forth herein; and
**WHEREAS, Parent, the sole shareholder of Seller, desires to unconditionallyguaranty all of Seller’s obligations hereunder.
**NOW, THEREFORE, in consideration of the Recitals and of the mutual covenants,conditions and agreements set forth herein and for other good and valuable consideration,the receipt and sufficiency of which hereby are acknowledged, it hereby is agreed that:-   ARTICLE    I    DEFINITIONS When used in this Agreement, the following terms shall have the meanings specified:-   Section      1.1. Accounts . 
"Accounts" shall mean all accounts receivable, notes receivable, prepaid    expenses and associated rights (including, without limitation, all security deposits,    letters of credit and security documents) arising from the sale of goods and services by    the U.S. Display Business in the ordinary course of business and existing as of the    Effective Time of the Closing.
-  Section 1.2. Affiliate. 
"Affiliate" shall mean, with respect to any Person, any other Person that    directly or indirectly controls, is controlled by or is under common control with such    Person.
- Section 1.3.Agreement. 
"Agreement" shall mean this Asset Purchase Agreement, together with the    Exhibits attached hereto, as the same may be amended from time to time in accordance with    the terms hereof.
-  Section 1.4.Assets. 
"Assets" shall mean all of the tangible and intangible assets owned by Seller    and used in the conduct of the U.S. Display Business as of the Effective Time of Closing,    including, but not limited to, the Accounts, the Equipment owned by Seller, all Real    Property owned by Seller, all Intangibles owned by Seller, the Inventory, the Books and    Records, and all Permits held by Seller that are transferable to Buyer, together with all    goodwill associated with the U.S. Display Business (to the extent such goodwill is not    included in such Intangibles); provided, however, that the term    "Assets" shall exclude the Excluded Assets, the Contracts and those items of    real or personal property leased or licensed pursuant thereto.
-   Section  1.5 . Assignment and Assumption Agreement . 
"Assignment and Assumption Agreement" shall mean the assignment and    assumption agreement, in the form of Exhibit 1.5 attached hereto, to be    executed by Buyer and Seller for the assignment of the Contracts and the Assumed    Liabilities from Seller to Buyer.
-  Section  1.6 . Assumed Liabilities . 
"Assumed Liabilities" shall mean Seller’s "current    liabilities" outstanding as of the Effective Time of Closing, as reflected on the    Final Statement of Adjusted Working Capital, together with all liabilities relating to    periods from and after the Effective Time of Closing under the Contracts and those items    set forth on Exhibit 1.6 attached hereto. 
-     Section  1.7 . Bill      of Sale . 
"Bill of Sale" shall mean the bill of sale with respect to the Assets, to be    executed by Seller in favor of Buyer, in the form of Exhibit 1.7 attached    hereto.
- Section 1.8.Books and Records. 
"Books and Records" shall mean original or true and complete copies of    Seller’s books, records, data and information relating primarily to the U.S. Display    Business, including, without limitation, all customer lists, financial and accounting    records, purchase orders and invoices, sales orders and sales order log books,    correspondence and miscellaneous records with respect to customers and supply sources and    all other general correspondence, records, books and files now or hereafter owned by    Seller and relating primarily to the U.S. Display Business; provided, however,    that Books and Records shall not include books, records or other materials relating (i) to    assets or contracts other than the Assets and Contracts, (ii) to outdated matters without    relevance to the ongoing business of the U.S. Display Business, Buyer’s use following    Closing of the Assets and Contracts, or Buyer’s satisfaction of the Assumed    Liabilities, or (iii) primarily to businesses of Seller other than the U.S. Display    Business; provided further, however, that Seller will provide Buyer access    pursuant to Section 5.5 to any books, records and other materials retained by it    which have relevance to the Assets, Contracts, Assumed Liabilities and the business of the    U.S. Display Business.
- Section  1.9 . Business Day . 
"Business Day" shall mean any day except a Saturday, Sunday or other day on    which commercial banks in Charlotte, North Carolina, are generally authorized to close.
-  Section 1.10.Buyer. 
"Buyer" shall mean CorrFlex Graphics, LLC, a North Carolina limited liability    company.
- Section 1.11.Buyer’s Consents. 
"Buyer’s Consents" shall mean all consents, approvals, certificates and    authorizations required to be obtained by Buyer in connection with the transactions    contemplated herein that are specifically identified on Exhibit 4.3 attached    hereto.
- Section 1.12.Buyer’s Plan. 
"Buyer’s Plan" shall mean one or more defined contribution plans that    are qualified under Section 401(a) of the Code and that are established or designated by    Buyer to accept rollover contributions from Seller’s Plan in accordance with Section    8.7 hereof.
-  Section 1.13.Closing. 
"Closing" shall mean the conference held at 9:00 a.m., local time, on the    Closing Date, at the offices of Robinson, Bradshaw & Hinson, counsel to Buyer, in    Charlotte, North Carolina.
-  Section 1.14.Closing Date. 
"Closing Date" shall mean the second Business Day following satisfaction of    the conditions to Closing set forth in Articles VI and VII hereof, or such    other date as the parties hereto may mutually agree in writing, on which date the Closing    shall occur.
- Section 1.15.Code. 
"Code" shall mean the Internal Revenue Code of 1986, as amended.
- Section 1.16.Continuing Employee. 
"Continuing Employee" shall mean any Employee of the U.S. Display Business    who is offered and accepts employment with Buyer from and after the Effective Time of    Closing.
-    Section  1.17 . Contracts . 
"Contracts" shall mean only those contracts, agreements, leases, licenses,    relationships and commitments that are listed on Exhibit 1.17 attached hereto. 
-  Section 1.18.Effective Time of      Closing. 
"Effective Time of Closing" shall mean 12:01 a.m., local time, on the Closing    Date.
- Section 1.19.Employee. 
"Employee" shall mean any person employed by Seller in its U.S. Display    Business prior to the Effective Time of Closing.
-  Section 1.20.Employee Benefit      Plans. 
"Employee Benefit Plans" shall mean "employee benefit plans" as    defined in Section 3(3) of ERISA and any other plans pursuant to which Seller has any    continuing obligation to provide compensation or other benefits to any present and former    Employee of the U.S. Display Business, or any beneficiary thereof.
-   Section   1.21 . Environmental      Laws . 
"Environmental Laws" shall mean any Laws relating to the protection of    safety, health or the environment, including without limitation Laws relating to    emissions, discharges, releases or threatened releases of pollutants, contaminants,    chemicals, or industrial, toxic or hazardous substances or wastes into the environment    (including without limitation ambient air, surface water, ground water, land surface or    subsurface strata) or otherwise relating to the manufacture, processing, distribution,    use, treatment, storage, disposal, transport or handling of pollutants, contaminates,    chemicals or industrial, toxic or hazardous substances or wastes, and specifically    including the Comprehensive Environmental Response, Compensation, and Liability Act (42    U.S.C.  9601 *et seq.*) ("CERCLA"), the Hazardous Material    Transportation Act (49 U.S.C.  1801 *et seq.*), the Resource Conservation    and Recovery Act (42 U.S.C.  6901 *et seq.*), the Federal Water Pollution    Control Act (33 U.S.C.  1251 *et seq.*), the Clean Air Act (42 U.S.C.  7401    *et seq.*), the Toxic Substances Control Act (15 U.S.C.  2601 *et seq.*),    the Safe Drinking Water Act (42 U.S.C.  300 *et seq.*) and the Occupational    Safety and Health Act (29 U.S.C.  651 *et seq.*), as such laws and regulations    have been or are amended or supplemented at any time prior to the Effective Time of    Closing, and each similar federal, state or local statute, and each rule and regulation    promulgated under such federal, state and local statutes.
- Section 1.22.Environmental Permits. 
"Environmental Permits" shall mean all material environmental licenses,    permits, approvals, authorizations, exemptions, classifications, certificates and    registrations made or held by Seller and necessary or required for the conduct of the U.S.    Display Business as of the Effective Time of Closing.
- Section 1.23.ERISA. 
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as    amended.
-   Section  1.24 . Equipment . 
"Equipment" shall mean all tangible assets (other than Inventory) owned by    Seller, or leased or licensed by Seller pursuant to a Contract, and used in the U.S.    Display Business as of the Effective Time of Closing, including, but not limited to, all    furniture, fixtures, leasehold improvements, machinery, equipment (including computer    hardware and data processing and telecommunications equipment), spare parts, tools and    rolling stock; provided, however, that the term "Equipment" shall    exclude the Excluded Assets. Equipment shall include, without limitation, those items    listed on Exhibit 1.24 attached hereto.
- Section  1.25 . Excluded Assets .    
"Excluded Assets" shall mean, collectively (i) cash and cash equivalents,    (ii) all of the capital stock of Consumer Promotions International, Inc. and Chesapeake    Display and Packaging (Canada) Limited, (iii) all of the membership interest in Color-Box,    LLC owned or held by Seller, (iv) all rights of Seller under those contracts, agreements,    leases, licenses, relationships and contracts that are not included among the Contracts    (including, without limitation, rebates receivable under any paper supply agreements), (v)    the Excluded Intangibles; and (vi) those assets specifically listed on Exhibit 1.25    attached hereto.
-  Section  1.26 . Excluded Intangibles . 
"Excluded Intangibles" shall mean those intangible assets owned, leased,    licensed or otherwise used by Seller that are described on Exhibit 1.26 attached    hereto.
-    Section  1.27 . Final      Adjusted Working Capital . 
"Final Adjusted Working Capital" shall mean an amount equal to "current    assets" minus "current liabilities" as reflected on the Final Statement of    Adjusted Working Capital.
- Section  1.28 . Final      Purchase Price . 
"Final Purchase Price" shall mean the Initial Purchase Price as adjusted    pursuant to Section 2.3 hereof.
-   Section  1.29 . Final Statement of Adjusted Working      Capital . 
"Final Statement of Adjusted Working Capital" shall mean the unaudited    special purpose statement of adjusted working capital of Seller as of the Effective Time    of Closing, to be prepared and delivered in accordance with Section 2.3 hereof.
- Section  1.30 . Financial      Statements . 
"Financial Statements" shall mean the unaudited condensed balance sheet of    the U.S. Display Business as of December 31, 2000, and the unaudited condensed income    statements of the U.S. Display Business for the fiscal years ended December 31, 1998,    1999, and 2000, copies of which are attached hereto as Exhibit 1.30.
- Section  1.31 . GAAP . 
"GAAP" shall mean generally accepted accounting principles as in effect in    the United States as of the date of the subject financial statement.
- Section  1.32 . Governmental      Authority . 
"Governmental Authority" shall mean any federal, state, local or other    governmental authority, or any political subdivision thereof, and any governmental,    judicial, public or statutory instrumentality, tribunal, agency, authority, body or entity    having legal jurisdiction over any matter or Person in question.
- Section  1.33 . Hazardous      Substance . 
"Hazardous Substance" shall mean and include each substance identified or    designated as such under CERCLA, as well as any other substance or material meeting any    one or more of the following criteria: (i) it is or contains a substance designated    as a hazardous waste, hazardous substance, hazardous material, pollutant, contaminant or    toxic substance under any Environmental Law; (ii) it is toxic, reactive, corrosive,    ignitable, infectious, radioactive or otherwise hazardous; or (iii) it is or    contains, without limiting the foregoing, petroleum hydrocarbons.
-  Section 1.34.HSR Act. 
"HSR Act" shall mean the Hart-Scott-Rodino Antitrust Improvements Act of 1976    (15 U.S.C.  18a), as amended.
-    Section 1.35.Initial Adjusted Working Capital. 
"Initial Adjusted Working Capital" shall mean $24.078 million, being the    amount equal to "current assets" minus "current liabilities" as    reflected on the Initial Statement of Adjusted Working Capital.
- Section 1.36.Initial Purchase Price. 
"Initial Purchase Price" shall mean $40.0 million.
-   Section  1.37 . Initial Statement of Adjusted Working      Capital . 
"Initial Statement of Adjusted Working Capital" shall mean the unaudited    special purpose statement of adjusted working capital of Seller as of December 31,    2000, a copy of which is attached hereto as Exhibit 1.37, which statement has    been prepared in accordance with GAAP and in a manner consistent with the past practice of    Seller, except as otherwise required by the Special Accounting Principles.
-  Section  1.38 . Intangibles .    
"Intangibles" shall mean all intangible assets owned or licensed by Seller    and used in the conduct of the U.S. Display Business as of the Effective Time of Closing,    including: all inventions, patents and patent applications; all registered and    unregistered trademarks, service marks, trade dress, logos, trade names and brand names,    and any combination of such names, including all goodwill associated therewith and all    applications, registrations and renewals in connection therewith; all copyrightable works,    all copyrights and all applications, registrations and renewals in connection therewith;    all trade secrets and confidential business information (including ideas, research and    development, know-how, compositions, designs, drawings, specifications, customer and    supplier lists, pricing and cost information and business and market plans and proposals);    all Software; and all other intellectual or industrial property; provided, however,    that the term "Intangibles" shall exclude the Excluded Intangibles. Attached    hereto as Exhibit 1.38 is a list of all material Intangibles.
- Section 1.39.Interim Financial Statements. 
"Interim Financial Statements" shall mean the unaudited condensed income    statement and balance sheet of the U.S. Display Business as of and for the quarter ending    April 1, 2001, to be delivered by Seller to Buyer pursuant to Section 5.13(a)    hereof. 
-  Section 1.40.Inventory. 
"Inventory" shall mean all the inventories of goods owned by Seller and held    for resale by the U.S. Display Business, all work-in-process of the U.S. Display Business,    and all materials and supplies owned by Seller and held for use in the U.S. Display    Business (including, without limitation, all fuel, tools, pallets and packaging    materials), in each case as of the Effective Time of Closing.
-  Section  1.41 . Knowledge of Seller . 
"Knowledge of Seller" shall mean the actual knowledge, after due inquiry, of    any person listed on Exhibit 1.41 attached hereto.
-  Section 1.42.Law. 
"Law" shall mean any (i) law, decree, statute or requirement of any    Governmental Authority that is binding on the U.S. Display Business, and the rules,    regulations and orders promulgated thereunder, and (ii) any judgment, order or award of    any court that is binding on the U.S. Display Business.
-  Section  1.43 . Liens .    
"Liens" shall mean any and all mortgages, deeds of trust, liens,    encumbrances, charges, claims, pledges, security interests or similar impositions, and any    options or rights of first refusal.
- Section 1.44.Material Adverse Effect. 
"Material Adverse Effect" shall mean a material adverse effect on the    business, condition (financial or otherwise), results of operations or assets of the U.S.    Display Business, taken as a whole; provided, however, that Material Adverse    Effect (and the word "material" and phrases of like import) shall exclude any    adverse changes or conditions as and to the extent such changes or conditions relate to or    result from (a) public or industry knowledge of the transactions contemplated by this    Agreement (including but not limited to any action or inaction by Seller’s Employees,    customers or vendors), (b) general economic conditions or other conditions affecting the    industries in which Seller competes, including fluctuating conditions resulting from the    seasonality of the U.S. Display Business, (c) exclusion of the Excluded Assets, and (d)    those matters disclosed on Exhibit 3.18 attached hereto.
-  Section  1.45 . Opinion of Buyer’s Counsel . 
"Opinion of Buyer’s Counsel" shall mean the opinion of Robinson,    Bradshaw & Hinson, P.A., counsel to Buyer, in the form of Exhibit 1.45    attached hereto.
-  Section  1.46 . Opinion of Seller’s Counsel . 
"Opinion of Seller’s Counsel" shall mean the opinion of Hunton &    Williams, counsel to Seller and Parent, in the form of Exhibit 1.46 attached    hereto.
- Section 1.47.Parent. 
"Parent" shall mean Chesapeake Corporation, a Virginia corporation and sole    shareholder of Seller.
-  Section  1.48 . Parent Guaranty and Non-Competition Agreement . 
"Parent Guaranty and Non-Competition Agreement" shall mean the Parent    guaranty and non-competition agreement among Buyer and Parent, substantially in the form    of Exhibit 1.48 attached hereto.
-  Section  1.49 . Permits .    
"Permits" shall mean all approvals, authorizations, registrations, permits,    consents, franchises, grants and licenses of Governmental Authorities necessary or    required for the conduct of the U.S. Display Business as of the Effective Time of Closing,    all material Permits (other than Environmental Permits) being listed on Exhibit 1.49    attached hereto.
-  Section  1.50 . Permitted      Liens . 
"Permitted Liens" shall mean only those Liens that are specifically listed on    Exhibit 1.50 attached hereto.
- Section 1.51. Person. 
"Person" shall mean any individual, sole proprietorship, trust, estate,    executor, legal representative, unincorporated association, association, institution,    corporation, company, partnership, limited liability company, limited liability    partnership, joint venture, Governmental Authority, regulatory or self-regulatory    authority, agency or other entity.
-  Section  1.52 . Plant Sites . 
"Plant Sites" shall mean the manufacturing plants and other facilities of    Seller listed on Exhibit 1.52 attached hereto. 
-  Section  1.53 . Real      Property . 
"Real Property" shall mean the real property described in Exhibit 1.53    hereto, together with improvements located thereon including all appurtenant rights,    claims and interests.
-  Section 1.54.Seller. 
"Seller" shall mean Chesapeake Display and Packaging Company, an Iowa    corporation and a wholly owned subsidiary of Parent.
- Section 1.55.Seller’s Consents. 
"Seller’s Consents" shall mean all consents, approvals, certificates and    authorizations required to be obtained by Seller in connection with the transactions    contemplated herein that are specifically identified on Exhibits 3.3 and 3.7    attached hereto.
-  Section 1.56.Seller’s Plan. 
"Seller’s Plan" shall mean the defined contribution plan that is    qualified under Section 401(a) of the Code and that is maintained for the benefit of    eligible Employees.
-  Section 1.57. Software . 
"Software" shall mean the computer software programs, including operating    systems, application programs, software tools, firmware and software embedded in equipment    (including both object code and source code versions thereof, if available to Seller    without charge), owned by Seller or licensed by Seller pursuant to a Contract and used in    the U.S. Display Business as of the Effective Time of Closing, and shall also include    written or electronic materials, if available to Seller without charge, that explain the    structure or use of Software or that were used in the development of Software, such as    logic diagrams, flow charts, procedural diagrams, error reports, manuals and training    materials.
- Section  1.58 . Special      Accounting Principles . 
"Special Accounting Principles" shall mean those principles set forth on Exhibit 1.58    attached hereto to be used in connection with preparing the Financial Statements, the    Interim Financial Statements, the Initial Statement of Adjusted Working Capital and the    Final Statement of Adjusted Working Capital. 
Section 1.59.Tax or Taxes.

"Tax" or "Taxes" shall mean any federal, state, county, local or    foreign taxes, charges, fees, levies, imposts, duties, other assessments or similar    charges of any kind whatsoever, including interest, penalties (civil or criminal) and    additions imposed thereon or with respect thereto.
Section 1.60.Tax Return.

"Tax Return" shall mean any report, return, document, schedule or other    information supplied or required to be supplied to a taxing authority with respect to    Taxes, including any return of an affiliated, combined or unitary group.
Section 
1.61
.
Transition      Services Agreement
. 

"Transition Services Agreement" shall mean the Agreement, dated as of the    Closing Date, between Parent and Buyer in substantially the form of Exhibit 1.61    attached hereto.
Section 1.62.U.S. Display Business.

"U.S. Display Business" shall mean the U.S. Display business of Seller, which    consists of (i) designing, manufacturing, assembling, packing and/or distributing    point-of-sale displays and merchandizing units, and (ii) providing contract packaging    services, including without limitation twinning, multi-packing, vacuum forming,    blistering, shrink-wrapping, shrink-banding, labeling, cartoning, carton-joining and    overwrapping, in each case, at its U.S. facilities, but excludes the business of Consumer    Promotions International.
Section 1.63.WARN.

"WARN" shall mean the Worker Adjustment, Retraining and Notification Act of  1988, as amended.
ARTICLE    II    PURCHASE AND SALE-  Section 2.1.Purchase and      Sale; Assignment and Assumption.
Seller hereby agrees that at the Closing, and upon all of the terms and subject to all        of the conditions of this Agreement, it shall sell, convey, transfer and deliver to Buyer        the Assets, free and clear of all Liens except for Permitted Liens, and Buyer hereby        agrees that at the Closing, and upon all of the terms and subject to all of the conditions        of this Agreement, it shall purchase the Assets, free and clear of all Liens except for        Permitted Liens.
Seller hereby agrees that at the Closing, and upon all of the terms and subject to all        of the conditions of this Agreement, it shall assign to Buyer the Assumed Liabilities and        all rights and obligations arising from and after the Effective Time of Closing under the        Contracts, free and clear of all Liens except for Permitted Liens, and Buyer hereby agrees        that at the Closing, and upon all of the terms and subject to all of the conditions of        this Agreement, it shall assume from Seller the Assumed Liabilities and all rights and        obligations arising from and after the Effective Time of Closing under the Contracts, free        and clear of all Liens except for Permitted Liens.

-  Section 2.2.Payment of the      Initial Purchase Price. 
In consideration of Seller’s sale, transfer, assignment, conveyance and delivery    of the Assets, Contracts and Assumed Liabilities, Buyer shall, at the Closing, pay to    Seller by wire transfer of immediately available funds an amount equal to the Initial    Purchase Price.
-    Section  2.3 . Final      Statement of Adjusted Working Capital; Settlement of Final Purchase Price .
Within thirty (30) days after the Closing Date, Seller shall prepare and deliver to        Buyer a draft Final Statement of Adjusted Working Capital, which shall be prepared        (i) except as required by the Special Accounting Principles, in accordance with GAAP        applied on a basis consistent with the past practice of Seller, and (ii) in a manner        consistent with the Initial Statement of Adjusted Working Capital.
If Buyer has no objections to the draft Final Statement of Adjusted Working Capital,        such draft shall constitute the Final Statement of Adjusted Working Capital. If Buyer has        any objections to the draft Final Statement of Adjusted Working Capital, it will deliver a        detailed statement describing its objections to Seller within twenty (20) days after        receiving the draft Final Statement of Adjusted Working Capital. Buyer and Seller will use        their reasonable best efforts to resolve any such objections. If a final resolution is not        obtained within thirty (30) days after Seller has received the statement of objections,        Buyer and Seller will select a nationally-recognized independent accounting firm mutually        acceptable to them to resolve any remaining objections. If Buyer and Seller are unable to        agree on the choice of an accounting firm, they will select a nationally-recognized        independent United States accounting firm by lot (after excluding PricewaterhouseCoopers        LLC, Deloitte & Touche and Arthur Andersen, LLP).
Buyer and Seller will each submit to the selected accounting firm a written statement        setting forth such party’s proposed aggregate resolution of the unresolved objections        and any supporting data and analysis. The selected accounting firm will select either        Buyer’s or Seller’s proposed aggregate resolution of the objections. Seller will        revise the draft Final Statement of Adjusted Working Capital as appropriate to reflect the        resolution of Buyer’s objections (as agreed upon by Buyer and Seller or as determined        by such selected accounting firm) and deliver it to Buyer within five (5) days after the        resolution of such objections. Such revised statement shall constitute the Final Statement        of Adjusted Working Capital.
To the extent that the Final Statement of Adjusted Working        Capital shows that Final Adjusted Working Capital is less than Initial Adjusted Working        Capital, Seller shall pay such difference to Buyer in immediately available funds within        two (2) Business Days of Seller’s delivery of such Final Statement of Adjusted        Working Capital. To the extent that the Final Statement of Adjusted Working Capital shows        that Final Adjusted Working Capital is greater than Initial Adjusted Working Capital,        Buyer shall pay such excess to Seller in immediately available funds within two (2)        Business Days of Seller’s delivery of such Final Statement of Adjusted Working        Capital. All payments made pursuant to this Section 2.3((d)) shall be accompanied        by accrued interest thereon from the Closing Date at the prevailing prime rate as        announced by SunTrust Bank in Richmond, Virginia, from time to time. 
If any unresolved objections are submitted to an accounting firm for resolution as        provided above, the party whose proposed resolution is not selected by the accounting firm        shall pay the fees and expenses of such accounting firm.
Seller will make the work papers and records used in preparing the draft Final Statement        of Adjusted Working Capital and the Final Statement of Adjusted Working Capital available        to Buyer at reasonable times and upon reasonable notice at any time following delivery by        Seller of the draft Final Statement of Adjusted Working Capital and during the resolution        of any objections with respect thereto.
Pro-ration of Property Taxes
. The parties agree that all property taxes with respect        to any of the Assets or items of real or personal property held under any Contract        (including, without limitation, property taxes payable by the tenant or lessee under any        lease) will be pro-rated as of the Closing Date and that, notwithstanding any other        provision of this Agreement, the economic burden of any such property tax will be borne by        Seller for all periods (or portions thereof) up to but excluding the Closing Date        ("Pre-Closing Period") and by Buyer for all periods (or portions thereof) on and        after the Closing Date ("Post-Closing Period"). Accordingly, notwithstanding any        other provision of this Agreement, (i) if Seller pays a property tax with respect to a        Post-Closing Period, Buyer will reimburse Seller upon demand for the amount of such        property tax so paid to the extent it is not reflected as a current asset on the Final        Statement of Adjusted Working Capital; and (ii) if Buyer pays a property tax with respect        to a Pre-Closing Period, Seller will reimburse Buyer upon demand for the amount of such        property tax so paid to the extent it is not reflected as a current liability on the Final        Statement of Adjusted Working Capital.
Section 2.4.Deliveries at Closing.

At Closing, (i) Seller shall deliver or cause to be delivered to Buyer the items listed    in Section 6.8 hereof, and (ii) Buyer shall deliver or cause to be delivered to    Seller the items listed in Section 7.7 hereof.
Section 
2.5
.
No Assumption of Other Liabilities
. 

Except as specifically set forth in this Agreement (including, without limitation,    Buyer’s assumption of the Assumed Liabilities), Buyer shall not assume any liability    or obligation of any kind of Seller or the U.S. Display Business (including, without    limitation, Seller’s use of the Assets and the items of real or personal property    held pursuant to the Contracts prior to the Effective Time of Closing, or performance by    Seller under the Contracts prior to the Effective Time of Closing), whether absolute or    contingent, accrued or unaccrued, asserted or unasserted, known or unknown, or otherwise.
Section 
2.6
.
Rebates, Programs and Allowances
. 

Buyer and Seller agree that (i) Seller shall remain solely liable for any and all  rebates, promotional allowances and similar amounts owing to customers of the U.S. Display  Business and relating to periods prior to the Effective Time of Closing, and (ii) Seller  shall be entitled to receive any and all rebates, promotional allowances and similar  amounts payable by suppliers and vendors and relating to periods prior to the Effective  Time of Closing (it being understood that the parties shall pro rate on an equitable basis  volume discounts and similar programs that relate to periods before and after the  Effective Time of Closing). A true and correct list of all rebate, promotional and similar  programs relating to Seller’s U.S. Display Business and in effect as of the Effective  Time of Closing is set forth on Exhibit 2.6 attached hereto.
ARTICLE IIIREPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to Buyer as of the date of this Agreement and  as of the Closing Date as follows:-  Section  3.1 . Organization      of Seller . 
Seller is a corporation duly incorporated, validly existing and in good standing under    the laws of the State of Iowa. Seller has full corporate power to carry on its U.S.    Display Business as it is now being conducted and to own, operate and hold under lease its    assets and properties as, and in the places where, such properties and assets now are    owned, operated or held. Seller is duly qualified or licensed as a foreign corporation,    and is in good standing, in each jurisdiction where the failure to be so qualified or    licensed would have a material adverse effect on the business, financial position or    results of operations of Seller. Exhibit 3.1 attached hereto is a true and correct    list of each jurisdiction in which the Seller is so qualified or licensed as a foreign    corporation.
-  Section  3.2 . Authorization; Enforceability . 
The execution, delivery and performance by Seller of this Agreement, and of all of the    documents and instruments contemplated hereby to which Seller is a party, are within the    corporate power of Seller and have been duly authorized by all necessary corporate action    of Seller. This Agreement has been duly executed and delivered by Seller. This Agreement    is, and the other documents and instruments required hereby to which Seller is a party    will be, when executed and delivered by the parties thereto, the valid and binding    obligations of Seller, enforceable against Seller in accordance with their respective    terms.
-  Section  3.3 . No Violation or Conflict by Seller . 
The execution, delivery and performance of this Agreement, and the other documents and    instruments required hereby to which Seller is a party, by Seller do not and will not    conflict with or violate any Law, judgment, order or decree binding on Seller or the    Articles of Incorporation or Bylaws of Seller. Except for compliance with the HSR Act, and    except as set forth on Exhibit 3.3 attached hereto, no notice to, filing or    registration with, or authorization, consent or approval of, any Governmental Authority is    necessary or is required to be made or obtained by Seller in connection with the execution    and delivery of this Agreement, and the other documents and instruments required hereby to    which Seller is a party, by Seller or the consummation by Seller of the transactions    contemplated hereby. Except as set forth in Exhibit 3.3 attached hereto, the    execution, delivery and performance of this Agreement, and the other documents and    instruments required hereby to which Seller is a party, do not and will not (i) constitute    a violation or breach of any contract or agreement to which Seller is a party or by which    Seller is bound (other than the Contracts, which are the subject of Section 3.7    hereof), or require the consent or approval of any party to any such contract or    agreement, or give any party to any such contract or agreement a right of termination,    cancellation, acceleration or modification thereunder, except where such violation or    breach or the failure to obtain such consent or approval would not, in the aggregate, have    a material adverse effect on Seller’s ability to consummate the transactions    contemplated hereby or perform its obligations hereunder, or (ii) result in, require or    permit the creation or imposition of any Lien upon or with respect to the Assets or the    items of real or personal property held by Seller pursuant to the Contracts.
-  Section  3.4 . Title to and Sufficiency of Assets . 
Seller owns good, valid and marketable title to all of the Assets, free and clear of    all Liens except for the Permitted Liens. As of the Effective Time of Closing, good, valid    and marketable title to the Assets, and good and valid leasehold interests in the items of    real and personal property held by Seller pursuant to the Contracts, free and clear of all    Liens except for the Permitted Liens, will pass to Buyer. The Assets and Contracts include    all tangible and intangible assets, contracts and rights (other than the Excluded Assets,    services of the type provided under the Transition Services Agreement and any    non-transferable Permits) necessary for the operation by Buyer after the Effective Time of    Closing of the U.S. Display Business in accordance with Seller’s current practice.    The Assets and Contracts do not include any equity or debt securities of or interest in,    or any right or obligation to acquire any equity or debt securities of or interest in, any    corporation, partnership, limited liability company, business trust, joint venture or    other business association. Exhibit 1.24 attached hereto lists all material    Equipment owned by Seller and used in the U.S. Display Business as currently conducted,    which, together with the material Equipment which is leased or licensed pursuant to the    Contracts, represents all of the material Equipment required to carry on the business of    the U.S. Display Business as currently conducted. 
Section 
3.5
.
No Litigation
. 

Exhibit 3.5 attached hereto is a true and complete list as of the date    hereof of all litigation, arbitration proceedings, governmental investigations, citations    or actions of any kind pending or, to the Knowledge of Seller, proposed or threatened,    that relate to the U.S. Display Business, the Assets or the Contracts (including the items    of real or personal property held by Seller pursuant to the Contracts). Except as set    forth on Exhibit 1.6, attached hereto, no such litigation is included among the    Assumed Liabilities. No such litigation seeks restraint, prohibition, damages or other    relief in connection with this Agreement or the consummation of the transactions    contemplated hereby, and no such litigation, in the reasonable belief of Seller, is likely    to have a material negative impact on the volume of business conducted with the U.S.    Display Business by any customer. There are no unsatisfied judgments, penalties or awards    that relate to the U.S. Display Business, the Assets or the Contracts (including the items    of real or personal property held by Seller pursuant to the Contracts).
Section 
3.6
.
Inventory
.    

The Inventory is useable or saleable in the ordinary course of the U.S. Display    Business as currently conducted, subject to the reserves and accruals established with    respect thereto on the books of Seller, and such reserves and accruals have been    determined in a manner consistent with GAAP and the past practices of Seller, subject to    the Special Accounting Principals. The Inventory is valued on the books of Seller in a    manner consistent with GAAP and the past practices of Seller, subject to the Special    Accounting Principles. 
Section 
3.7
.
Contracts
. 
Except as set forth in Exhibit 1.17 hereto, each Contract is in full    force and effect and, to Seller’s Knowledge, is enforceable in accordance with its    terms (except as the enforcement thereof may be limited or otherwise affected by    bankruptcy, insolvency, reorganization, moratorium or other laws generally affecting the    rights of creditors and subject to general equity principles (whether considered at law or    in equity)). Seller and, to the Knowledge of Seller, each of the other parties to the    Contracts, has performed each material term, covenant and condition of each of the    Contracts which is to be performed by it at or before the date hereof. No event has    occurred that would, with the passage of time or compliance with any applicable notice    requirements, constitute a breach or default by Seller or, to the Knowledge of Seller, any    other Person under any of the Contracts. To the Knowledge of Seller, no party to any of    the Contracts intends to cancel, terminate, accelerate the maturity or performance of or    exercise any option or other remedy under any of the material Contracts. Except as set    forth in Exhibit 3.7 attached hereto, the execution, delivery and performance of    this Agreement, and the other documents and instruments required hereby to which Seller is    a party, do not and will not (i) constitute a violation or breach of any material    Contract, or require the consent or approval of any party to any such Contract or give any    party to any such Contract a right of termination, cancellation, acceleration or    modification thereunder, or (ii) result in, require or permit the creation or imposition    of any Lien upon or with respect to the Assets or any items of real or personal property    that are held by Seller pursuant to the Contracts. Seller has delivered to Buyer a correct    and complete copy of each material Contract.
-  Section  3.8 . Accounts .        The Accounts all have arisen from bonafide transactions in the    ordinary course of business; the Accounts are expected to be collectible in accordance    with normal trade practice, net of the reserve for uncollectible accounts reflected on the    books of Seller therefor (including, when delivered to Buyer, the Final Statement of    Adjusted Working Capital); such reserve has been determined in a manner consistent with    GAAP and the current practices of Seller, subject to the Special Accounting Principles;    and, to the Knowledge of Seller, there are no contests, claims or rights of set-off (other    than returns in the ordinary course of business) relating to the amount or validity of any    Account, other than as reflected on the books of Seller (it being understood that this    Section shall not constitute a guaranty of collection of any Accounts). Except as set    forth in Exhibit 3.8 attached hereto, there are no pending or, to the    Knowledge of Seller, threatened disputes or claims between Seller and any Account obligor    outside of the ordinary course of business and relating to any Account.  Section 3.9.Condition of Equipment and Facilities. 
The improvements (including, without limitation, the roofs, electrical, plumbing    and HVAC systems, floors, exterior walls and interior load-bearing walls) located at each    owned parcel of Real Property, and at each leased parcel of Real Property insofar as    Seller is responsible for maintaining such improvements at such leased sites, taken as a    whole, are in good operating condition and repair for facilities of like type and age,    subject to ordinary wear and tear and Seller’s customary maintenance schedules, and    are substantially fit for the purposes for which they currently are being utilized. Each    material item of Equipment, and the Equipment taken as a whole, is in good operating    condition and repair for equipment of like type and age, subject to ordinary wear and tear    and Seller’s customary maintenance schedules, and is substantially fit for the    purposes for which it currently is being utilized.
Section 
3.10
.
Financial      Statements; Projections
. 
- The Financial Statements are true and correct in all material respects, and present        fairly the financial position and results of operations of the U.S. Display Business as of        the dates and for the periods specified therein, and were prepared in accordance with GAAP        applied on a basis consistent with the current practice of Seller, subject to the Special        Accounting Principles. 
Exhibit 3.10
 attached hereto contains the projected income statements for the U.S.        Display Business for the three-year period ending December 31, 2003. Such projections have        been prepared in good faith by Seller based upon assumptions that were reasonable when        made and accurate historical data. The assumptions used in the preparation of such        projections continue to be reasonable as of the date hereof.
The Interim Financial Statements, when delivered pursuant to 
Section 5.13(a) hereof
,        shall be true and correct in all material respects, and present fairly the financial        position and results of operations of the U.S. Display Business as of the dates and for        the periods specified therein, and shall be prepared in accordance with GAAP applied on a        basis consistent with the current practice of Seller, subject to the Special Accounting        Principles.
Section 
3.11
.
Compliance with Law
. 

The current conduct of the U.S. Display Business (including Seller’s current use    of its Assets and any items of real or personal property held by Seller pursuant to the    Contracts, and Seller’s performance under the Contracts) does not violate or conflict    with any Law in any material respect. All material Permits required by Seller to conduct    its U.S. Display Business have been obtained, are in full force and effect and are being    complied with in all material respects. Except as set forth in Exhibit 1.49    attached hereto, consummation of the transactions contemplated by this Agreement will not,    with respect to any material Permit (other than any Environmental Permit), require the    consent or approval of, or any filing with, any Governmental Authority, and all such    material Permits will continue in full force and effect immediately after the Effective    Time of Closing in accordance with their terms. No event (other than the consummation of    the transactions contemplated by this Agreement) has occurred or circumstance exists that,    to the Knowledge of Seller (with or without notice or lapse of time), would result in the    revocation, withdrawal, suspension, cancellation, termination of or any material    modification to any material Permit. Seller has delivered to Buyer complete copies of each    material Permit (other than Environmental Permits).
Section 
3.12
.
Taxes
.    

Seller has filed all required Tax Returns relating to the U.S. Display Business, the    Assets and the Contracts. All such Tax Returns are correct and complete in all material    respects. There are no unpaid Taxes due and payable, the non-payment of which could    adversely affect any of the Assets or the use thereof or the Contracts (including any    items of real or personal property held by Seller pursuant thereto), or for which Buyer    will be liable as Seller’s successor or transferee by reason of purchasing the Assets    or assuming the Contracts. No Tax authority has asserted any claim for the assessment of    any such Tax liability. Seller is not a foreign person for purposes of Section 1445(b)(2)    of the Code. None of the Assets is subject to a "safe harbor lease" under former    Section 168(f)(8) of the Internal Revenue Code of 1954, as amended before the Tax Reform    Act of 1984. There are no Tax liens upon the Assets or any items of real or personal    property held by Seller pursuant to the Contracts, except liens for Taxes not yet due.    Except as set forth on Exhibit 3.12 attached hereto, there are no matters under    discussion between any Governmental Authority and Seller or any Affiliate of Seller with    respect to any additional Taxes relating to the U.S. Display Business. No claim for past    due Taxes relating to the U.S. Display Business has been made within the last five years    by any Governmental Authority in a jurisdiction where Seller does not file Tax Returns.
Section 
3.13
.
Employment Agreements and Benefits
. 

Exhibit 3.13 attached hereto is a true and complete list of all agreements    relating to the compensation and other benefits of persons who are currently Employees,    salesmen, consultants and other agents of Seller relating to the use of the Assets, the    Contracts or the U.S. Display Business under which Seller has any continuing liability,    including, without limitation, collective bargaining agreements and pension, retirement,    bonus, stock option, profit sharing, health, disability, life insurance, hospitalization,    education or other similar plans or arrangements (whether or not subject to ERISA), true    copies of which have been delivered by Seller to Buyer. None of the agreements listed on Exhibit    3.13 will be breached by Seller’s execution, delivery and performance of this    Agreement. Except as contemplated in Section 8.6 hereof, no such agreements require    Buyer to assume any employment, compensation, fringe benefit, pension, profit sharing or    deferred compensation agreement or plan in respect of any employee of Seller.    Neither Seller nor any ERISA Affiliate has (i) contributed to, been required to    contribute to, or maintained a "multiemployer plan" (as defined in ERISA Section    3(37) or 4001(a)(3)) or (ii) had any complete or partial withdrawal from any multiemployer    plan that could result, directly or indirectly, in any withdrawal liability under Subtitle    E of Title IV of ERISA that would become, on or after the Closing Date, an obligation or    liability of Buyer. The provisions of each Employee Benefit Plan and the administration of    each such plan are in all material respects in compliance with applicable Law, and Seller    has not received any written notice alleging to the contrary with respect to any such    plan. Except as set forth on Exhibit 3.13 attached hereto, there is no action,    claim or demand of any kind (other than routine claims for benefits) that has been brought    or, to the Knowledge of Seller, is proposed or threatened, against any Employee Benefit    Plan or the assets thereof, or against the fiduciary of any such plan. Except as    contemplated in Section 8.6 hereof, neither Seller nor any ERISA Affiliate has    incurred (nor has any event occurred that could result in Seller or any ERISA Affiliate    incurring) any liability in connection with any existing or previously existing Employee    Benefit Plan that could become, on or after the Closing Date, an obligation or liability    of Buyer. For purposes of this Section, "ERISA Affiliate" means any Affiliate of    Seller, within the meaning of Section 414(b), 414(c), 414(m), or 414(o) of the Code, or    Section 4001(b) of ERISA.
Section 
3.14
.
Labor      Matters
.
- Except as set forth in  Exhibit 3.14  attached hereto, as of the date hereof,        (i) Seller is not a party to any collective bargaining agreement with any labor union or        organization pertaining to Employees of Seller, and (ii) no labor union or organization is        recognized as the collective bargaining representative of Employees of Seller. As of the        date hereof, (i) no labor organization has made a pending demand to Seller for        recognition as the bargaining representative of any Employees of Seller, (ii) there        are no representation petitions pending before the National Labor Relations Board with        respect to Employees of Seller, and (iii) to the Knowledge of Seller, no union        organizing activities are in progress with respect to Employees of Seller. 
- Except as set forth in  Exhibit 3.14  attached hereto, as of the date hereof:        (i) there are no pending or, to Seller’s Knowledge, proposed or threatened        strikes or lockouts involving Employees of Seller; (ii) there is no strike, formal        dispute, formal grievance, arbitration proceeding, general slowdown, work to rule or work        stoppage, or charge of unfair labor practice pending before a court, regulatory body or        arbitration tribunal or, to Seller’s Knowledge, proposed or threatened against or        affecting the U.S. Display Business; and (iii) there are no charges or complaints of        discrimination pending or, to Seller’s Knowledge, proposed or threatened against        Seller and relating to the U.S. Display Business before the United States Equal Employment        Opportunity Commission or any other federal, state, local or foreign agency, board or        tribunal.
- With respect to the U.S. Display Business, there has been no "mass layoff" or        "plant closing," as defined by WARN, within six (6) months prior to the Closing        Date (without regard to any actions taken by Buyer after the Effective Time of Closing).        As soon as reasonably practicable, Seller shall provide Buyer with a list of all lay-offs        of employees of the U.S. Display Business, by location and date, for the 90-day period        prior to June 1, 2001.
Section 3.15.Intangibles.

Seller owns the entire right, title and interest in and to the owned Intangibles, and    holds valid and subsisting licenses with respect to the licensed Intangibles, subject only    to the Permitted Liens. There are no claims, demands or proceedings instituted, pending    or, to the Knowledge of Seller, threatened by any third party pertaining to or challenging    Seller’s rights to use any of the Intangibles; to the Knowledge of Seller, there is    no trademark, trade name, patent or copyright owned by a third party (other than the    Excluded Intangibles) which Seller is using without a license to do so; and, to the    Knowledge of Seller, no third party is infringing upon any Intangible owned by, or    exclusively licensed to, Seller.
Section 3.16.Fees and Expenses of      Brokers and Others.

Seller is not committed to any liability for any brokers’ or finders’ fees or    any similar fees in connection with the transactions contemplated by this Agreement, and    has not retained any broker or other intermediary to act on its behalf in connection with    the transactions contemplated by this Agreement. Pursuant to a separate agreement with    Parent, Goldman, Sachs & Co. ("Goldman") will be paid a fee upon the    consummation of the transactions contemplated by this Agreement. Such fee and all other    fees and expenses (including attorneys’ and accountants’ fees) of Seller and    Parent in connection with the transactions contemplated herein shall be the sole    responsibility of Seller and Parent. 
Section 
3.17
.
Orders, Commitments and Returns
. 

All accepted and unfilled orders pursuant to Contracts that are open purchase orders    for the sale of goods to customers of the U.S. Display Business and the performance of    services for customers of the U.S. Display Business were made in bonafide    transactions in the ordinary course of business. Except as set forth in Exhibit 3.17    attached hereto, there are no claims against Seller pending or, to the Knowledge of    Seller, threatened (except for claims of a nature and size that arise in the ordinary    course of business of Seller) by customers of the U.S. Display Business related to    shortages, credits, damaged goods and related billing errors or otherwise related to the    shipment of goods or provision of services by the U.S. Display Business to its customers. 
Section 
3.18
.
No Material Adverse Change
. 

Except as set forth in Exhibit 3.18 attached hereto, since    December 31, 2000, Seller has carried on its U.S. Display Business in the ordinary    course and substantially in the same manner as heretofore carried on and there has not    been (a) any change or development with respect to the U.S. Display Business    constituting a Material Adverse Effect; (b) any loss, damage, condemnation or    destruction to the Assets or properties of the U.S. Display Business, whether or not    insured against, with respect to which, as of the date hereof, the aggregate cost to    Seller to replace such Assets or properties would exceed $500,000; (c) any Lien made    on any of the Assets or any item of real or personal property held by Seller pursuant to    the Contracts, except for Permitted Liens; (d) any sale, lease, transfer or other    disposition of assets or properties of the type included in the Assets other than in the    ordinary course of business; (e) any material increase in any compensation payable to    any shareholder, director or officer of Seller or increases in compensation to employees    of Seller other than in the ordinary course of business; provided that any    individual increases in excess of five percent (5%) of gross compensation prior to the    date hereof are set forth on Exhibit 3.18; (f) any adoption or modification of    any material Contract; or (g) any agreement, whether or not in writing, to do any of the    foregoing.
Section 
3.19
.
Environmental Conditions
. 
- Except as set forth in  Exhibit 3.19(a) , the U.S. Display Business, and Seller in        connection therewith, (i) is and has been (except with respect to noncompliance that        has been fully resolved and corrected with all penalties paid and obligations performed        after any required disclosure to appropriate Governmental Authorities) in material        compliance with all Environmental Laws, (ii) has not received any communication        (written or oral) from any Governmental Authority that alleges that it is not in such        compliance (except for noncompliance that has been resolved and corrected as provided        above), and (iii) has all material Environmental Permits required for the conduct of        the U.S. Display Business.
Exhibit 3.19(b)
 identifies all environmental reports, audits or assessments, or        occupational health studies, that relate to the Real Property undertaken by the Seller or        any of its agents, independent contractors or representatives. 
Except as set forth in 
Exhibit 3.19(c)
,
 there does not exist, is not        occurring, and has not occurred at any time while owned or operated by Seller, any        presence, generation, storage, treatment, transport, release or disposal of any        "Hazardous Substance" on, in, under, about, to or from any parcel of Real        Property in material violation of any Environmental Law or that could lead to liability or        obligation on the part of an owner or operator of any of the Real Property now or in the        future.
The Seller has heretofore delivered to Buyer true and complete copies of each of the        following documents:
- each non-privileged environmental report, audit, and assessment, and each non-privileged          occupational health study, identified in  Exhibit 3.19(d) ; and
- each Environmental Permit.
Except as set forth in 
Exhibit 3.19(e)
, none of the Real Property is, and there        has been no offsite shipment by Seller or its agents from the Real Property of a Hazardous        Substance to, a site that is, pursuant to CERCLA or any other Environmental Law:        (i) on the "National Priorities List" or any other list of sites suspected        to be contaminated by any Hazardous Substance; (ii) subject to a claim,        administrative order or other request to take investigative, removal or remedial action        under CERCLA or any other Environmental Law; or (iii) otherwise the subject or source        of any federal, state or private investigation, remediation or cost recovery or        contribution effort or claim relating to Environmental Law.
Exhibit 3.19(f)
 sets forth, with respect to each parcel of Real Property, all        material Environmental Permits. Except as set forth in 
Exhibit 3.19(f)
        attached hereto, consummation of the transactions contemplated by this Agreement will not,        with respect to any material Environmental Permit, require the consent or approval of, or        any filing with, any Governmental Authority. Seller has delivered to Buyer complete copies        of each material Environmental Permit.
Exhibit 3.19(g)
identifies (i) all on-site and, to the Knowledge of        Seller, off-site locations where Seller has stored, disposed or arranged for the disposal        of Hazardous Substances generated by the U.S. Display Business in violation of, or in        amounts or in a manner that could be reasonably expected to give rise to any liability        under Environmental Laws, (ii) all leaking underground storage tanks located on any        parcel of Real Property, (iii) all asbestos contained in or forming part of any        building, building component, structure or office space on any parcel of Real Property        which is currently friable in the ordinary course of business as conducted on the date        hereof or otherwise currently requires corrective action under applicable Environmental        Laws, and (iv) all polychlorinated biphenyls (PCBs) present on any parcel of Real        Property.
Notwithstanding any provision of this Agreement to the contrary, this 
Section 3.19
        shall constitute the sole representation and warranty of Seller related to environmental        matters.
Section 
3.20
.
Related Party Transactions
. 

Except as set forth in Exhibit 3.20 attached hereto, (i) neither Seller nor any    of its Affiliates owns, directly or indirectly, on an individual or joint basis, any    material interest in, or serves as an officer or director of, any customer, competitor or    supplier of Seller or any organization which is a party to a material Contract with    Seller, and (ii) none of Seller’s Affiliates is a party to any Contract with    Seller.
Section 
3.21
.
Real Property
. 

Exhibit 1.53 attached hereto is a true, complete and correct list of all of    the Real Property owned or leased by Seller and used in the U.S. Display Business. With    respect to each such parcel of Real Property, except as set forth in Exhibit 1.53    attached hereto:- there are no pending or, to the Knowledge of Seller, threatened condemnation        proceedings, lawsuits or administrative actions relating thereto;
- there are no leases, subleases, licenses, concessions or other agreements, written or        oral, granting to any Person the right to use or occupy any portion thereof;
- with respect to owned parcels of Real Property, there are no outstanding options or        rights of first refusal to purchase, lease or otherwise acquire a parcel or any portion        thereof or interest therein;
- to the Knowledge of Seller, there are no Persons (other than Seller) in possession of        any owned parcel of Real Property, other than tenants under leases or subleases disclosed        in  Exhibit 1.53  attached hereto who are in possession of space to which they        are entitled under such lease or sublease; 
- to the Knowledge of Seller, there is no existing violation of or nonconformity with, and        Seller is not under investigation with respect to, has not been charged with and has not        received any written notice of any alleged violation of or nonconformity with, any        restriction, condition, covenant, commitment, contract or agreement relating thereto, the        non-compliance with which would have a Material Adverse Effect; 
- Seller will promptly deliver to Buyer any surveys of any part of the owned Real Property        that may be in the possession of Seller; 
- there are no encroachments of buildings or improvements comprising a part of the Real        Property onto adjacent property or onto any easements encumbering such Real Property which        would have a Material Adverse Effect; and
- Seller has obtained and delivered to Buyer the commitment (together with copies of all        documentary exceptions listed or referred to therein, hereinafter referred to as the        "Title Commitment") of Lawyers Title Insurance Corporation (the "Title        Company") to issue one or more owner’s (and lender’s) policies of title        insurance insuring in one of the Companies good and marketable fee simple title to each        parcel of owned Real Property on ALTA Owner’s Form 1992, with no exceptions from        coverage other than those pre-printed on the policy and the Permitted Liens. If Buyer        desires to obtain, at its sole cost, such owner’s policies of title insurance at        Closing, Seller agrees (i) to execute and deliver to Buyer at Closing the Title        Company’s standard form of owners affidavit as to mechanics’ liens and        possession (with such modifications thereto as are necessary in order to make the        affidavit factually accurate), (ii) to use reasonable efforts to comply with the customary        and applicable requirements of Seller contained in the Title Commitment to have such        policies issued and (iii) to use reasonable efforts to clear up any of the exceptions from        coverage on the Title Commitment that do not in fact affect the Real Property;  provided,  however , that Seller shall not be required to obtain updated or new surveys of any        parcel of owned Real Property and that receipt of such owner’s policies by Buyer        shall not be a condition precedent to Buyer’s obligations hereunder.
- Since January 1, 1998, the Seller has not received information or notice from any        insurance company or board of fire underwriters requesting the performance of any work or        alteration with respect to the Real Property outside of the ordinary course of business,        or requiring a material increase in the insurance rates applicable to the Real Property.
Section 
3.22
.
Customers
. 

Exhibit 3.22 attached hereto lists the U.S. Display Business’ top 20  customers by gross sales volume for fiscal year 2000. Except as set forth on Exhibit  3.22 attached hereto, to the Knowledge of Seller, as of the date hereof, no such  customer is considering any material reduction in its commercial relationship with Seller.
ARTICLE IV    REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to Seller as of the date of this Agreement and  as of the Closing Date as follows: -  Section 4.1.Organization of Buyer. 
Buyer is a limited liability company duly organized, validly existing and in good    standing under the laws of the State of North Carolina.
-   Section  4.2 . Authorization; Enforceability . 
The execution, delivery and performance by Buyer of this Agreement, and of all of the    documents and instruments contemplated hereby to which Buyer is a party, are within the    limited liability company power of Buyer and have been duly authorized by all necessary    limited liability company action of Buyer. This Agreement has been duly executed and    delivered by Buyer. This Agreement is, and the other documents and instruments required    hereby to which Buyer is a party will be, when executed and delivered by the parties    thereto, the valid and binding obligations of Buyer, enforceable against Buyer in    accordance with their respective terms.
-  Section   4.3 . No      Violation or Conflict by Buyer . 
The execution, delivery and performance of this Agreement, and the other documents and    instruments required hereby to which Buyer is a party, by Buyer do not and will not    conflict with or violate any Law, judgment, order or decree binding on Buyer or the    Articles of Organization or Operating Agreement of Buyer. Except for compliance with the    HSR Act, and except as set forth on Exhibit 4.3 attached hereto, no notice to,    filing or registration with, or authorization, consent or approval of, any Governmental    Authority is necessary or is required to be made or obtained by Buyer in connection with    the execution and delivery of this Agreement, and the other documents and instruments    required hereby to which Buyer is a party, by Buyer or the consummation by Buyer of the    transactions contemplated hereby. Except as set forth in Exhibit 4.3 attached    hereto, the execution, delivery and performance of this Agreement, and the other documents    and instruments required hereby to which Buyer is a party, do not and will not constitute    a violation or breach of any contract or agreement to which Buyer is a party or by which    Buyer is bound, or require the consent or approval of any party to any such contract or    agreement, or give any party to any such contract or agreement a right of termination,    cancellation, acceleration or modification thereunder, except where such violation or    breach or the failure to obtain such consent or approval would not, in the aggregate, have    a material adverse effect on Buyer’s ability to consummate the transactions    contemplated hereby or perform its obligations hereunder.
-   Section       4.4 . No Litigation . 
There is no litigation, arbitration proceeding, governmental investigation, citation or    action of any kind pending, or, to the knowledge of Buyer, proposed or threatened, that    seeks restraint, prohibition, damages or other relief in connection with this Agreement or    the consummation of the transactions contemplated hereby.
-   Section  4.5 . No Broker . 

Buyer has retained no broker or other intermediary to act on its behalf in connection  with the transactions contemplated by this Agreement other than Buyer’s arrangements  with Heller Financial, Inc., Bank of America, N.A., and Congress Financial Corporation  relating to obtaining financing for the transactions contemplated herein. Pursuant to  separate agreements with Buyer, Heller Financial, Inc., Bank of America, N.A., and  Congress Financial Corporation will be paid certain fees in conjunction with the  transactions contemplated herein. Such fees and all other fees and expenses (including  attorney’s and accountant’s fees) of Buyer in connection with the transactions  contemplated herein shall be the sole responsibility of Buyer.
ARTICLE V    CERTAIN MATTERS PENDING THE CLOSING
Seller and Buyer covenant and agree that from and after the date of this Agreement  and until the Closing Date:-  Section  5.1 . Carry on in Regular Course . 
Except as specifically contemplated by this Agreement, Seller’s 100 Day Plan (a    copy of which has been delivered to Buyer) or as set forth on Exhibit 5.1    attached hereto, Seller shall carry on its U.S. Display Business (including transactions    with its Affiliates and the acquisition or disposition of Assets) in the ordinary course    and substantially in the same manner as heretofore carried on and to use its reasonable    best efforts to preserve the Assets, Contracts, business and relationships with suppliers    and customers of the U.S. Display Business and, subject to Section 5.3 hereof, to    keep available the services of its officers and employees. Seller shall (i) advise    Buyer promptly in writing of any change in the financial position, results of operations,    assets or liabilities of the U.S. Display Business constituting a Material Adverse Effect,    (ii) deliver to Buyer a list of all material acquisitions or dispositions of Equipment    between December 31, 2000, and the date hereof, and (iii) give Buyer prior written notice    of any material dispositions of Equipment after the date hereof. Seller shall not    dividend, distribute or transfer any Assets or assign any Contracts to Parent or any    Affiliate of Seller, except for dividends, distributions or transfers of Excluded Assets    or liabilities other than the Assumed Liabilities.
-  Section  5.2 . Indebtedness .    
Seller shall not (a) mortgage, pledge or otherwise encumber any of the Assets,    except for Permitted Liens, or (b) create, incur or assume any liabilities of the    type included among the Assumed Liabilities, except accounts payable and other such    liabilities incurred in the ordinary course of business.
-  Section  5.3 . Compensation .    
Without the prior written consent of Buyer or as otherwise expressly contemplated in    this Agreement, Seller shall not (i) grant any increases, except for increases in the    ordinary course of business on annual salary review dates (but in any event not more than    five percent (5%) of the annual gross compensation per employee), in the rate of pay of    any Employees of the U.S. Display Business, (ii) approve any employee promotions, or    (iii) institute any new Employee Benefit Plan, amend, alter or terminate, partially    or completely, any Employee Benefit Plan or assume, enter into, amend, alter or terminate    any collective bargaining agreement to which Seller is a party or by which Seller is    affected, except in any such case as required by Law or the terms of any existing Employee    Benefit Plan.
-  Section  5.4 . Compliance      with Law . 
Seller shall comply in all material respects with all applicable material Laws binding    upon Seller and relating to the U.S. Display Business (except for any orders of any court    or Governmental Authority which are being contested by Seller in good faith by appropriate    proceedings).
-  Section  5.5 . Access .    
At Buyer’s expense, Buyer and its authorized agents, officers and representatives,    and representatives of Buyer’s financing sources, shall have reasonable access to the    employees, properties, books and records, Contracts, information and documents of the U.S.    Display Business to conduct such examinations and investigations of the U.S. Display    Business as Buyer deems necessary; provided, however, that such examinations    and investigations: (a) shall be conducted only in the presence of a designated    representative of Seller; (b) shall be conducted during Seller’s normal business    hours; and (c) shall not unreasonably interfere with Seller’s operations and    activities. Seller shall and shall cause its officers, employees, counsel, independent    auditors and financial advisors to cooperate in all reasonable respects with Buyer’s    examinations and investigations. 
-  Section  5.6 . Cooperation .    
Subject to the terms and conditions herein provided, each of the parties hereto agrees    to use its reasonable best efforts to take, or cause to be taken, all action, and to do,    or cause to be done, all things necessary, proper and advisable to consummate and make    effective the transactions contemplated by this Agreement. Without limiting the foregoing,    Buyer and Seller shall use their reasonable best efforts and shall cooperate in all    respects in connection with the giving of any notices to any Governmental Authority or    securing the permission, approval, determination, consent or waiver of any Governmental    Authority required by Law in connection with the transactions contemplated herein    including, without limitation, the filing of premerger notification and report forms under    the HSR Act.****Buyer hereby agrees to pay the filing fees associated with such    filings under the HSR Act. Buyer and Seller shall use their reasonable best efforts in    connection with obtaining, respectively, the Buyer’s Consents and the Seller’s    Consents. Seller shall give Buyer prompt written notice upon discovering, to the Knowledge    of Seller, (x) any fact or condition that causes or constitutes a material breach of any    representations and warranties set forth in Article III hereof, (y) any material    breach of any covenant of the Seller herein or (z) the occurrence of any event that may    make the satisfaction of the conditions set forth in Article VI impossible or    reasonably unlikely. Buyer shall give Seller prompt written notice upon discovering, to    the knowledge of Buyer, (x) any fact or condition that causes or constitutes a material    breach of any representations and warranties set forth in Article IV hereof, (y)    any material breach of any covenant of Buyer herein or (z) the occurrence of any event    that may make the satisfaction of the conditions set forth in Article VII    impossible or reasonably unlikely.
-  Section  5.7 . Publicity .    
All general notices, releases, statements and communications to Employees, suppliers,    distributors and customers of the U.S. Display Business prior to the Closing Date and to    the general public and the press relating to the transactions contemplated by this    Agreement shall be made only at such times and in such manner as may be mutually agreed    upon by Buyer and Seller; provided, however, that either Seller or Buyer    shall be entitled to make a public announcement relating to the transactions contemplated    herein if, in the opinion of its legal counsel, such announcement is required to comply    with Law or applicable stock exchange rules and regulations.
-  Section  5.8 . Confidentiality . 
Notwithstanding any other provision of this Agreement to the contrary, Buyer agrees    that, unless and until the transactions contemplated herein are consummated, Buyer shall    remain subject to all of the terms and conditions of the Confidentiality Agreement, dated    December 13, 2000, between Seller and Buyer, the terms of which Confidentiality Agreement    are incorporated herein by reference.
-   Section  5.9 . Environmental Due Diligence .
Buyer may, at its election, engage a nationally recognized third party environmental        consultant (which may be Environmental Resource Management) to conduct a "phase        I" environmental investigation of the Plant Sites (the "Phase I        Investigation"). Any Phase I Investigation will be conducted at Buyer’s expense        in accordance with the specifications set forth in Part 1 of 
Exhibit 5.9
        attached hereto, and will be completed within fourteen (14) days after the date of this        Agreement (subject to extension for delays caused by Seller, including failure to provide        reasonably requested information and access to Plant Sites in a timely manner).
If the results of any Phase I Investigation indicate a "recognized environmental        condition" (as that term is defined in ASTM E 1527-00 – Standard Practice for        Environmental Site Assessments: Phase I Environmental Site Assessments Process) or other        condition or violation of Environmental Law reasonably of concern to Buyer’s        environmental consultant, Buyer may request that Seller provide to Buyer and its agents        access to conduct a "phase II" environmental investigation ("Phase II        Investigation"). Seller may grant or deny such access with respect to any one or more        Plant Sites in its sole discretion. If permitted by Seller, Buyer may engage a nationally        recognized third party environmental consultant to conduct the Phase II Investigation,        which Phase II Investigation shall be conducted at Buyer’s expense and shall be        completed by June 1, 2001. If a Phase II Investigation is not permitted by Seller with        respect to any Plant Site, then Buyer shall have the right to terminate this Agreement in        accordance with 
Section 9.1(e)
 hereof (and, in the event this Agreement is so        terminated by Buyer, then Seller shall promptly reimburse Buyer for its actual        out-of-pocket costs incurred in connection with this transaction). 
Buyer shall, no later than 10 days prior to the Closing Date, advise Seller of any        environmental condition or alleged environmental condition identified by the Phase I        Investigation or Phase II Investigation that is of the type listed in Part 2 of 
Exhibit        5.9
 and that affects any Plant Site (an "Environmental Condition"), and        shall provide Seller with copies of the relevant portion of the Phase I Investigation        report or the Phase II Investigation report and any related supporting documentation in        Buyer’s possession or control relating to any Environmental Conditions or alleged        Environmental Condition.
As to any Plant Site affected by an Environmental Condition or alleged Environmental        Condition, Buyer and Seller shall engage in good faith negotiations, prior to Closing,        with respect to the existence of such Environmental Condition and the scope of remediation        or other corrective action required with respect thereto (a "Remediation Plan").        The parties expect that any agreed upon Remediation Plan will address Seller’s pre-        and post-Closing remediation obligations and special indemnification obligations in        accordance with Part 3 of 
Exhibit 5.9
 attached hereto. In the event that the        parties are unable to agree upon the existence of any alleged Environmental Condition and        a Remediation Plan with respect thereto, then Buyer shall have the option of waiving such        Environmental Condition or alleged Environmental Condition with no adjustment to the        Purchase Price therefor (it being understood that Seller shall have no obligation to        Buyer, its successors or assigns with respect to any Environmental Condition or alleged        Environmental Condition that is so waived by Buyer or with respect to any Environmental        Condition or alleged Environmental Condition identified in the Phase I Investigation or        Phase II Investigation that is first asserted by Buyer after Closing). In the event that,        at Closing, there remain any Environmental Conditions or alleged Environmental Conditions        as to which Buyer and Seller have not agreed upon a Remediation Plan or that have not been        waived by Buyer, then Seller (at its option) shall either: (i) accept Buyer’s final        proposed Remediation Plan with respect to all unresolved Environmental Conditions, and the        parties shall proceed to Closing; or (ii) terminate this Agreement in accordance with 
Section 9.1(e)
        hereof.
Seller and Buyer shall each use their commercially reasonable efforts to transfer to        (or, if not transferable, make otherwise available to) Buyer all material Environmental        Permits; 
provided
, 
however
, that Buyer shall pay all costs associated with        such transfers. If any such transfer cannot be obtained prior to Closing, Buyer        may in the exercise of its sole discretion waive such requirement as a condition to        Closing, and Seller and Buyer shall continue to use their commercially reasonable efforts        to obtain any such transfer as soon as possible after the Closing Date or otherwise obtain        for Buyer the practical benefit of such Environmental Permits.
Seller shall obtain such approvals, on terms reasonably satisfactory to Buyer, as are        required by applicable state or local Environmental Laws (including without limitation the        New Jersey Industrial Site Recovery Act) of a transferor of an interest in real property        or shall have demonstrated to the reasonable satisfaction of Buyer that no such approval        is required. Seller shall give Buyer reasonable notice in advance of all meetings        scheduled between Seller and state or local environmental authorities with respect to the        foregoing and Buyer and Buyer's representatives shall have the right, without the        obligation, to attend and participate in all such meetings. Seller shall promptly provide        to Buyer copies of all documents and correspondence to and from such environmental        authorities relating to such matters.

- Section 5.10.Employment Agreements with Key Employees. 
Seller agrees to use its reasonable best efforts to assist and cooperate with Buyer in    encouraging the key Employees identified by Buyer to execute employment agreements or    otherwise agree to become employed by Buyer. Buyer shall notify Seller of the identity of    such key Employees within twenty (20) days after the date hereof.
- Section 5.11.Exclusivity. 
In recognition of the time that shall be expended and the expense that shall be    incurred by Buyer in connection with the transactions contemplated hereby, until the    earlier of (A) such time, if any, as this Agreement is terminated pursuant to Article    IX or (B) such time on or after June 1, 2001, that Buyer does not have the ability to    obtain financing pursuant to the Financing Proposals (as defined in Section 5.12    hereof) for any reason other than completion of customary documentation for such financing    or the lender’s customary "material adverse change" condition to funding,    Seller and Parent shall not, and shall cause their officers, agents, employees and    representatives not to, directly or indirectly, (a) enter into any agreement,    understanding, letter of intent or other commitment or arrangement of any kind with any    Person relating to (i)  the possible direct or indirect acquisition of all or a    portion of the Assets (other than in the ordinary course of business as permitted    hereunder) or Seller’s capital stock or (ii)  any business combination with    Seller, (b) encourage, solicit, engage in negotiations or discussions with, or    provide information with respect to any inquiries or proposals relating to the foregoing    clauses (i) and (ii) or (c) discuss or disclose any confidential information    pertaining to the U.S. Display Business (except as may be required by Law, or as necessary    in connection with this transaction, and except to the extent that such information    becomes public other than as result of a violation hereof), with any Person other than    Buyer without the prior written approval of Buyer.
- Section 5.12.Buyer’s Financing. 
Buyer is a party to those certain letter agreements, (i) dated as of April 19, 2001,    between Buyer and Heller Financial, Inc., and (ii) dated as of April 18, 2001, between    Buyer and Bank of America, N.A. and Congress Financial Corporation (the "Financing    Proposals"), true and complete copies of which have been delivered by Buyer to    Seller. Buyer has paid each of the $100,000 initial deposits to be paid to the prospective    lenders pursuant to the Financing Proposals. Buyer shall use its good faith commercially    reasonable efforts to (i) ensure that it complies with all covenants and satisfies    all conditions applicable to Buyer in at least one of the Financing Proposals, and    (ii) obtain, pursuant to at least one of the Financing Proposals or otherwise, the    ability to borrow on the Closing Date such amount as is necessary to permit Buyer to pay    the Initial Purchase Price at Closing. Buyer shall notify Seller within three (3) Business    Days of any adverse development affecting its ability to obtain financing pursuant to the    Financing Proposals. 
- Section 5.13.Interim Financial Statements and Monthly      Financial Statements. 
As soon as reasonably available and consistent with Parent’s normal schedule of        preparing quarterly financial statements, Seller shall provide to Buyer the Interim        Financial Statements.
As soon as reasonably available and consistent with Seller’s normal schedule of        preparing fiscal monthly financial statements for internal management purposes, Seller        shall provide to Buyer an unaudited condensed income statement and balance sheet of the        U.S. Display Business as of and for each month ending after the date hereof and prior to        the Effective Time of Closing (the "Monthly Financial Statements"). 

- Section  5.14 . Post      Closing Access and Cooperation .
Seller agrees that after the Closing, Seller shall provide such cooperation as Buyer or        its counsel may reasonably request in connection with any proceedings related to the        conduct of the U.S. Display Business to which Buyer or its Affiliates are a party and with        respect to which the pre-Closing conduct of such business is relevant. Such cooperation        shall include, without limitation, making employees of Seller available upon the        reasonable request and at the expense of Buyer, to consult with and assist Buyer and its        counsel in connection with any such proceedings and to prepare for and testify in any such        proceedings, including depositions, trials and arbitration proceedings. 
Buyer agrees that after the Closing, Buyer shall provide such cooperation as Seller or        its counsel may reasonably request in connection with (i) any proceedings relating to the        U.S. Display Business prior to Closing to which Seller or any of its Affiliates are a        party and (ii) matters relating to the operations and subsidiaries of Seller that will        remain after Closing. Such cooperation shall include, without limitation, making employees        of Buyer available upon the reasonable request and at the expense of Seller to consult        with and assist Seller and its counsel regarding any such proceedings and to prepare for        and testify in connection with any such proceedings, including depositions, trials and        arbitration proceedings.
Seller agrees that after the Closing, Seller shall provide Buyer and its representatives        access to Seller’s plant facility in Marion, Iowa, for the purpose of removing any        Assets or items of personal property held by Seller pursuant to the Contracts from such        facility at reasonable times during reasonable business hours upon prior written notice to        Parent; 
provided
, 
however
, that Buyer shall pay and be responsible for all        costs associated with the removal of such Assets and items of personal property.

ARTICLE VI    CONDITIONS PRECEDENT TO THE OBLIGATIONS OF BUYER
Each and every obligation of Buyer to be performed at the Closing shall be subject  to the satisfaction prior to or at the Closing, or waiver by Buyer, of the following  express conditions precedent:-   Section  6.1 . Compliance with Agreement . 
Seller shall have performed and complied in all material respects with all of its    obligations under this Agreement, which are to be performed or complied with by it prior    to or at the Closing.
-   Section  6.2 . Proceedings and Instruments Satisfactory .    
All proceedings, corporate or other, to be taken by Seller in connection with the    transactions contemplated by this Agreement, and all documents incident thereto, shall be    reasonably satisfactory in form and substance to Buyer, and Seller shall have made    available to Buyer for examination the originals or true and correct copies of all    documents which Buyer may reasonably request in connection with the transactions    contemplated by this Agreement.
-   Section  6.3 . No Litigation . 
No investigation, suit, action or other proceeding shall be pending before any court or    governmental agency that seeks restraint, prohibition, damages or other relief in    connection with this Agreement or the consummation of the transactions contemplated    hereby.
-   Section  6.4 . Representations and Warranties . 
The representations and warranties made by Seller in this Agreement shall be true and    correct as of the Closing Date with the same force and effect as though such    representations and warranties had been made on the Closing Date, except for such breaches    and inaccuracies thereof which do not, in the aggregate, constitute a Material Adverse    Effect and which will not have a material adverse effect on the Seller’s ability to    perform its obligations under this Agreement.
-   Section  6.5 . Antitrust Filings . 
In the reasonable opinion of Buyer, all necessary requirements of the HSR Act and the    regulations promulgated thereunder shall have been complied with, and any "waiting    period" applicable to the transactions contemplated by this Agreement which are    imposed by such statute or regulations shall have expired prior to the Closing Date or    shall have been terminated by the appropriate agency without the imposition of any    material conditions or other requirements.
-   Section  6.6 . Seller’s Consents; Material Environmental Permits . 
All of the Seller’s Consents shall have been obtained and remain in full force and    effect. The parties shall have obtained the transfer of certain material Environmental    Permits in accordance with Section 5.9(e) hereof.
- Section 6.7.Financing. 
Buyer shall have obtained financing on terms and conditions reasonably satisfactory to    Buyer for the Initial Purchase Price. Buyer acknowledges that this condition shall be    deemed to be satisfied if such financing can be obtained on commercially reasonable terms    pursuant to the Financing Proposals.
-   Section  6.8 . Deliveries at Closing . 

Seller shall have delivered to Buyer the following documents, each in form and  substance reasonably satisfactory to Buyer, properly executed by each party thereto and  dated as of the Closing Date: (i) the Bill of Sale; (ii) the Assignment and Assumption  Agreement; (iii) the Parent Guaranty and Non-Competition Agreement; (iv) the  Seller’s Consents; (v) the Opinion of Seller’s Counsel; (vi) a certificate of  the Secretary of Seller as to such factual matters as may reasonably be requested by  Buyer; (vii) the Transition Services Agreement, (viii) special warranty deeds, in  customary form, conveying fee simple title to the owned Real Property to Buyer; and (ix) a  certificate, dated as of the Closing Date and signed by an authorized officer of Seller,  certifying as to the matters in Sections 6.1 and 6.4.
ARTICLE    VII    CONDITIONS PRECEDENT TO THE OBLIGATIONS    OF SELLER
Each and every obligation of Seller to be performed at the Closing shall be subject  to the satisfaction prior to or at the Closing, or waiver by Seller, of the following  express conditions precedent:-   Section  7.1 . Compliance with Agreement . 
Buyer shall have performed and complied in all material respects with all of its    obligations under this Agreement, which are to be performed or complied with by it prior    to or at the Closing.
-   Section  7.2 . Proceedings and Instruments      Satisfactory . 
All proceedings, limited liability company or other, to be taken by Buyer in connection    with the transactions contemplated by this Agreement, and all documents incident thereto,    shall be reasonably satisfactory in form and substance to Seller, and Buyer shall have    made available to Seller for examination the originals or true and correct copies of all    documents which Seller may reasonably request in connection with the transactions    contemplated by this Agreement.
-   Section  7.3 . No Litigation . 
No investigation, suit, action or other proceeding shall be pending before any court or    governmental agency that seeks restraint, prohibition, damages or other relief in    connection with this Agreement or the consummation of the transactions contemplated    hereby.
-   Section  7.4 . Representations and Warranties . 
The representations and warranties made by Buyer in this Agreement shall be true and    correct as of the Closing Date with the same force and effect as though such    representations and warranties had been made on the Closing Date, except for such breaches    and inaccuracies thereof which will not, in the aggregate, have a material adverse effect    on Buyer’s ability to perform its obligations under this Agreement.
-   Section  7.5 . Antitrust Filings . 
In the reasonable opinion of Seller, all necessary requirements of the HSR Act and the    regulations promulgated thereunder shall have been complied with, and any "waiting    period" applicable to the transactions contemplated by this Agreement which are    imposed by such statute or regulations shall have expired prior to the Closing Date or    shall have been terminated by the appropriate agency without the imposition of any    material conditions or other requirements.
- Section 7.6.Buyer’s Consents. 
All of the Buyer’s Consents shall have been obtained and remain in full force and    effect.
-   Section  7.7 . Deliveries at Closing . 

Buyer shall have delivered to Seller the following documents, each in form and  substance reasonably satisfactory to Buyer, properly executed by each party thereto and  dated as of the Closing Date: (i) the Initial Purchase Price; (ii) the Assignment and  Assumption Agreement; (iii) the Parent Guaranty and Non-Competition Agreement; (iv) the  Buyer’s Consents; (v) the Opinion of Buyer’s Counsel; (vi) a certificate of the  Secretary of Buyer as to such factual matters as may be reasonably requested by Seller;  (vii) the Transition Services Agreement; and (viii) a certificate, dated as of the  Closing Date and signed by an authorized officer of Buyer, certifying as to matters in Sections  7.1 and 7.4.
ARTICLE VIII    INDEMNITIES AND ADDITIONAL COVENANTS-   Section  8.1 . Seller’s      Indemnity .
Seller hereby agrees to indemnify and hold Buyer, its Affiliates        and their respective officers, directors, managers, members, employees and agents        (collectively, the "Buyer Indemnified Parties") harmless from and against, and        agrees to defend promptly the Buyer Indemnified Parties from and to reimburse the Buyer        Indemnified Parties for, any and all losses, damages, costs, diminution in value,        expenses, liabilities, obligations and claims of any kind, including, without limitation,        reasonable attorneys’ fees and other legal costs and expenses (hereinafter referred        to collectively as "Losses"), that the Buyer Indemnified Parties may at any time        suffer or incur, or become subject to, as a result of or in connection with (i) any        breach or inaccuracy of any of the representations and warranties made by Seller in or        pursuant to this Agreement (it being understood that (i) the "except for" clause        in Section 6.4 hereof and (ii) any waiver by Buyer of the condition to Closing set        forth in Section 6.4 hereof shall not, in either case, in any way be deemed a        waiver of Buyer’s right to indemnification pursuant to this Section 8.1(a)(i)        for a breach or inaccuracy of a representation or warranty made by Seller), (ii) any        failure by Seller to perform any of its covenants and obligations set forth in this        Agreement or in any agreement, document or instrument delivered pursuant hereto (it being        understood that (i) the "material" qualifiers in Section 6.1 hereof and        (ii) any waiver by Buyer of the condition to Closing set forth in Section 6.1        hereof shall not, in either case, in any way be deemed a waiver of Buyer’s right to        indemnification pursuant to this Section 8.1(a)(ii) for the failure by Seller to        perform any of its covenants or obligations set forth herein), (iii) claims by third        parties against the Buyer Indemnified Parties relating to the operation and ownership by        Seller of the Assets and the use of the items of real or personal property held by Seller        pursuant to the Contracts, the performance by Seller under the Contracts and the conduct        of its U.S. Display Business prior to the Effective Time of Closing, (iv) product warranty        claims asserted by customers of the U.S. Display Business relating to products designed,        manufactured, constructed, distributed, sold, leased, supported or installed by Seller or        services performed by Seller prior to the Effective Time of Closing ("Product        Warranty Claims"), and (v) any other liability of Seller to third parties, other than        any Assumed Liability (including without limitation any liability that becomes, or is        alleged to have become, a liability of Buyer under any applicable bulk sales law, under        any doctrine of de facto merger or successor liability, or otherwise by operation of Law);        provided, however, that Seller shall not be required to indemnify the Buyer        Indemnified Parties pursuant to Section 8.1((a))(i) hereof in respect of the        representations and warranties made by Seller unless such right to indemnification is        asserted by the Buyer Indemnified Parties (whether or not such Losses have actually been        incurred) by written notice to Seller within the following time periods:

(1) with respect to the representations and warranties set forth in Section 3.6      and 3.8 hereof, on or before March 31, 2002;

(2) with respect to the representations and warranties set forth in Section 3.19      hereof, within 36 months after the Closing Date;

(3) with respect to the representations and warranties set forth in Sections 3.12      and 3.13 hereof, insofar as they related to compliance with Tax Laws and ERISA,      within 30 days after expiration of the applicable statute of limitations with respect to      the underlying Law which forms the basis of such claim (including all extensions thereof      agreed to with Tax authorities);

(4) with respect to the representations and warranties set forth in Section 3.2      and the first two sentences of Section 3.4 hereof, without time limitations; and

(5) with respect to all other representations and warranties set forth in Article III      hereof, on or before March 31, 2003.

Notwithstanding the foregoing, Seller shall not be required to indemnify the Buyer      Indemnified Parties pursuant to Section 8.1((a))(i) in respect of the      representations and warranties made by Seller or pursuant to Section 8.1((a))(iv)      hereof with respect to Product Warranty Claims unless and until the amount of all Losses      for which indemnification is sought hereunder first exceeds $250,000, in which event all      Losses in excess of such amount shall be subject to indemnification. Seller’s      aggregate obligation pursuant to Section 8.1((a))(i) and Section      8.1((a))(iv) shall in no event exceed an amount equal to thirty percent (30%) of the      Final Purchase Price.
The amounts for which Seller shall be liable under 
Section 8.1((a))
 hereof        shall be net of any insurance proceeds received by the Buyer Indemnified Parties in        connection with the facts giving rise to the right of indemnification (less any        retroactive insurance premiums or other premium increase, where such increase results        directly from the filing or payment of any insurance claim related thereto).
In the event a claim or demand by or from a third party against any Buyer Indemnified        Party arises that is covered by the indemnity provisions of 
Section 8.1((a))
        of this Agreement, notice shall be promptly given by the Buyer Indemnified Party to        Seller. The failure of the Buyer Indemnified Party to promptly notify Seller shall not        relieve Seller of any indemnification obligation hereunder except to the extent Seller        demonstrates that the defense of such claim or demand is materially prejudiced by the        failure to give such notice; 
provided
, 
however
, that this sentence shall not        apply to notices given after the expiration of the time periods specified in 
Section        8.1(a) (1), (2), (3)
 and 
(5)
 hereof. Provided that Seller admits in writing to        the party seeking indemnification that such claim is covered by the indemnity provisions        of 
Section 8.1((a))
 hereof, Seller shall have the right to contest and defend        by all appropriate legal proceedings such claim and to control all settlements (unless the        Buyer Indemnified Party agrees to assume the cost of settlement and to forgo such        indemnity) and to select lead counsel to defend any and all such claims at the sole cost        and expense of Seller; 
provided
, 
however
, that (i) counsel selected by        Seller is reasonably satisfactory to the Buyer Indemnified Party and conducts the defense        actively and diligently, (ii) if Seller or any Affiliate is also a party to the        proceeding, the Buyer Indemnified Party has not determined in good faith that joint        representation would be inappropriate due to actual or potential conflicting interests        between them and (iii) no compromise or settlement of such claims may be effected by        Seller without the Buyer Indemnified Party’s consent unless (A) there is no finding        or admission of any violation of Law, and (B) the sole relief provided is monetary damages        that are paid in full by Seller. If Seller has assumed the defense of such claim, the        Buyer Indemnified Party may select counsel to participate in any defense, in which event        the Buyer Indemnified Party’s counsel shall be at the sole cost and expense of the        Buyer Indemnified Party. In connection with any such claim, action or proceeding, the        parties shall cooperate with each other and provide each other with access to relevant        books and records in their possession.
Notwithstanding 
Section 8.1(c)
 hereof, Buyer shall have the right to control all        communications with customers of the U.S. Display Business regarding Product Warranty        Claims and to control all settlements related thereto; 
provided
, 
however
,        that Buyer shall (i) consult with Seller as to the appropriate credit to be issued, or        services or products to be provided, to the claimant in order to remedy the alleged        Product Warranty Claim, (ii) use its good faith commercially reasonable efforts to        mitigate the cost of such remedy, (iii) provide such remedy to the claimant (subject to        Buyer’s right to be indemnified for the costs of such remedy pursuant to the        provisions of 
Section 8.1(a)(iv)
 hereof), and (iv) obtain a complete release for        the benefit of Seller from such claimant regarding such Product Warranty Claim.
Buyer and Seller acknowledge and agree that Buyer’s only direct claim against        Seller with respect to environmental matters related to pre-Closing operation and        ownership of the U.S. Display Business (including the use or condition of the Assets and        the items of real or personal property held pursuant to the Contracts) is through        indemnification, pursuant to 
Section 8.1(a)(i)
 hereof, for any breach of the        representations and warranties set forth in 
Section 3.19
 hereof. In addition,        Seller has agreed to indemnify Buyer against third party claims against Buyer related to        the pre-Closing operation or ownership of the U.S. Display Business (including with        respect to third party environmental claims) pursuant to 
Section 8.1(a)(iii)
 and 
8.1(a)(v)
        hereof. Buyer and Seller have agreed that Buyer shall not initiate or otherwise instigate        a third party claim with respect to such environmental matters with the purpose or effect        of depriving Seller of the benefits of the limited claim period, "deductible" or        "cap" that would apply to a claim for indemnification pursuant to 
Section        8.1(a)(i)
 hereof except to the extent any such action is required by Law. Accordingly,        Buyer shall not initiate or maintain any contacts with any Governmental Authorities or        other third parties with respect to any potential third party environmental claims        relating to the pre-Closing operation of the U.S. Display Business (including the use or        condition of the Assets and the items of real or personal property held pursuant to the        Contracts), or cooperate with such parties regarding any such claims, except as required        by any Law. Buyer shall notify Seller of and provide a copy of all material requests for        information, notices of violation, requests, demands, or orders that additional work be        performed or any other communications to or from any Governmental Authorities or other        third parties with respect to potential third party environmental claims relating to the        pre-Closing operation of the U.S. Display Business; 
provided
, 
however
, that        the failure to give such notice shall not relieve Seller of any indemnification obligation        hereunder except to the extent Seller demonstrates that the defense of such claim or        demand is materially prejudiced by the failure to give such notice. If any Governmental        Authorities or other third parties contact Buyer with respect to a potential third party        environmental claim relating to the pre-Closing operation of the U.S. Display Business,        Buyer shall cooperate reasonably with Seller in coordinating a response to such third        party, so long as such response complies with all Laws and Seller is in compliance with        its environmental indemnity obligations hereunder. Any successor to Buyer that wishes to        enjoy the benefits of 
Section 8.1(a)
 hereof must by written instrument signed by        such successor agree to be bound by the obligations of Buyer contained in this 
Section        8.1(e)
. 
Except for claims of fraud against Seller and except as set forth in 
Section 2.3, 8.4
,        
8.6
 and 
10.11
 hereof, this 
Section 8.1
 shall be the sole remedy        of Buyer against Seller after Closing for any claim arising in connection with the        transactions contemplated herein; 
provided
, 
however
, that the parties hereto        may enforce the Parent Guaranty and Non-Competition Agreement, the Transition Services        Agreement and any other agreements specifically contemplated herein or entered into        pursuant hereto in accordance with their terms. Seller’s representations and        warranties made herein shall survive the Closing, but only to the extent and for such time        as is necessary to enable Buyer to enforce its rights to indemnification under this        Section.

-  Section  8.2 . Buyer’s Indemnity .
Buyer hereby agrees to indemnify and hold Seller, its Affiliates        and their respective officers, directors, managers, members, employees and agents        (collectively, the "Seller Indemnified Parties") harmless from and against, and        agrees to defend promptly the Seller Indemnified Parties from and to reimburse the Seller        Indemnified Parties for, any and all Losses that the Seller Indemnified Parties may at any        time suffer or incur, or become subject to, as a result of or in connection with        (i) any breach or inaccuracy of any of the representations and warranties made by        Buyer in or pursuant to this Agreement (it being understood that (i) the "except        for" clause in Section 7.4 hereof and (ii) any waiver by Seller of the        condition to Closing set forth in Section 7.4 hereof shall not, in either case, in        any way be deemed a waiver of Seller’s right to indemnification pursuant to this Section        8.2(a)(i) for a breach or inaccuracy of a representation or warranty made by Buyer),        (ii) any failure by Buyer to perform any of its covenants and obligations set forth        in this Agreement or in any agreement, document or instrument delivered pursuant hereto        (it being understood that (i) the "material" qualifiers in Section 7.1        hereof and (ii) any waiver by Seller of the condition to Closing set forth in Section        7.1 hereof shall not, in either case, in any way be deemed a waiver of Seller’s        right to indemnification pursuant to this Section 8.2(a)(ii) for the failure by        Buyer to perform any of its covenants or obligations set forth herein), and        (iii) claims by third parties against the Seller Indemnified Parties relating to the        operation and ownership by Buyer of the Assets and the use of the items of real or        personal property held by Seller pursuant to the Contracts, the performance by Buyer under        the Contracts, the Assumed Liabilities and the conduct of Buyer’s business from and        after the Effective Time of Closing (including, but not limited to, any product warranty        claims relating to products designed, manufactured, constructed, distributed, sold,        leased, supported or installed by Buyer or services performed by Buyer after the Effective        Time of Closing), provided, however, that Buyer shall not be required to        indemnify the Seller Indemnified Parties pursuant to Section 8.2((a))(i)        hereof in respect of the representations and warranties made by Buyer unless such right to        indemnification is asserted by the Seller Indemnified Parties (whether or not such Losses        have actually been incurred) by written notice to Buyer within the following time periods:
(1) with respect to the representations and warranties set forth in Section 4.2      hereof, without time limitations; and

(2) with respect to all other representations and warranties set forth in Article IV      hereof, on or before March 31, 2003.

Notwithstanding the foregoing, Buyer shall not be required to indemnify the Seller      Indemnified Parties pursuant to Section 8.2((a))(i) in respect of the      representations and warranties made by Buyer unless and until the amount of all Losses for      which such indemnification is sought hereunder first exceeds $250,000, in which event all      Losses in excess of such amount shall be subject to indemnification. Buyer’s      aggregate obligation pursuant to Section 8.2((a))(i) shall in no event exceed      an amount equal to thirty percent (30%) of the Final Purchase Price.
The amounts for which Buyer shall be liable under 
Section 8.2((a))
 hereof        shall be net of any insurance proceeds received by the Seller Indemnified Parties in        connection with the facts giving rise to the right of indemnification (less any        retroactive insurance premiums or other premium increase, where such increase results        directly from the filing or payment of any insurance claim related thereto).
In the event a claim or demand by or from a third party against any Seller Indemnified        Party arises that is covered by the indemnity provisions of 
Section 8.2((a))
        of this Agreement, notice shall be promptly given by the Seller Indemnified Party to        Buyer. The failure of the Seller Indemnified Party to promptly notify Buyer shall not        relieve Buyer of any indemnification obligations hereunder except to the extent Buyer        demonstrates that the defense of such claim or demand is materially prejudiced by the        failure to give such notice; 
provided
, 
however
, that this sentence shall not        apply to notices given after the expiration of the time period specified in 
Section 8.2(a)(2)
        hereof. Provided that Buyer admits in writing to Seller that such claim is covered by the        indemnity provisions of 
Section 8.2((a))
 hereof, Buyer shall have the right to        contest and defend by all appropriate legal proceedings such claim and to control all        settlements (unless the Seller Indemnified Party agrees to assume the cost of settlement        and to forgo such indemnity) and to select lead counsel to defend any and all such claims        at the sole cost and expense of Buyer; 
provided
, 
however
, that (i) counsel        selected by Buyer is reasonably satisfactory to the Seller Indemnified Party and conducts        the defense actively and diligently, (ii) if Buyer or any Affiliate is also a party to the        proceeding, the Seller Indemnified Party has not determined in good faith that joint        representation would be inappropriate due to actual or potential conflicting interests        between them and (iii) no compromise or settlement of such claims may be effected by Buyer        without the Seller Indemnified Party’s consent unless (A) there is no finding or        admission of any violation of Law, and (B) the sole relief provided is monetary damages        that are paid in full by Buyer. If Buyer has assumed the defense of such claim, the Seller        Indemnified Party may select counsel to participate in any defense, in which event the        Seller Indemnified Party’s counsel shall be at the sole cost and expense of the        Seller Indemnified Party. In connection with any such claim, action or proceeding, the        parties shall cooperate with each other and provide each other with access to relevant        books and records in their possession.
Except for claims of fraud against Buyer and except as provided in 
Sections 2.3, 8.6
,        
8.9
, and 
8.10
 and 
10.11
 hereof, this 
Section 8.2
 shall be the        sole remedy of Seller against Buyer after Closing for any claim arising in connection with        the transactions contemplated herein; 
provided
, 
however
, that the parties        hereto may enforce the Parent Guaranty and Non-Competition Agreement, the Transition        Services Agreement and any other agreements specifically contemplated herein or entered        into pursuant hereto in accordance with their terms. Buyer’s representations and        warranties made herein shall survive the Closing, but only to the extent and for such time        as is necessary to enable Seller to enforce its rights to indemnification under this        Section.
Section 
8.3
.
Arbitration      of Indemnity Claims
. 

Any party making a claim for indemnity under Sections 8.1 or 8.2 hereof, other than    third-party claims (an "Indemnified Party"), shall notify the party against whom    the claim is made (either Buyer or Seller) (the "Indemnifying Party") in writing    of the basis for such claim setting forth the nature and amount of the damages resulting    from such claim. Notice of any such claim shall be given reasonably promptly after the    Indemnified Party becomes aware of the facts or circumstances giving rise to such claim.    The Indemnifying Party shall give written notice of any disagreement with such claim    within 30 days following receipt of the Indemnified Party’s notice of the claim,    specifying in reasonable detail the nature and extent of such disagreement. If the    Indemnifying Party and the Indemnified Party are unable to resolve any disagreement within    30 days following receipt by the Indemnifying Party of the notice referred to in the    preceding sentence, the disagreement shall be submitted for resolution to an independent    Person (the "Arbitrator") mutually agreed by the Indemnifying Party and the    Indemnified Party. If the Indemnifying Party and the Indemnified Party cannot agree on a    single arbitrator, then the disagreement shall be submitted to a panel of three    independent Persons (the "Arbitrators"), one selected by the Indemnifying Party,    one selected by the Indemnified Party and one selected by the two Arbitrators so selected,    and shall be conducted in accordance with the Rules of the American Arbitration    Association. Any such arbitration shall be held in Raleigh, North Carolina, or such other    location to which the parties to such dispute mutually agree. The Indemnifying Party and    the Indemnified Party will each submit to the Arbitrator(s) a written statement setting    forth such party’s proposed aggregate resolution of the dispute and any supporting    data and analysis. The Arbitrators will select either the Indemnifying Party’s or the    Indemnified Party’s proposed aggregate resolution of the dispute. The    Arbitrator(s)’ determination shall be made within 30 days of the submission of the    dispute, shall be in accordance with this Agreement, shall be set forth in a written    statement delivered to the Indemnifying Party and the Indemnified Party and shall be    final, binding and conclusive. Judgment upon the decision rendered by the Arbitrator(s)    may be entered in any court having jurisdiction thereof and may include the award of    attorneys’ fees and other costs to the extent provided by this Article. The Person    who is prevailed against in the resolution of such disagreement shall pay the fees and    expenses of the Arbitrator(s) and the reasonable expenses of the other party (including    attorneys’ fees) related to the arbitration. Any amount owing by any Person as a    result of this Section 8.3****shall be paid within two Business Days after    final determination of such amount.
Section 
8.4
.
Bulk Sales Compliance
. 

Except as otherwise provided herein, Buyer hereby waives compliance by Seller with the    provisions of the bulk sales laws of any state (including any such laws relating to    Taxes), insofar as any such laws may apply to the transactions contemplated herein. Seller    hereby covenants and agrees to pay and discharge when due all claims of creditors that    could be asserted against Buyer by reason of such non-compliance. Seller hereby agrees to    indemnify and hold Buyer harmless from and against and shall on demand reimburse Buyer for    any and all Losses suffered by Buyer by reason of Seller’s failure to pay and    discharge any such claims.
Section 
8.5
.
Additional Instruments
. 

At any time and from time to time on and after the Closing, at either party’s    request and without further consideration, Seller or Buyer, as the case may be, shall    execute and deliver such other instruments of sale, transfer, conveyance, assignment and    confirmation and take such other action as Seller or Buyer may reasonably deem necessary    or desirable in order to more effectively transfer, convey and assign to Buyer, and to    confirm Buyer’s title to and interest in, and obligations with respect to, the    Assets, the Contracts and the Assumed Liabilities, and the consummation of the    transactions contemplated herein.
Section 
8.6
.
Employment Matters
.
- Buyer and Seller have agreed that Seller shall be solely responsible for all liabilities        or obligations of any kind with respect to the Employees for matters occurring on or prior        to the Closing Date, including but not limited to any claims by any Employees related to        their employment by Seller or to the termination of their employment by Seller prior to        and as of the Effective Time of Closing. Without limiting the generality of the foregoing        sentence, Seller shall be solely responsible for the following matters related to        Seller’s employment of the Employees and the termination of such employment: except        as provided in  Section 8.6(i)  hereof, any required compliance before Closing with        WARN; any required compliance with the Consolidated Omnibus Budget Reconciliation Act of        1985, as amended ("COBRA") for qualifying events (as defined in Code section        4980B) occurring on or prior to the Effective Time of Closing; and all alleged and actual        obligations and claims arising from or relating to any employment agreement, collective        bargaining agreement or Employee Benefit Plans, any grievances, arbitrations or unfair        labor practice charges and relating to compliance with any applicable state or federal        labor or employment law (including but not limited to all laws pertaining to        discrimination, workers’ compensation, unemployment compensation, occupational safety        and health, unfair labor practices, family and medical leave, and wages, hours or employee        benefits) for events occurring on or prior to the Effective Time of Closing. Except as        specifically set forth in  Sections 8.6(c)  and  8.6(d)  below, Buyer shall not        be obligated under and hereby specifically disclaims any assumption or liability with        respect to any collective bargaining agreement, employment contract or Employee Benefit        Plan to which Seller is a party or under which any of the Employees are covered. Buyer and        Seller have agreed that Buyer shall be solely responsible for all liabilities or        obligations of any kind with respect to Continuing Employees for matters occurring after        the Closing Date, including but not limited to any claims by any Continuing Employees        related to their employment by Buyer or to the termination of their employment by Buyer        after the Effective Time of Closing. Without limiting the generality of the foregoing        sentence, Buyer shall be solely responsible for the following matters related to        Buyer’s employment of Continuing Employees and the termination of such employment:        except as provided in  Section 8.6(i)  hereof, any required compliance after Closing        with WARN; any required compliance with COBRA for qualifying events (as defined in Code        section 4980B) occurring after the Effective Time of Closing; and all alleged and actual        obligations and claims arising from or relating to any employment agreement, collective        bargaining agreement or Employee Benefit Plans, any grievances, arbitrations or unfair        labor practice charges and relating to compliance with any applicable state or federal        labor or employment law (including but not limited to all laws pertaining to        discrimination, workers’ compensation, unemployment compensation, occupational safety        and health, unfair labor practices, family and medical leave, and wages, hours or employee        benefits) for events occurring after the Effective Time of Closing.
- Seller agrees to terminate, as of the Effective Time of Closing, the employment of any        of its Employees to whom it does not intend to offer employment in its other operations.        Except as specifically provided in  Section 8.6(d)  hereof, Seller agrees to satisfy        all compensation, severance pay, vacation pay, sick pay and other obligations under        applicable Law with respect to its Employees, including any obligation to bargain with any        union representing its Employees with respect to the transactions contemplated by this        Agreement, the effects thereof, and, if required, the decision to enter into this        Agreement. Except to the extent specifically set forth in  Sections 8.6(c)  and  8.6(d)         below, Buyer shall have no liability or obligation with respect to the Employees.
- Buyer agrees to offer employment, as of the Effective Time of Closing, to all persons        who are actively employed by Seller immediately prior to the Effective Time of Closing,        and to all inactive Employees who are receiving disability or worker’s compensation        benefits as of the date such Employee is eligible to return to work;  provided ,  however ,        that no such Employee shall be offered employment under this provision after six months        following the Closing Date and Buyer shall not be required, at Closing or any time        thereafter, to offer employment to former employees of Seller who have been laid off by        Seller prior to the Effective Time of Closing. Buyer agrees that the offers of employment        shall be at wage rates that are at least comparable to Seller’s wage rates in effect        on the Closing Date.
- (i) With respect to each Continuing Employee, Buyer agrees to offer vacation benefits        and sick day and personal day policies to such Continuing Employee that are consistent        with those currently offered by Seller, and to recognize such Continuing Employee’s        service with Seller for purposes of such policies. Buyer and Seller agree that the Initial        Statement of Adjusted Working Capital and Final Statement of Adjusted Working Capital        shall include accruals for vacation pay, sick days and personal days in accordance with        the Special Accounting Principles.
- Buyer agrees that Continuing Employees shall be eligible to participate in a defined        contribution plan that is qualified under Sections 401(a) and 401(k) of the Code and shall        recognize, for purposes of eligibility to participate and vesting purposes, service with        the Seller and Affiliates of the Seller prior to the Closing Date to the extent that such        service is recognized under Seller’s Plan. Seller agrees to cause Seller’s Plan        to be amended to fully vest each Continuing Employee in his account balances under        Seller’s Plan. Subject to the conditions prescribed by the following sentence, Buyer        agrees that the Buyer’s Plan will accept rollovers in the form of cash and any        outstanding loan (provided that such loan is in good standing as of the date of the        rollover) from the Seller’s Plan on behalf of each Continuing Employee who directs        that a rollover be made. The Buyer’s Plan shall not be required to accept a rollover        contribution in accordance with the preceding sentence unless the administrator of the        Seller’s Plan certifies with respect to such rollover that (A) the Seller’s Plan        has received a favorable determination letter from the Internal Revenue Service covering        the Tax Reform Act of 1986, (B) the distribution from the Seller’s Plan is an        "eligible rollover distribution" as defined under Section 402(c)(4) of the Code,        (C) no part of the distribution from the Seller’s Plan to be rolled over is        considered a return of employee after-Tax contributions, (D) the distribution from the        Seller’s Plan is not part of a series of periodic payments and (E) the distribution        is not a "required minimum payment" under Section 401(a)(9) of the Code.
- Buyer agrees to provide welfare benefit plans (as defined in Section 3(1) of ERISA) (the        "Buyer’s Welfare Plans") that provide benefits to Continuing Employees that        are at least substantially equivalent to such benefits provided to similarly situated        employees of Buyer immediately prior to the Closing Date. With respect to such Continuing        Employees, and, as applicable, their beneficiaries and dependents, Buyer’s Welfare        Plans shall not include a waiting or eligibility period or a preexisting condition        restriction or limitation (provided that any preexisting condition restriction or        limitation under Seller’s corresponding welfare benefit plans has been satisfied        subject in all respects to the provision of the Health Insurance Portability and        Accountability Act of 1996). To the extent that such Continuing Employees or their        dependents or beneficiaries have satisfied any deductibles of the Seller’s Welfare        Plans for the year that includes the Closing Date, such amounts will be credited toward        the satisfaction of any such requirements under Buyer’s Welfare Plans.
- Buyer agrees to adopt, with respect to the Continuing Employees only, a severance        benefit plan that provides benefits that are identical in form and amount to Seller’s        severance benefit program listed on  Exhibit 3.13  attached hereto (provided that        Buyer’s plan shall provide benefits only to Continuing Employees terminated on or        before December 31, 2001), and agrees to keep such severance benefit program in effect        until at least December 31, 2001. Subject to  Section 8.10  below, Buyer agrees to        pay (at Buyer’s sole cost and expense) severance pay and other benefits to Continuing        Employees terminated on or before December 31, 2001, under such severance benefit program,        in accordance with the terms of such program, and Buyer will recognize service with the        Seller and its Affiliates before the Effective Time of Closing for purposes of the payment        of any severance pay.
- Seller agrees that it will perform its obligations, if any, under the Non-Compete and        Confidentiality Agreements listed on  Exhibit 3.13  attached hereto, in accordance        with the terms of such agreements in effect as of the Effective Time of Closing;  provided ,         however , that Buyer agrees to reasonably assist Seller with Seller’s efforts        to mitigate its liabilities and obligations under such agreements.
- Buyer agrees to be solely responsible for, and to indemnify and hold Seller harmless        from, all liabilities and obligations, including attorneys’ fees, under WARN or any        other Law requiring notice prior to termination of employment or the payment of severance        pay, wages or benefits as a result of or with respect to (i) the transactions contemplated        by this Agreement, and (ii) layoffs, employment terminations or other employment related        actions or omissions occurring after the Closing Date (whether such actions alone or in        conjunction with the employment related actions by the Seller before Closing give rise to        such liabilities or obligations).
Section 
8.7
.
Allocation of Purchase Price
. 

The Initial Purchase Price plus the Assumed Liabilities (to the extent they    constitute part of the amount realized by Seller for federal income Tax purposes) shall be    allocated among the Assets and the Contracts as mutually agreed upon by the parties prior    to Closing, which the parties shall adjust to reflect any differences between the Final    Purchase Price and the Initial Purchase Price. This allocation is intended to comply with    the allocation method required by Section 1060 of the Code. The parties shall cooperate to    comply with all requirements of Section 1060 and the regulations thereunder, and once the    allocation has been adjusted to reflect the Final Purchase Price, the allocation shall be    adjusted only if and to the extent necessary to comply with such requirements. Buyer and    Seller agree that they will not take nor will they permit any affiliated person to take,    for income Tax purposes, any position inconsistent with such allocation; provided, however,    that (i) Buyer’s total cost for the Assets may differ from the total amount allocated    hereunder to reflect Buyer’s transaction costs other than the Final Purchase Price    and Assumed Liabilities, and (ii) the amount realized by Seller may differ from the total    amount allocated hereunder to reflect Seller’s transaction costs that reduce the    amount realized for income tax purposes.
Section 
8.8
.
Access to Books and Records
. 

From and after the Closing, Buyer will authorize and permit Seller and its    representatives to have access during normal business hours, upon reasonable notice and    for reasonable purposes and in such manner as will not unreasonably interfere with the    conduct of Buyer’s business, to all books, records, files, documents and    correspondence included among the Assets that relate to the conduct of the U.S. Display    Business prior to the Effective Time of Closing. From and after the Closing, Seller will    authorize and permit Buyer and its representatives to have access during normal business    hours, upon reasonable notice and for reasonable purposes and in such manner as will not    unreasonably interfere with the conduct of Seller’s business, to all books, records,    files, documents and correspondence not included among the Assets that relate to the    conduct of the U.S. Display Business prior to the Effective Time of Closing. Buyer and    Seller agree to maintain all books and records, files, documents and other correspondence    related to the U.S. Display Business prior to the Effective Time of Closing for a period    of five (5) years from the Effective Time of Closing, during which period each party shall    have the right to review and copy, at the copying party’s expense, any such books,    papers and records.
Section 
8.9
.
Use of      Excluded Intangibles
. 

Buyer agrees that without Seller’s consent it will not make any use of any of the    Excluded Intangibles including, without limitation, the names "Chesapeake    Corporation" or "Chesapeake Display and Packaging Company," the wordmarks    "Chesapeake" or "CD&P," the phrase "Resourceful by    Nature" or the "rolling C" logo, or any variation thereof in any manner; provided,    however, that Buyer may use such names and marks (i) on pre-printed purchase    orders, checks, and business forms bearing such names or marks on the Closing Date, for a    commercially reasonable period of time in which to use or consume such items in the    ordinary course of business after Closing, and (ii) on work-in-process and finished goods    inventory, building signage, trucks, trailers and similar uses bearing such names or marks    on the Closing Date, until December 31, 2002. In addition, Buyer may use the    "Chesapeake Display and Packaging Company" name in the phrase "CorrFlex    Display and Packaging, LLC (acquiror of Chesapeake Display and Packaging Company)"    and equivalent uses for up to 24 months following the Closing Date, with the prior written    consent of Seller for each such use and the form thereof (such consent not to be    unreasonably withheld). Buyer shall indemnify and hold harmless for any Losses suffered by    Seller that are directly attributable to Buyer’s use of the Excluded Intangibles    pursuant to this Section.
Section 
8.10
.
Cinnaminson Facility
. 

If Buyer elects to close the facility located in Cinnaminson, New Jersey (the  "Cinnaminson Facility"), prior to December 31, 2001, and gives Seller at  least seventy-five (75) days prior written notice of such closure, Seller shall: (i) pay  all severance costs that arise under Seller’s severance agreements and polices that  are in effect on the Closing Date with respect to Continuing Employees whose employment is  terminated in connection with such closure; provided, however, that Buyer  shall use its good faith commercially reasonable efforts to mitigate such costs by  offering Continuing Employees at the Cinnaminson Facility comparable employment at  Buyer’s other facilities where available and practical; and (ii) assume the lease for  the Cinnaminson Facility (and the lease for any leased or licensed Assets or Equipment  used in the conduct of the U.S. Display Business at such facility as of the Effective Date  of Closing) from and after the closure date. Notwithstanding closure of the Cinnaminson  Facility pursuant to this Section 8.10, Assets (other than leased or licensed  Assets or Equipment used in the conduct of the U.S. Display Business at such facility as  of the Effective Date of Closing) at the Cinnaminson Facility shall be the property of  Buyer after such closure. Buyer shall remove all such Assets (other than leased or  licensed Assets or Equipment used in the conduct of the U.S. Display Business at such  facility as of the Effective Date of Closing) from the Cinnaminson Facility within 60 days  of such closure. 
ARTICLE IX    TERMINATION- Section  9.1 . Termination .    
Time is of the essence of this Agreement. This Agreement may be terminated and the    transactions contemplated hereby may be abandoned as follows: (a) at any time prior    to the Closing Date by mutual written agreement of Seller and Buyer; (b) by Buyer if,    prior to the Closing Date, any of the conditions set forth in Article VI of    this Agreement shall have become impossible to fulfill on or before June 29, 2001, or if    Seller is in material breach of its obligations hereunder (unless Seller is diligently    attempting to cure such breach by all commercially reasonable efforts, and such breach is    susceptible to being cured on or before June 29, 2001); (c) by Seller if, prior to    the Closing Date, if any of the conditions set forth in Article VII of this    Agreement shall have become impossible to fulfill on or before June 29, 2001, or if Buyer    is in material breach of its obligations hereunder (unless Buyer is diligently attempting    to cure such breach by all commercially reasonable efforts, and such breach is susceptible    to being cured on or before June 29, 2001); (d) by Seller or Buyer at any time after    June 29, 2001, if the Closing has not occurred by such date; or (e) by Buyer or Seller    pursuant to Section 5.9 hereof.
-  Section  9.2 . Rights on Termination; Waiver .
If this Agreement is terminated pursuant to 
Section 9.1
, all further obligations        of the parties under or pursuant to this Agreement shall terminate without further        liability of either party to the other (except any liability of any party then in        violation or breach of its obligations hereunder, as to which the party not in breach        shall retain all of its rights and remedies under applicable Law); 
provided
, that        the parties’ obligations contained in 
Section 5.8
 of this Agreement shall        survive any such termination.
If any of the conditions set forth in 
Article VI
 of this Agreement have not been        satisfied, Buyer may nevertheless elect to waive such conditions and proceed with the        consummation of the transactions contemplated hereby. If any of the conditions set forth        in 
Article VII
 of this Agreement have not been satisfied, Seller may        nevertheless elect to waive such conditions and proceed with the consummation of the        transactions contemplated hereby.

ARTICLE X    MISCELLANEOUS-  Section 10.1.Transfer Taxes      and Fees. 
Buyer and Seller shall each pay one-half of all filing, transfer, sales, recordation    and similar Taxes (other than filing fees under the HSR Act) charged to sellers, grantors,    transferors, assignors, purchasers, grantees, transferees or assignees under applicable    Law in connection with the transactions contemplated hereunder.
-  Section 10.2.Entire Agreement;      Amendment. 
Except as set forth in Section 5.8 hereof, this Agreement and the documents    referred to herein and to be delivered pursuant hereto constitute the entire agreement    between the parties pertaining to the subject matter hereof, and supersede all prior and    contemporaneous agreements, understandings, negotiations and discussions of the parties,    whether oral or written, and there are no warranties, representations or other agreements    between the parties in connection with the subject matter hereof, except as specifically    set forth herein or therein. No amendment, supplement, modification, waiver or termination    of this Agreement shall be binding unless executed in writing by the party to be bound    thereby. No waiver of any of the provisions of this Agreement shall be deemed or shall    constitute a waiver of any other provision of this Agreement, whether or not similar, nor    shall such waiver constitute a continuing waiver unless otherwise expressly provided.
- Section   10.3 . Expenses .    
Except as otherwise specifically provided herein, whether or not the transactions    contemplated by this Agreement are consummated, each of the parties hereto shall pay the    fees and expenses of their respective counsel, accountants and other experts and the other    expenses incident to the negotiation and preparation of this Agreement and consummation of    the transactions contemplated hereby.
-  Section  10.4 . Governing      Law . 
This Agreement shall be construed and interpreted according to the laws of the    Commonwealth of Virginia, without regard to the conflicts of law rules thereof. Buyer and    Seller hereby agree that service of process delivered pursuant to Section 10.6    hereof shall suffice as adequate service of process.
-  Section  10.5 . Assignment .    
This Agreement and each party’s respective rights hereunder may not be assigned at    any time except as expressly set forth herein without the prior written consent of the    other party, except that Buyer may assign all of its rights, interests and obligations    hereunder to a newly formed wholly-owned subsidiary of Buyer formed for the purpose of    consummating the transactions contemplated herein and having no prior business operations    or liabilities; provided, however, that any such assignment shall not    relieve Buyer of its obligations hereunder, and that as a condition to such assignment,    Buyer shall execute and deliver to Seller a guaranty of all of the obligations of such    subsidiary under this Agreement of like tenor with the guaranty provisions of the Parent    Guaranty and Non-Competition Agreement. Subject to the preceding sentence, this Agreement    is binding upon inures to the benefit of, and is enforceable by, the parties hereto and    their respective successors and assigns.
-  Section  10.6 . Notices .    
All communications, notices and disclosures required or permitted by this Agreement    shall be in writing and shall be deemed to have been given when delivered personally or by    messenger or one (1) Business Day after having been sent by overnight delivery service, or    three (3) Business Days after the date when mailed by registered or certified United    States mail, postage prepaid, return receipt requested, or when received via telecopy,    telex or other electronic transmission, in all cases addressed to the person for whom it    is intended at his address set forth below or to such other address as a party shall have    designated by notice in writing to the other party in the manner provided by this Section:
If to Buyer: CorrFlex Graphics, LLC
P.O. Box 5878
701 Rickert Street
Statesville, North Carolina 28687
Attention: L. Kerry Vickar, LL.B.
Chairman & Chief Executive Officer
Facsimile: (704) 872-7778
With a copy to: Allain Andry, Esq.
Robinson, Bradshaw & Hinson, P.A.
101 North Tryon Street, Suite 1900
Charlotte, North Carolina 28246
Facsimile: (704) 378-4000
If to Seller: Chesapeake Display and Packaging Company
c/o Chesapeake Corporation
James Center II
1021 East Cary Street
P.O. Box 2350
Richmond, Virginia 23218-2350
Attention: J.P. Causey Jr., Esq.
Senior Vice President, Secretary 
& General Counsel
Facsimile: (804) 697-1192
 
With a copy to: Gary E. Thompson, Esq.
Hunton & Williams
Riverfront Plaza, East Tower
951 East Byrd Street
Richmond, Virginia 23219-4074
Facsimile: (804) 788-8218
 
-  Section 10.7.Counterparts;      Headings. 
This Agreement may be executed in several counterparts, each of which shall be deemed    an original, but such counterparts shall together constitute but one and the same    Agreement. The Table of Contents and Article and Section headings in this Agreement are    inserted for convenience of reference only and shall not constitute a part hereof.
-  Section 10.8.Interpretation. 
Unless the context requires otherwise, all words used in this Agreement in the singular    number shall extend to and include the plural, all words in the plural number shall extend    to and include the singular and all words in any gender shall extend to and include all    genders. All references to contracts, agreements, leases or other understandings or    arrangements shall refer to oral as well as written matters. 
-  Section 10.9.Severability. 
If any provision, clause or part of this Agreement, or the application thereof under    certain circumstances, is held invalid, the remainder of this Agreement, or the    application of such provision, clause or part under other circumstances, shall not be    affected thereby.
-  Section 10.10.No Reliance. 
No third party is entitled to rely on any of the representations, warranties and    agreements contained in this Agreement, other than the Buyer Indemnified Parties and the    Seller Indemnified Parties, who may rely on the provisions of Article VIII hereof.    Buyer and Seller assume no liability to any other third party because of any reliance on    the representations, warranties and agreements of Buyer or Seller contained in this    Agreement.
-  Section  10.11 . Specific Performance . 
Seller and Buyer hereby agree that irreparable damage would occur in the event any of    the provisions of this Agreement were not performed in accordance with the terms hereof    and that the parties shall be entitled to specific performance of the terms hereof, in    addition to any other remedy at law or equity.
IN WITNESS WHEREOF, each party hereto has caused this Asset Purchase Agreement to be    executed in its name by a duly authorized officer as of the day and year first above    written.
 
 
CORRFLEX GRAPHICS, LLC
By: /s/ L. Kerry Vickar
           L. Kerry Vickar
Its: Chairman & CEO
By: /s/ Bryan L. Smith
           Bryan L. Smith
Its: President
 
CHESAPEAKE DISPLAY AND PACKAGING COMPANY
By: /s/ Andy Kohut
           Andy Kohut
Its: President
 

Exhibit 1.5

Assignment and Assumption Agreement

ASSIGNMENT AND ASSUMPTION AGREEMENT

**ASSIGNMENT AND ASSUMPTION AGREEMENT**, dated as of _________, 2001,    between **CHESAPEAKE DISPLAY AND PACKAGING COMPANY**, an Iowa corporation (the    "Assignor"), and **CORRFLEX GRAPHICS, LLC**, a North Carolina limited    liability company ("Assignee").

WHEREAS, Assignor and Assignee are parties to that certain Asset Purchase    Agreement, dated as of ________, 2001 (the "Purchase Agreement"), the terms of    which are incorporated by reference herein; and

**WHEREAS**, pursuant to the Purchase Agreement, Assignor has agreed to assign to    Assignee, and Assignee has agreed to assume from Assignor, all of the Assumed Liabilities    and all of Assignor’s rights and obligations arising from and after the Effective    Time of Closing under the Contracts, all subject to the terms, conditions,    representations, warranties, covenants and agreements set forth in the Purchase Agreement.

**NOW, THEREFORE**, for and in consideration of the payment of the Initial Purchase    Price by Assignee to Assignor on the date hereof and for other good and valuable    consideration, the receipt and sufficiency of which are hereby acknowledged, Assignor and    Assignee hereby agree as follows:

1. Assignment. Assignor hereby assigns, transfers and sets over to Assignee, its    successors and assigns, as of the Effective Time of Closing, Assignor’s entire right,    title, interest and obligations in, to and under the Assumed Liabilities, and the rights    and obligations arising from and after the Effective Time of Closing under the Contracts.

2. Assumption. Assignee hereby assumes and accepts from Assignor, as of the    Effective Time of Closing, Assignor’s entire right, title, interest and obligations    in, to and under the Assumed Liabilities, and the rights and obligations arising from and    after the Effective Time of Closing under the Contracts.

3. Further Assurances. Assignor and Assignee agree to do such further acts and    to execute and deliver such further agreements, instruments or documents as may be    necessary or appropriate to carry out the purposes of this Assignment and Assumption    Agreement.

4. Defined Terms. Capitalized terms not defined herein shall have the meanings    assigned to them in the Purchase Agreement.

5. Inconsistencies. To the extent of any inconsistency between this Assignment    and Assumption Agreement and the Purchase Agreement, the Purchase Agreement shall control    and prevail.

**IN WITNESS WHEREOF**, each party has caused this Agreement to be executed by its    duly authorized representative as of the date first above written.
**Assignor:

CHESAPEAKE DISPLAY AND PACKAGING 

COMPANY**
 

By:
Its:**Assignee:

CORRFLEX GRAPHICS, LLC**
 

By:
Its:**Exhibit 1.6

Assumed Liabilities**Letter dated January 4, 2001 from counsel for Midwest Quality Gloves, Inc. to Wells      Lamont (CD&P customer) demanding that Wells Lamont "cease immediately" from      using a glove display system (Midwest’s so-called "Glove Hut") designed and      manufactured by Chesapeake Display and Packaging Company to which Midwest claims it has      superior intellectual property rights (patent pending).
Letter dated March 17, 2000 from Pack ‘N’ Stack, Inc. counsel to Chesapeake      Display and Packaging Company demanding that Chesapeake Display and Packaging Company      "immediately cease and desist" from manufacturing, using, and marketing      "auto glued trays" to which Pack ‘N’ Stack claims patent rights.      Chesapeake Display and Packaging Company has responded. No further notice has been      received from Pack ‘N’ Stack.
** 

 

 

Exhibit 1.7

Bill of Sale

BILL OF SALE**
**BILL OF SALE**, made as of _____________, 2001, by **CHESAPEAKE DISPLAY    AND PACKAGING COMPANY**, an Iowa corporation ("Seller"), to **CORRFLEX    GRAPHICS, LLC**, a North Carolina limited liability company ("Buyer").

**WHEREAS**, Seller and Buyer have entered into that certain Asset Purchase    Agreement, dated as of ______________, 2001 (the "Purchase Agreement"), the    terms of which are incorporated herein by reference and made a part hereof, with respect    to the sale by Seller and purchase by Buyer of certain assets owned by Seller and used in    Seller’s U.S. Display Business.

**NOW, THEREFORE**, for and in consideration of the payment of the Initial Purchase    Price and other good and valuable consideration, the receipt and sufficiency of which are    hereby acknowledged, Seller hereby sells, conveys, assigns, transfers and delivers to    Buyer, its successors and assigns, all of the Assets (other than the owned Real Property,    which is being conveyed from Seller to Buyer pursuant to separate special warranty deeds).

**TO HAVE AND TO HOLD** all such assets hereby sold and transferred to Buyer and its    successors and assigns forever.

Capitalized terms not otherwise defined herein shall have the meanings given in the    Purchase Agreement. To the extent of any inconsistency between this Bill of Sale and the    Purchase Agreement, the Purchase Agreement shall control and prevail.

**IN WITNESS WHEREOF,**Seller has caused this Bill of Sale to be executed by its    duly authorized representative as of the date first above written

**CHESAPEAKE DISPLAY AND PACKAGING
COMPANY**
 

 

By:
Name:

Its:

 

 

 
**Exhibit 1.17

Contracts**
 

1. World Park Standard Warehouse Lease, dated March 3, 1997, by and between System    Realty Three, Inc. and Chesapeake Display and Packaging Company for the premises located    at 9756 International Boulevard, Building 24, Cincinnati, Ohio; Second Amendment to Lease,    dated May 9, 2000, by and between Cabot Industrial Properties, L.P. and the Company for    the premises located at Building 24, 9756 International Drive Cincinnati, Ohio; and    attached Lease Term Termination Agreement, dated May 9, 2000, by and between Cabot    Industrial Properties, L.P. and Chesapeake Display and Packaging Company for the premises    located at Suites 220 and 225 of Technology Woods at 4701 Creek Road, Blue Ash, Ohio.

2. Lease Agreement, dated June 30, 1995, First Extension and Amendment Agreement, dated    July 1, 2000, and Commission Agreement, dated July 19, 2000, by and between Salem Business    Park, LLC and Chesapeake Display and Packaging Company for the premises located at    Building 43, 3300 Old Lexington Road, Winston-Salem, North Carolina.

3. Lease Agreement, dated March 1, 1998, by and between J.G. Messick & Sons, Inc.    and Chesapeake Display and Packaging Company for the premises located at 2900 Lowery    Street, Winston-Salem, North Carolina.

4. Lease Agreement, dated December 28, 1992, by and between Forsyth/Chesapeake Partners    Limited Partnership and Chesapeake Display and Packaging Company for the premises located    at Forum 52 Industrial Park, Rural Hall, Forsyth County, North Carolina.

5. Month-To-Month Lease Agreement, dated July 25, 1996, by and between    Highwoods/Forsyth Limited Partnership and Chesapeake Permanent Display, a Division of the    Company, for the premises located at 1325 Ivy Avenue, Winston-Salem, North Carolina.

6. Lease Agreement, dated January 31, 1998, by and between Salem Business Park, LLC and    Chesapeake Display and Packaging Company for the premises located at Building 30, 3300 Old    Lexington Road, Winston-Salem, North Carolina.

7. Letter, dated March 18, 1996, from Twin City regarding increasing rental rates at    Chesapeake Display and Packaging Company’s Twin City Warehouse.

8. Non-Disclosure Agreement, dated December 21, 2000, between Chesapeake Display &    Packaging and McNeil Consumer Healthcare Company Division of McNeil-PPC., Inc.

9. Customer Contract, dated December 19, 2000, between Chesapeake Display &    Packaging and Minnesota Mining and Manufacturing Company.

10. Letter, dated September 18, 2000, from Intel to Chesapeake Display and Packaging    including a Request for Proposal and Terms and Conditions.

11. Letter Agreement, dated January 24, 2000, between the Company and Decision    Analysts, Inc. regarding Peak Net Marketing Research Agreement.

12. Contract and Rate Quotation, dated May 25, 2000, between the Company and Verst    Group Logistics.

13. Lease Agreement between Chesapeake Display and Packaging and AT&T Credit    Corporation.

14. Lease Agreements between Chesapeake Display and Packaging and IKON Office    Solutions, Inc.

15. Master Lease Agreement between Chesapeake Display and Packaging and Yale Financial    Services, Inc.

16. Vehicle Lease Service Agreement, dated December 22, 1997, between Chesapeake    Display and Packaging and Penske Truck Leasing.

17. Services Agreement, dated May 3, 2000, between Chesapeake Display and Packaging and    RPC Mechanical, Inc.

18. Commercial Sales Agreement, dated March 31, 1999, between Chesapeake Display and    Packaging and ADT Security Services, Inc.

19. Customer-Vendor Agreement, dated November 1, 1999, between Chesapeake Display and    Packaging and First Choice Distribution. 

20. Pest Management Service Agreement, dated December 21, 1999, between Chesapeake    Display and Packaging and Prest-X-Company.

21. Rental Service Agreement, dated November 1, 1999, between Chesapeake Display and    Packaging and City Laundering Co.

22. Service Agreement, dated June 16, 1994, between Chesapeake Display and Packaging    and Hawkeye State Scale, Inc.

23. Vehicle Lease Service Agreement, dated November 6, 1997, between Chesapeake Display    and Packaging and Paclease/Truck Leasing, Inc.

24. Schedule "A" of Truck Lease and Service Agreement, dated July 7, 2000,    between Chesapeake Display and Packaging and Brown NationaLease.

25. Lease Agreement, dated January 21, 1999, between Chesapeake Display and Packaging    and Hupp TOYOTALift.

26. Rental Agreement, dated May 19, 1990, between Chesapeake Display and Packaging and    Olympic Compactor Rentals.

27. Equipment Maintenance and Supply Agreement, dated November 22, 2000, between    Chesapeake Display and Packaging and Copy Systems Inc.

28. Accepted Proposal, dated November 28, 2000, between Chesapeake Display and    Packaging and An Earth Art.

29. Lease Agreement, dated June 12, 2000, between Chesapeake Display and Packaging and    IKON Office Solutions, Inc.

30. Lease Agreement, dated December 14, 1998, between Chesapeake Display and Packaging    and Lease Corporation of America.

31. Equipment Rental Contract, dated May 27, 1999, between Chesapeake Display and    Packaging and Waterhouse Bottled Water Service.

32. Equipment Lease, dated February 2, 1998, between Chesapeake Display and Packaging    and Bankers Leasing Company. 

33. Equipment Rental Agreement, dated June 22, 2000, between Chesapeake Display and    Packaging and Xtra Lease.****
34. Equipment Rental Agreement, dated October 6, 2000, between Chesapeake Display    and Packaging and Xtra Lease.****
35. Warehousing Rate Proposal, dated February 8, 2000, between Chesapeake Display    and Packaging and GSTC Logistics, Inc. 

36. Quality Systems International Software License and Support Agreement, dated May 31,    2000, between Quality Systems International and Chesapeake Display and Packaging Company.

37. License Agreement, dated August 25, 1998, between Cyre, Inc. and Chesapeake Display    and Packaging. 

38. Master Multi-Site Service Agreement, dated October 1, 2000, between WAM!NET, Inc.    and Chesapeake Display and Packaging.

39. Changepoint Software License and Maintenance Agreement, dated June 9, 1999, between    Changepoint Inc. and Chesapeake Display and Packaging, as amended.

40. Symantec Value License Program, Issued November 10, 2000 to Chesapeake Display and    Packaging. 

41. Letter Agreement, dated May 18, 2000, from CSC Leasing Company to Chesapeake    Display and Packaging regarding the sale of surplus computer equipment.

42. Letter Confidentiality Agreement, dated November 13, 2000, between Chesapeake    Display and Packaging and Scott Freeman with AMX International, Inc. 

43. Letter Confidentiality Agreement, dated November 13, 2000, between Chesapeake    Display and Packaging and Steven Murphy with Data Systems International.

44. Letter Confidentiality Agreement, dated November 13, 2000, between Chesapeake    Display and Packaging Company and Charles Schwiderski with Data Systems International.

45. Letter Confidentiality Agreement, dated November 13, 2000, between Chesapeake    Display and Packaging Company and Rockey Tripodi with Born Information Services.

46. Letter of Intent, dated March 26, 1998, between Chesapeake Display and Packaging    Company and THIMM Verpackung.

47. Lease Agreement, dated January 24, 2001, between Russell Gerdin and Chesapeake    Display and Packaging for the premises located at 2570 Independence Road in Scott Six    Industrial Park, Iowa City, Iowa, and Parent Guaranty. Lease and Parent Guaranty to be    assumed by Buyer.

48. Commercial Lease, dated October 25, 2000, between Cummings Properties, LLC and    CD&P for the premises located 100 Cummings Center, Suite 116F, Beverly, MA 01915. 

49. Lease, dated April 30, 1996, between Berkshire Industrial Corporation and CD&P    for the premises located at Berkshire Corporate Park, Bethel, CT.

50. Multi-Tenant Industrial Lease, dated December 15, 1997, between 2703 Cindel Drive,    LLC and CD&P for the premises located at 2703 Cindel Drive, Cindel Business Park,    Cinnaminson, NJ.

51. Lease Agreement, dated March 14, 1996, between Church St. Partners and CD&P for    the premises located at 1274 N. Church Street, Moorestown, NJ. Lease expires on    June 30, 2001.

52. Assignment of Lease, dated January 1, 1990, between American National Bank and    Trust Company of Chicago as Trustee and CD&P for the premises located at 1111    Pasquinelli Dr., Westmont, IL.

53. Lease for the Carolina Public Warehouse, located at 3609 Glenn Ave., Winston-Salem,    North Carolina. 

54. Lease for the Public Warehouse located at 5805 Courtesy Lane, Shreveport,    Louisiana.****
55. Lease for the Hill & Williams Warehouse located at 625 44th Street, Marion,    Iowa.****
56. Lease for the GSTC Public Warehouse located at 400 Hwy 150 East, Walford, Iowa.****
57. Lease for the Lentz Warehouse located at 6220 Clementine Dr., Clemmons, North    Carolina.

58. Lease of Public Warehouse located at 1075 Victor Hill Rd., Greer, South Carolina.****
59. License Agreement for Sametime Software, a Lotus Notes software designed for    instant messaging and electronic conferencing via a computer.****
60. License of JD Edwards software.****
61. License of Harry Rhodes software.

62. Letter Agreement between Revlon and Chesapeake Display and Packaging Company, dated    March 26, 2001, regarding Revlon Assembly and Distribution Facility in Winston-Salem,    North Carolina.

63. Agreement, dated January 24, 2001, between Septagon Construction Co., Inc. and    Chesapeake Display and Packaging.

64. Virtuoso Business Centers Service Agreement, dated March 19, 2001, between Virtuoso    Business Centers and Chesapeake Display and Packaging Company for the lease of the    premises at #212, 213 and 214, 1010 N. /Central Avenue, Glendale, California 91202, and    attached Service Agreement and Amendment.

65. All Software licenses, including without limitation licenses with respect to all    shrink wrapped and original equipment Software loaded on Equipment (excluding licenses for    the Software required to perform the Services contemplated in the Transition Services    Agreement, which licenses are to be assigned to Buyer pursuant to the provisions of the    Transition Services Agreement).

66. All Equipment leases that have rental payments of less than $100,000 per year    (excluding the leases for the two AS/400 computers and the two RS6000 computers that are    to be assigned to Buyer pursuant to the provisions of the Transition Services Agreement).

67. All maintenance agreements for Equipment entered into in the ordinary course of    business of the U.S. Display Business.

68. All express and implied warranty rights relating to the Assets.

69. All vendor and supplier supply agreements and purchase orders entered into for the    purchase of goods or services in the ordinary course of business of the U.S. Display    Business.

70. All customer supply agreements and accepted and unfilled orders for the sale of    goods to, and performance of services for, customers of the U.S. Display Business in the    ordinary course of business of the U.S. Display Business.

71. All other contracts, agreements, and understandings entered into in the ordinary    course of business of the U.S. Display Business and which remain in effect at the    Effective Time of Closing, none of which (individually or in the aggregate) are material.
**Exhibit 1.24

Equipment**
1. See attached list.
**Exhibit 1.25

Excluded Assets**
1. Claims against former employee Dan Ritz for unjust enrichment, fraud and breach    of Non-Compete and Confidentiality Agreement and related claims against Smurfit Stone    Corrugated Container Corporation.

2. Claims against former employee Ted Gleis arising from Gleis’ Non-Compete and    Confidentiality Agreement and related claims against Smurfit Stone Corrugated Container    Corporation.

3. Claims against former employee Michael Keith arising from Keith’s Non-Compete    and Confidentiality Agreement and related claims against Prestige Display and Packaging.

4. Any intercompany balances due to or receivable from Color-Box, LLC.

5. Any pension plan assets.

6. Accounts due from officers, employees and Affiliates of Seller.

7. The minute books, stock records and corporate seal of Seller.

8. All of Seller’s insurance policies and rights thereunder, except for any    insurance proceeds received or receivable for loss or damage after December 31, 2000, of    items of tangible personal property of the U.S. Display Business held as of such date    (except to the extent such proceeds have been used to repair or purchase items of tangible    personal property included in the Assets).

9. Pre-Closing rights of the U.S. Display Business relating to deposits, prepaid    expenses, rebates and claims for refunds.

10. All personnel records and other records of the U.S. Display Business that Seller is    required by Law to retain in its possession.

11. All assets owned or held by Seller and not used primarily in the U.S. Display    Business.

12. Mechanicsburg facility located at Old Silver Springs Road, Mechanicsburg,    Pennsylvania.

13. Facility in Marion, Iowa.

14. The power supply backup-18KVA, which is to be transferred to Buyer pursuant to the    provisions of the Transition Services Agreement. 
**Exhibit 1.26

Excluded Intangibles**Names "Chesapeake Corporation" and "Chesapeake Display and Packaging      Company."
Wordmarks "Chesapeake," "CD&P" and any variations or derivations      thereof.
Phrase "Resourceful by Nature."
The "rolling C" logo.
**Exhibit 1.30

Financial Statements

U.S. Display Business

Condensed Income Statements

for the fiscal years ended December 31,

(unaudited)
****(in thousands)**1998 **1999 **2000      External Sales, Net
200,793 
189,004 
177,998Internal Sales, Net
8,348 
1,311 
176Net Sales
209,141 
190,315 
178,173      Direct Costs
135,580 
100,124 
132,869Contribution Margin
73,561 
90,191 
45,305Contribution % Sales
35.2% 
47.4% 
25.4%      Period Manufacturing
25,313 
35,565 
25,543Depreciation Expense
4,232 
4,773 
4,661LIFO Expense  
200 
258Gross Margin
44,016 
49,652 
14,842Gross Margin % Sales
21.0% 
26.1% 
8.3%      Selling Expense
18,889 
18,041 
19,341General & Admin. Expense
19,079 
23,854 
33,253Total SG&A Expense
37,968 
41,895 
52,594Operating Income
6,048 
7,757 
(37,751)      Other Income
(880) 
672 
445Other Deductions
11 
1 
0Amortization Expense
768 
768 
768EBIT
4,389 
7,660 
(38,075)      Restructuring
3,600 
815 
1,140EBITR
789 
6,845 
(39,215)** 

U.S. Display Business

Condensed Balance Sheet

as of December 31, 2000

(unaudited)
 
(in thousands)**December 31, 

2000  Current assets: Cash and cash equivalents$ 10Accounts receivable27,587Inventory14,500Other current assets3,516Total current assets45,613  Property, plant and equipment, net43,913Goodwill and intangibles, net7,115Overfunded pension5,260Other assets52,810Total assets$ 154,711  Current liabilities: Accounts payable$ 19,873 Taxes payable (receivable)(20,595)Accrued expenses6,534Intercompany debt50,516Total current liabilities56,328  Intercompany debt78,050Long-term external debt63Other long-term liabilities7,786Deferred income taxes11,269Total liabilities153,496  Stockholders’ equity1,215  Total liabilities and stockholders’ equity$ 154,711
 
**Exhibit 1.37

Initial Statement of Adjusted Working Capital

 

 

U.S. Display
Statement of Adjusted Working Capital 
As of December 31, 2000
(in thousands)
US Display
US    Display
Adjustments
As AdjustedCurrent    assets:Cash and    cash equivalents
$ 10 
$    (10)
(1) 
$ - Accounts    receivable
27,587    
(4,546)
(2) 
23,013 
(28)
(4) Inventory
14,500    
(371)
(2) 
14,129 Other    current assets
3,516    
(211)
(2) 
1,848 
(1,457)
(3) Total    current assets
$    45,613 
$    (6,623)
$ 38,990 Current    liabilitiesAccounts    payable 
$ 19,873 

$    (10,098)
(2) 
$ 9,775 Taxes    payable (receivable)
(20,595)

20,595    
(3) Accrued    expenses
6,534    
(1,142)
(5) 
5,106
(211)
(2) Intercompany    debt
(75)
(6)
- Total    current liabilities
$    5,812 
$    9,069
$ 14,881 Total    Working Capital
$    39,801
$    (15,692) 
$ 24,109 Difference    between Preliminary and Final December 31, 2000, Balance Sheet
(31)Adjusted    working capital
$ 24,078(1)Eliminate    cash and outstanding check balances(2)Eliminate    balances with ColorBox(3)Eliminate    tax balances. (4)Eliminate    Smurfit-Stone rebate(5)Eliminate    restructure(6)Eliminate    legal accrual**Exhibit 1.38

Intangibles**
1. Patent No. 4,929,116: Coupler assembly for connecting corrugated sheet material.

2. Patent No. 4,949,851: Collapsible display.

3. Design Patent No. 319,940: Foldable tray unit for product merchandising displaystand.

4. Design Patent No. 359,180: Display tray.

5. Patent No. 5,611,438: Product display and display hook for use in same.

6. Design Patent No. 380,113: Can dispenser and holder.

7. Design Patent No. 432,912: Box.

8. Design Patent No. 433,630: Box.

9. Design Patent No. 295,815: Refrigerated dispenser display stand.

10. Design Patent No. 319,938: Article display stand.

11. Design Patent No. 328,205: Display rack.

12. Design Patent No. 328,210: Display rack module.

13. Design Patent No. 335,048: Display stand.

14. Design Patent No. 335,049: Display stand.

15. Design Patent No. 335,050: Display stand.

16. Design Patent No. 337,511: Flange plate for a spool.

17. Design Patent No. 337,718: Interlock panel for a spool.

18. Design Patent No. 341,769: Spool.

19. Design Patent No. 352,147: Portable display cart.

20. Patent No. 4,420,947: Shelf support system.

21. U.S. Patent Application (No. 09/271,744) for display system for advancing products(filed March 18, 1999).

22. Pending Patent Applications
**Country**Serial No.**Filing Date**Title
US
60/162,116
Oct. 29, 1999Display Assembly
US
60/162,114
Oct. 29, 1999Floor Standing Panel Display
US
60/162,115
Oct. 29, 1999Foldable Double Sided Display    Unit
US
60/237,150
Oct. 2, 2000Suitcase Style Pre-Pack    Floorstand
US
60/265,746
Feb. 2, 2001Wheeled Display With Built-in    Retail Ramp
23. Trademarks "Peake Net," "Peak Solutions."

24. License of JD Edwards software.

25. License of Harry Rhodes software.

26. All Software embedded in material Equipment.

 **Exhibit 1.41

Knowledge of Seller**- Thomas H. Johnson.
- Andrew J. Kohut.
- William T. Tolley.
- J.P. Causey Jr.
- Michael A. Bellanca.
- Thomas A. Smith.
- Robert D. Troudt
- Lawrence J. Siebert, Jr.
- Christopher R. Burgess
- Theodore A. Samotis
- Pierre R. Gioeli

 **Exhibit 1.45

Opinion of Buyer’s Counsel**
1. The Opinion of Buyer’s Counsel to be in customary form reasonably acceptable to    Seller and consistent with Buyer’s mark-up of the most recent draft shared between    the parties.

 
**Exhibit 1.46

Opinion of Seller’s Counsel**
1. The Opinion of Seller’s Counsel to be in customary form reasonably acceptable    to Buyer and consistent with Buyer’s mark-up of the most recent draft shared between    the parties.

 

 
**Exhibit 1.48

Parent Guaranty and Non-Competition Agreement**
1. See attached form of Guaranty and Non-Competition Agreement.
**Exhibit 1.49

Permits****None.**
 
**Exhibit 1.50

Permitted Liens**
 
- Interests of lessors in leased Real Property and Equipment as set forth in the relevant    Contracts and as provided by Law.
- All exceptions reported on the Title Commitments delivered by Seller to Buyer pursuant    to  Section 3.21(h)  of the Agreement.
- Liens for Taxes not yet due.
- Liens on landlord’s fee simple interest in any leased Real Property.
- Other immaterial Liens that are not reasonably expected to interfere with Buyer’s    use of the Assets or items real or personal property held by Seller pursuant to the    Contracts or operations of the U.S. Display Business.
- Liens pursuant to the items set forth on  Exhibit 3.3 , which liens shall be    released prior to Closing.

 
**Exhibit 1.52

Plant Sites**
1. Production facility located at 555 Aureole St., Winston-Salem, Forsyth County, North    Carolina.

2. Production facility located at 4450 Olympic Blvd., Erlanger, Boone and Kenton    Counties, Kentucky.

3. Rural Hall Assembly Plant located at Forum 52 Industrial Park, Rural Hall, North    Carolina

4. Cinnaminson facility located at 2703 Cindel Dr., Cinnaminson, New Jersey

5. Permanent Display facility located at 2900 Lowery Street, Winston-Salem, North    Carolina

6. Sharonville Plant located at 9756 International Blvd., Cincinnati, Ohio

7. Scott Six Industrial Park facility located at 2570 Independence Road, Iowa City,    Iowa

 
**Exhibit 1.53

Real Property**
 
**Owned Real Estate.**a.Production facility located at 555 Aureole St.,        Winston-Salem, Forsyth County, North Carolina. b.Production facility located at 4450 Olympic Blvd., Erlanger,        Boone and Kenton Counties, Kentucky.
 
**Leased Real Estate.**a.Moorestown facility located at 1274 N. Church St.,    Moorestown, New Jersey.b.Rural Hall Assembly Plant located at Forum 52 Industrial    Park, Rural Hall, North Carolina.c.Berkshire Corporate Park facility located at 9 Berkshire    Blvd., Bethel, Connecticut.d.Salem Business Park facility located at 3300 Old Lexington    Rd., Winston-Salem, North Carolina.e.Cinnaminson facility located at 2703 Cindel Dr., Cinnaminson,    New Jersey.f.Beverly facility located at 100 Cummings Center, Boston,    Massachusetts.g.Office space located at Nos. 212, 213 and 214, 1010 N.    Central Avenue, Glendale, California 91202.h.Westmont facility located at Executive Place II, Westmont,    Illinois.i.Permanent Display facility located at 2900 Lowery Street,    Winston-Salem, North Carolina.j.Sharonville Plant located at 9756 International Blvd.,    Cincinnati, Ohio.k.Scott Six Industrial Park facility located at 2570    Independence Road, Iowa City, Iowa.**3. Recommendations Regarding Sprinklers at Erlanger**
At the time that Chesapeake acquired the Erlanger plant in 1996, our insurers, IRI,        judged the building’s sprinkler system to be adequate. In 1998, however, an IRI Loss        Prevention Survey report indicated that the sprinkler system was of unacceptable design        for the storage configuration. The area at issue was the racked warehousing in the north        end of the plant, which had previously been used for incidental storage.

Estimates for upgrading the sprinkler system range from $100,000 to $300,000. 

During the renewal of property coverage for the 6/01/00 to 6/01/01 term, IRI required        an additional facultative premium of $42,000 for the Erlanger sprinkler system issue.

 
**Exhibit 1.58

Special Accounting Principles****I. Financial Statements.
1. "Obsolete inventory" shall be defined as "inventory that is no longer        required for manufacture of products or is no longer salable at regular prices determined        on a basis consistent with current practices."

2. The Financial Statements shall be unaudited.

3. The Financial Statements shall be condensed.

4. The Financial Statements shall include income statements for the fiscal years ended        December 31, 1998, 1999, and 2000, and a balance sheet as of December 31, 2000.

5. The Financial Statements shall exclude balance sheets as of December 31, 1998, and        1999, and statements of cash flows for the fiscal years ended December 31, 1998, 1999, and        2000, and shall have no notes to the Financial Statements. 

6. Inventory valuation method:
- Inventory is valued at the lower of cost or market determined by a standard cost system.          All standard costs for 2001 were updated on December 31, 2000. Standard costs are analyzed          quarterly for any changes in actual costs and are updated accordingly. Work center costing          rates were calculated based on 2001 budgeted activity levels and costs. Based on projected          utilization for 2001, each work center’s total costs were broken down into hourly          cost rates for labor and overhead.
- Standard costs for roll stock were based on December 2000 actual purchase prices. Other          material costs were based on a review and comparison to the last purchase order cost for          each item.
- Manufactured or assembled standard item costs are the sum of the required materials per          the bill of materials multiplied by their respective 2001 material cost standard plus the          work center time to produce (as determined by the routing for each item) multiplied by the          2001 work center rate per hour.
- All inventory is valued on a standard cost basis approximating average-cost except roll          stock, which is valued on a LIFO basis.

**II. Interim Financial Statements.
1. "Obsolete inventory" shall be defined as "inventory that is no longer        required for manufacture of products or is no longer salable at regular prices determined        on a basis consistent with current practices."

2. The Interim Financial Statements shall be unaudited.

3. The Interim Financial Statements shall be condensed.

4. The Interim Financial Statements shall include an income statement for the fiscal        quarter ended April 1, 2001, and a balance sheet as of such date, and shall exclude any        income statements or balance sheets for any other periods or dates, any statements of cash        flows and any notes to the Interim Financial Statements.

5. Inventory valuation method:
- Inventory is valued at the lower of cost or market determined by a standard cost system.          All standard costs for 2001 were updated on December 31, 2000. Standard costs are analyzed          quarterly for any changes in actual costs and are updated accordingly. Work center costing          rates were calculated based on 2001 budgeted activity levels and costs. Based on projected          utilization for 2001, each work center’s total costs were broken down into hourly          cost rates for labor and overhead.
- Standard costs for roll stock were based on December 2000 actual purchase prices. Other          material costs were based on a review and comparison to the last purchase order cost for          each item.
- Manufactured or assembled standard item costs are the sum of the required materials per          the bill of materials multiplied by their respective 2001 material cost standard plus the          work center time to produce (as determined by the routing for each item) multiplied by the          2001 work center rate per hour.
- All inventory is valued on a standard cost basis approximating average-cost except roll          stock which is valued on a LIFO basis.

**III. Initial Statement of Adjusted Working Capital.
1. Current assets shall exclude the Excluded Assets.

2. Current liabilities shall exclude any liabilities not being assumed by Buyer        pursuant to the Agreement (i.e., liabilities other than (a) the Assumed Liabilities, and        (b) liabilities arising after the Effective Time of Closing pursuant to the Contracts).

3. Accrued legal expenses and accrued restructuring charges shall be excluded.

4. "Obsolete inventory" shall be defined as "inventory that is no longer        required for manufacture of products or is no longer salable at regular prices determined        on a basis consistent with current practices."

5. Elections under, modifications and exceptions to GAAP and Seller’s past        practice as set forth in the Notes to the Initial Statement of Adjusted Working Capital.

6. Rebates receivable pursuant to Section 2.6 of the Agreement shall be        excluded.

7. Inventory valuation methods:
- Inventory is valued at the lower of cost or market determined by a standard cost system.          All standard costs for 2001 were updated on December 31, 2000. Standard costs are analyzed          quarterly for any changes in actual costs and are updated accordingly. Work center costing          rates were calculated based on 2001 budgeted activity levels and costs. Based on projected          utilization for 2001, each work center’s total costs were broken down into hourly          cost rates for labor and overhead.
- Standard costs for roll stock were based on December 2000 actual purchase prices. Other          material costs were based on a review and comparison to the last purchase order cost for          each item.
- Manufactured or assembled standard item costs are the sum of the required materials per          the bill of materials multiplied by their respective 2001 material cost standard plus the          work center time to produce (as determined by the routing for each item) multiplied by the          2001 work center rate per hour.
- All inventory is valued on a standard cost basis approximating average-cost except roll          stock which is valued on a LIFO basis.

**IV. Final Statement of Adjusted Working Capital.
1. Current assets shall exclude the Excluded Assets. 

2. Current liabilities shall exclude any liabilities not being assumed by Buyer        pursuant to the Agreement (i.e., liabilities other than (a) the Assumed Liabilities, and        (b) liabilities arising after the Closing Date pursuant to the Contracts).

3. Accrued legal expenses, accrued restructuring charges, accrued payroll expenses and        accrued payroll taxes shall be excluded.

4. "Obsolete inventory" shall be defined as "inventory that is no longer        required for manufacture of products or is no longer salable at regular prices determined        on a basis consistent with current practices."

5. Elections under, modifications and exceptions to GAAP and Seller’s past        practice as set forth in the Notes to the Final Statement of Adjusted Working Capital.

6. Rebates receivable under any paper supply agreements shall be excluded.

7. Inventory valuation methods:
- Inventory is valued at the lower of cost or market determined by a standard cost system.          All standard costs for 2001 were updated on December 31, 2000. Standard costs are analyzed          quarterly for any changes in actual costs and are updated accordingly. Work center costing          rates were calculated based on 2001 budgeted activity levels and costs. Based on projected          utilization for 2001, each work center’s total costs were broken down into hourly          cost rates for labor and overhead.
- Standard costs for roll stock were based on December 2000 actual purchase prices. Other          material costs were based on a review and comparison to the last purchase order cost for          each item.
- Manufactured or assembled standard item costs are the sum of the required materials per          the bill of materials multiplied by their respective 2001 material cost standard plus the          work center time to produce (as determined by the routing for each item) multiplied by the          2001 work center rate per hour.
- All inventory is valued on a standard cost basis approximating average-cost except roll          stock which is valued on a LIFO basis.

9. Insurance proceeds received or receivable shall be excluded from current assets (it        being understood that any insurance proceeds received or receivable by Seller for loss or        damage after December 31, 2000, of items of tangible personal property of the U.S. Display        Business held as of such date (except to the extent such proceeds have been used to repair        or purchase items of tangible personal property included in the Assets) shall be included        in the Assets without an adjustment to working capital).

 
**Exhibit 1.61

Transition Services Agreement**
1. See attached form of Transition Services Agreement.**Exhibit 2.6

Rebates, Programs and Allowances**
1. Rebate available under the Paper Products Supply Agreement, dated May 23, 1997,    between Chesapeake Corporation and St. Laurent Paper Products Corp.
**Exhibit 3.1

Foreign Qualifications**
 

1. Iowa (state of incorporation)

2. California

3. Connecticut

4. Illinois

5. Kentucky

6. Massachusetts

7. Mississippi

8. New Jersey

9. North Carolina

10. Ohio

11. Pennsylvania
**Exhibit 3.3

Seller’s Consents**
1. Consent of lender with respect to the Amended and Restated Credit Agreement, dated    as of February 8, 2001, among Chesapeake Corporation, Chesapeake U.K. Holdings Limited,    Chesapeake UK Acquisitions PLC, Chesapeake UK Acquisitions II PLC, Boxmore International    PLC, Field Group PLC, Chesapeake Europe, SAS, the Lenders referred to therein, First Union    National Bank, as Administrative Agent, Bank of America, N.A., as Syndication Agent,    Wachovia Bank, N.A., as Documentation Agent, and First Union Securities, Inc., as the Lead    Arranger and Sole Book Runner.

2. Consent of lender with respect to the Subsidiary Guaranty, dated as of June 15,    2000, by each Subsidiary of Chesapeake Corporation that is a signatory thereto, including    Chesapeake Display and Packaging Company, Chesapeake Packaging Co. and Capitol Packaging    Corporation, in favor of First Union National Bank.

3. Consent of lender with respect to the Security Agreement, dated as of December 29,    2000, by Chesapeake Corporation, WTM I Company, Chesapeake Packaging Co., Chesapeake    Display and Packaging Company, Capitol Packaging Corporation, Green Printing Company,    Delmarva Properties, Inc., Stonehouse Inc., Cary St. Company, and Chesapeake Trading    Company, Inc. in favor of First Union National Bank.

4. Consent of lender with respect to the Patent Security Agreement, dated as ofDecember 29, 2000, between Chesapeake Corporation, Capitol Packaging Corporation,Chesapeake Display and Packaging Company, Chesapeake Packaging Co. Consumer PromotionsInternational, Inc. and First Union National Bank.**Exhibit 3.5

Litigation
River Road Associates v. Chesapeake Display and Packaging Company
, No. 98-3594 (SSB)      (U.S. Dist. Ct. NJ).
Jerry J. Peek v. Chesapeake Display & Packaging, et al.
, Civil Action No.      1:00cv02617 (U.S. Dist. Ct. NJ).
Patrick Scott Lay v. Chesapeake Display & Packaging Company, d/b/a/ Color Box
,      No. 00-378-GPM (U.S. Dist. Ct., S.D. Ill.).
Pablo Defarrari v. Chesapeake Display & Packaging Company
, Case No.      760CL01M00035-00 (Richmond City Circuit Ct.).
Race and gender discrimination and retaliation claims by Cheryl Kimpton and Carla Heard,      filed with the Iowa Civil Rights Commission in Des Moines, Iowa, on November 20, 2000      (EEOC Nos. 261110216 and 261110217).
Fernando Contreras "national origin/ancestry" discrimination claims against      Color-Box, LLC (Visalia, California), filed on September 29, 1999, with the California      Department of Fair Employment and Housing (EEOC No. 370 99 7444). 
Bedwell v. Chesapeake Display and Packaging Company
, No. CV01-02-0369 (Butler      County, Ohio Ct. of Common Pleas).
Threatened lawsuit by George Petker (former Color-Box LLC employee) alleging breach of      Non-Compete and Confidentiality Agreement by Chesapeake Display and Packaging Company.
Claims against former employee Dan Ritz for unjust enrichment, fraud and breach of      Non-Compete and Confidentiality Agreement and related claims against Smurfit Stone      Corrugated Container Corporation.
Claims against former employee Ted Gleis arising from Gleis’ Non-Compete and      Confidentiality Agreement and related claims against Smurfit Stone Corrugated Container      Corporation.
Claims against former employee Michael Keith arising from Keith’s Non-Compete and      Confidentiality Agreement and related claims against Prestige Display and Packaging.
Letter dated August 4, 2000 from counsel to Daniel P. Moll, former Chesapeake Display      and Packaging Company employee, claiming unspecified discrimination against Mr. Moll      because his severance payment is allegedly less than similarly-situated Chesapeake Display      and Packaging Company employees who were terminated in the same time period. After an      exchange of letters, Seller has heard nothing further from Mr. Moll since August 2000.
All employment related claims related to Chesapeake Display and Packaging Company      workforce reduction in 1
st
 Quarter 2001. 
Letter dated January 4, 2001 from counsel for Midwest Quality Gloves, Inc. to Wells      Lamont (CD&P customer) demanding that Wells Lamont "cease immediately" from      using a glove display system (Midwest’s so-called "Glove Hut") designed and      manufactured by Chesapeake Display and Packaging Company to which Midwest claims it has      superior intellectual property rights (patent pending). To be assumed by Buyer.
Letter dated March 17, 2000 from Pack ‘N’ Stack, Inc. counsel to Chesapeake      Display and Packaging Company demanding that Chesapeake Display and Packaging Company      "immediately cease and desist" from manufacturing, using, and marketing      "auto glued trays" to which Pack ‘N’ Stack claims patent rights.      Chesapeake Display and Packaging Company has responded. No further notice has been      received from Pack ‘N’ Stack. To be assumed by Buyer.
Consumer’s product liability claim against Hershey Foods Corporation involving      alleged infestation of Hershey’s "Pot of Gold" individual cluster product,      shipped to CD&P’s Mechanicsburg, Pennsylvania, assembly operation on August 19,      1998, and September 4, 1998; CD&P has been notified by Hershey that CD&P may be      added as an addition defendant to lawsuit.
Norma Falcon vs. Walco et al.
, Case No. 99186683 (Superior Ct. of Calif., Tulare      County).
Miller Janitorial Service, Inc. and Jerome Miller v. Chesapeake Display and Packaging,      Inc.
, filed on April 9, 2001, in the General Court of Justice, Superior Court      Division, for Forsyth County, North Carolina.
**Exhibit 3.7

Seller’s Contract Consents

 **
Consents to the assignment to Buyer with respect to the following Agreements:
1. World Park Standard Warehouse Lease, dated March 3, 1997, by and between System    Realty Three, Inc. and Chesapeake Display and Packaging Company for the premises located    at 9756 International Boulevard, Building 24, Cincinnati, Ohio; Second Amendment to Lease,    dated May 9, 2000, by and between Cabot Industrial Properties, L.P. and the Company for    the premises located at Building 24, 9756 International Drive Cincinnati, Ohio; and    attached Lease Term Termination Agreement, dated May 9, 2000, by and between Cabot    Industrial Properties, L.P. and Chesapeake Display and Packaging Company for the premises    located at Suites 220 and 225 of Technology Woods at 4701 Creek Road, Blue Ash, Ohio.

2. Lease Agreement, dated June 30, 1995, First Extension and Amendment Agreement, dated    July 1, 2000, and Commission Agreement, dated July 19, 2000, by and between Salem Business    Park, LLC and Chesapeake Display and Packaging Company for the premises located at    Building 43, 3300 Old Lexington Road, Winston-Salem, North Carolina.

3. Lease Agreement, dated March 1, 1998, by and between J.G. Messick & Sons, Inc.    and Chesapeake Display and Packaging Company for the premises located at 2900 Lowery    Street, Winston-Salem, North Carolina.

4. Lease Agreement, dated December 28, 1992, by and between Forsyth/Chesapeake Partners    Limited Partnership and Chesapeake Display and Packaging Company for the premises located    at Forum 52 Industrial Park, Rural Hall, Forsyth County, North Carolina.

6. Lease Agreement, dated January 31, 1998, by and between Salem Business Park, LLC and    Chesapeake Display and Packaging Company for the premises located at Building 30, 3300 Old    Lexington Road, Winston-Salem, North Carolina.

8. Lease Agreement, dated January 24, 2001, between Russell Gerdin and Chesapeake    Display and Packaging for the premises located at 2570 Independence Road in Scott Six    Industrial Park, Iowa City, Iowa, and Parent Guaranty. Lease and Parent Guaranty to be    assumed by Buyer.

9. Commercial Lease, dated October 25, 2000, between Cummings Properties, LLC and    CD&P for the premises located 100 Cummings Center, Suite 116F, Beverly, MA 01915. 

10. Lease, dated April 30, 1996, between Berkshire Industrial Corporation and CD&P    for the premises located at Berkshire Corporate Park, Bethel, CT.

11. Multi-Tenant Industrial Lease, dated December 15, 1997, between 2703 Cindel Drive,    LLC and CD&P for the premises located at 2703 Cindel Drive, Cindel Business Park,    Cinnaminson, NJ.

12. Lease Agreement, dated March 14, 1996, between Church St. Partners and CD&P for    the premises located at 1274 N. Church Street, Moorestown, NJ. Lease expires on    June 30, 2001.

13. Assignment of Lease, dated January 1, 1990, between American National Bank and    Trust Company of Chicago as Trustee and CD&P for the premises located at 1111    Pasquinelli Dr., Westmont, IL.

14. License of JD Edwards software.

15. License of Harry Rhodes software.

17. Virtuoso Business Centers Service Agreement, dated March 31, 2001, between Viruoso    Business Centers and Chesapeake Display and Packaging Company for the lease of the    premises at #212, 213 and 214, 1010 N. Central Avenue, Glendale, California 91202, and    attached Service Agreement and Amendment.
**                Exhibit            3.8

                             Accounts**
1. None.**                Exhibit            3.10

                            Projections

 

           U.S. Display            Business

   Condensed Financial Projections

for Fiscal Years 2001, 2002 and 2003**
                                (unaudited)
****(in millions)**Actual 

2000**Estimated**
**2001****Estimated

2002**Estimated

2003Sales
$ 178.1
$ 170.0
$ 178.0
$ 195.0Percent growth
(5.8)%
(4.5)%
4.7%
9.6%Adjusted EBITDA
$ (12.9)
$ 1.0
$ 13.0
$ 27.0Percent margin
N.M.
0.6%
7.3%
13.8%Adjusted EBIT*
$ (22.6)
$ (8.7)
$ 3.3
$ 17.3Percent margin
N.M.
N.M.
1.9%
8.9%CAPEX
$ 4.2
$ 3.0
$ 5.0
$ 5.0Working Capital
$ 31.0
$ 31.0
$ 32.0
$ 35.0* Projected figures include recurring U.S. Display Business headquarters    costs** 

 
Exhibit 3.12

Taxes

1. The Chesapeake Display and Packaging 1996, 1997, 1998 and 1999 Kentucky Sales    and Use Tax Returns are presently under examination by the Kentucky Department of    Taxation.

2. The Chesapeake Corporation and Subsidiaries Consolidated 1998 U.S. Form 1120 is    presently under examination by the Internal Revenue Service.

3. The Chesapeake Corporation 401(k) Plan for Salaried Employees Form 5500 for the Plan    Year Ended December 31, 1998, is undergoing a routine audit by the IRS.
**Exhibit 3.13

Employment and Benefits Agreements**
 
- Chesapeake Corporation.
Chesapeake Corporation Retirement Plan for Salaried Employees (Qualified Pension Plan) 
Chesapeake Corporation Retirement Plan for Hourly Employees (Qualified Pension Plan)
Chesapeake Corporation Executive Supplemental Retirement Plan. (Pension Plan)
Chesapeake Corporation 401(k) Savings Plan for Hourly Employees (Qualified Pension Plan)
Chesapeake Corporation 401(k) Savings Plan for Salaried Employees (Qualified Pension      Plan). 
Chesapeake Corporation 401(k) Restoration Plan. (Pension Plan)
Chesapeake Corporation Long Term Disability Plan for Salaried Employees. (Welfare Plan)
Chesapeake Corporation Hourly Flex Plan. (Welfare Plan)
Chesapeake Corporation Flex Plan for Salaried Employees. (Welfare Plan)
Chesapeake Corporation Group Life, Medical and Dependent Life Plan for Salaried      Employees. (Welfare Plan)
Chesapeake Corporation Travel Accident Plan for Salaried Employees. (Welfare Plan)
Chesapeake Corporation Employee Assistance Program. (Welfare Plan)
Chesapeake Corporation Foundation Scholarship Program.
Chesapeake Corporation Salaried Employees’ Stock Purchase Plan.
Chesapeake Corporation Hourly Employees’ Stock Purchase Plan.
Chesapeake Corporation 1998-2000 Cycle of Long-Term Incentive Program under the      Chesapeake Corporation 1997 Incentive Plan.
Chesapeake Corporation Salaried Employees’ Benefits Continuation Plan. (Welfare      Plan)
Chesapeake Corporation Severance Benefits Plan for Employees. (Welfare Plan)
Chesapeake Corporation 1987 Stock Option Plan.
Chesapeake Corporation 1993 Incentive Plan.
Chesapeake Corporation 1997 Incentive Plan.
Chesapeake Corporation Officers’ Deferred Compensation Program under the Chesapeake      Corporation 1997 Incentive Plan.
Chesapeake Corporation Foundation Employee Matching Gift Program.
Chesapeake Corporation Sick Leave (Short-Term Disability) Plan for Salaried Employees.      (Welfare Plan)
Chesapeake Corporation Officers’ Incentive Program under the 1997 Incentive Plan.
All locations have vacation and holiday pay, tuition refund program, and for selected      key employees, financial planning and income tax preparation programs.

- Chesapeake Display and Packaging Company.
Chesapeake Display and Packaging Company North America Incentive Compensation Plan.
Chesapeake Display and Packaging Company Gain Sharing Plan.
Chesapeake Display and Packaging Company Group Life, Disability, Medical Plan for Hourly      Employees. (Welfare Plan)
Chesapeake Display and Packaging Sales Commissions Programs and Plans.
Chesapeake Display and Packaging Company Phantom Stock Bonus Arrangements with the      following employees: 
- L. Paul Boroughs
- Robert D. Troudt
Employee Non-Competition and Confidentiality Agreements.
Employment and Severance Benefits Agreement between Chesapeake Display and Packaging      Company and the following employees:
- Leon E. Formanczyk.
- Jeffrey L. Jordy.
- James R. Ghere.
- Robert D. Troudt.
- Lawrence J. Siebert, Jr.
- Kevin S. Hyland.
- Theodore A. Samotis.
- Pierre R. Gioeli.
Lump Sum Payment Agreements between Chesapeake Display and Packaging Company and the      following employees:
- Bruce Hagood.
- Jeff J. Riddle.
- Theodore C. Topalu.
- Richard R. Hastings.
- Gregory M. Dugan.
- Robert J. Boden.
- Robert J. Fix, Jr.
- Todd A. Peterson.
- Daniel D. Miller.
- Patrick R. Connelly.
- Paul J. Crowell.
Retention Agreements with the following employees at the Marion, Iowa, facility:
- Leahy, Diane S.
- Tuecke, Tara J
- Paulsen, Cheryl L.
- Thibodeaux, Ronald J.
- Bruce Jr., Robert E.
- Engel, Heather L
- Vondracek, Laurie K
- Peterson, Todd A.
- Kuchemann, Thomas H.
- Lees, David P.
- Kirchner, Angela M.
- Sanchez, Antonio L.
- Johnson, Mary L
- Robenalt, John M.
- Rowe, James L.
Chesapeake Display and Packaging Company Severance Benefits Plan for Employees.
Employment Agreement, dated March 10, 2000, by and between Chesapeake Display and      Packaging Company and Scott Maher.
Employment Agreement, dated March 9, 2000, by and between Chesapeake Display and      Packaging Company and Tracy Cini.
All locations have vacation and holiday pay, tuition refund program, and for selected      key employees, financial planning and income tax preparation programs.
**Exhibit 3.14

Labor Matters**
1. WARN Act notices were issued on February 6, 2001, in connection with the planned    move of the Marion, Iowa, facility to Iowa City, Iowa.

2. Employment related litigation, charges and disputes set forth on Exhibit 3.5.
** 

 

Exhibit 3.17

Customer Claims Against Seller**
1. Approximately $90,000 claim by Duracell for incorrect pricing.

2. Approximately $37,000 claim by P&G for duplicate invoices.

3. Approximately $37,000 in the aggregate of additional claims by customers claiming    shortages, credits due, incorrect billing, damaged goods, etc.
**Exhibit 3.18

Material Adverse Changes**
 
The following actions taken since December 31, 2000, relating to or in response to      Chesapeake Display and Packaging Company’s accounting and profitability difficulties:
Restatement of financial statements and the corresponding entries and modifications to          Chesapeake Display and Packaging Company’s books and records required to accomplish          such restatements;
Inventory write-offs; 
Implementation of the "100 Day Plan";
Management changes;
Headcount reductions; 
Office reductions;
Implementation of a new business model; 
Facility rationalization of the Glendale facility, the Salem Tower at the Winston-Salem          facility and the Moorestown facility;
Relocation of Marion facility operations to Iowa City facility; and
Operating changes affecting areas including, but not limited to, (i) warehousing and          transportation, (ii) overtime and (iii) estimating models.

 **Exhibit 3.19

Environmental Conditions**
(a) 1. Final closure documentation never received for underground storage tanks removed        from the Winston-Salem facility in 1989.

2. Tier II reports for the Winston-Salem facility for 1999 and 2000 were filed late.

(b) 1. H&W Privileged Environmental Review Program Report on Cincinnati plant dated        March 1999.

2. Michael A. Bellanca safety report on Cincinnati plant dated August 26, 1997.

3. H&W Privileged Environmental Review Program Report on Erlanger plant dated        September 4, 1997.

4. Foppe Thelen Group Inc. Phase I environmental report on Erlanger plant dated        September 8, 1993.

5. H&W Privileged Environmental Review Program Report on Marion plant dated        December 1992.

6. Michael A. Bellanca safety report on Marion plant dated October 25, 1996.

7. Hunton & Williams (Kevin Finto) privileged memo on environmental status at        Marion plant dated October 22, 1987.

8. H&W Privileged Environmental Review Program Report on Lowery Street plant in        Winston-Salem dated November 1996.

9. Michael A. Bellanca safety report on Rural Hall plant dated September 25, 1997.

10. H&W Privileged Environmental Review Program Report on Rural Hall plant dated        January 14, 1997.

11. H&W Privileged Environmental Review Program Report on Rural Hall plant dated        September 2, 1999.

12. H&W Privileged Environmental Review Program Report on Winston-Salem plant dated        February 26, 1997.

13. H&W Privileged Environmental Review Program Report on Winston-Salem plant dated        August 31, 1999.

14. Apex environmental, inc. Limited Site Assessment Report on Groundwater Incident at        Winston-Salem plant dated April 2, 2001.

 

 

(c) 1. Final closure documentation never received for underground storage tanks removed        from the Winston-Salem facility in 1989.

 

 

(d) 1. Michael A. Bellanca safety report on Cincinnati plant dated August 26, 1997.

2. Foppe Thelen Group Inc. Phase I environmental report on Erlanger plant dated        September 8, 1993.

3. Michael A. Bellanca safety report on Marion plant dated October 25, 1996.

4. Michael A. Bellanca safety report on Rural Hall plant dated September 25, 1997.

5. Apex Environmental, Inc. Limited Site Assessment Report on Groundwater Incident at        Winston-Salem plant dated April 2, 2001.

 

 

(e) 1. Winston-Salem facility.
A. Notices of Violation ("NOVs") from Forsyth County for failure to report            fuel oil usage, dated February 2, 1997 and May 5, 1998. 

B. Winston-Salem facility: NOV from Forsyth County for filing late report on fuel oil            and natural gas usage, dated February 2, 2000. Civil penalty of $250 paid on April 11,            2000.

C. Winston-Salem facility: Notice of Noncompliance with City of Winston-Salem permit            requirements (exceeded TSS limit), March 26, 1998; NOV on March 2, 1999 for TSS exceedance            and letter acknowledging TSS exceedance on April 29, 1999. No enforcement action initiated            because Facility’s treatment system is model for City. 

D. Winston-Salem facility: Final closure documentation never received for underground            storage tanks removed in 1989.

E. Winston-Salem facility: Joint Spill Prevention Control and Countermeasure / Release            Prevention Control and Countermeasure Plan was not certified by a Registered Professional            Engineer.

 

(f)****1. Winston-Salem Facility.
A. Air Permit No. 00761R2 from Forsyth County. (Consent to transfer to Buyer required.)

B. Wastewater – Industrial User Pretreatment Permit No. 1042 from the City of            Winston-Salem, North Carolina. (Consent to transfer to Buyer required.)

C. Storm Water – General Permit No. NCG050000 and Certificate of Coverage No.            NCG050028 from the North Carolina Department of Environment and Natural Resources.            (Consent to transfer to Buyer required.)

 

(g) 1. Winston-Salem Facility.
A. Final closure documentation never received for underground storage tanks removed in            1989.
**Exhibit 3.20

Related Party Transactions**
1. Certain officers and directors of Parent are officers and directors of Seller.

2. Certain support services are provided to Seller by Parent.

3. The Employee Benefit Plans, Pension Plans and Welfare Plans of Parent provided to    employees of Seller as set forth on Exhibit 3.13.

4. Employment agreements and other agreements and arrangements between Parent or Seller    on the one hand and employees, officers or directors of Seller on the other hand as set    forth on Exhibit 3.13.
**Exhibit 3.22

Customers****Customer****2000 SalesProcter and Gamble
$68,781,568Duracell
29,983,883Sara Lee
11,915,492Hershey
10,844,333Nestle
6,092,355McNeil
5,630,100Warner Lambert
4,336,469RJR Displays
4,199,748Reynolds Metals
4,001,689General Mills
3,586,776Brown and Williamson
2,753,171John Deere
2,714,161Ryobi
2,350,149Gillette
2,106,687Paramount
1,818,793Wells Lamong
1,640,419Colgate
1,539,748Rayovac
1,524,649Bayer
1,287,471Kayser-Roth
1,238,082**Exhibit 4.3

Buyer’s Consents**
 

1. Consent of lender under the Loan Agreement, dated as of January 9, 1998 and as    amended, between CorrFlex Graphics, LLC and its subsidiaries, certain individual members    of CorrFlex Graphics, LLC and Allied Capital Corporation.

2. Consent of lender under the Loan Agreement, dated as of November 12, 1999 and as    amended, between CorrFlex Graphics, LLC and Bank of America, N.A.

3. Consent of investors under the Investment Agreement, dated December 27, 1999,    between CorrFlex Graphics, LLC and its subsidiaries, certain individual members of    CorrFlex Graphics, LLC, Allied Capital Corporation and Core Capital Partners, LP.

 

 

 
**Exhibit 5.1

Actions Not in Regular Course

 **
1. None.
**Exhibit 5.9

Environmental Due Diligence**
 

Part 1 - Specifications for Performance of Phase I Investigation

 

The Phase I Investigation shall be performed in accordance with (a) the standardspromulgated by the American Society of Testing and Materials ("ASTM")designation E 1527-00, as set forth in the document entitled "Standard Practice forEnvironmental Site Assessments: Phase I Environmental Site Assessment Process ("ASTMStandard"), and (b) the letter, dated April 9, 2001, from Environmental ResourcesManagement to Robinson, Bradshaw & Hinson, P.A., counsel to Buyer.

Part 2 - Environmental Conditions
1. Existence of unremediated leaking underground storage tanks (as defined in 40 CFR        Part 280).

2. Existence of municipal or industrial solid waste landfills, as defined under        applicable state law.

3. Existence of hazardous waste management unit as defined in 40 CFR Part 260.10.

4. Plant Site is listed on the National Priorities List (40 CFR Part 300 App A).

5. Plant Site is listed on the CERCLIS list.

6. Plant Site includes areas upon which there has been a release of petroleum products        or Hazardous Materials in sufficient quantities to require reporting and remediation under        40 CFR Part 300 or analogous state law.
Plant Site is currently in violation of any Environmental Law.

Existence of any "recognized environmental condition" as that term is defined      in ASTM E 1527-00 (Standard Practice for Environmental Site Assessments: Phase I      Environmental Site Assessment Process).

Part 3 - Remediation Plans

The parties contemplate that any agreed upon Remediation Plan will provide that:- Seller shall remediate the specified Environmental Conditions (the "Remediation    Items") as soon as practical so that each such item complies with applicable    Environmental Laws, as in effect on the date such compliance is achieved, in the most    reasonably cost-effective manner that is practicable and that is consistent with the    operations and facilities of Seller as of the Effective Time of Closing, including,    without limitation, the provision of notice to appropriate governmental agencies as    required by Law (the "Remediation Work");
- All Remediation Work shall be conducted under Seller’s control and at Seller’s    sole cost and expense;
- Seller shall be responsible for all Losses (including, without limitation, the payment    of all fees (including expert and consulting fees), penalties or fines) in connection with    the matters that are the subject of the Remediation Work for periods prior to the    completion of the applicable Remediation Work, it being understood that the cost and    expense of continuing to operate in compliance with applicable Environmental Laws during    and following completion of the Remediation Work shall be the responsibility of Buyer; 
- All Remediation Work shall be conducted in a prompt, good and workmanlike manner and in    material compliance with all Environmental Laws then in effect, it being understood that    representatives of Buyer shall be entitled to be present to observe all Remediation Work    and to review all relevant books and records related thereto (except those protected by    the attorney-client privilege);
- Buyer shall be entitled to participate with Seller in significant meetings and    negotiations with governmental authorities regarding any Remediation Items; and
- With respect to any Remediation Items as to which Remediation Work is not complete    before Closing, (i) Seller will agree to use its commercially reasonable best efforts to    complete such Remediation Work within six months after the Closing Date, (ii) Buyer will    agree to provide Seller, and Seller’s authorized agents, with reasonable access to    the applicable Plant Sites to complete such Remediation Work, and (iii) Seller will agree    to indemnify and hold harmless Buyer from any and all Losses incurred by Buyer as a result    of Seller’s undertaking and/or completing such Remediation Work after Closing. 

 

 

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