Document:

Exhibit
10.1

 

Execution
Copy

 

 

AGREEMENT AND PLAN
OF MERGER

 

AMONG

 

EURAMAX
INTERNATIONAL, INC.

 

AMERIMAX
PENNSYLVANIA, INC.

 

AND

 

BERGER HOLDINGS,
LTD.

 

Dated as of
October 10, 2003

 

 

 

Table of Contents

 

	
  ARTICLE I

  	
  THE OFFER

  
	
   

  	
   

  
	
  Section 1.1.

  	
  The Offer.

  
	
  Section 1.2.

  	
  Company Actions

  
	
  Section 1.3.

  	
  Stockholder
  Lists.

  
	
  Section
  1.4.

  	
  Directors;
  Section 14(f).

  
	
   

  	
   

  
	
  ARTICLE II

  	
  THE MERGER

  
	
   

  	
   

  
	
  Section 2.1.

  	
  The Merger.

  
	
  Section 2.2.

  	
  Effective Time.

  
	
  Section 2.3.

  	
  Effects
  of the Merger.

  
	
  Section
  2.4.

  	
  Articles of
  Incorporation; Bylaws.

  
	
  Section 2.5.

  	
  Directors
  and Officers.

  
	
  Section 2.6.

  	
  Conversion of Securities.

  
	
  Section 2.7.

  	
  Dissenting
  Shares.

  
	
  Section 2.8.

  	
  Surrender
  of Shares.

  
	
  Section 2.9.

  	
  No Further
  Transfer or Ownership Rights.

  
	
  Section 2.10.

  	
  Treatment
  of Options.

  
	
  Section 2.11.

  	
  Closing.

  
	
   

  	
   

  
	
  ARTICLE III

  	
  REPRESENTATIONS
  AND WARRANTIES OF THE COMPANY

  
	
   

  	
   

  
	
  Section
  3.1.

  	
  Organization and
  Qualification

  
	
  Section 3.2.

  	
  Capitalization.

  
	
  Section
  3.3.

  	
  Authority
  Relative to this Agreement.

  
	
  Section
  3.4.

  	
  Absence of Certain Changes.

  
	
  Section 3.5.

  	
  Reports.

  
	
  Section 3.6.

  	
  Proxy
  Statement.

  
	
  Section
  3.7.

  	
  Consents and
  Approvals; No Violation.

  
	
  Section
  3.8.

  	
  Brokerage Fees and
  Commissions.

  
	
  Section
  3.9.

  	
  Schedule 14D-9; Offer
  Documents.

  
	
  Section 3.10.

  	
  Litigation.

  
	
  Section
  3.11.

  	
  Absence of Changes
  in Benefit Plans.

  
	
  Section 3.12.

  	
  ERISA
  Compliance.

  
	
  Section 3.13.

  	
  Taxes.

  

 

i

 

	
  Section 3.14.

  	
  No
  Excess Parachute Payments; Termination Payments;
  Section 162(m) of the Code.

  
	
  Section 3.15.

  	
  Compliance
  with Applicable Laws; Environmental.

  
	
  Section 3.16.

  	
  State
  Takeover Statutes.

  
	
  Section 3.17.

  	
  Contracts.

  
	
  Section 3.18.

  	
  Labor Matters.

  
	
  Section 3.19.

  	
  Title
  to Properties.

  
	
  Section 3.20.

  	
  Undisclosed
  Liabilities; Indebtedness.

  
	
  Section
  3.21.

  	
  Opinion of
  Company Financial Advisor.

  
	
  Section
  3.22.

  	
  Intellectual
  Property.

  
	
  Section 3.23.

  	
  Insurance.

  
	
  Section
  3.24.

  	
  Affiliate
  Transactions.

  
	
  Section
  3.25.

  	
  Indemnification
  Claims.

  
	
  Section
  3.26.

  	
  Absence of
  Questionable Payments.

  
	
  Section 3.27.

  	
  Products
  Liability.

  
	
  Section 3.28.

  	
  Relationship
  with Customers and Suppliers.

  
	
  Section
  3.29.

  	
  Company Rights Agreement.

  
	
   

  	
   

  
	
  ARTICLE IV

  	
  REPRESENTATIONS
  AND WARRANTIES OF PARENT AND PURCHASER

  
	
   

  	
   

  
	
  Section
  4.1.

  	
  Organization and
  Qualification.

  
	
  Section 4.2.

  	
  Authority Relative
  to this Agreement.

  
	
  Section 4.3.

  	
  Proxy Statement.

  
	
  Section 4.4.

  	
  Consents and
  Approvals; No Violation.

  
	
  Section
  4.5.

  	
  Schedule TO; Offer
  Documents.

  
	
   

  	
   

  
	
  ARTICLE
  V

  	
  CONDUCT OF
  BUSINESS PENDING THE MERGER

  
	
   

  	
   

  
	
  Section 5.1.

  	
  Conduct
  of Business of the Company Pending the Merger.

  
	
  Section
  5.2.

  	
  Prohibited Actions
  by the Company.

  
	
   

  	
   

  
	
  ARTICLE VI

  	
  COVENANTS

  
	
   

  	
   

  
	
  Section 6.1.

  	
  No
  Solicitation.

  
	
  Section 6.2.

  	
  Access
  to Information.

  
	
  Section 6.3.

  	
  Confidentiality Agreement.

  
	
  Section
  6.4.

  	
  Commercially
  Reasonable Best Efforts.

  
	
  Section 6.5.

  	
  Indemnification
  of Directors and Officers.

  
	
  Section
  6.6.

  	
  Event Notices and
  Other Actions.

  
	
  Section
  6.7.

  	
  Third Party
  Standstill Agreements.

  
	
  Section 6.8.

  	
  Employee
  Stock Options; Employee Plans and Benefits and Employment Contracts.

  
	
  Section 6.9.

  	
  Purchase
  of Shares.

  

 

ii

 

	
  Section
  6.10.

  	
  Meeting of the
  Company’s Shareholders.

  
	
  Section 6.11.

  	
  Proxy
  Statement.

  
	
  Section
  6.12.

  	
  Public
  Announcements.

  
	
  Section 6.13.

  	
  Shareholder
  Litigation.

  
	
  Section 6.14.

  	
  FIRPTA.

  
	
   

  	
   

  
	
  ARTICLE
  VII

  	
  CONDITIONS TO
  CONSUMMATION OF THE MERGER

  
	
   

  	
   

  
	
  Section
  7.1.

  	
  Conditions
  to Each Party’s Obligation to Effect the Merger.

  
	
  Section 7.2.

  	
  Conditions
  to Obligations of Parent and Purchaser to Effect the Merger.

  
	
   

  	
   

  
	
  ARTICLE
  VIII

  	
  TERMINATION; AMENDMENT;
  WAIVER

  
	
   

  	
   

  
	
  Section 8.1.

  	
  Termination.

  
	
  Section 8.2.

  	
  Effect
  of Termination.

  
	
  Section 8.3.

  	
  Expenses; Termination Fee.

  
	
  Section 8.4.

  	
  Amendment.

  
	
  Section 8.5.

  	
  Extension;
  Waiver.

  
	
   

  	
   

  
	
  ARTICLE IX

  	
  MISCELLANEOUS

  
	
   

  	
   

  
	
  Section 9.1.

  	
  Non-Survival
  of Representations and Warranties.

  
	
  Section
  9.2.

  	
  Entire Agreement;
  Assignment.

  
	
  Section
  9.3.

  	
  Enforcement of the
  Agreement.

  
	
  Section 9.4.

  	
  Severability.

  
	
  Section 9.5.

  	
  Notices.

  
	
  Section 9.6.

  	
  Failure
  or Indulgence Not Waiver; Remedies Cumulative.

  
	
  Section
  9.7.

  	
  Governing Law;
  Consent to Jurisdiction.

  
	
  Section 9.8.

  	
  Descriptive
  Headings.

  
	
  Section 9.9.

  	
  Parties
  in Interest.

  
	
  Section 9.10.

  	
  Counterparts.

  
	
  Section 9.11.

  	
  Certain
  Definitions.

  
	
  Section 9.12.

  	
  Interpretation.

  

 

iii

 

CERTAIN
DEFINITIONS

 

	
  Acquisition
  Agreement

  
	
  Acquisition
  Proposal

  
	
  affiliate

  
	
  Agreement

  
	
  Articles
  of Merger

  
	
  B&S

  
	
  beneficial
  owner

  
	
  Benefit
  Plans

  
	
  Bidders

  
	
  business
  day

  
	
  Cash
  Payment

  
	
  Certain
  Shareholders

  
	
  Certificates

  
	
  Closing

  
	
  Code

  
	
  Common
  Stock Price

  
	
  Company

  
	
  Company
  Common Stock

  
	
  Company
  Disclosure Schedule

  
	
  Company
  Form 10-K

  
	
  Company
  Preferred Stock

  
	
  Company
  Rights Agreement

  
	
  Company
  SEC Documents

  
	
  Company
  Shareholder Approval

  
	
  Company
  Stock Option Plan

  
	
  Confidentiality
  Agreement

  
	
  Continuing
  Employee

  
	
  Contract

  
	
  control

  
	
  D&O
  Insurance

  
	
  Department
  of State

  
	
  Dissenting
  Shareholder

  
	
  Dissenting
  Shares

  
	
  EDGAR

  
	
  Effective
  Time

  
	
  Environmental
  Claim

  
	
  Environmental
  Laws

  
	
  Environmental
  Liabilities

  
	
  ERISA

  
	
  ERISA
  Affiliate

  
	
  Exchange
  Act

  
	
  Expenses

  
	
  Fairness
  Opinion

  
	
  Filed
  Company SEC Documents

  
	
  Fully
  Diluted Shares

  
	
  Governmental
  Entity

  
	
  group

  
	
  Hazardous
  Materials

  
	
  Independent
  Directors

  
	
  Intellectual
  Property

  
	
  IRS

  
	
  Licenses

  
	
  Liens

  
	
  Material
  Adverse Effect

  
	
  Material
  Business

  
	
  Merger

  
	
  Merger
  Consideration

  
	
  Minimum
  Condition

  
	
  Notice
  Filing

  
	
  Offer

  
	
  Offer
  Documents

  
	
  Offer
  to Purchase

  
	
  Option

  
	
  Other
  Action

  
	
  Owned
  Real Property

  
	
  Parent

  
	
  Paying
  Agent

  
	
  PBCL

  
	
  Pension
  Plan

  
	
  Permits

  
	
  person

  
	
  Proxy
  Statement

  
	
  Purchaser

  
	
  Real
  Property Leases

  
	
  Releases

  
	
  Rights

  
	
  SARs

  
	
  Schedule
  14D-9

  
	
  Schedule
  TO

  
	
  SEC

  
	
  Securities
  Act

  
	
  Share
  Acquisition Date

  

 

iv

 

	
  Shareholder
  Meeting

  	
   

  	
  8

  
	
  subsidiary

  	
   

  	
  60

  
	
  Superior
  Proposal

  	
   

  	
  42

  
	
  Surviving
  Corporation

  	
   

  	
  7

  
	
  Tax
  Returns

  	
   

  	
  24

  
	
  Taxes

  	
   

  	
  24

  
	
  Tender
  and Option Agreement

  	
   

  	
  1

  
	
  Termination
  Fee

  	
   

  	
  55

  
	
  Transactions

  	
   

  	
  4

  
	
  Voting
  Company Debt

  	
   

  	
  14

  
	
  WARN
  Act

  	
   

  	
  23

  

 

v

 

Execution
Copy

 

AGREEMENT AND PLAN
OF MERGER

 

THIS
IS AN AGREEMENT AND PLAN OF MERGER (this “Agreement”), dated as of
October 10, 2003, among Euramax International, Inc., a Delaware corporation (“Parent”),
Amerimax Pennsylvania, Inc., a Pennsylvania corporation and an indirect wholly
owned subsidiary of Parent (“Purchaser”), and Berger Holdings, Ltd., a
Pennsylvania corporation (the “Company”).

 

Background

 

WHEREAS,
the Board of Directors of the Company has determined that it is fair to,
advisable and in the best interests of the Company and the shareholders of the
Company to enter into and consummate this Agreement with Parent and Purchaser,
providing for the merger (the “Merger”) of Purchaser with and into the
Company, with the Company as the Surviving Corporation, in accordance with the
Pennsylvania Business Corporation Law of 1988, as amended (the “PBCL”),
and the other transactions contemplated hereby, upon the terms and subject to
the conditions set forth herein;

 

WHEREAS,
the Board of Directors of Purchaser has approved the Merger of Purchaser with
and into the Company and such other transactions in accordance with the PBCL
upon the terms and subject to the conditions set forth herein;

 

WHEREAS,
the Company and Purchaser have agreed that, upon the terms and subject to the
conditions contained herein, Purchaser shall commence an offer (as amended or
supplemented in accordance with this Agreement, the “Offer”) to purchase
for cash all of the issued and outstanding shares of common stock, par value
$.01 per share (the “Company Common Stock”), of the Company, at a price
per share of $3.90, net to the seller in cash (the “Common Stock Price”);

 

WHEREAS,
the Board of Directors of the Company has determined that the consideration to
be paid for each share of Company Common Stock in the Offer and the Merger is
fair to the holders of shares of Company Common Stock and has resolved to
recommend that the holders of such shares of Company Common Stock tender their
shares pursuant to the Offer and approve and adopt this Agreement and the
Merger upon the terms and subject to the conditions set forth herein;

 

WHEREAS,
the Company, Parent and Purchaser desire to make certain representations,
warranties, covenants and agreements in connection with the Offer and the
Merger;

 

WHEREAS,
simultaneously with the execution and delivery of this Agreement and in order
to induce Parent and Purchaser to enter into this Agreement, certain
shareholders of the Company (the “Certain Shareholders”) have executed
and delivered to Parent and Purchaser an agreement (the “Tender and Option
Agreement”) pursuant to which the Certain Shareholders have agreed to take
specified actions in furtherance of the transactions contemplated by this Agreement,
including tendering their shares of Company Common Stock into the Offer and

 

 

granting Parent and
Purchaser the Purchase Option (as such term is defined in the Tender and Option
Agreement) with respect to such shares of Company Common Stock and to make the
Incentive Payments (as such term is defined in the Tender and Option
Agreement); and

 

WHEREAS,
simultaneously with the execution and delivery of this Agreement and in order
to induce Parent and Purchaser to enter into this Agreement, the Company has
granted the Purchaser an option to purchase shares of Company Common Stock
pursuant to an agreement among Parent, Purchaser and the Company (the “Top-up
Option Agreement”).

 

NOW,
THEREFORE, in consideration of the foregoing and the respective representations,
warranties, covenants and agreements set forth herein and intending to be
legally bound hereby, Parent, Purchaser and the Company hereby agree as
follows:

 

ARTICLE I

 

THE OFFER

 

Section
1.1.                                   The Offer.

 

(a)                                  Subject
to the provisions of this Agreement, and provided that this Agreement shall not
have been terminated in accordance with Section 8.1 and so long as none of the
events or circumstances set forth in clauses (a)-(i) of Annex A hereto shall
have occurred and be continuing, not later than the fifth business day from the
date of public announcement of the execution of this Agreement, Parent shall
cause Purchaser to commence (within the meaning of Rule 14d-2 under the
Securities Exchange Act of 1934, as amended (the “Exchange Act”)), the
Offer at a price equal to the Common Stock Price for the Company Common Stock
(including the associated preferred stock purchase rights (the “Rights”)
issued pursuant to the Rights Agreement, dated as of August 21, 1998, by and
between the Company and Oxford Transfer & Registrar, as Rights Agent (the “Company
Rights Agreement””)).  The
obligation of Purchaser to consummate the Offer, to accept for payment and to
pay for any shares of Company Common Stock tendered pursuant to the Offer shall
be subject to those conditions set forth in Annex A.  It is agreed that the conditions to the Offer set forth on Annex
A are for the benefit of Purchaser and may be asserted by Purchaser regardless
of the circumstances giving rise to any such condition (other than any action or
inaction by Purchaser in violation of this Agreement) and Purchaser expressly
reserves the right, in its sole discretion, to waive any such condition;
provided that, without the consent of the Company, Parent or Purchaser shall
not waive the Minimum Condition (except for waivers reducing the Minimum
Condition not below a majority of the outstanding shares of Company Common
Stock on a fully diluted basis) or the condition set forth in paragraph (g) of
Annex A.  The initial expiration date of
the Offer shall be the 20th business day following the commencement
of the Offer in accordance with Rule 14e-1(a) promulgated under the Exchange
Act, unless this Agreement is terminated in accordance with Article VIII, in
which case the Offer (whether or not previously extended in accordance with the
terms hereof) shall expire on such date of termination (in either case, the “Expiration
Date”).

 

(b)                                 Purchaser
expressly reserves the right, in its sole discretion, to modify and make
changes to the terms and conditions of the Offer, provided  that
without the prior consent of the Company, no modification or change may be made
which (i) decreases the

 

2

 

consideration payable in the Offer (except as permitted by this Agreement),
(ii) changes the form of consideration payable in the Offer (other than by
adding consideration), (iii) increases the Minimum Condition, or reduces the
Minimum Condition below a majority of the outstanding shares of Company Common
Stock on a fully diluted basis, (iv) decreases the maximum number of shares of
Company Common Stock sought pursuant to the Offer, (v) changes any other terms
or conditions to the Offer in a manner materially adverse to the Company or its
shareholders or option holders, or (vi) imposes additional conditions to the
Offer (other than solely in respect of any consideration which is payable in
addition to the Common Stock Price). 
Notwithstanding the foregoing, Purchaser may (but shall not be required
under this Agreement or otherwise to), without the consent of the Company, (i)
extend the Offer on one or more occasions for such period as may be determined
by Purchaser in its sole discretion (each such extension period not to exceed
10 business days at a time), if at the then scheduled expiration date of the
Offer any of the conditions to Purchaser’s obligations to accept for payment
and pay for shares of Company Common Stock shall not be satisfied or waived and
(ii) extend the Offer for any period required by any rule, regulation, interpretation
or position of the Securities and Exchange Commission (the “SEC”) or the
staff thereof applicable to the Offer. 
Without limiting the right of Purchaser to extend the Offer, provided
that this Agreement shall not have been terminated in accordance with Section
8.1 hereof, if the conditions set forth in Annex A are not satisfied or, to the
extent permitted hereby, waived by Purchaser as of the date the Offer would
otherwise have expired, then, except to the extent that such conditions in the reasonable
judgment of Purchaser are incapable of being satisfied, at the request of the
Company, Purchaser shall extend the Offer from time to time until the earlier
of (i) December 31, 2003, (ii) the consummation of the Offer or (iii)
termination of this Agreement.  On the
terms and subject to the conditions of the Offer and this Agreement, promptly
after expiration of the Offer, Purchaser shall accept for payment and pay for,
and Parent shall cause Purchaser to accept for payment and pay for, all shares
of Company Common Stock (including the associated Rights) validly tendered and
not withdrawn pursuant to the Offer that Purchaser becomes obligated to
purchase pursuant to the Offer. 
Notwithstanding the foregoing, Purchaser may in its sole discretion
elect to provide for a subsequent offering period pursuant to, and on the terms
required by, Rule 14d-11 under the Exchange Act.

 

(c)                                  On
the date of commencement of the Offer, Parent and Purchaser shall file with the
SEC with respect to the Offer a Tender Offer Statement on Schedule TO (together
with all amendments and supplements thereto and including the exhibits thereto,
the “Schedule TO”) with respect to the Offer which will comply in all
material respects with the provisions of applicable federal securities laws,
and will contain the offer to purchase relating to the Offer (the “Offer to
Purchase”) and forms of related letters of transmittal and summary
advertisement (which documents, together with any supplements or amendments
thereto and including the exhibits thereto, are referred to herein collectively
as the “Offer Documents”). 
Parent shall deliver copies of the proposed forms of the Schedule TO and
the Offer Documents to the Company within a reasonable time prior to the
commencement of the Offer for review and comment by the Company and its
counsel.  The Company and its counsel
shall be given a reasonable opportunity to promptly review any amendments and
supplements to the Schedule TO and the exhibits thereto prior to their filing
with the SEC or dissemination to shareholders of the Company.  Parent agrees to provide the Company and its
counsel in writing any comments that Purchaser, Parent or their counsel may
receive from the SEC or its staff with respect to the Offer Documents promptly
after the receipt thereof.  Each of the
Company, Parent and Purchaser

 

3

 

shall promptly correct any information provided by it for use in the
Schedule TO or the Offer Documents that shall be or shall have become false or
misleading in any material respect and Parent and Purchaser further agree to
take all steps necessary to cause such Schedule TO or Offer Documents as so
corrected to be filed with the SEC and disseminated to the shareholders of the
Company, as and to the extent required by applicable federal securities laws.

 

(d)                                 The
parties understand and agree that the Common Stock Price has been calculated
based upon the accuracy of the representation and warranty set forth in Section
3.2(a) and that, in the event the number of outstanding shares of Company
Common Stock or the number of shares of Company Common Stock issuable upon the
exercise or conversion of, or subject to, options, warrants, securities or
other agreements exceeds the amounts specifically set forth in Section 3.2(a)
(including without limitation as a result of any stock split, stock dividend,
including any dividend or distribution of securities convertible into shares of
the Company Common Stock, recapitalization, or other like change occurring
after the date of this Agreement) or the number of Options and exercise prices
therefor set forth in Section 3.2(a) of the Company Disclosure Schedule are
inaccurately stated in any manner adverse to Parent or Purchaser, the Common
Stock Price shall be appropriately adjusted downward.  The provisions of this paragraph (d) shall not, however, affect
the representation set forth in Section 3.2(a).  Notwithstanding the foregoing, there shall be no adjustment
pursuant to this paragraph (d) with respect to the issuance of shares of
Company Common Stock upon the exercise of Options disclosed on Section 3.2(a)
of the Company Disclosure Schedule.

 

Section
1.2.                                   Company Actions

 

(a)                                  The
Company hereby consents to the Offer and represents and warrants that (i) its
Board of Directors, at a meeting duly called and held on October 10, 2003, has
duly and by unanimous vote adopted resolutions approving the Offer, the Merger,
this Agreement, the Tender and Option Agreement, the Top-up Option Agreement
and the other transactions contemplated hereby and thereby (collectively, the “Transactions”),
determining that the terms of the Offer and the Merger are fair to, advisable
and in the best interests of, the Company’s shareholders and recommending
acceptance of the Offer and adoption of the Merger and this Agreement by the
shareholders of the Company, (ii) the Company has taken all necessary action to
render the provisions of any anti-takeover statute, rule or regulation that to
the Company’s knowledge may be applicable to the Transactions (including
Sections 2538 through 2588, inclusive, of the PBCL) inapplicable with respect
to the Transactions, and (iii) Boenning & Scattergood, Inc. (“B&S”)
has delivered to the Company’s Board of Directors its opinion (the “Fairness
Opinion”) that the Common Stock Price to be received by the Company’s
shareholders is fair, from a financial point of view, to such shareholders and
a complete and correct signed copy of such opinion has been delivered by the
Company to Parent.  The Company has been
authorized by B&S to permit the inclusion of the Fairness Opinion (and,
subject to prior review and consent by B&S, a reference thereto) in the
Offer Documents and in the Schedule 14D-9 referred to below and the Proxy
Statement.  The Company hereby consents
to the inclusion in the Offer Documents of the recommendations of the Company’s
Board of Directors described in this Section 1.2.  The Company has been advised that all of its directors and
executive officers presently intend either to tender their shares of Company
Common Stock pursuant to the Offer or (solely in the case of directors and
executive officers who would as a

 

4

 

result of the tender incur liability under Section 16(b) of the
Exchange Act) to vote in favor of the Merger.

 

(b)                                 The
Company shall file with the SEC on the date of the commencement of the Offer a
Solicitation/Recommendation Statement on Schedule 14D-9 (together with all
amendments and supplements thereto and including the exhibits thereto, the “Schedule
14D-9”) which shall comply in all material respects with the provisions of
applicable federal securities laws, and will contain such recommendations of
the Board in favor of the Offer and the Merger, and shall disseminate the
Schedule 14D-9 as required by Rule 14d-9 promulgated under the Exchange Act and
shall mail such Schedule 14D-9 together with the Offer Documents that are
mailed to the Company’s shareholders. 
The Company shall deliver the proposed forms of the Schedule 14D-9 and
the exhibits thereto to Parent within a reasonable time prior to the
commencement of the Offer for review and comment by Parent and its
counsel.  Parent and its counsel shall
be given a reasonable opportunity to promptly review any amendments and
supplements to the Schedule 14D-9 and the exhibits thereto prior to their
filing with the SEC or dissemination to shareholders of the Company.  The Company agrees to provide Parent and its
counsel in writing any comments that the Company or its counsel may receive
from the SEC or its staff with respect to the Schedule 14D-9 promptly after
receipt thereof.  Each of the Company,
Parent and Purchaser shall promptly correct any information provided by it for
use in the Schedule 14D-9 that shall have become false or misleading in any
material respect and the Company further agrees to take all steps necessary to
cause such Schedule 14D-9 as so corrected to be filed with the SEC and
disseminated to the shareholders of the Company, as and to the extent required
by applicable federal securities laws.

 

Section
1.3.                                   Stockholder Lists.   In connection with the Offer, the Company shall promptly furnish
to, or cause to be furnished to, Parent and Purchaser mailing labels, security
position listings, any non-objecting beneficial owner lists and any available
listing or computer file containing the names and addresses of the record
holders of shares of Company Common Stock as of a recent date and of those
persons becoming record holders subsequent to such date (to the extent
available), together with all other relevant, material information in the
Company’s possession or control regarding the beneficial owners of shares of
Company Common Stock and shall furnish Parent and Purchaser with such
information and assistance as Parent, Purchaser or their respective agents may
reasonably request in communicating the Offer to the record and beneficial
holders of shares of Company Common Stock. 
Subject to the requirements of law, and except for such steps as are
necessary to disseminate the Offer Documents and any other documents necessary
to consummate the Merger, Parent and Purchaser shall, and shall cause each of
their affiliates to, hold the information contained in any of such labels and
lists in confidence, use such information only in connection with the Offer and
the Merger, and, if this Agreement is terminated, deliver to the Company all
copies of such information or extracts therefrom then in their possession or
under their control.

 

Section
1.4.                                   Directors; Section 14(f).

 

(a)                                  Immediately
upon the acceptance for payment of and payment for any shares of Common Stock
by Purchaser or any of its affiliates pursuant to the Offer (the “Share
Acquisition Date”), Purchaser shall be entitled to designate such number of
directors, rounded up to the next whole number, on the Board of Directors of
the Company as will give

 

5

 

Purchaser, subject to compliance with Section 14(f) of the Exchange
Act, representation on the Board of Directors of the Company equal to the product
of (i) the total number of directors on the Board of Directors of the Company
(giving effect to the increase in the size of such Board pursuant to this
Section 1.4) and (ii) the percentage that the number of shares of Company
Common Stock beneficially owned by Purchaser and its affiliates (including
shares of Company Common Stock so accepted for payment and purchased) bears to
the number of shares of Company Common Stock then outstanding.  In furtherance thereof, concurrently with
such acceptance for payment and payment for such shares of Company Common Stock
the Company shall, upon request of Parent and in compliance with Section 14(f)
of the Exchange Act and Rule 14f-1 promulgated thereunder, use its best efforts
promptly either to increase the size of its Board of Directors or to secure the
resignations of such number of its incumbent directors, or both, as is
necessary to enable such designees of Parent to be so elected or appointed to
the Company’s Board of Directors, and, subject to applicable law, the Company
shall take all actions available to the Company to cause such designees of
Parent to be so elected or appointed. 
At such time, the Company shall, if requested by Parent and subject to
applicable law, also take all action necessary to cause persons designated by
Parent to constitute at least the same percentage (rounded up to the next whole
number) as is on the Company’s Board of Directors of (i) each committee of the
Company’s Board of Directors (other than any committee of the Board established
to take action under this Agreement of the type described in Section 1.4(c)
hereof or to the extent such appointment would be contrary to applicable law or
any exchange on which the Company Common Stock is then listed), (ii) each board
of directors (or similar body) of each subsidiary of the Company and (iii) each
committee (or similar body) of each such board.  Subject to applicable law, the Company shall promptly take all
action reasonably requested by Parent necessary to effect any such election, including
mailing to its shareholders the information required by Section 14(f) of the
Exchange Act and Rule 14f-1 promulgated thereunder (or, at Parent’s request
upon reasonable advance notice, furnishing such information to Parent for
inclusion in the Offer Documents initially filed with the SEC and distributed
to the shareholders of the Company) as is necessary to enable Purchaser’s
designees to be elected to the Company’s Board of Directors.  Such
designees of Purchaser shall be assigned to the classes of directors selected
by the Purchaser (except that the Independent Directors described in Section
1.4(b) below shall remain in their current classes).  Parent or Purchaser shall supply to the Company in
writing, and be solely responsible for any information so supplied by them, any
information with respect to Parent or Purchaser or their nominees, officers,
directors and affiliates required by Section 14(f) and Rule 14f-1 to be
included in the appropriate information statement.

 

(b)                                 Notwithstanding
the foregoing, the Company shall use its best efforts to ensure that, in the
event that Purchaser’s designees are elected to the Board of Directors of the
Company, such Board of Directors shall have, at all times prior to the
Effective Time, at least two directors who are directors on the date of this
Agreement and who are not officers or affiliates of the Company (it being
understood that for purposes of this sentence, a director of the Company shall
not be deemed an affiliate of the Company solely as a result of his status as a
director of the Company), Parent or any of their respective affiliates (the “Independent
Directors”); and provided further, that, in such event, if the number of
Independent Directors shall be reduced below two for any reason whatsoever the
remaining Independent Director may designate a person to fill such vacancy who
is not an officer or affiliate of the Company, Parent, or any of their
respective affiliates and such person shall be deemed to be an Independent
Director for purposes of this Agreement or, if no Independent Directors then
remain, the other

 

6

 

directors may designate two persons to fill such vacancies who shall
not be officers or affiliates of the Company, Parent or any of their respective
subsidiaries, and such persons shall be deemed to be Independent Directors for
purposes of this Agreement.  Subject to
applicable law, the Company shall promptly take all action reasonably requested
by Parent necessary to effect any such election, including mailing to its
shareholders the information required by Section 14(f) of the Exchange Act and
Rule 14f-1 promulgated thereunder (or, at Parent’s request, furnishing such
information to Parent for inclusion in the Offer Documents initially filed with
the SEC and distributed to the shareholders of the Company).

 

(c)                                  From
and after the time, if any, that Parent’s designees constitute a majority of
the Company’s Board of Directors and prior to the Effective Time, (i) any
amendment of the articles of incorporation or bylaws of the Company or the
authorization of any other action (“Other Action”) to be taken by the
Company under this Agreement (including the consent of the Company pursuant to
Section 2.1), if such amendment or Other Action materially and adversely
affects the holders of shares of Company Common Stock other than Parent and its
affiliates or (ii) any amendment of this Agreement, any extension by the
Company of the time for the performance of any of the obligations or other acts
of Parent or Purchaser hereunder, any waiver of any of the Company’s rights
hereunder or any termination of this Agreement by the Company, may be effected
only by the action of a majority of the Independent Directors of the Company,
which action shall be deemed to constitute the action of any committee
specifically designated by the Board of Directors of the Company to approve the
actions contemplated hereby and the full Board of Directors of the Company; provided,
that, if there shall be no Independent Directors, such actions may be
effected by majority vote of the entire Board of Directors of the Company.

 

ARTICLE II

 

THE MERGER

 

Section
2.1.                                   The Merger. 
Upon the terms and subject to the conditions hereof, and in accordance
with the relevant provisions of the PBCL, Purchaser shall be merged with and
into the Company as soon as practicable following the satisfaction or waiver of
the conditions set forth in Article VII. 
Following the Merger, the Company shall continue as the surviving
corporation (the “Surviving Corporation”) under the name “Berger
Holdings, Ltd.” and shall continue its existence under the laws of the
Commonwealth of Pennsylvania, and the separate corporate existence of Purchaser
shall cease.  At the election of Parent,
with the consent of the Company (which consent will not be unreasonably
withheld or delayed), any direct or indirect wholly owned subsidiary of Parent
may be substituted for Purchaser as a constituent corporation in the
Merger.  Notwithstanding the foregoing,
with the consent of the Company (which consent will not be unreasonably
withheld or delayed), Parent may elect at any time prior to the time that the
notice of the meeting of shareholders of the Company to consider approval of
the Merger and this Agreement (the “Shareholder Meeting”) is first given
to the Company’s shareholders that instead of merging Purchaser into the
Company as hereinabove provided, to merge the Company into Purchaser or another
direct or indirect wholly owned subsidiary of Parent; provided, however,
that the Company shall not be deemed to have breached any of its
representations, warranties or covenants herein solely by reason of such
election and it shall not be a condition to the consummation of the Offer or
the Merger that any consents, licenses, permits or other

 

7

 

authorizations be obtained that would not otherwise be necessary if the
form of the Merger had not been so modified. 
In such event the parties shall execute an appropriate amendment to this
Agreement in order to reflect the foregoing and to provide that Purchaser or
such other subsidiary of Parent shall be the Surviving Corporation and shall
continue under the name “Berger Holdings, Ltd.”

 

Section
2.2.                                   Effective Time.  As soon as practicable after the satisfaction or waiver of the
conditions set forth in Article VII, the parties hereto shall cause the Merger
to be consummated by filing articles of merger (the “Articles of Merger”)
with the Department of State of the Commonwealth of Pennsylvania (the “Department
of State”), in such form as required by and executed in accordance with the
relevant provisions of the PBCL (the date and time of the filing of the
Articles of Merger with the Department of State (or such later time as is
specified in the Articles of Merger) being the “Effective Time”).

 

Section
2.3.                                   Effects of the Merger.  The Merger shall have the effects set forth
in the applicable provisions of the PBCL. 
Without limiting the generality of the foregoing and subject thereto, at
the Effective Time all the property, rights, privileges, immunities, powers and
franchises of the Company and Purchaser shall vest in the Surviving
Corporation, and all debts, liabilities and duties of the Company and Purchaser
shall become the debts, liabilities and duties of the Surviving Corporation.

 

Section
2.4.                                   Articles of Incorporation; Bylaws.  (a) 
At the Effective Time and without any further action on the part of the
Company and Purchaser, the Articles of Incorporation of the Company, as in
effect immediately prior to the Effective Time until thereafter further amended
as provided therein and under the PBCL, shall be the articles of incorporation
of the Surviving Corporation following the Merger.

 

(b)                                 At
the Effective Time and without any further action on the part of the Company
and Purchaser, the Bylaws of the Purchaser shall be the Bylaws of the Surviving
Corporation and thereafter may be amended or repealed in accordance with their
terms or the Articles of Incorporation of the Surviving Corporation and as provided
by law.

 

Section
2.5.                                   Directors and Officers.   The directors of Purchaser immediately
prior to the Effective Time shall be the initial directors of the Surviving
Corporation, each to hold office in accordance with the Articles of
Incorporation and Bylaws of the Surviving Corporation, and the officers of
Purchaser immediately prior to the Effective Time shall be the initial officers
of the Surviving Corporation, in each case until their respective successors
are duly elected or appointed (as the case may be) and qualified.

 

Section
2.6.                                   Conversion of Securities.  At the Effective Time, by virtue of the
Merger and without any action on the part of Purchaser, the Company or the
holders of any of the following securities:

 

(a)                                  Each
share of common stock, par value $0.01 per share, of Purchaser issued and
outstanding immediately prior to the Effective Time shall be converted into one
validly issued, fully paid and nonassessable share of common stock of the
Surviving Corporation.

 

8

 

(b)                                 Each
share of Company Common Stock held in the treasury of the Company and each
share of Company Common Stock owned by Parent or Purchaser or any direct or
indirect subsidiary of the Company, Parent or Purchaser, in each case immediately
prior to the Effective Time, shall be cancelled and retired without any
conversion thereof and no payment or distribution shall be made with respect
thereto.

 

(c)                                  Each
issued and outstanding share of Company Common Stock (other than shares cancelled
pursuant to Section 2.6(b) and any Dissenting Shares (as defined in Section
2.7(a))), including the associated Rights issued pursuant to the Company Rights
Agreement, shall be converted into the right to receive the Common Stock Price
or any higher price that may be paid for shares of Company Common Stock
pursuant to the Offer (the “Merger Consideration”) payable to the holder
thereof, in each case without interest, upon surrender of the certificate
formerly representing such share in the manner provided in Section 2.8, less
any required withholding taxes.

 

Section
2.7.                                   Dissenting Shares.  (a)  Notwithstanding any
provision of this Agreement to the contrary, any issued and outstanding shares
of Company Common Stock held by a Dissenting Shareholder (as defined below) (“Dissenting
Shares”) shall not be converted into the Merger Consideration but shall,
solely to the extent required by the PBCL, become the right to receive such
consideration as may be determined to be due to such Dissenting Shareholder
pursuant to the PBCL; provided, however, that each share of Company Common
Stock outstanding immediately prior to the Effective Time and held by a
Dissenting Shareholder who, after the Effective Time, loses his or her right of
appraisal, pursuant to the PBCL, shall be deemed to be converted as of the
Effective Time into the right to receive the Merger Consideration, without any
interest thereon.  As used in this
Agreement, the term “Dissenting Shareholder” means any record holder or
beneficial owner of shares of Company Common Stock who complies with all
provisions of the PBCL (including the provisions of Sections 1574 through 1580
and Section 1930 of the PBCL) concerning the right of holders of Company Common
Stock to dissent from the Merger and obtain fair value for their shares.

 

(b)                                 The
Company shall give Parent (i) prompt notice of any demands for appraisal
pursuant to the applicable provisions of the PBCL received by the Company,
withdrawals of such demands, and any other instruments served pursuant to the PBCL
and received by the Company and (ii) the opportunity to participate in all
negotiations and proceedings with respect to demands for appraisal under the
PBCL.  The Company shall not, except
with the prior written consent of Parent, make any payment with respect to any
such demands for appraisal or offer to settle or settle any such demands.

 

Section
2.8.                                   Surrender of Shares.  (a) 
Prior to the earlier of the mailing of the Proxy Statement and the
Effective Time, Parent shall appoint a bank or trust company which is
reasonably satisfactory to the Company to act as paying agent (the “Paying
Agent”) for the payment of the Merger Consideration.  When and as needed for each former holder of
Company Common Stock who becomes entitled to receive the Merger Consideration
in accordance with Section 2.8(b) below, Parent shall cause the Surviving
Corporation to deposit with the Paying Agent for the benefit of such former
holders of shares of Company Common Stock sufficient funds to make all payments
pursuant to this Section 2.8.  Such
funds shall be invested by the Paying Agent as directed by the Surviving
Corporation.  Any net profit resulting
from, or interest

 

9

 

or income produced by, such investments will be payable to the
Surviving Corporation or as it directs.

 

(b)                                 Promptly
after the Effective Time, the Surviving Corporation shall cause to be mailed to
each record holder, as of the Effective Time, of an outstanding certificate or
certificates which immediately prior to the Effective Time represented shares
of Company Common Stock (the “Certificates”), a letter of transmittal in
customary form (which shall specify that delivery shall be effected, and risk
of loss and title to the Certificates shall pass, only upon proper delivery of
the Certificates to the Paying Agent) and instructions for use in effecting the
surrender of the Certificates for payment of the Merger Consideration
therefor.  Upon surrender to the Paying
Agent of a Certificate, together with such letter of transmittal, duly
completed and validly executed in accordance with the instructions thereto, and
such other documents as may be required pursuant to such instructions, the
holder of such Certificate shall be entitled to receive in exchange therefor the
aggregate amount of Merger Consideration into which the number of shares of
Company Common Stock previously represented by such Certificate or Certificates
surrendered shall have been converted pursuant to this Agreement.  If any Merger Consideration is to be
remitted to a person whose name is other than that in which the Certificate for
shares of Company Common Stock surrendered for exchange is registered, it shall
be a condition of such exchange that the Certificate so surrendered shall be
properly endorsed, with signature guaranteed, or otherwise in proper form for
transfer, and that the person requesting such exchange shall have paid any
transfer and/or other taxes required by reason of the remittance of Merger
Consideration to a person whose name is other than that of the registered
holder of the Certificate surrendered, or the person requesting such exchange
shall have established to the satisfaction of the Surviving Corporation that
such tax either has been paid or is not applicable.  No interest shall be paid or accrued, upon the surrender of the
Certificates, for the benefit of holders of the Certificates on any Merger
Consideration.  Parent and the Surviving
Corporation shall pay all fees and expenses of the Paying Agent in connection
with the distribution of the Merger Consideration.

 

(c)                                  At
any time following six months after the Effective Time, the Surviving
Corporation shall be entitled to require the Paying Agent to deliver to it any
funds (including any interest received with respect thereto) which had been
deposited with the Paying Agent and which have not been disbursed to holders of
Certificates, and thereafter such holders shall be entitled to look only to the
Surviving Corporation (subject to abandoned property, escheat or other similar
laws) and only as general creditors thereof for payment of their claim for
Merger Consideration to which such holders may be entitled.

 

(d)                                 Notwithstanding
the provisions of Section 2.8(c), neither the Surviving Corporation nor the
Paying Agent shall be liable to any person in respect of any Merger
Consideration delivered to a public official pursuant to any applicable
abandoned property, escheat or similar law. 
If any Certificates representing shares of Company Common Stock shall
not have been surrendered prior to six months after the Effective Time (or
immediately prior to such earlier date on which any Merger Consideration in
respect of such Certificate would otherwise escheat to or become the property
of any governmental entity), any such cash shall, to the extent permitted by
applicable law, become the property of the Parent, free and clear of all claims
or interest of any person previously entitled thereto.

 

10

 

(e)                                  Parent
shall be entitled to deduct and withhold from the consideration otherwise
payable pursuant to this Agreement to any former holder of shares of Company
Common Stock such amounts as Parent (or any affiliate thereof) is required to
deduct and withhold with respect to the making of such payment under the Code
(as defined herein), or any provision of any applicable federal, state, local
or foreign law, rule or regulation.  To
the extent that amounts are so withheld by Parent and paid by Parent to the applicable
taxing authority, such withheld amounts shall be treated for all purposes of
this Agreement as having been paid to the former holder of shares of Company
Common Stock in respect of which such deduction and withholding was made by
Parent.

 

Section
2.9.                                   No Further Transfer or Ownership
Rights.  After the Effective
Time, there shall be no further transfer on the records of the Company (or the
Surviving Corporation) or its transfer agent of certificates representing
shares of Company Common Stock which have been converted pursuant to this Agreement
into the right to receive Merger Consideration, and if such certificates are
presented to the Company for transfer, they shall be cancelled against delivery
of the Merger Consideration therefor. 
From and after the Effective Time, the holders of Certificates
evidencing ownership of shares of Company Common Stock outstanding immediately
prior to the Effective Time shall cease to have any rights with respect to such
shares of Company Common Stock except as otherwise provided for herein or by
applicable law.  All Merger
Consideration paid upon the surrender for exchange of Certificates representing
shares of Company Common Stock in accordance with the terms of this Article II
shall be deemed to have been paid in full satisfaction of all rights pertaining
to the shares of Company Common Stock exchanged for Merger Consideration
theretofore represented by such Certificates.

 

Section
2.10.                             Treatment of Options.  Simultaneously with the execution of this
Agreement, the Board of Directors of the Company (or, if appropriate, any
committee thereof) has adopted appropriate resolutions, and the Company hereby
agrees to take all other actions necessary after the date hereof, if any, to
provide that each outstanding stock option (each “Option”) heretofore
granted by the Company, whether under the Company’s 1996 Stock Incentive Plan
(the “Company Stock Option Plan”) or otherwise, shall at the Effective
Time be cancelled, and each holder of outstanding Options which are vested and
exercisable immediately prior to the Effective Time shall be entitled to
receive a payment in cash as provided in Section 6.8 hereof (subject to any
applicable withholding taxes, the “Cash Payment”).  As provided herein, all Options (whether or
not vested or exercisable) and the Company Stock Option Plan (and any feature
of any Benefit Plan or other plan, program or arrangement providing for the
issuance or grant of any other interest in respect of the capital stock of the
Company or any subsidiary) shall terminate as of the Effective Time.  The Company will take all steps necessary to
ensure that none of the Company or any of its subsidiaries is or will be bound
by any Options, other options, warrants, rights or agreements which would
entitle any person, other than the current shareholders of Purchaser or its
affiliates, to acquire any capital stock of the Surviving Corporation or any of
its subsidiaries or, to receive any payment in respect thereof (except for Cash
Payments to be made as provided in Section 6.8 hereof to holders of Options
that are vested and exercisable immediately prior to the Effective Time) and to
cause the Options to be cancelled or cause the holders of the Options to agree
to such cancellation thereof as provided herein.

 

11

 

Section
2.11.                             Closing.  Upon
the terms and subject to the conditions hereof, as soon as practicable after
consummation of the Offer, and to the extent required by the PBCL after the
vote of the shareholders of the Company in favor of the approval of the Merger
and this Agreement has been obtained, the Company and Purchaser (or Parent if
appropriate) shall execute and file with the Department of State the Articles
of Merger, and the parties shall take all such other and further actions as may
be required by law to make the Merger effective.  Prior to the filing referred to in this Section 2.11, a closing
(the “Closing”) will be held at the offices of Dechert LLP, 4000 Bell
Atlantic Tower, 1717 Arch Street, Philadelphia, PA 19103-2793 (or such other
place as the parties may agree) for the purpose of confirming all of the
foregoing.

 

ARTICLE III

 

REPRESENTATIONS
AND WARRANTIES OF THE COMPANY

 

The
Company hereby represents and warrants to Parent and Purchaser as follows:

 

Section
3.1.                                   Organization and Qualification

 

(a)                                  The
Company is a corporation duly organized, validly existing and in good standing
under the laws of the Commonwealth of Pennsylvania and has the requisite
corporate power and corporate authority and possesses all governmental
franchises and Permits (as defined herein) necessary to enable it to own, lease
and operate its properties and assets and to carry on its business as it is now
being conducted except where failure to possess such franchises and Permits,
individually or in the aggregate, has not had and could not reasonably be
expected to have a Material Adverse Effect on the Company.  The Company is duly qualified as a foreign
corporation or licensed to do business, and is in good standing, in each jurisdiction
where the character of its properties owned or leased or the nature of its
activities makes such qualification or licensing necessary, except where the
failure to be so qualified or licensed or in good standing, individually or in
the aggregate, has not had and could not reasonably be expected to have a
Material Adverse Effect on the Company.

 

(b)                                 The
only subsidiaries of the Company are those set forth on Section 3.1(b) of the
Company Disclosure Schedule.  Each
subsidiary of the Company is a corporation duly organized, validly existing and
in good standing under the laws of its jurisdiction of incorporation (which
jurisdiction is set forth opposite its name in Section 3.1(b) of the Company
Disclosure Schedule) and has the requisite corporate power and corporate
authority and possesses all governmental franchises and Permits necessary to
enable it to own, lease and operate its properties and assets and to carry on
its business as it is now being conducted except where failure to possess such
franchises and Permits, individually or in the aggregate, has not had and could
not reasonably be expected to have a Material Adverse Effect on the
Company.  Each subsidiary of the Company
is duly qualified as a foreign corporation or licensed to do business, and is
in good standing, in each jurisdiction where the character of its properties
owned or leased or the nature of its activities makes such qualification or
licensing necessary, except where the failure to be so qualified or licensed or
in good standing, individually or in the aggregate, has not had and could not
reasonably be expected to have a Material Adverse Effect on the Company.  None of the subsidiaries of the Company own
any capital stock of the Company.

 

12

 

(c)                                  All
of the outstanding shares of capital stock of each such subsidiary have been
validly issued and are fully paid and non-assessable and, except as set forth
in Section 3.1(c) of the Company Disclosure Schedule, are owned by the Company,
by another wholly owned subsidiary of the Company or by the Company and another
such wholly owned subsidiary, free and clear of all pledges, claims, equities,
options, liens, charges, call rights, rights of first refusal, “tag” or “drag”
along rights, encumbrances and security interests of any kind or nature
whatsoever (collectively, “Liens”). 
Except for the capital stock of its subsidiaries or as set forth on
Section 3.1(c)(i) of the Company Disclosure Schedule, the Company does not own,
directly or indirectly, any capital stock or other ownership interest in any
corporation, partnership, limited liability company, joint venture or other
entity.  The Company has delivered to
Parent complete and correct copies of its Articles of Incorporation and Bylaws
and the comparable charters and bylaws or other organizational documents of the
subsidiaries set forth on Section 3.1(c)(ii) of the Company Disclosure
Schedule, in each case as amended to the date of this Agreement.

 

Section
3.2.                                   Capitalization.

 

(a)                                  The
authorized capital stock of the Company consists of 20,000,000 shares of
Company Common Stock and 5,000,000 shares of preferred stock, par value $.01
per share (“Company Preferred Stock”). 
All of the issued and outstanding shares of Company Common Stock have
been duly authorized and validly issued and are fully paid and nonassessable
and are not subject to preemptive rights. 
As of the date hereof, (i) 5,271,926 shares of Company Common Stock were
issued and outstanding, (ii) no shares of Company Preferred Stock were issued
and outstanding, (iii) no shares of Company Common Stock and no shares of
Company Preferred Stock were held in the treasury of the Company, (iv)
2,360,675 shares of Company Common Stock were reserved for issuance pursuant to
outstanding Options, including Options for 726,675 shares issued under the
Company Stock Option Plan and Options for 1,634,000 shares issued outside of
the Company Stock Option Plan and (v) no shares of Company Preferred Stock were
reserved for issuance, except for a series of 2,000 shares of Company Preferred
Stock designated as Series B Junior Participating Preferred Stock reserved for
issuance pursuant to the Company Rights Agreement, none of which is issued and
outstanding as of the date hereof.  Such
shares of Company Common Stock reserved for issuance upon the exercise of
Options, whether under the Company Stock Option Plan or otherwise, have not
been issued and will not be issued prior to the Effective Time, and no
commitment has been or will be made for their issuance, other than possible
issuances under the Options described in the preceding sentence and issued and
outstanding as of the date of this Agreement. 
At the Effective Time, each Option shall be cancelled and the holder
thereof shall not be entitled to receive any consideration therefor other than
the cash payments provided by Sections 2.10 and (without duplication) 6.8 of
this Agreement.  Section 3.2(a) of the
Company Disclosure Schedule sets forth the exercise prices and number of shares
of Company Common Stock in respect of outstanding Options and the dates on
which any unvested Options are scheduled to vest or become exercisable.  As of the date hereof and, except to the
extent any unvested Options vest and become exercisable on the dates set forth
on Section 3.2(a) of the Company Disclosure Schedule or are otherwise
cancelled, as of the Effective Time, all of the Options will be vested and
exercisable and entitled to receive the Cash Payment at the Effective Time, and
no Options will be terminated without payment as of the Effective Time.  There are no bonds, debentures, notes or
other indebtedness of the Company having the right to vote (or convertible
into, or

 

13

 

exchangeable for, securities having the right to vote) on any matters
on which shareholders of the Company may vote (“Voting Company Debt”).  Except for the Rights issued pursuant to the
Company Rights Agreement, and except as set forth above, there are no
outstanding securities, options, warrants, calls, rights, convertible or
exchangeable securities, “phantom” stock rights, stock appreciation rights (“SARs”),
stock-based performance units, commitments, agreements, arrangements or
undertakings of any kind to which the Company or any of its subsidiaries is a
party or by which any of them is bound obligating the Company or any of its
subsidiaries to issue, deliver or sell, or cause to be issued, delivered or
sold, additional shares of capital stock or other voting securities of the
Company or any of its subsidiaries or obligating the Company or any of its
subsidiaries to issue, grant, extend or enter into any such security, option,
warrant, call, right, unit, commitment, agreement, arrangement or
undertaking.  There are not any
outstanding contractual obligations of the Company or any of its subsidiaries
to repurchase, redeem or otherwise acquire, or providing preemptive or
registration rights (except for the registration rights provided for in the
Tender and Option Agreement) with respect to, any shares of, or any outstanding
options, warrants or rights of any kind to acquire any shares of, or any
outstanding securities that are convertible into or exchangeable for any shares
of, capital stock of the Company or any of its subsidiaries.  The Company and its subsidiaries do not have
outstanding any loans to any person in respect of the purchase of securities
issued by the Company and its subsidiaries.

 

(b)                                 There
are no voting trusts, proxies or other agreements, commitments or
understandings of any character to which the Company or any of its subsidiaries
is a party or by which the Company or any of its subsidiaries is bound with
respect to the voting of any shares of capital stock of the Company or any of
its subsidiaries or with respect to the registration of the offering, sale or
delivery of any shares of capital stock of the Company or any of its
subsidiaries under the Securities Act of 1933, as amended (the “Securities
Act”) except for the rights provided for in the Tender and Option
Agreement.

 

Section
3.3.                                   Authority
Relative to this Agreement.

 

(a)                                  The
Company has all requisite corporate power and corporate authority to execute
and deliver this Agreement and each instrument required hereby to be executed
and delivered by the Company prior to or at the Effective Time, to perform its
obligations hereunder and thereunder, and to consummate the Transactions
(subject to the Company Shareholder Approval (as defined herein) with respect
to the Merger).  The execution and
delivery of this Agreement and each instrument required hereby to be executed
and delivered by the Company prior to or at the Effective Time and the
performance of its obligations hereunder and thereunder and the consummation by
the Company of the Transactions have been duly and validly authorized by the
Board of Directors of the Company and no other corporate proceedings on the
part of the Company are necessary to authorize this Agreement or to consummate
the Transactions (other than the Company Shareholder Approval and the filing
and recordation of appropriate merger documents as required by the PBCL).  This Agreement has been duly and validly
executed and delivered by the Company, and, assuming this Agreement constitutes
a valid and binding obligation of Parent and Purchaser, this Agreement constitutes
a valid and binding agreement of the Company, enforceable against the Company
in accordance with its terms.

 

14

 

(b)                                 The
only vote of holders of any class or series of capital stock of the Company or
any of its subsidiaries necessary to adopt or approve this Agreement and the
Merger is the adoption and approval of this Agreement and the Merger by the
holders of a majority of the votes cast by the holders of shares of Company
Common Stock at the Shareholder Meeting, with each share of Company Common
Stock entitled to one vote per share (the “Company Shareholder Approval”).  The affirmative vote of the holders of any
capital stock or other securities (or any separate class thereof) of the
Company or any of its subsidiaries, or any of them, is not necessary to
consummate the Offer or any transaction contemplated by this Agreement other
than as set forth in the preceding sentence. 
Notwithstanding the foregoing, if Purchaser shall acquire 80% or more of
the then outstanding shares of Company Common Stock, the Purchaser may without
a meeting of the shareholders of the Company and otherwise in accordance with
Section 1924(b)(1) of the PBCL (including, without limitation, adoption by the
board of directors of Purchaser of a short-form plan of merger in accordance
with the PBCL and consistent with the terms of the Merger) effect the Merger.

 

Section
3.4.                                   Absence of Certain Changes.  Except as set forth in Section 3.4 of the
Company Disclosure Schedule, since December 31, 2002, the Company and its
subsidiaries have conducted their business only in the ordinary course, and
during such period there has not been any event, change, effect or development
that, individually or in the aggregate, has had or could reasonably be expected
to have a Material Adverse Effect on the Company, and the Company and its
subsidiaries are not aware of any event, change, effect or development which
may reasonably be expected to occur or exist that, individually or in the
aggregate, would have a Material Adverse Effect on the Company.  Except as specifically disclosed in the
Company’s filings and reports (including proxy statements) under the Exchange
Act filed since December 31, 2002 and publicly available prior to the date of
this Agreement (the “Filed Company SEC Documents”) or as set forth in
Section 3.4 of the Company Disclosure Schedule, since December 31, 2002 there
has not been (a) any declaration, setting aside or payment of any dividend or
other distribution in respect of the capital stock of the Company or any
redemption or other acquisition by the Company of any capital stock of the
Company; (b) any entry into any agreement, commitment or transaction by the
Company or any of its subsidiaries which is material to the Company and its
subsidiaries taken as a whole, except agreements, commitments or transactions
in the ordinary course of business, consistent with prior practice; (c) any
split, combination or reclassification of the Company’s capital stock or of any
other equity interests in the Company, or any issuance or the authorization of
any issuance of any other securities in respect of, in lieu of or in
substitution for shares of its capital stock or of any other equity interests
in the Company; (d)(i) any granting by the Company or any of its subsidiaries
to any officer, director or key employee of the Company or any of its
subsidiaries of any increase in compensation, except in the ordinary course of
business consistent with prior practice or as was required under employment
agreements in effect as of the date of the most recent audited financial
statements included in the Filed Company SEC Documents, (ii) any granting
by the Company or any of its subsidiaries to any such officer, director or key
employee of any increase in severance or termination pay, except as was required
under employment, severance or termination agreements in effect as of the date
of the most recent audited financial statements included in the Filed Company
SEC Documents or (iii) any entry by the Company or any of its subsidiaries into
any employment, severance or termination agreement with any such officer,
director or key employee; (e) any damage, destruction or loss, whether or not
covered by insurance, that, individually or in the aggregate, has had or could
reasonably be expected to have a Material

 

15

 

Adverse Effect on the Company; (f) any change in accounting methods,
principles or practices by the Company or any subsidiary materially affecting
the consolidated assets, liabilities, results of operations or business of the
Company or its subsidiaries, except insofar as may have been required by a
change in generally accepted accounting principles; or (g) any making or
revocation of any material Tax election (except in a manner consistent with past
practice), any change of a method of accounting for Tax purposes, or any
settlement or compromise of any material Tax liability with any Governmental
Entity or any agreement to an extension of a statute of limitations.

 

Section
3.5.                                   Reports. 
(a)  Since January 1, 2000, the
Company has timely filed all required forms, reports and documents with the SEC
required to be filed by it pursuant to the federal securities laws and the SEC
rules and regulations thereunder (collectively, the “Company SEC Documents”),
all of which have complied as of their respective filing dates in all material
respects with all applicable requirements of the Securities Act and the
Exchange Act, and the rules promulgated thereunder.  The Company has delivered or made available copies of all such
forms, reports or documents to Parent, except to the extent they are available
via the SEC’s Electronic Data Gathering, Analysis and Retrieval (“EDGAR”)
system.  None of such forms, reports or
documents at the time filed, contained any untrue statement of a material fact
or omitted to state a material fact required to be stated therein or necessary
in order to make the statements therein, in light of the circumstances under
which they were made, not misleading. 
Except to the extent that information contained in any Company SEC
Document has been revised or superseded by a later-filed Company SEC Document
filed and publicly available prior to the date hereof, none of the Company SEC
Documents contains any untrue statement of a material fact or omits to state
any material fact required to be stated therein or necessary in order to make
the statements therein, in light of the circumstances under which they were
made, not misleading.  The financial
statements of the Company included in the Company SEC Documents (including the
notes thereto) complied as to form in all material respects with applicable
accounting requirements and the published rules and regulations of the SEC with
respect thereto (including, without limitation, the furnishing of any certification
under the Sarbanes-Oxley Act of 2002), have been prepared in accordance with
generally accepted accounting principles (except, in the case of unaudited
statements, as permitted by Form 10-Q of the SEC) applied on a consistent basis
during the periods involved (except as may be indicated in the notes thereto)
and fairly present in accordance with generally accepted accounting principles
the consolidated financial position of the Company and its consolidated
subsidiaries as of the dates thereof and the consolidated results of their
operations and cash flows for the periods then ended (and include, in the case
of any unaudited interim financial statements, reasonable accruals for normal
year-end adjustments).  No subsidiaries
of the Company are required to file periodic reports with the SEC under the
Exchange Act.

 

(b)                                 Since
January 1, 2000, the Company and its subsidiaries have filed all reports
required to be filed with any Governmental Entity other than the SEC, including
state securities administrators, except where the failure to file any such
reports of the Company and its subsidiaries, individually or in the aggregate,
has not had and could not reasonably be expected to have a Material Adverse
Effect on the Company.  Such reports of
the Company and its subsidiaries, including all those filed after the date of
this Agreement and prior to the Effective Time, were prepared in all material
respects in accordance with the requirements of applicable law.

 

16

 

Section
3.6.                                   Proxy Statement.  If a Proxy Statement is required for the consummation of the
Merger under applicable law, the Proxy Statement will comply in all material
respects with the Exchange Act, except that no representation is made by the
Company with respect to information supplied by or on behalf of Parent or any
affiliate of Parent specifically for inclusion in the Proxy Statement.  None of the information supplied by the
Company specifically for inclusion in the Proxy Statement shall, at the time
the Proxy Statement is mailed or at the time of the Shareholder Meeting or at
the Effective Time, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they
were made, not misleading; provided however that the Company makes no
representation or warranty as to any of the information relating to and
supplied by or on behalf of Parent and Purchaser specifically for inclusion in
the Proxy Statement.  The letter to
shareholders, notice of meeting, proxy statement and form of proxy, or the
information statement, as the case may be, to be distributed to shareholders in
connection with the Merger, or any schedule required to be filed by the Company
with the SEC in connection therewith, together with any amendments or
supplements thereto, are collectively referred to herein as the “Proxy
Statement.”  If, at any time prior
to the Effective Time, any event relating to the Company or any of its
affiliates, officers or directors is discovered by the Company that should be
set forth in a supplement to the Proxy Statement, the Company will promptly
inform Parent and Purchaser and prepare, file and disseminate such supplement
as may be required by applicable law.

 

Section
3.7.                                   Consents
and Approvals; No Violation.  
Subject to obtaining the Company Shareholder Approval (if required under
the PBCL) and the taking of the actions described in the immediately succeeding
sentence, except as set forth in Section 3.7 of the Company Disclosure
Schedule, the execution, delivery and performance of this Agreement, the Tender
and Option Agreement and the Top-up Option Agreement do not, and the
consummation of the Transactions (including the changes in ownership of shares
of Company Common Stock or the composition of the Board of Directors of the
Company) and compliance with the provisions of this Agreement, the Tender and
Option Agreement and the Top-up Option Agreement will not, conflict with, or
result in any violation of, or default (with or without notice or lapse of
time, or both) under, or give rise to a right of termination, cancellation or
acceleration of any obligation or loss of a material benefit under, or result
in the creation of any Lien upon any of the material properties or assets of
the Company or any of its subsidiaries under, or result in the termination of,
or require that any consent be obtained or any notice be given with respect to,
(i) the Articles of Incorporation or Bylaws of the Company or the comparable
charter or organizational documents of any of its subsidiaries, (ii) any loan
or credit agreement, note, bond, mortgage, indenture, lease, license or other
agreement, instrument, Contract or Permit applicable to the Company or any of
its subsidiaries or their respective properties or assets, (iii) any judgment,
order, writ, injunction or decree, or material law, statute, ordinance, rule or
regulation applicable to the Company or any of its subsidiaries or their
respective properties or assets or (iv) material license, sublicense, consent
or other agreement (whether written or otherwise) pertaining to Intellectual
Property (as defined herein) used by the Company in the conduct of its
business, and by which the Company licenses or otherwise authorizes a third
party to use any Intellectual Property (the “Licenses”), other than, in
the case of clauses (ii)and (iv), any such conflicts, violations, defaults,
rights, Liens, losses of a material benefit, consents or notices that,
individually or in the aggregate, have not and could not reasonably be expected
to have a Material Adverse Effect on the Company.   No consent, approval, order or authorization of, or

 

17

 

registration, declaration or filing with, any Federal, state or local
government or any court, administrative or regulatory agency or commission or
other governmental authority or agency, domestic or foreign (a “Governmental
Entity”) is required by the Company or any of its subsidiaries in
connection with the execution and delivery of this Agreement by the Company or
the consummation by the Company of the Transactions, except for (i) the filing
with the SEC of (x) the Schedule 14D-9 and a current report on Form 8-K, as
well as an amendment to Form 8-A in reference to the Rights Agreement that was
originally filed on September 15, 1998, (y) if required, the Proxy Statement
relating to the approval by the Company’s shareholders of this Agreement and
(z) such reports under Sections 13(a) and 14(f) of the Exchange Act as may be
required in connection with this Agreement and the Transactions contemplated by
this Agreement, (ii) the filing of the Articles of Merger pursuant to the PBCL,
(iii) as set forth in Section 3.7 of the Company Disclosure Schedule and (iv)
such consents, approvals, orders, authorizations, registrations, declarations
or filings which, individually or in the aggregate, have not had and could not
be reasonably expected to have a Material Adverse Effect on the Company.

 

Section
3.8.                                   Brokerage Fees and Commissions.  Except for those fees and expenses payable
to (i) Houlihan Lokey Howard & Zukin Capital pursuant to that certain
letter agreement dated June 27, 2002, as amended by that certain letter
agreement dated October 7, 2003, and (ii) B&S in connection with the
Fairness Opinion pursuant to that certain letter agreement dated September 10,
2003, no person is entitled to receive any investment banking, brokerage or
finder’s fee or commission in connection with this Agreement or the
Transactions based upon arrangements made by or on behalf of the Company or any
of its subsidiaries or by any affiliate of the Company or any of its
subsidiaries.  A copy of the above agreements
and any amendments or supplements thereto have previously been delivered to
Parent.  The estimated fees and expenses
incurred and to be incurred by the Company for counsel, accountants, investment
bankers, financial printers, experts and consultants in connection with this
Agreement and the Transactions are set forth in Section 3.8 of the Company
Disclosure Schedule, such estimated fees and expenses being the most recent
such information available to the Company as of the date hereof; provided,
however, that the Company makes no representations concerning such
information except that the Company has no actual knowledge that such
information was not reasonable as of the date stated or as of the date hereof.

 

Section
3.9.                                   Schedule 14D-9; Offer Documents.  Neither the Schedule 14D-9, any other
document required to be filed by the Company with the SEC in connection with
the Transactions, nor any information supplied by the Company in writing for
inclusion in the Offer Documents or the Schedule TO shall, at the respective
times the Schedule 14D-9, any such other filings by the Company, the Schedule
TO, the Offer Documents or any amendments or supplements thereto are filed with
the SEC or are first published, sent or given to shareholders of the Company,
as the case may be, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they are
made, not misleading.  The Schedule
14D-9 and any other document required to be filed by the Company with the SEC
in connection with the Transactions will comply as to form in all material
respects with the requirements of the Exchange Act and the rules and
regulations thereunder.  Notwithstanding
the foregoing, no representation or warranty is made by the Company with
respect to statements made or

 

18

 

incorporated by reference therein based on information supplied by or
on behalf of Parent or Purchaser specifically for inclusion or incorporation by
reference therein.

 

Section
3.10.                             Litigation. 
Except as disclosed in Section 3.10 of the Company Disclosure Schedule,
there is no claim, suit, action or proceeding (including arbitration
proceedings) pending or, to the knowledge of the Company, threatened against
the Company or any of its subsidiaries that, individually or in the aggregate,
has since December 31, 2002 had or could reasonably be expected to have a
Material Adverse Effect on the Company, nor is there any judgment, decree,
injunction, rule or order of any Governmental Entity or arbitrator outstanding
against the Company or any of its subsidiaries which, individually or in the
aggregate, has since December 31, 2002 had or could reasonably be expected to
have a Material Adverse Effect on the Company. 
The most recent financial statements contained in the Filed Company SEC
Documents reflect an adequate reserve for all claims, suits, actions,
proceedings, judgments, decrees, injunctions, rules or orders pending or, to
the knowledge of the Company, threatened against the Company or any of its
subsidiaries through the date of such financial statements.

 

Section
3.11.                             Absence of Changes in Benefit Plans.  Except as disclosed in Section 3.11 of the
Company Disclosure Schedule, or as contemplated in Section 2.10 and Section 6.8
of this Agreement or as required by applicable law, since January 1, 2002,
there has not been any adoption or amendment in any material respect by the
Company or any of its subsidiaries of any collective bargaining agreement or
any bonus, pension, profit sharing, deferred compensation, incentive
compensation, stock ownership, stock purchase, stock option, phantom stock,
retirement, vacation, severance, disability, death benefit, hospitalization,
medical or other plan, arrangement or understanding (whether or not legally
binding) providing benefits to any current or former employee, officer or
director of the Company or any of its subsidiaries or for which the Company or
any of its subsidiaries is liable. 
Except as filed or incorporated by reference as an exhibit to the
Company Form 10-K or disclosed in Section 3.11 of the Company Disclosure
Schedule, there exist no employment, compensation, loan, consulting, severance,
termination or indemnification agreements, arrangements or understandings
between either of the Company or any of its subsidiaries and any current or
former officer or director of either of the Company or any of its subsidiaries
or for which either of the Company or any of its subsidiaries is liable.

 

Section
3.12.                             ERISA Compliance.  (a)  Section 3.12(a) of
the Company Disclosure Schedule sets forth a complete list of all “employee
benefit plans” (as defined in Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended (“ERISA”) including without limitation,
all “multiemployer pension plans” as defined in Section 3(37) of ERISA),
employment contracts, bonus, pension, profit sharing, deferred compensation,
incentive compensation, excess benefit, stock, stock option, severance,
termination pay, change in control or other employee benefit plans, programs or
arrangements, including, but not limited to, those providing medical, dental,
vision, disability, life insurance and vacation benefits (other than those
required to be maintained by law), whether written or unwritten, qualified or
unqualified, funded or unfunded, foreign or domestic currently maintained, or
contributed to, or required to be maintained or contributed to, by the Company
or any other person or entity that, together with the Company, is treated as a
single employer under Section 414 of the Internal Revenue Code of 1986, as
amended (the “Code”) (each an “ERISA Affiliate”) for the benefit
of any current or former employees, officers or directors of the Company or any
of its subsidiaries or with respect

 

19

 

to which the Company or any of its subsidiaries has any liability
(collectively, the “Benefit Plans”). 
Except as disclosed on Section 3.12(a) of the Company Disclosure
Schedule, as applicable with respect to each Benefit Plan, the Company has
delivered or made available to Purchaser, true and complete copies of (i) each
Benefit Plan, including all amendments thereto, and in the case of an unwritten
Benefit Plan, a written description thereof, (ii) all trust documents,
investment management contracts, custodial agreements and insurance contracts
relating thereto, (iii) the current summary plan description and each summary
of material modifications thereto, (iv) the three most recent annual reports
(Form 5500 and all schedules thereto) filed with the Internal Revenue Service
(“IRS”), (v) the most recent IRS determination letter and each currently
pending application to the IRS for a determination letter, (vi) the three most
recent summary annual reports, financial statements and trustee reports, and
(vii) all records, notices and filings concerning IRS or Department of Labor
audits or investigations, “prohibited transactions” within the meaning of
Section 406 of ERISA or Section 4975 of the Code and “reportable events” within
the meaning of Section 4043 of ERISA.

 

(b)                                 No
event has occurred and, to the knowledge of the Company, there exists no
condition or set of circumstances in connection with which the Company or any
ERISA Affiliate could reasonably be expected to be subject to any liability
under the terms of any Benefit Plan, under ERISA, or, with respect to any
Benefit Plan, under the Code or any other applicable law, rule or regulation,
domestic or foreign, other than any condition or set of circumstances that,
individually or in the aggregate has not had and could not reasonably be
expected to have a Material Adverse Effect on the Company.  Each of the Benefit Plans has been
administered in material compliance with its terms and all applicable
laws.  All contributions that are
required to be made by the Company or any ERISA Affiliate to any Benefit Plan
have been made.  The Company’s only
ERISA Affiliates currently, and during any period for which any relevant statute
of limitations remains open are, and have been, the subsidiaries listed on
Section 3.1(b) of the Company Disclosure Schedule.

 

(c)                                  The
Benefit Plans which are “employee pension benefit plans” within the meaning of
Section 3(2) of ERISA and which are intended to meet the qualification
requirements of Section 401(a) of the Code, other than those plans that are
multiemployer plans (each a “Pension Plan”) now meet, and at all times
since their inception have met the requirements for such qualification in all
material respects, and the related trusts are now, and at all times since their
inception have been, exempt from taxation under Section 501(a) of the
Code.  All Pension Plans have received
determination letters from the IRS or utilize a prototype plan document for
which an IRS opinion is available to the effect that such Pension Plans are
qualified in form and the related trusts are exempt from federal income taxes
and no determination letter with respect to any Pension Plan has been revoked
nor, to the knowledge of the Company is there any reason for such revocation,
nor has any Pension Plan been amended, or failed to be amended, since the date
of its most recent determination letter in any respect which would adversely
affect its qualification.  The Company has furnished or made available to
Parent the three most recent actuarial reports with respect to each Benefit
Plan, other than a multiemployer plan, that is a defined benefit pension plan,
as defined by Section 3(35) of ERISA. 
The information supplied to the actuary by the Company and its ERISA
Affiliates for use in preparing those reports was complete and accurate in all
material respects.  The conclusions
expressed in those reports are complete and correct in all material
respects.  No event has occurred since
the date of the most recent such actuarial report that had, or is reasonably
likely to have, a materially adverse effect on

 

20

 

the ratio of plan assets to the actuarial present
value of plan obligations for accumulated benefits shown in such report.

 

(d)                                 Section
3.12(d) of the Company Disclosure Schedule lists: (1) the excess of the
liabilities, determined using the accumulated benefit obligation methodology of
Statement of Financial Accounting Standards No. 87, of any Benefit Plan subject
to Title IV of ERISA, other than any Benefit Plan that is a multiemployer plan,
over the fair market value of such Benefit Plan’s assets (2) the amount of any
unfunded deferred compensation and (3) the actuarially determined present value
of any obligation to provide retiree medical or life insurance benefits
determined in accordance with Statement of Financial Accounting Standard No.
106.  For the purposes of this Section
3.12(d) unfunded liabilities and projected costs have been determined by the
Company and its actuaries using actuarial methods and assumptions that are,
singly and in the aggregate, reasonable taking into account circumstances known
to them on the date of this Agreement, and, except as adjusted to satisfy the
requirements that such assumptions be reasonable, consistent with prior
practice.

 

(e)                                  Multiemployer
Plans.

 

(i)                                     Section
3.12(e)(i) of the Company Disclosure Schedule lists each Benefit Plan that is a
multiemployer pension plan.

 

(ii)                                  All
required contributions, withdrawal liability payments or other payments of any
type that the Company or any ERISA Affiliate have been obligated to make to any
multiemployer pension plan have been duly and timely made.  Any withdrawal liability incurred with
respect to any multiemployer pension plan has been fully paid as of the date
hereof.

 

(iii)                               Neither the Company nor
any ERISA Affiliate has undertaken any course of action that could reasonably
be expected to lead to a complete or partial withdrawal from any multiemployer
pension plan.

 

(iv)                              Neither
the Company nor any ERISA Affiliate is subject to any liability, contingent or
accrued, arising out of a transaction described in Section 4204 of ERISA.

 

(v)                                 Set
forth next to each multiemployer pension plan listed on Section 3.12(e)(i) of
the Company Disclosure Schedule, is the estimated amount of the withdrawal
liability that would be incurred by the Company or any ERISA Affiliate with
respect to such plan, under Section 4201 of ERISA, if the Company or any ERISA
Affiliate were to completely withdraw from such multiemployer pension plan,
such estimated amount being the most recent such information available to the
Company with respect to each such plan; provided, however, that
the Company makes no representations concerning such information except that
the Company has no reason to believe that such information was not valid as of
the date stated.

 

(f)                                    Except
as set forth on Section 3.12(f) of the Company Disclosure Schedule, the
execution and delivery of this Agreement do not, and the consummation of the
Transactions will not (i) require the Company, any ERISA Affiliate or any of
the Company’s subsidiaries to pay greater compensation or make a larger
contribution to, or pay greater benefits

 

21

 

or accelerate payment or vesting of a benefit under, any Benefit Plan
or any other program, agreement, policy or arrangement or (ii) create or give
rise to any additional vested rights or service credits under any Benefit Plan
or any other program, agreement, policy or arrangement.

 

(g)                                 Except
as set forth in Section 3.12(g) of the Company Disclosure Schedule, neither the
Company nor any ERISA Affiliate nor any of the Company’s subsidiaries is a
party to or is bound by any severance agreement, program or policy.

 

(h)                                 Except
as set forth in Section 3.12(h) of the Company Disclosure Schedule, no Benefit
Plan provides benefits, including without limitation, death or medical
benefits, beyond termination of employment or retirement other than (i)
coverage mandated by law or (ii) death or retirement benefits under a Benefit
Plan qualified under Section 401(a) of the Code.  Neither the Company nor any ERISA Affiliate or any of the
Company’s subsidiaries is contractually or otherwise obligated (whether or not
in writing) to provide any person with life, medical, dental or disability
benefits for any period of time beyond retirement or termination of employment,
other than as required by the provisions of Sections 601 through 608 of ERISA
and Section 4980B of the Code.

 

(i)                                     With
respect to any Benefit Plan that is an employee welfare benefit plan (as
defined in Section 3(1) of ERISA), other than any such Benefit Plan that is a
multiemployer plan, and except as set forth in Section 3.12(i) of the Company
Disclosure Schedule, (i) no such Benefit Plan is funded through a “welfare
benefit fund”, as such term is defined in Section 419(e) of the Code, (ii) each
such Benefit Plan that is a “group health plan”, as such term is defined in
Section 5000(b)(l) of the Code, complies, and
has complied for each taxable year of the Company or any relevant ERISA
Affiliate for which the statute of limitations on assessment of taxes remains
open, in all material respects with the applicable requirements of Sections
601 through 608 of ERISA and Section 4980B(f) of the Code, (iii) each such
Benefit Plan (including any such Plan covering retirees or other former
employees) may be amended or terminated without material liability to the
Company or any ERISA Affiliate or any of the Company’s subsidiaries on or at
any time after the consummation of the Offer and (iv) the Company, each ERISA Affiliate and each such Benefit Plan
that is a covered entity as that term is defined in regulations issued under
the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) are
in compliance, in all material respects, with the applicable requirements of
the privacy regulations issued under HIPAA.

 

(j)                                     Except as set forth in Section 3.12(a) of the
Company Disclosure Schedule, there is no material pension, welfare, bonus,
stock purchase, stock ownership, stock option, deferred compensation,
incentive, severance, termination or other compensation plan or arrangement, or
other material employee fringe benefit plan presently maintained by, or
contributed to by the Company, or any ERISA Affiliate which is for the benefit
of any employee of the Company or any ERISA Affiliate, including any such plan
required to be maintained or contributed to by the law of the relevant jurisdiction,
maintained outside the jurisdiction of the United States.

 

(k)                                  The
Company and its subsidiaries have not incurred any liability under, and have
complied in all respects with, the Worker Adjustment Retraining Notification
Act and the regulations promulgated thereunder (the “WARN Act”) and do
not reasonably

 

22

 

expect to incur any such liability as a result of actions taken or not
taken prior to the Effective Time. 
Section 3.12(k) of the Company Disclosure Schedule lists (i) all the
employees terminated or laid off by the Company and its subsidiaries during the
90 days prior to the date hereof and (ii) all the employees of the Company or
its subsidiaries who have experienced a reduction in hours of work of more than
50% (other than voluntary reductions in hours per week) during any month during
the 90 days prior to the date hereof and describes all notices given by the
Company and its subsidiaries in connection with the WARN Act.  The Company will not be deemed to be in
breach of this Agreement as a result of any WARN Act liability due to actions
taken by the Purchaser or actions that Purchaser causes the Company to take
after the Share Acquisition Date.

 

Section
3.13.                             Taxes.  Except to
the extent the failure of any of the following has not had and could not
reasonably be expected, individually or in the aggregate, to have a Material
Adverse Effect on the Company:

 

(a)                                  (i)
All federal income and other Tax Returns (as defined herein) that are required
to be filed by or with respect to the Company or any of its subsidiaries have
been timely filed (taking into account any extensions of time to file obtained
before the date hereof), and all such Tax Returns are true, complete and
accurate and correctly reflect the income, or other measure of Tax (as defined
herein), required to be shown thereon, (ii) except as disclosed in Section
3.13(a)(ii) of the Company Disclosure Schedule, all Taxes that are due have
been paid in full (or adequate provision for the payment thereof has been
made), other than those being contested in good faith, and (iii) the most
recent financial statements contained in the Filed Company SEC Documents
reflect an adequate reserve for all Taxes of the Company and its subsidiaries
for all taxable periods and portions thereof through the date of such financial
statements.

 

(b)                                 Except
as set forth in Section 3.13(b) of the Company Disclosure Schedule, to the
knowledge of the Company, no Tax Return of the Company or any of its
subsidiaries is under audit or examination by any Governmental Entity, and no
written notice of such an audit or examination has been received by the Company
or a subsidiary.

 

(c)                                  Except
as set forth in Section 3.13(c) of the Company Disclosure Schedule, there is
not in force any extension of time with respect to the due date for the filing
of any Tax Return or any waiver or agreement for any extension of time for the
assessment or payment of any Tax due.

 

(d)                                 Except
as set forth in Section 3.13(d) of the Company Disclosure Schedule, there is no
issue raised or claim against the Company or any of its subsidiaries for any
Taxes, and no assessment, deficiency or adjustment has been asserted or
proposed with respect to any Tax Return and no issues relating to Taxes were
raised in writing by a Governmental Entity in a completed audit or examination
that can reasonably be expected to recur in a later taxable period.

 

(e)                                  Except
as set forth in Section 3.13(e) of the Company Disclosure Schedule, none of the
Company and its subsidiaries, has been a member of an affiliated group filing a
consolidated federal income Tax Return other than the affiliated group of which
the Company is the common parent corporation.

 

23

 

(f)                                    There
are no Liens for Taxes on the assets of the Company or any of its subsidiaries
except for Liens for Taxes not yet due and payable.

 

(g)                                 Except
as set forth in Section 3.13(g) of the Company Disclosure Schedule, neither the
Company nor any of its subsidiaries is bound by any tax sharing, tax indemnity
or similar agreement with respect to Taxes.

 

(h)                                 Except
as set forth in Section 3.13 (h) of the Company Disclosure Schedule, neither
the Company nor any of its subsidiaries has (a) been the subject of a Tax
ruling that would have continuing effect after the Effective Time, (b) been the
subject of a closing agreement with any Governmental Entity that would have
continuing effect after the Effective Time, or (c) granted a power of attorney
with respect to any Tax matter that would have continuing effect after the
Effective Time.

 

As
used herein, “Tax Returns” shall mean all returns and reports of or with
respect to any Tax which are required to be filed by or with respect to the
Company or any of its subsidiaries, and “Taxes” shall mean (i) all
taxes, charges, imposts, tariffs, fees, levies or other similar assessments or
liabilities, including income taxes, ad valorem taxes, value-added taxes,
excise taxes, withholding taxes, stamp taxes or other taxes of or with respect
to gross receipts, premiums, real property, personal property, windfall
profits, sales, use, transfers, licensing, employment, payroll and franchises
imposed by or under any statute, law, rule or regulation, and such terms shall
include any interest, fines, penalties, assessments or additions to tax
resulting from, attributable to or incurred in connection with any such tax or
any contest or dispute thereof; (ii) liability of the Company or any subsidiary
for the payment of any amounts of the type described in clause (i) as a result
of being a member of an affiliated, combined, consolidated or unitary group for
any taxable period and (iii) liability of the Company or any subsidiary for the
payment of any amounts of the type described in clauses (i) or (ii) as a result
of any express or implied obligation to indemnify any other person.

 

Section
3.14.                             No Excess Parachute Payments;
Termination Payments; Section 162(m) of the Code.  Except as set forth in Section 3.14 of the
Company Disclosure Schedule, any amount that could be received (whether in cash
or property or the vesting of property) as a result of any of the transactions
contemplated by this Agreement by any employee, officer or director of either
of the Company or any of their affiliates who is a “disqualified individual”
(as is defined in Treasury Regulation Section 1.280G-1) under any employment,
severance, change of control or termination agreement, other compensation
arrangement or Benefit Plan would not be characterized as an “excess parachute
payment” (as is defined in Section 280G(b)(1) of the Code).  Except as set forth in Section 3.14 of the
Company Disclosure Schedule, there are no payments that the Company or any of
its subsidiaries, or the Surviving Corporation is or would be required to make
to any of the Company’s current or former employees or to any third party which
payment is contingent upon a change of control of the Company or any of its
subsidiaries or payable as a result of the Transactions, including, without
limitation, the termination of any of the Company’s or any of its subsidiaries’
employees after the Effective Time.  The
disallowance of a deduction under Section 162(m) of the Code for employee
remuneration will not apply to any amount paid or payable by the Company or any
of its subsidiaries under any commitment, program, arrangement or
understanding.

 

24

 

Section
3.15.                             Compliance with Applicable Laws;
Environmental.   Except
for any of the following which, individually or in the aggregate, has not had
and could not reasonably be expected to have a Material Adverse Effect on the
Company or which are otherwise specifically disclosed in the Filed Company SEC
Documents or set forth on Section 3.15 of the Company Disclosure Schedule:

 

(a)                                  The
Company and its subsidiaries has in effect all Federal, state, local and
foreign governmental approvals, authorizations, certificates, filings,
franchises, licenses, notices, permits and rights (“Permits”) necessary
for it to own, lease or operate its properties and assets and to carry on its
business as now conducted, and there has occurred no default under any such
Permit.  Each of the Company and its
subsidiaries is in compliance with all applicable statutes, laws, ordinances,
rules, orders and regulations of any Governmental Entity.

 

(b)                                 Each
of the Company and its subsidiaries and their respective properties, assets,
businesses and operations is, and has been, and each of the Company’s former
subsidiaries, while subsidiaries of the Company and their respective
properties, assets, businesses and operations, was, in compliance with all
applicable Environmental Laws and Environmental Permits.  The term “Environmental Laws” means
any federal, state, local or foreign law, statute, code, ordinance, rule, regulation,
policy, guideline, permit, consent, approval, license, judgment, order, writ,
decree, injunction or other authorization relating to the generation,
treatment, storage, recycling, disposal, use, handling, manufacturing,
transportation, shipment, emission, discharge, release or threatened release of
Hazardous Material (as defined herein) into the environment, buildings,
facilities or structures, including, without limitation, into ambient air,
soil, sediments, land surface or subsurface, surface water, groundwater,
publicly owned treatment works, septic systems or land, including without
limitation, the following statutes, their implementing regulations and any
state corollaries:  the Hazardous
Materials Transportation Act, 49 U.S.C. Section 1801 et  seq., the
Resource Conservation and Recovery Act, 42 U.S.C. Section 6901 et  seq.,
the Comprehensive Environmental Response, Compensation and Liability Act, as
amended by the Superfund Amendments and Reauthorization Act, 42 U.S.C. Section
9601 et  seq., the Toxic Substances Control Act, 15 U.S.C. Section
2601 et  seq., the Clean Water Act, 33 U.S.C. Section 1251 et
seq. and the Clean Air Act, 42 U.S.C. Section 7401 et  seq.  The term “Environmental Permit” means
any permit, license, approval or other authorization issued under any
Environmental Law.

 

(c)                                  There
have been no Releases (as defined herein) of Hazardous Material in, on, under,
or from any currently or previously owned or operated properties or in
connection with the operation of the Company which has contaminated such
properties or any surrounding site or any off-site location (excluding any
Releases by persons other than the Company or any of its past or present
affiliates at previously owned or operated properties for which the Company
does not have knowledge).  “Hazardous
Materials” means (l) hazardous materials, pollutants or contaminants,
medical, hazardous or infectious wastes, hazardous waste constituents,
hazardous chemicals, hazardous or toxic pollutants, and hazardous or toxic
substances as those terms are defined in or regulated by any Environmental Law,
(2) petroleum, including crude oil and any fractions thereof, (3) natural gas,
synthetic gas and any mixtures thereof, (4) radioactive materials including,
without limitation, source byproduct or special nuclear materials,
(5) pesticides and (6) asbestos and asbestos-containing materials.  “Releases”

 

25

 

means spills, leaks, discharges, disposal, pumping, pouring, emissions,
injection, emptying, leaching, dumping or allowing to escape.

 

(d)                                 The
Company and its subsidiaries and their respective properties, assets,
businesses and operations are not subject to any Environmental Claims (direct
or contingent) or Environmental Liabilities (as such terms are defined herein)
arising from or based upon any act, omission, event, condition or circumstance
occurring or existing on or prior to the date hereof or for which the Company
and its subsidiaries are responsible, including without limitation, any such Environmental
Claims or Environmental Liabilities arising from or based upon the ownership or
operation of assets, businesses or properties of the Company or any subsidiary
or, to the Company’s knowledge, their respective predecessors, and (ii) neither
the Company nor any of its subsidiaries has received any notice of any
violation of any Environmental Law or Environmental Permit or any Environmental
Claim in connection with their respective assets, properties, businesses or
operations.

 

(e)                                  The
Company has provided or made available to Purchaser and has disclosed on
Section 3.15(e) of the Company Disclosure Schedule all material environmental
assessment reports prepared by, on behalf of or, to the extent in the Company’s
or any subsidiary’s possession or control, relating to the Company or any
subsidiary regarding the environmental condition of the Company’s properties or
the compliance with applicable Environmental Laws by the Company or any
subsidiary.

 

(f)                                    The
term “Environmental Claim” means any third party (including governmental
agencies, regulatory agencies, employees or other private parties) action,
lawsuit, claim, investigation or proceeding (including claims or proceedings
under the Occupational Safety and Health Act or similar laws relating to safety
of employees) which seeks to impose liability under Environmental Laws or
common law relating to the exposure to the release of Hazardous Materials, or
for (i) noise; (ii) pollution or contamination of the air, surface
water, ground water, land or structure; (iii) the generation, handling,
treatment, storage, disposal or transportation of Hazardous Materials,
including wastes; (iv) exposure to Hazardous Materials; (v) the safety or
health of employees; or (vi) the manufacture, processing, distribution in commerce,
use, or storage of Hazardous Materials. 
An “Environmental Claim” includes, but is not limited, to, a common law
action, as well as a proceeding to issue, modify or terminate an Environmental
Permit of the Company or any of its subsidiaries.  The term “Environmental Liabilities” includes all costs
arising from any Environmental Claim or violation or alleged violation or
circumstance or condition which would give rise to a violation or liability
under any Environmental Permit or Environmental Law under any recognized theory
of recovery, at law or in equity, and whether based on negligence, strict
liability or otherwise, including but not limited to:  remedial, removal, response, abatement, investigative, monitoring,
personal injury and damage to property, and any other related costs, expenses,
losses, damages, penalties, fines, liabilities and obligations, including
reasonable attorney’s fees and court costs.

 

Section
3.16.                             State Takeover Statutes.   The Company has taken all action necessary
(except for the notice filing required to be filed by Purchaser with the
Pennsylvania Securities Commission under Section 8(a) of the Pennsylvania
Takeover Disclosure Law (the “Notice Filing)) to render the provisions
of any anti-takeover statute, rule or regulation that may be applicable to the
Transactions under Pennsylvania law (including Sections 2538 through 2588,

 

26

 

inclusive, of the PBCL) inapplicable to Parent, Purchaser and their
respective affiliates, and to the Offer, the Merger and the Tender and Option
Agreement, the Top-up Option Agreement and this Agreement and the other
Transactions.  The Board of Directors of
the Company has approved the Merger, the Tender and Option Agreement, the
Top-up Option Agreement and this Agreement and the other Transactions.  Except for the requirement to make the
Notice Filing, no Pennsylvania anti-takeover statute, rule or regulation (other
than Sections 1921 through 1930 of the PBCL and provisions of the PBCL
generally applicable to the powers of a corporation and the duties and powers
of its board of directors in a takeover context, including Sections
1502(a)(18), 1525(b), 1715 and 2513) is applicable to the Transactions,
including the Merger.  To the Company’s
knowledge, no other “fair price,” “moratorium,” “control share acquisition,”
“business combination,” or other state takeover statute or similar statute or
regulation applies or purports to apply to the Company, Parent, Purchaser,
affiliates of Parent or Purchaser, the Offer, the Merger, the Tender and Option
Agreement, the Top-up Option Agreement, this Agreement, or any of the other
Transactions based upon the Company’s operations.  As a result of the foregoing actions, the only corporate action
required to authorize the Merger is the Company Shareholder Approval and no
further action is required to authorize the other Transactions.

 

Section
3.17.                             Contracts.  
Section 3.17 to the Company Disclosure Schedule lists, under the
relevant heading, all oral or written contracts, agreements, arrangements,
guarantees, licenses, leases and executory commitments (each a “Contract”),
other than Benefit Plans and agreements disclosed on Section 3.11 to the
Company Disclosure Schedule or filed with the SEC and currently publicly available
via EDGAR, that exist as of the date hereof to which the Company or any of its
subsidiaries is a party or by which it is bound and which fall within any of
the following categories: (a) Contracts not entered into in the ordinary course
of the Company’s and its subsidiaries’ businesses other than those that
individually or in the aggregate are not material to the business of the
Company and its subsidiaries, taken as a whole, (b) joint venture and
partnership agreements, (c) Contracts containing covenants purporting to limit
the freedom of the Company or any of its subsidiaries to compete in any line of
business in any geographic area or to hire any individual or group of
individuals, (d) Contracts which after the consummation of any of the Transactions
would have the effect of limiting the freedom of Parent or any of its
subsidiaries to compete in any line of business in any geographic area or to
hire any individual or group of individuals, (e) Contracts which contain
minimum purchase conditions in excess of $25,000 and which cannot be canceled
by the Company without penalty or further payment and with less than 90 days
notice, or requirements or other terms that restrict or limit the purchasing or
distribution relationships of the Company or its affiliates (including after
consummation of any of the Transactions), Parent or any of its affiliates, or
any customer, licensee or lessee thereof, (f) Contracts relating to any
outstanding commitment for capital expenditures in excess of $25,000, (g)
indentures, mortgages, promissory notes, loan agreements or guarantees of
borrowed money, letters of credit or other agreements or instruments of the
Company or its subsidiaries or commitments for the borrowing or the lending by
the Company or any of its subsidiaries of amounts in excess of $25,000 in the
aggregate or providing for the creation of any charge, security interest,
encumbrance or lien upon any of the assets of the Company or any of its
subsidiaries with an aggregate value in excess of $25,000, (h) Contracts
providing for “earn-outs” or other contingent payments by the Company or any of
it subsidiaries involving more than $25,000 per contract over the terms of all
such Contracts, (i) Contracts associated with off balance sheet financing in
excess of $25,000 in the aggregate, including but not limited to arrangements
for the sale of receivables, (j) Licenses, (k) stock purchase

 

27

 

agreements, asset purchase agreements or other acquisition or
divestiture agreements where the consideration in any individual transaction
exceeds $25,000 since January 1, 2001, (l) material Contracts with respect to
which a change in the ownership (whether directly or indirectly) of shares of
Company Common Stock or the composition of the Board of Directors of the
Company may result in a violation of or default under, or give rise to a right
of termination, cancellation or acceleration of any obligation or loss of
benefits under such Contract or (m) any other agreement involving goods,
services, payments or liabilities in excess of $50,000.  All Contracts to which the Company or any
subsidiary is a party or by which it is bound are valid and binding obligations
of the Company or such subsidiary and, to the knowledge of the Company, the
valid and binding obligation of each other party thereto except such Contracts
which if not so valid and binding could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect on the Company.
Neither the Company nor any of its subsidiaries nor, to the knowledge of the
Company, any other party thereto is in violation of or in default in respect
of, nor has there occurred an event or condition which with the passage of time
or giving of notice (or both) would constitute a default under or permit the
termination of, any such Contract except such violations or defaults under or
terminations which, individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect on the Company.  Set forth in Section 3.17(n) to the Company
Disclosure Schedule is the amount of the annual premium currently paid by the
Company for its directors’ and officers’ liability insurance.  The Company has delivered or made available
to Parent true and correct copies of the Contracts and Licenses set forth on
Section 3.17(o) to the Company Disclosure Schedule and the waivers and
consents thereto as are necessary to provide that the consummation of the
transactions contemplated by this Agreement will not have any affect on the
Company’s rights or obligations under such Contracts or Licenses or conflict
with, or result in any violation of, or default (with or without notice or
lapse of time, or both) under, or give rise to a right of termination,
cancellation or acceleration of any obligation or loss of a material benefit
under, or result in the creation of any Lien upon any of the material
properties or assets of the Company or any subsidiaries under, or result in the
termination of such Contracts or Licenses.

 

Section
3.18.                             Labor Matters.  
Except to the extent set forth in Section 3.18 of the Company Disclosure
Schedule, (a) no employee of the Company or any of its subsidiaries is
represented by any union or other labor organization; (b) the Company and
all of its subsidiaries are in material compliance with applicable laws
respecting employment and employment practices, terms and conditions of
employment and wages and hours, and are not engaged in any unfair labor
practices which, individually or in the aggregate, could reasonably be expected
to have a Material Adverse Effect on the Company; (c) there is no unfair labor
practice complaint against the Company or any of its subsidiaries pending or,
to the knowledge of the Company, threatened by or before the National Labor
Relations Board or any other Governmental Entity; (d) there are no labor
strikes, disputes, slowdowns, representation campaigns or work stoppages
pending or, to the knowledge of the Company, threatened against or affecting
the Company or any of its subsidiaries which, individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect on the Company;
(e) no grievances or arbitration proceedings arising out of or under collective
bargaining agreements are pending and no claims therefor have been asserted
against the Company or its subsidiaries which, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect on
the Company; and (f) neither the Company nor any of its subsidiaries has experienced
any material work stoppage since

 

28

 

January 1, 2001.  The Company
and its subsidiaries are in material compliance with all applicable federal,
state, local or foreign labor laws, rules and regulations.

 

Section
3.19.                             Title to Properties.  (a) The Company and its subsidiaries have
good, valid and marketable title to, or valid leasehold interests in, all their
material tangible properties (including real property) and assets except for
such as are no longer used or useful in the conduct of their respective
businesses or as have been disposed of in the ordinary course of business and
except for defects in title, easements, restrictive covenants and similar
encumbrances or impediments that, in the aggregate, do not and will not
materially interfere with their ability to conduct their respective businesses
as currently conducted or are otherwise set forth on Section 3.19 of the
Company Disclosure Schedule.  All such
material properties and assets, other than properties and assets in which the
Company or any of its subsidiaries has leasehold interests, are free and clear
of all Liens, except for Liens that, individually or in the aggregate, do not
and will not materially interfere with the ability of the Company and its
subsidiaries to conduct their respective businesses substantially as currently
conducted.

 

(b)                                 Section
3.19(b) of the Company Disclosure Schedule sets forth the addresses of (i) the
real property currently owned by the Company or its subsidiaries (the “Owned
Real Property”) and (ii) any real property formerly owned or leased by the
Company or its subsidiaries since the later of (x) 10 years prior to the date
of this Agreement and (y) in the case of Copper Craft, Inc. and Walker Metal
Products, Inc., the date of their respective acquisitions.  The Company is in actual possession of the
Owned Real Property.  The Company has
delivered to Parent complete and correct copies of all existing title insurance
policies held by the Company, and all surveys possessed by the Company with
respect to the Owned Real Property (and, to the knowledge of the Company, such
surveys are accurate in all material respects and no material changes or
improvements have been made to such properties which would be reflected in an
updated new survey).  Except as set
forth in Section 3.19(b) of the Company Disclosure Schedule, and to the
knowledge of the Company, no portion of any of the improvements erected on the
Owned Real Property encroaches on adjoining property or public streets in any
material respect and no portion of any of the Owned Real Property is, or has
been subjected to an ad valorem tax valuation such that a change in ownership
or use (whether now existing or in the future) has caused or will cause
material additional ad valorem taxes to be imposed upon the Owned Real
Property.  The water, gas, electricity
and other utilities serving each of the Owned Real Property is adequate to
service the normal operation of each of the Owned Real Property in all material
respects.

 

(c)                                  Section
3.19(c) of the Company Disclosure Schedule is an accurate and complete list of
all leases or rights of occupancy pursuant to which the Company or any of its
subsidiaries leases or subleases any real property or interest therein
(collectively, the “Real Property Leases”).  Except as set forth in Section 3.19(c) of the Company Disclosure
Schedule, the Company or one of its subsidiaries is the lessee under all Real
Property Leases, and no party other than the Company or one of its subsidiaries
has any right to possession, occupancy or use of any of the properties demised
under the Real Property Leases.  A true
and correct copy of each Real Property Lease has been delivered to Buyer,
together with all amendments and modifications thereto, and all subordination,
non-disturbance and/or attornment agreements related thereto, and no changes
have been made thereto since the date of delivery except as disclosed in
Section 3.19(c) of the Company Disclosure Schedule.  Each Real Property Lease to

 

29

 

which the Company or any subsidiary is a party or by which it is bound
is a valid and binding obligation of the Company or such subsidiary and, to the
knowledge of the Company, the valid and binding obligation of each other party
thereto. Neither the Company nor any of its subsidiaries nor, to the knowledge
of the Company, any other party thereto is in material violation of or in
material default in respect of, nor has there occurred an event or condition
which with the passage of time or giving of notice (or both) would constitute a
material default under or permit the termination of, any such Real Property
Lease.

 

(d)                                 The
Company or one of its subsidiaries is in actual possession of the properties
demised under the Real Property Leases. 
The Company or one of its subsidiaries has good, valid and indefeasible
title to all the leasehold estates conveyed under the Real Property Leases free
and clear of all Liens except for Liens that, individually or in the aggregate,
do not and will not materially interfere with the ability of the Company and
its subsidiaries to conduct their respective businesses substantially as
currently conducted.  Except as set
forth in Section 3.19(d) of the Company Disclosure Schedule, the basic rent and
all additional rent payable under the Real Property Leases have been paid to
date and not more than one (1) month in advance.  The total basic rent and all additional rent paid by the Company
and its subsidiaries under the Real Property Leases was $748,000 in fiscal year
2002.  All work required to be performed
under the Real Property Leases by the landlords thereunder or by the Company or
any of its subsidiaries has been performed, except where the failure to so
perform could not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect on the Company, and, to the extent that the
Company or any of its subsidiaries is responsible for payment of such work, has
been fully paid for, whether directly to the contractor performing such work or
to such landlord as reimbursement therefor, except for items which the Company
or any of its Subsidiaries is disputing in good faith (which items are set
forth in Section 3.19(d) of the Company Disclosure Schedule).  There have been no casualties which could
result in the termination of any Real Property Lease or the application of any
buy-out provisions contained in any Real Property Lease relative to damage by
casualty.

 

Section
3.20.                             Undisclosed Liabilities;
Indebtedness.

 

(a)                                  Except
as and to the extent specifically disclosed in the Filed Company SEC Documents
or accrued on the June 30, 2003 balance sheet included in the Filed Company SEC
Documents, or as set forth in Section 3.20(a) of the Company Disclosure
Schedule, and except for liabilities incurred in the ordinary course of
business consistent with prior practice and otherwise not in contravention of
this Agreement, neither the Company nor any of its subsidiaries have any
liabilities or obligations of any nature (whether absolute, contingent or
otherwise, and whether or not required to be reflected or reserved against in a
consolidated balance sheet of the Company and its subsidiaries prepared in
accordance with United States generally accepted accounting principles) that could,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on the Company.

 

(b)                                 Except
as and to the extent specifically disclosed on Section 3.20(b) of the Company
Disclosure Schedule (indicating the dollar amount of Indebtedness outstanding,
the person or entity to whom such Indebtedness is owed and the agreement under
which such Indebtedness was incurred), as of the date hereof neither the
Company nor any of its subsidiaries have incurred or have outstanding any Indebtedness.  For purposes of this

 

30

 

Agreement, “Indebtedness” shall mean (i) any indebtedness for
borrowed money, (ii) all obligations for the deferred purchase price of
property or services (other than trade accounts payable in the ordinary course
of business and consistent with past practice), (iii) all obligations evidenced
by notes, bonds, debentures or other similar instruments, (iv) all obligations
of the Company as lessee or lessees under leases that have been or should be,
in accordance with generally accepted accounting principles, recorded as
capital leases and (v) all obligations, contingent or otherwise, under
acceptance, letter of credit or similar facilities.  As of the date hereof, the Company and its subsidiaries have at
least $2,000,000 of borrowing availability under the Company’s existing
revolving credit facility disclosed on Section 3.17 of the Company Disclosure
Schedule.

 

Section
3.21.                             Opinion of Company Financial Advisor.  The Company has received the opinion of
B&S, dated the date of this Agreement, to the effect that, as of such date,
the consideration to be received in the Offer and the Merger by the Company’s
shareholders is fair to the Company’s shareholders from a financial point of view,
a signed copy of which opinion has been delivered to Parent, and such opinion
has not been amended, modified or revoked in a manner adverse to Parent or
Purchaser.  The Company has been
authorized by B&S to permit the inclusion of such fairness opinion (and,
subject to prior review and consent by B&S, a reference thereto) in the
Offer Documents and in Schedule 14D-9 and the Proxy Statement.

 

Section
3.22.                             Intellectual Property.

 

(a)                                  Except
to the extent the failure of any of the following would not, individually or in
the aggregate, have a Material Adverse Effect on the Company:

 

(i)                                     Except
as disclosed in Section 3.22(a)(i) of the Company Disclosure Schedule, the
Company and each of its subsidiaries owns free and clear of any Liens, claims,
or similar encumbrances, and has the right to bring actions for the
infringement, dilution, misappropriation or other violation of, and/or is
licensed to use all patents and patent applications, trademarks, service marks,
trade names, and registrations and applications for registration of industrial
designs, copyrights, mask works, trademarks, service marks, trade names, trade
dress, and all domain names, technology, inventions, know-how, trade secrets,
product designs, services procedures, processes and all agreements and other
rights with respect to intellectual property and computer programs
(collectively, “Intellectual Property”) used in or necessary for the
conduct of the Company’s and its subsidiaries’ businesses as currently
conducted.

 

(ii)                                  To
the extent that any works of authorship, materials, products, technology or
software have been developed or created independently or jointly by any person
other than the Company or its subsidiaries for which the Company or any of its
subsidiaries has, directly or indirectly, paid, the Company or such subsidiary
has a written agreement with such person with respect thereto, and the Company
or such subsidiary thereby has obtained ownership of, and is the exclusive
owner of, all Intellectual Property therein or thereto by operation of law or
by valid assignment.  In each case in
which either the Company or any of its subsidiaries has acquired any
Intellectual Property from any person, the Company or such subsidiary has
obtained a valid and enforceable assignment sufficient to irrevocably transfer
all rights in such Intellectual Property to the Company or such subsidiary.

 

31

 

(iii)                               All of the patents,
industrial design registrations, trademark and service mark registrations,
copyright registrations, mask work registrations and domain name registrations,
and all applications for such registrations, owned by the Company or any of its
subsidiaries are, and, to the knowledge of the Company, those licensed to the
Company or any of its subsidiaries are, valid and in full force and effect, are
(in the case of those owned by the Company or any of its subsidiaries) held of
record in the name of the Company or such subsidiary, are not the subject of
any cancellation or reexamination proceeding or any other proceeding
challenging their extent or validity, and all necessary registration,
maintenance and renewal fees in connection with such patents and registrations
have been paid and all necessary documents and certificates in connection with such
patents and registrations have been filed with the relevant patent, copyright,
trademark or other authorities in the United States for the purposes of
maintaining such patents and registrations. 
Since January 1, 2002, the Company and its subsidiaries have had sales
outside the United States not exceeding $500,000 in the aggregate.

 

(iv)                              To
the knowledge of the Company, except as disclosed in Section 3.22(a)(iv) of the
Company Disclosure Schedule, the use of such Intellectual Property by the
Company and its subsidiaries in the conduct of their business as currently
conducted does not infringe on the rights of any party.

 

(v)                                 Except
as disclosed in Section 3.22(a)(v) of the Company Disclosure Schedule, and to
the knowledge of the Company, no person is infringing on any right of the
Company or any of its subsidiaries with respect to such Intellectual Property.

 

(vi)                              The
Company and its subsidiaries are not, and the consummation of the Transactions
will not cause them to be, in breach or violation of any agreement relating to
the use of any of its Intellectual Property, and they have not received any
notification, written or oral, from any third party that there is any such
violation, breach, or inability to perform under any such agreement.

 

(vii)                           There are no agreements,
written or oral, which limit any rights by the Company or any of its
subsidiaries to use any of the Intellectual Property owned by any of them in
the manner such Intellectual Property is currently used by the Company and its
subsidiaries.

 

(viii)                        To the Company’s knowledge,
none of the material trade secrets, know-how or other confidential or
proprietary information of the Company or any of its subsidiaries has been
disclosed to any person unless such disclosure was necessary, and was made pursuant
to an appropriate confidentiality agreement.

 

(ix)                                Except
as disclosed in Section 3.22(a)(ix) of the Company Disclosure Schedule, neither
the Company nor any of its subsidiaries has given any indemnification to any
third party against infringement of such Intellectual Property rights, and
neither the Company nor any of its subsidiaries has agreed to, or assumed, any
obligation or duty to indemnify, reimburse, hold harmless, guaranty or
otherwise assume or incur any obligation or liability or provide a right of
rescission to any third party with respect to the infringement, dilution,
misappropriation or other violation of the Intellectual Property of the Company
or any of its subsidiaries or any other third party.

 

32

 

(b)                                 The Company and each of its affiliates have in
fact received or will obtain prior to the expiration date of the Offer an
executed employee confidentiality agreement with the employees listed on
Section 3.22(b) of the Company Disclosure Schedule that, among other things,
obligates such employees to protect the Company’s confidential information and
the confidential information the Company receives from its customers and
vendors.

 

Section
3.23.                             Insurance. 
The Company or its subsidiaries maintain policies of fire and casualty,
liability and other forms of insurance set forth in Section 3.23 of the
Company’s Disclosure Schedule (disclosing in reasonable detail for each policy
the title and issuer of the policy, the type of policy and risks/losses
covered, the persons covered, the coverage limits and deductibles, and the
annual premiums).  All such policies are
in full force and effect, all premiums due and payable thereon have been paid,
and no notice of cancellation or termination has been received with respect to
any such policy.

 

Section
3.24.                             Affiliate Transactions.  Section 3.24 of the Company Disclosure
Schedule sets forth a true and complete list (including names of parties,
amounts involved and brief descriptions) of all transactions, agreements,
arrangements or understandings (or series thereof), written or oral, between
the Company or any of its subsidiaries and any of its or their directors or
executive officers (including, in the case of natural persons, any of such
persons’ relatives or affiliates, but excluding any dealings exclusively among
the Company and its subsidiaries) currently existing or effected or entered
into since January 1, 2001, other than any such transactions, agreements,
arrangements or understandings otherwise specifically disclosed in the Filed
Company SEC Documents.

 

Section
3.25.                             Indemnification Claims.  Other than as set forth on Section 3.25 of
the Company Disclosure Schedule, the Company is not aware of any
indemnification, breach of contract or similar claims by or against the Company
or any of its subsidiaries which are pending or, to the knowledge of the
Company, threatened (or which could be reasonably expected to be made in the
future), in each case in excess of $25,000 in amount, with respect to any acquisition
or disposition by the Company of any assets or businesses.

 

Section
3.26.                             Absence of Questionable Payments.  To the Company’s knowledge, neither the
Company nor any of its subsidiaries nor any director, officer, agent, employee
or other person acting on behalf of the Company or any of its subsidiaries, has
used any corporate or other funds for unlawful contributions, payments, gifts,
or entertainment, or made any unlawful expenditures relating to political
activity to government officials or others or established or maintained any
unlawful or unrecorded funds in violation of (i) Section 30A of the Exchange
Act or (ii) Section 104 of the Foreign Corrupt Practices Act of 1977 (15 U.S.C.
§79dd-2), as amended, or (iii) any other applicable foreign, federal or state
law.  To the Company’s knowledge,
neither the Company nor any of its subsidiaries nor any current director,
officer, agent, employee or other person acting on behalf of the Company or any
of its subsidiaries, has accepted or received any unlawful contributions,
payments, gifts, or expenditures.  To
the Company’s knowledge, the Company and each of its subsidiaries which is
required to file reports pursuant to Section 12 or 15(d) of the Exchange Act is
in compliance with the provisions of Section 13(b) of the Exchange Act, except
where the failure to do so could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect on the Company.

 

33

 

Section
3.27.                             Products Liability.  There are no (a) liabilities, known or
unknown, fixed or contingent, with respect to any products of the Company or
its subsidiaries that are based on a theory of strict product liability,
negligence or other tort theories (as distinct from product warranty claims
described in clause (b) below), or (b) liabilities of the Company or its
subsidiaries, known or unknown, fixed or contingent, which have been asserted,
for the breach of any express or implied product warranty or any other similar
claim with respect to any product manufactured or sold by the Company or its
subsidiaries (other than any claim based on standard warranty obligations made
by the Company or its subsidiaries in the ordinary course of the conduct of
their business to purchasers of their products), which as to (a) and (b) above,
individually or in the aggregate could reasonably be expected to have a
Material Adverse Effect on the Company. 
Section 3.27 of the Company Disclosure Schedule contains copies of the
Company’s and its subsidiaries’ standard warranties and return policies.  The Company and each of its subsidiaries and
predecessors has not and does not produce, market, distribute, sell or
otherwise use in the operation of its business any product or component that
contains asbestos.

 

Section
3.28.                             Relationship with Customers and
Suppliers.  There are no
suppliers of raw materials to the Company and its subsidiaries for which there
are not adequate alternative suppliers of such raw materials on commercially
reasonable terms.  As of the date of
this Agreement, the Company knows of no written or (to the extent known by an
officer or director of the Company) oral communication, fact, event or action
which exists or has occurred within 12 months prior to the date hereof, which
would lead the Company reasonably to believe that (i) any of its customers who
accounted for the ten largest dollar volume of purchases from the Company and
its subsidiaries for the 12 months ended June 30, 2003 (the “Major Customers”)
or (ii) any of its suppliers who accounted for the ten largest dollar volume of
purchases by the Company and its subsidiaries for the 12 months ended June 30,
2003, will terminate or materially and adversely modify its business
relationship with Company or its subsidiaries.

 

Section
3.29.                             Company Rights Agreement.  Each right issued under the Company Rights
Agreement is represented by the certificate representing the associated shares
of Company Common Stock and is not exercisable or transferable apart from the
associated shares of Company Common Stock, and the Company has taken all
necessary actions so that (a) the Company Rights Agreement will not be
applicable to this Agreement, the Offer, the Merger and the other transactions
contemplated hereby and (b)(i) none of Parent, Purchaser or their Affiliates is
an Acquiring Person (as defined in the Company Rights Agreement) pursuant to
the Company Rights Agreement and (ii) a Distribution Date, a Triggering Event
or a Stock Acquisition Date (as such terms are defined in the Company Rights
Agreement) does not occur, in the case of clauses (i) and (ii), by reason of
the execution of this Agreement and the consummation of the Offer, the Merger
and the other transactions contemplated hereby.

 

34

 

ARTICLE IV

 

REPRESENTATIONS
AND WARRANTIES OF PARENT AND PURCHASER

 

Parent
and Purchaser represent and warrant to the Company as follows:

 

Section
4.1.                                   Organization and Qualification.  Each of Parent and Purchaser is a
corporation duly organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation and has the requisite corporate
power and corporate authority to carry on its business as it is now being
conducted.  Each of Parent and Purchaser
is duly qualified as a foreign corporation or licensed to do business, and is
in good standing, in each jurisdiction where the character of its properties
owned or leased or the nature of its activities makes such qualification or
licensing necessary, except where the failure to be so qualified or licensed
and in good standing could not reasonably be expected to prevent or materially
delay the consummation of the Offer or the Merger.  Purchaser is an indirect wholly owned subsidiary of Parent.

 

Section
4.2.                                   Authority Relative to this Agreement.  Each of Parent and Purchaser has all
requisite corporate power and corporate authority to execute and deliver this
Agreement and each instrument required hereby to be executed and delivered by
Parent or Purchaser prior to or at the Effective Time, to perform its
obligations hereunder and thereunder, and to consummate the Transactions.  The execution and delivery by Parent and
Purchaser of this Agreement and each instrument required hereby to be exercised
and delivered by Parent or Purchaser prior to or at the Effective Time and the
performance of their respective obligations hereunder and thereunder, and the
consummation by Parent and Purchaser of the Transactions have been duly and
validly authorized by the respective Boards of Directors of Parent and
Purchaser, and the shareholders of Purchaser and Parent, and no other corporate
proceedings on the part of Parent or Purchaser are necessary to authorize this
Agreement, or commence the Offer or to consummate the Transactions (including the
Offer) other than filing and recordation of appropriate merger documents as
required by the PBCL.  This Agreement
has been duly and validly executed and delivered by each of Parent and
Purchaser and, assuming this Agreement constitutes a valid and binding
obligation of the Company, this Agreement constitutes a valid and binding
agreement of each of Parent and Purchaser, enforceable against each of Parent
and Purchaser in accordance with its terms.

 

Section
4.3.                                   Proxy Statement.  None of the information supplied in writing by Parent, Purchaser
and their respective affiliates specifically for inclusion in the Proxy
Statement, if required, shall, at the time the Proxy Statement is mailed, at
the time of the Shareholder Meeting or at the Effective Time, contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading;
provided, however, that Parent and Purchaser make no representation or warranty
as to any of the information relating to and supplied by or on behalf of the
Company specifically for inclusion in the Proxy Statement.  If, at any time prior to the Effective Time,
any event relating to Parent or any of its affiliates, officers or directors is
discovered by Parent that should be set forth in a supplement to the Proxy
Statement, Parent will promptly inform the Company.

 

35

 

Section
4.4.                                   Consents and Approvals; No Violation.  Subject to the taking of the actions
described in the immediately succeeding sentence, the execution and delivery of
this Agreement, the Tender and Option Agreement and the Top-up Option Agreement
do not, and the consummation of the Transactions will not, conflict with, or
result in any violation of, or default (with or without notice or lapse of
time, or both) under, or give rise to a right of termination, cancellation or
acceleration of any obligation or to loss of a material benefit under, or
result in the creation of any Lien upon any of the material properties or
assets of Parent under (i) the certificate of incorporation or bylaws of Parent
or Purchaser, (ii) any loan or credit agreement, note, bond, indenture, lease
or other agreement, instrument or Permit applicable to Parent or Purchaser or
their respective properties or assets, or (iii) any judgment, order, writ,
injunction or decree, or material law, statute, ordinance, rule or regulation
applicable to Parent or Purchaser or their respective properties or assets,
other than, in the case of clause (ii), (A) the Company’s Second Amended and
Restated Credit Agreement, dated as of March 15, 2002, as amended, by and among
the Company, its subsidiaries, the lenders party thereto and BNP Paribas as
Agent (the “Existing Parent Credit Agreement”) and (B) any such
conflicts, violations, defaults, rights or Liens that individually or in the
aggregate would not (x) impair in any material respect the ability of Parent
and Purchaser to perform their respective obligations under this Agreement or
(y) prevent or impede the consummation of any of the Transactions.  No consent, approval, order or authorization
of, or registration, declaration or filing with, any Governmental Entity or any
other person is required by Parent or Purchaser in connection with the
execution and delivery of this Agreement or the consummation by Parent or
Purchaser, as the case may be, of any of the Transactions, except (A)
 pursuant to the Securities Act and the Exchange Act, (B) the filing
of the Articles of Merger pursuant to the PBCL, (C) such filings and
approvals as may be required under the “blue sky,” takeover or securities laws
of various states, (D) the consent of the lenders under the Existing Parent
Credit Agreement or (E) where the failure to obtain any such consent, approval,
authorization or permit, or to make any such filing or notification, would not
prevent or delay consummation of the Offer or the Merger or would not otherwise
prevent Parent from performing its obligations under this Agreement.

 

Section
4.5.                                   Schedule TO; Offer Documents.  Neither the Schedule TO, the Offer Documents
nor any information supplied by Parent or Purchaser in writing for inclusion in
the Schedule 14D-9 shall, at the respective times the Schedule 14D-9, the
Schedule TO, the Offer Documents or any amendments or supplements thereto are
filed with the SEC or are first published, sent or given to shareholders of the
Company, as the case may be, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they are made, not misleading.  The
Schedule TO and the Offer Documents will comply as to form in all material
respects with the requirements of the Exchange Act and the rules and
regulations thereunder.  Notwithstanding
the foregoing, no representation or warranty is made by Parent or Purchaser
with respect to statements made or incorporated by reference therein based on
information supplied by the Company specifically for inclusion or incorporation
by reference therein.

 

36

 

ARTICLE V

 

CONDUCT OF
BUSINESS PENDING THE MERGER

 

Section
5.1.                                   Conduct of Business of the Company
Pending the Merger.  The
Company hereby covenants and agrees that, prior to the Effective Time, unless
otherwise expressly contemplated by this Agreement or consented to in writing
by Parent, it will and will cause each of its subsidiaries to:

 

(a)                                  operate
its business in the usual and ordinary course consistent with past practices;

 

(b)                                 use
its commercially reasonable best efforts to preserve intact its business
organization, maintain its rights and franchises, retain the services of its
respective key employees and maintain its relationships with its respective
customers and suppliers and others having business dealings with it to the end
that its goodwill and ongoing business shall be unimpaired at the Effective
Time;

 

(c)                                  use
its commercially reasonable best efforts to maintain and keep its material
properties and assets in as good repair and condition as at present, ordinary
wear and tear excepted, and to maintain supplies and inventories in quantities
consistent with its customary business practice; and

 

(d)                                 use
its commercially reasonable best efforts to keep in full force and effect
insurance and bonds comparable in amount and scope of coverage to that
currently maintained.

 

Section
5.2.                                   Prohibited Actions by the Company.   Without limiting the generality of Section
5.1, except as set forth in Section 5.2 of the Company Disclosure Schedule, the
Company covenants and agrees that, except as expressly contemplated by this
Agreement or otherwise consented to in writing by Parent, from the date of this
Agreement until the Effective Time, it will not do, and will not permit any of
its subsidiaries to do, any of the following:

 

(a)                                  (i)  increase the compensation (or benefits)
payable to or to become payable to any director or employee, except for
increases in salary or wages of employees in the ordinary course of business
and consistent with past practice; (ii) grant any severance or termination pay
(other than pursuant to the normal severance policy or practice of the Company
or its subsidiaries as disclosed in Section 3.12 of the Company Disclosure
Schedule and in effect on the date of this Agreement) to, or enter into or
amend in any material respect any employment or severance agreement with, any
employee; (iii) establish, adopt, enter into or amend any collective bargaining
agreement or Benefit Plan of the Company or any ERISA Affiliate; or (iv) take
any action to accelerate any rights or benefits, or make any determinations not
in the ordinary course of business consistent with past practice, under any
collective bargaining agreement or Benefit Plan of the Company or any ERISA
Affiliate;

 

(b)                                 declare,
set aside or pay any dividend on, or make any other distribution in respect of
(whether in cash, stock or property), outstanding shares of capital stock,

 

37

 

except for dividends by a wholly owned subsidiary of the Company to the
Company or another wholly owned subsidiary of the Company;

 

(c)                                  redeem,
purchase or otherwise acquire, or offer or propose to redeem, purchase or
otherwise acquire, any outstanding shares of capital stock of, or other equity
interests in, or any securities that are convertible into or exchangeable for
any shares of capital stock of, or other equity interests in, or any
outstanding options, warrants or rights of any kind to acquire any shares of
capital stock of, or other equity interests in, the Company or any of its
subsidiaries (other than (i) any such acquisition by the Company or any of its
wholly owned subsidiaries directly from any wholly owned subsidiary of the
Company in exchange for capital contributions or loans to such subsidiary, or
(ii) any acquisition, purchase, forfeiture or retirement of shares of Company
Common Stock or the Options occurring pursuant to the terms (as in effect on
the date of this Agreement) of any existing Benefit Plan of the Company or any
of its subsidiaries, in a manner otherwise consistent with the terms of this
Agreement);

 

(d)                                 effect
any reorganization or recapitalization; or split, combine or reclassify any of
the capital stock of, or other equity interests in, the Company or any of its
subsidiaries or issue or authorize or propose the issuance of any other
securities in respect of, in lieu of or in substitution for, shares of such
capital stock or such equity interests;

 

(e)                                  except
as contemplated by the Company Rights Agreement and not in violation of this
Agreement (including without limitation Sections 3.29 and 5.2(q) hereof),
offer, sell, issue or grant, or authorize or propose the offering, sale,
issuance or grant of, any shares of capital stock of, or other equity interests
in, any securities convertible into or exchangeable for (or accelerate any
right to convert or exchange securities for) any shares of capital stock of, or
other equity interest in, or any options, warrants or rights of any kind to
acquire any shares of capital stock of, or other equity interests in, or any
Voting Company Debt or other voting securities of, the Company or any of its
subsidiaries, or any “phantom” stock, “phantom” stock rights, SARs or
stock-based performance units, other than issuances of shares of Company Common
Stock upon the exercise of the Options outstanding at the date of this
Agreement in accordance with the terms thereof (as in effect on the date of
this Agreement);

 

(f)                                    acquire
or agree to acquire, by merging or consolidating with, by purchasing an equity
interest in or a portion of the assets of, or in any other manner, any business
or any corporation, partnership, association or other business organization or
division thereof or otherwise acquire any assets of any other person (other
than the purchase of inventories and supplies from suppliers or vendors in the
ordinary course of business and consistent with past practice and other than
asset acquisitions which do not exceed $25,000 in any individual transaction or
$50,000 in the aggregate);

 

(g)                                 sell,
lease, exchange or otherwise dispose of, or grant any Lien with respect to, any
of the properties or assets of the Company or any of its subsidiaries that have
a fair market or book value (whichever is greater) of more than $25,000
individually or $50,000 in the aggregate, except for dispositions of excess or
obsolete assets and sales of inventories in the ordinary course of business and
consistent with past practice;

 

38

 

(h)                                 propose
or adopt any amendments to its articles of incorporation or bylaws or other
organizational documents;

 

(i)                                     effect
any change in any accounting methods, principles or practices in effect as of
December 31, 2002 affecting the reported consolidated assets, liabilities or
results of operations of the Company, except as may be required by a change in
generally accepted accounting principles;

 

(j)                                     (i)                                     incur
any Indebtedness (other than borrowings for working capital purposes under the
Company’s existing revolving credit facility disclosed on Section 3.17 of the
Company Disclosure Schedule), issue or sell any debt securities or warrants or
other rights to acquire any debt securities of the Company or any of its
subsidiaries, guarantee any such indebtedness or debt securities of another
person, enter into any “keep well” or other agreement to maintain any financial
statement condition of another person or enter into any arrangement having the
economic effect of any of the foregoing, or (ii) make any loans, advances or
capital contributions to, or investments in, any other person, other than to or
in the Company or any direct or indirect wholly owned subsidiary of the
Company;

 

(k)                                  enter
into any Contract described in Section 3.17 other than Contracts with customers
and suppliers for goods or services entered into in the ordinary course of
business and consistent with past practices that are not expected to result in
payments to or liabilities of the Company and its subsidiaries in excess of
$100,000 for any single Contract or series of related Contracts which are
reasonably expected to be performed within 90 days of entry or as permitted by
other subsections of this Section 5.2 ; provided, however, that
Parent agrees that it shall not unreasonably withhold or delay its consent to
Contracts of the type specified in sub-clause (j) of Section 3.17 to the extent
not permitted by the foregoing;

 

(l)                                     pay,
discharge, settle or satisfy any claims, liabilities or obligations (absolute,
accrued, asserted or unasserted, contingent or otherwise), other than the
payment, discharge, settlement or satisfaction, in the ordinary course of
business consistent with past practice or in accordance with their terms, of
liabilities reflected or reserved against in the most recent consolidated
financial statements (or the notes thereto) of the Company included in the
Filed Company SEC Documents (but not in excess of the amount so reflected or
reserved) or incurred since the date of such financial statements in the
ordinary course of business consistent with past practice;

 

(m)                               take
any of the actions set forth in Section 3.4 not otherwise specified herein;

 

(n)                                 settle
the terms of any material litigation affecting the Company or any of its
subsidiaries, including any litigation with shareholders of the Company or
involving this Agreement or the Transactions;

 

(o)                                 make
or revoke any Tax election except in a manner consistent with past practice,
change any method of accounting for Tax purposes, settle or compromise any
material Tax liability, or agree to an extension of time of a statute of
limitations;

 

39

 

(p)                                 make
or agree to make any new capital expenditures other than capital expenditures
made in the ordinary course of business and consistent with past practices
which individually do not exceed $100,000 and which in the aggregate do not
exceed $250,000;

 

(q)                                 (i)
amend or waive any provisions of the Company Rights Agreement (other than such
amendments as are necessary to accommodate this Agreement and the Transactions,
but not with respect to any other Acquisition Proposal) or redeem any Rights or
(ii) implement or adopt any other so-called “poison pill,” shareholder rights
plan or other similar plan; provided, however, that the Company
may delay the “Distribution Date” (as defined in the Company Rights Agreement)
as contemplated by Section 3(a)(ii) of the Company Rights Agreement to a date
not later than the date described in Section 3(a)(i) of the Company Rights Plan
without the consent of Parent; or

 

(r)                                    agree
in writing or otherwise to take any of the foregoing actions or any action
which would make any representation or warranty of the Company in this
Agreement, the Tender and Option Agreement or the Top-up Option Agreement
untrue or incorrect in any material respect or cause any condition set forth in
Annex A to occur or any condition in Article VII to be unsatisfied.

 

ARTICLE VI

 

COVENANTS

 

Section
6.1.                                   No Solicitation.

 

(a)                                  From
and after the date hereof until the Effective Time or the termination of this
Agreement in accordance with Section 8.1, neither the Company nor any of its
subsidiaries will directly or indirectly initiate, solicit or encourage
(including by way of furnishing non-public information or assistance), or take
any other action to facilitate, any inquiries or the making or submission of
any Acquisition Proposal (as defined herein) or enter into or maintain or
continue discussions or negotiate with any person or group in furtherance of
such inquiries or to obtain or induce any person or group to make or submit an
Acquisition Proposal or agree to or endorse any Acquisition Proposal or assist
or participate in, facilitate or encourage, any effort or attempt by any other
person or group to do or seek any of the foregoing or authorize or permit any
of its officers, directors or employees or any of its subsidiaries or
affiliates or any investment banker, financial advisor, attorney, accountant or
other representative or agent retained by it or any of its subsidiaries to take
any such action; provided, however, that nothing contained in
this Agreement shall prohibit the Company or the Board of Directors of the
Company from, prior to the earlier to occur of acceptance for payment of shares
of Company Common Stock pursuant to the Offer or adoption of this Agreement by
the requisite vote of the shareholders of the Company, furnishing information
to or entering into discussions or negotiations with any person or entity that
makes an unsolicited (i.e. not solicited after the date of this Agreement)
written, bona fide Acquisition Proposal that the Board of Directors of the
Company determines reasonably and in good faith constitutes or presents a
reasonable likelihood of resulting in a Superior Proposal (as defined herein),
if, and only to the extent that prior to taking such action (other than the
negotiation of the confidentiality agreement referred to in the following clause
(y) prior to the disclosure of any Company information) the Company (x)

 

40

 

delivers to Parent and Purchaser the notice required pursuant to
Section 6.1(c) stating that it is taking such action and (y) receives from such
person or group an executed confidentiality agreement that is not, in any
material respect, less restrictive as to such person or entity than the
Confidentiality Agreement and which, in any event, contains customary
confidentiality and standstill restrictions and shall not contain any
exclusivity provisions which would prohibit the Company from complying with its
obligations under this Section 6.1 or otherwise under this Agreement.  Without limiting the foregoing, it is
understood that any violation of the restrictions set forth in this Section 6.1
by any officer, director, employee or affiliate of the Company or any of its
subsidiaries or any investment banker, attorney, accountant or other advisor,
agent or representative of the Company or any of its subsidiaries, whether or
not such person is purporting to act on behalf of the Company or any of its
subsidiaries or otherwise, shall be deemed to be a breach of this Section 6.1
by the Company.

 

(b)                                 Neither
the Board of Directors of the Company nor any committee thereof shall (i)
withdraw, modify in a manner adverse to Parent or Purchaser or fail to make, or
propose to withdraw, modify in a manner adverse to Parent or Purchaser or fail
to make its approval or recommendation of the Offer or the Merger or of the
Tender and Option Agreement, this Agreement and the other Transactions, (ii)
except as permitted by Section 6.1(e), approve or recommend, or propose to
approve or recommend, any Acquisition Proposal, (iii) take any action not
previously taken to render the provisions of any anti-takeover statute, rule or
regulation (including Sections 2538 through 2588, inclusive, of the PBCL)
inapplicable to any person (other than Parent, Purchaser or their affiliates)
or group or to any Acquisition Proposal, or (iv) cause the Company to accept
such Acquisition Proposal and/or enter into any letter of intent, agreement in
principle, acquisition agreement or other similar agreement (each, an “Acquisition
Agreement”) related to any Acquisition Proposal.

 

(c)                                  In
addition to the obligations of the Company set forth in paragraphs (a) and (b)
above, the Company shall promptly (and in any event, within one business day)
advise Parent orally and in writing of any request for information or the
submission or receipt after the date of this Agreement of any Acquisition
Proposal, or any inquiry with respect to or which could reasonably be expected
to lead to any Acquisition Proposal, the material terms and conditions of such
request, Acquisition Proposal or inquiry, and the identity of the person making
any such request, Acquisition Proposal or inquiry and the Company’s response or
responses thereto.  The Company will
keep Parent fully informed of the status and details (including amendments or
proposed amendments) of any such request, Acquisition Proposal or inquiry.  Immediately following the execution of this
Agreement, the Company will cease and cause to be terminated any existing
activities, discussions or negotiations with any parties conducted heretofore
with respect to any of the foregoing.

 

(d)                                 “Acquisition
Proposal” means an inquiry, offer or proposal regarding any of the
following (other than the Transactions contemplated by this Agreement)
involving the Company or any of its subsidiaries:  (i) any merger, consolidation, share exchange, recapitalization,
liquidation, dissolution, business combination or other similar transaction;
(ii) any sale, lease, exchange, mortgage, pledge, transfer or other disposition
of 20% or more of the assets of the Company and its subsidiaries, taken as a
whole, or of any Material Business (as defined herein) or of any subsidiary or
subsidiaries responsible for a Material Business in a single transaction or
series of related transactions; (iii) any tender offer (including a self tender

 

41

 

offer) or exchange offer that, if consummated, would result in any
person or group beneficially owning more than 20% of the outstanding shares of
any class of equity securities of the Company or its subsidiaries (or in the
case of a person or group which beneficially owns more than 20% of the
outstanding shares of any class of equity securities of the Company as of the
date hereof, would result in such person or group increasing the percentage or
number of shares of such class beneficially owned by such person or group) or
the filing of a registration statement under the Securities Act in connection
therewith; (iv) any acquisition of 20% or more of the outstanding shares of
capital stock of the Company or the filing of a registration statement under
the Securities Act in connection therewith or any other acquisition or
disposition the consummation of which would prevent or materially diminish the
benefits to Parent of the Merger; or (v) any public announcement by the Company
or any third party of a proposal, plan or intention to do any of the foregoing
or of any agreement to engage in any of the foregoing.  “Superior Proposal” means any
proposal made by one or more third parties (the “Bidders”) to acquire, directly
or indirectly, including pursuant to a tender offer, exchange offer, merger,
consolidation, share exchange, business combination, recapitalization,
liquidation, dissolution or other similar transaction, all the shares of
Company Common Stock then outstanding or all or substantially all of the assets
of the Company and its subsidiaries, for consideration consisting of all cash
and for which such Bidders have such consideration immediately available and
such proposal is not otherwise subject to a financing condition, which the
Board of Directors of the Company determines reasonably and in good faith
(after receiving a fairness opinion of B&S or another financial advisor of
nationally recognized reputation) to be superior to the holders of Company
Common Stock from a financial point of view (taking into account any changes to
the terms of this Agreement and the Offer that have been proposed by Parent in
response to such proposal) and to be more favorable to the Company and
the holders of Company Common Stock (taking into account all financial and
strategic considerations, including relevant legal, financial, regulatory and
other aspects of such proposal and the third party making such proposal and the
conditions and prospects for completion of such proposal) than the Offer, the
Merger and the other Transactions taken as a whole.  “Material Business” means any business (or the assets
needed to carry out such business) that contributed or represented 20% or more
of the net sales, the net income or the assets (including equity securities) of
the Company and its subsidiaries taken as a whole.

 

(e)                                  Nothing
contained in this Section 6.1 shall prohibit the Company or the Board of
Directors of the Company from taking and disclosing to its shareholders a
position contemplated by Rules 14d-9 and 14e-2(a) promulgated under the
Exchange Act or from making any disclosure to the Company’s shareholders if the
Board of Directors of the Company, after consultation with independent legal
counsel (who may be the Company’s regularly engaged independent counsel),
determines reasonably and in good faith that the failure to take such action
would reasonably be expected to constitute a breach of the fiduciary duty of
the Board of Directors under applicable law; provided that neither the Board of
Directors of the Company nor any committee thereof withdraws or modifies, or
proposes to withdraw or modify, the approval or recommendation of the Board of
Directors of the Company of the Offer or the Merger.

 

Section
6.2.                                   Access to Information.  Between the date of this Agreement and the
Effective Time, subject to applicable law and the Confidentiality and
Exclusivity Agreement dated August 4, 2003 (the “Confidentiality Agreement”)
between Parent and the Company, the

 

42

 

Company shall, and shall cause its subsidiaries to (a) afford to Parent
and its officers, directors, employees, accountants, consultants, legal
counsel, agents and other representatives reasonable access during normal
business hours and at all other reasonable times to the officers and certain
employees, agents, properties, offices and other facilities of the Company and
its subsidiaries and to their books and records (including all Tax Returns and
all books and records related to Taxes and such returns), (b) permit Parent to
make such inspections as it may reasonably require (and the Company shall
cooperate with Parent in any such inspections, including, without limitation,
environmental due diligence), and (c) furnish promptly to Parent and its
representatives a copy of each report, schedule, registration statement and
other document filed by it during such period pursuant to the requirements of
federal or state securities laws and such other information concerning the
business, properties, contracts, records and personnel of the Company and its
subsidiaries (including financial, operating and other data and information) in
the possession of the Company or the Company’s counsel, accountants or other
consultants or agents as may be reasonably requested, from time to time, by or
on behalf of Parent.

 

Section 6.3.                                   Confidentiality Agreement.  The parties agree that the provisions of the
Confidentiality Agreement shall remain binding and in full force and effect in
accordance with its terms, except that the ninth (9th) paragraph thereof
(regarding non-solicitation) is superseded by Section 6.1 of this
Agreement.  The parties shall comply
with, and shall cause their respective representatives to comply with, all of
their respective obligations under the Confidentiality Agreement until the
Effective Time, at which time the Confidentiality Agreement shall terminate and
be of no further force and effect. 
Notwithstanding anything herein (or in the Confidentiality Agreement) to
the contrary, any party subject to confidentiality obligations hereunder or
under any related document (and any employee, representative or other agent of
such party) may disclose to any and all persons, without limitation of any
kind, any information with respect to the U.S. federal income tax treatment and
U.S. federal income tax structure of the transactions contemplated herein and
all materials of any kind (including opinions or other tax analyses) that are
provided to it relating to such tax treatment and tax structure.  To the extent not inconsistent with the
immediately preceding sentence, this authorization does not extend to
disclosure of any other information, including without limitation (a) the
identities of participants or potential participants in this transaction, (b)
the existence or status of any negotiations, or (c) or any other term or
detail, or portion of any documents or other materials, not related to the tax
treatment or tax structure of the potential transaction.

 

 

Section
6.4.                                   Commercially Reasonable Best
Efforts.  (a)  Subject to the terms and conditions herein
(including Section 6.1), each of the parties hereto agrees to use its
commercially reasonable best efforts to take, or cause to be taken, all
appropriate action, and to do, or cause to be done, all things necessary,
proper or advisable under applicable laws and regulations to consummate and
make effective as soon as reasonably practicable the Transactions.  In case at any time after the Effective Time
any further action is necessary or desirable to carry out the purposes of this
Agreement, the Top-up Option Agreement and the Tender and Option Agreement, the
proper officers and directors of each party to this Agreement shall take all
such necessary action.  Such
commercially reasonable best efforts shall apply to, without limitation,
(i) the obtaining of all necessary consents, approvals or waivers from
third parties and Governmental Entities necessary to the consummation of the
Transactions and (ii) opposing vigorously any litigation or administrative
proceeding relating to this Agreement and the Tender and Option Agreement or
the transactions contemplated hereby and thereby,

 

43

 

including, without limitation, promptly appealing any adverse court or
agency order.  Notwithstanding the
foregoing or any other provisions contained in this Agreement or the Tender and
Option Agreement to the contrary, neither Parent nor any of its affiliates
shall be under any obligation of any kind to (i) enter into any negotiations or
to otherwise agree with or litigate against any Governmental Entity, including
but not limited to any governmental or regulatory authority with jurisdiction
over the enforcement of any applicable federal, state, local and foreign antitrust,
competition or other similar laws, or (ii) otherwise agree with any
Governmental Entity or any other party to sell or otherwise dispose of, agree
to any limitations on the ownership or control of, or hold separate (through
the establishment of a trust or otherwise) particular assets or categories of
assets or businesses of any of the Company, its subsidiaries, Parent or any of
Parent’s affiliates.  Parent and the
Company acknowledge and agree that the failure to obtain any consents under any
of the agreements listed in Section 3.7 of the Company Disclosure Schedule
shall not result in the failure to satisfy the condition set forth in clause
(j) of Annex A, except to the extent such agreements are marked with an
asterisk (*) on Section 3.7 of the Company Disclosure Schedule.

 

(b)                                 The
Company shall give and make all required and material notices and reports to
the appropriate persons with respect to the Permits and Environmental Permits
that may be necessary for the sale and purchase of the business and the
ownership, operation and use of the assets of Surviving Corporation by Parent
and Purchaser after the Effective Time. 
Subject to the other terms of this Agreement, each of the Company,
Parent and Purchaser shall cooperate and use their respective commercially
reasonable best efforts to make all filings, to obtain all actions or
nonactions, waivers, Permits and orders of Governmental Entities necessary to
consummate the Transactions and to take all reasonable steps as may be
necessary to obtain an approval or waiver from, or to avoid an action or
proceeding by, any Governmental Entity. 
Each of the parties hereto will furnish to the other parties such
necessary information and reasonable assistance as such other parties may
reasonably request in connection with the foregoing.

 

(c)                                  The
Company and its Board of Directors shall (i) ensure that no state takeover
statute or similar statute, rule or regulation (including Sections 2538 through
2588, inclusive, of the PBCL) is or becomes applicable to the Offer, the
Merger, this Agreement, the Tender and Option Agreement or any of the other
Transactions contemplated by the foregoing and (ii) if any state takeover
statute or similar statute, rule or regulation becomes applicable to the Offer,
the Merger, this Agreement, the Tender and Option Agreement or any other
Transactions, ensure that the Offer, the Merger and the other Transactions,
including the transactions contemplated by this Agreement and the Tender and
Option Agreement may be consummated as promptly as practicable on the terms
contemplated by this Agreement and the Tender and Option Agreement and
otherwise to minimize the effect of such statute or regulation on the Offer,
the Merger and the other Transactions, including the Transactions contemplated
by this Agreement, and the Tender and Option Agreement.  Purchaser agrees to make the Notice Filing.

 

Section
6.5.                                   Indemnification of Directors and
Officers.

 

(a)                                  Parent
and Purchaser agree that all rights to indemnification for acts or omissions
occurring prior to the Effective Time existing as of the date hereof in favor
of

 

44

 

the current or former directors or officers of the Company and its
subsidiaries (including any director or officer of the Company or its subsidiaries
acting in their capacity as directors, officers, agents or trustees of any
Benefit Plan for employees of the Company and its subsidiaries) as provided in
the Company and/or, if greater, such subsidiaries’ respective articles of
incorporation or bylaws shall survive the Merger and shall continue in full
force and effect in accordance with their terms for a period of six years from
the Effective Time (notwithstanding any subsequent amendment of the respective
articles of incorporation or bylaws, provided that any amendment shall
explicitly retain these rights for these persons).  Parent shall cause to be purchased, promptly following the Share
Acquisition Date, an extension covering a period of six years from the
Effective Time for the Company’s directors’ and officers’ insurance and
indemnification policy in effect on the date of this Agreement (the “D&O
Insurance”), so long as the aggregate premium to be paid by the Company for
such D&O Insurance extension would not exceed $168,750.

 

(b)                                 If
any claim or claims shall, subsequent to the Share Acquisition Date and within
six years after the Effective Time, be made in writing against any present or
former director or officer of the Company or its subsidiaries based on or
arising out of the services of such person prior to the Effective Time in the
capacity of such person as a director or officer of the Company or its
subsidiaries (and such director or officer shall have given Parent written
notice of such claim or claims within such six year period), the provisions of
Section 6.5(a) respecting the rights to indemnify the current or former
directors or officers under the articles of incorporation and bylaws of the
Company and/or its subsidiaries shall continue in effect until the final
disposition of all such claims.

 

(c)                                  Notwithstanding
anything to the contrary in this Section 6.5, neither Parent nor the Surviving
Corporation shall be liable for any settlement effected without its written
consent, which shall not be unreasonably withheld.

 

(d)                                 In
the event the Surviving Corporation or Parent or any of their respective
successors or assigns (i) consolidates with or merges into any other person and
shall not be the continuing or surviving corporation or entity of such
consolidation or merger, or (ii) transfers all or substantially all of its
properties and assets to any person, then, and in each such case, proper
provision shall be made (whether by operation of law or otherwise if necessary)
so that the successors and assigns of Parent or the Surviving Corporation, as
the case may be, assume the obligations set forth in this Section 6.5.

 

Section
6.6.                                   Event Notices and Other Actions.  (a) From and after the date of this
Agreement until the Effective Time, the Company shall promptly notify Parent
and Purchaser of (i) the occurrence or nonoccurrence of any event, the
occurrence or nonoccurrence of which has resulted in, or could reasonably be
expected to result in, any condition to the Offer set forth in Annex A, or any
condition to the Merger set forth in Article VII, not being satisfied, (ii) the
Company’s failure to comply with any covenant or agreement to be complied with
by it pursuant to this Agreement which has resulted in, or could reasonably be
expected to result in, any condition to the Offer set forth in Annex A, or any
condition to the Merger set forth in Article VII, not being satisfied and (iii)
any representation or warranty made by the Company contained in this Agreement
that is qualified as to materiality becoming untrue or inaccurate in any respect
or any such representation or warranty that is not so qualified as to
materiality becoming untrue

 

45

 

or inaccurate in any material respect. 
The Company’s delivery of any notice pursuant to this Section 6.6(a)
shall not cure any breach of any representation or warranty of the Company
contained in this Agreement or otherwise limit or affect the remedies available
hereunder to Parent or Purchaser.

 

(b)                                 The
Company shall not, and shall not permit any of its subsidiaries to, take any
action or nonaction that will, or that could reasonably be expected to, result
in (i) any of the representations and warranties of the Company set forth in
this Agreement that is qualified as to materiality becoming untrue, (ii) any of
such representations and warranties that is not so qualified becoming untrue in
any material respect or (iii) except as otherwise permitted by Section 6.1 and
subject to Section 6.4(a), any condition to the Offer set forth in Annex A, or
any condition to the Merger set forth in Article VII, not being satisfied.

 

Section
6.7.                                   Third Party Standstill Agreements.  During the period from the date of this
Agreement through the Effective Time, the Company shall not terminate, amend,
modify or waive any material provision of any confidentiality or standstill or
similar agreement to which the Company or any of its subsidiaries is a party
(other than any involving Parent or Purchaser).  Subject to the foregoing, during such period, the Company agrees
to enforce and agrees to permit (and, to the fullest extent permitted under
applicable law, hereby assigns its rights thereunder to Parent and Purchaser)
Parent and Purchaser to enforce on its behalf and as third party beneficiaries
thereof, to the fullest extent permitted under applicable law, the provisions
of any such agreements, including obtaining injunctions to prevent any breaches
of such agreements and to enforce specifically the terms and provisions thereof
in any court or other tribunal having jurisdiction.  In addition, the Company hereby waives any rights the Company may
have under any standstill or similar agreements to object to the transfer to
Purchaser of all shares of Company Common Stock held by shareholders covered by
such standstill or similar agreements and hereby covenants not to consent to
the transfer of any shares of Company Common Stock held by such shareholders to
any other person unless (i) the Company has obtained the specific, prior
written consent of Parent with respect to any such transfer or (ii) this
Agreement has been terminated pursuant to Article VIII.

 

Section
6.8.                                   Employee Stock Options; Employee
Plans and Benefits and Employment Contracts.

 

(a)                                  Company
Stock Option Plans.  Simultaneously
with the execution of this Agreement, the Board of Directors of the Company
(or, if appropriate, any committee administering the Company Stock Option
Plans) shall adopt such resolutions or take such other actions as are required
to effect the transactions contemplated by Section 2.10 in respect of all
outstanding Options and thereafter the Board of Directors of the Company (or
any such committee) shall adopt any such additional resolutions and take such
additional actions as are required in furtherance of the foregoing.

 

(b)                                 Payments
in Respect of Options.  Each Option
vested and exercisable immediately prior to the Effective Time and cancelled
pursuant to Section 2.10 shall, upon cancellation, be converted into the right
to receive an amount in cash equal to the product of (i) the number of shares
of Company Common Stock subject to such Option and (ii) the excess, if any, of
the Merger Consideration for Company Common Stock over the exercise price

 

46

 

per share subject or related to such Option.  All other Options shall be cancelled without payment immediately
prior to the Effective Time.

 

(c)                                  Time
of Payment.  The amount described in
subsection (b) shall be paid by the Company immediately before the Effective
Time.

 

(d)                                 Taxes;
Interest.  All amounts payable
pursuant to Section 2.10 and Section 6.8(b) and (c) shall be subject to any
required withholding of taxes and shall be paid without interest.

 

(e)                                  Termination
of Equity-Based Compensation.  No
further grants of Options shall be made under the Company Stock Option Plan or
otherwise by the Company after the date of this Agreement, and the provision in
any other Benefit Plan providing for the potential issuance, transfer or grant
of any capital stock of the Company or any of its subsidiaries or any interest,
or release of restrictions in respect of any capital stock of the Company or
any of its subsidiaries shall be deleted, and the Company Stock Options Plan
shall be terminated, as of the Effective Time, and the Company shall ensure
that following the Effective Time no holder of an Option (whether or not
outstanding as of the Effective Time), restricted stock, derivative security,
or any participant in any other Benefit Plan shall have any right thereunder to
acquire any capital stock of the Company or any of its subsidiaries or the
Surviving Corporation.  No participant
in the Company Stock Option Plan or other holder of Options shall be entitled
to receive any other payment or benefit thereunder except as provided in
Section 2.10 and Section 6.8.

 

(f)                                    No
Right to Employment; Benefit Plans. 
Except as provided in this Section 6.8(f), nothing contained in this
Agreement shall confer upon any employee of the Company, any ERISA Affiliate or
any of the Company’s subsidiaries any right with respect to employment by
Parent, the Purchaser or any of the Parent’s subsidiaries or the Surviving
Corporation or any of its ERISA Affiliates, nor shall anything herein interfere
with the right of Parent, the Purchaser or any of the Parent’s subsidiaries, or
the Surviving Corporation or any of its ERISA Affiliates, to terminate the
employment of any employee who continues employment with the Surviving
Corporation or any ERISA Affiliate after the Effective Time (“Continuing
Employee”) at anytime, with or without cause, or except as otherwise expressly
provided in this Section 6.8 restrict Parent, the Purchaser or any of the
Parent’s subsidiaries in the exercise of their independent business judgment in
modifying any other terms and conditions of the employment of any Continuing
Employee.  No provision of this
Agreement shall create any third party beneficiary rights in any Continuing
Employee, any beneficiary or any dependent thereof with respect to the
compensation, terms and conditions of employment or benefits that may be provided
to any Continuing Employee by the Surviving Corporation or its ERISA Affiliates
or under any Benefit Plan which the Surviving Corporation or its ERISA
Affiliates may maintain or cause to be maintained with respect to such
Continuing Employee.  Notwithstanding
the forgoing, Parent agrees that following the Share Acquisition Date (assuming
Purchaser’s designees under Section 1.4(a) constitute at least a majority of
the Board of Directors) it will use its commercially reasonable best efforts to
cause the Company and the Surviving Corporation to comply with the applicable
terms and provisions of the agreements listed on Section 6.8(f) of the Company
Disclosure Schedule if such agreements are then in effect.  Nothing herein shall require Parent or the
Surviving Corporation to continue any particular Benefit Plan, agreement,

 

47

 

policy or arrangement or prevent the amendment or termination thereof; provided,
however, that subject to applicable law the Company’s employees shall
receive full credit for prior years of service to the Company under, and shall
not be subject to any waiting periods under, any benefit plans which Parent or
the Surviving Corporation make available to Continuing Employees.

 

Section
6.9.                                   Purchase of Shares.  Except pursuant to the Offer, the Tender and
Option Agreement, or the Top-Up Agreement, neither Parent nor Purchaser nor any
subsidiary of Parent shall acquire beneficial ownership (within the meaning of
Rule 13d-3 under the Exchange Act) of any Company Common Stock without the
prior written consent of the Company.

 

Section
6.10.                             Meeting of the Company’s Shareholders.

 

(a)                                  To
the extent required by applicable law, the Company shall promptly after
consummation of the Offer take all action necessary in accordance with the PBCL
and its Articles of Incorporation and Bylaws to convene a Shareholder Meeting
to consider and vote on the Merger and this Agreement.  At the Shareholder Meeting, all of the shares
of Company Common Stock then owned by Parent, Purchaser or any other subsidiary
of Parent shall be voted to approve the Merger and this Agreement.  The Board of Directors of the Company shall
recommend that the Company’s shareholders vote to approve the Merger and this
Agreement if such vote is sought, shall use its commercially reasonable best
efforts to solicit from shareholders of the Company proxies in favor of the
Merger and shall use its best efforts to take all other action in its judgment
necessary and appropriate to secure the vote of shareholders required by the
PBCL to effect the Merger.

 

(b)                                 Parent
and Purchaser shall not, and they shall cause their subsidiaries not to, sell,
transfer, assign, encumber or otherwise dispose of the shares of Company Common
Stock acquired pursuant to the Offer or otherwise prior to the Shareholder
Meeting; provided, however, that this Section 6.10(b) shall not apply to the
sale, transfer, assignment, encumbrance or other disposition of any or all such
shares of Company Common Stock in transactions involving solely Parent,
Purchaser and/or one or more of their wholly owned subsidiaries.  Parent and Purchaser shall, or shall cause
their subsidiaries to, vote any shares of Company Common Stock owned by them in
favor of the Merger.

 

(c)                                  Notwithstanding
the foregoing, in the event that Purchaser shall acquire at least 80% of the
Company Common Stock, the parties hereto agree to take all necessary and
appropriate action to cause the Merger to become effective, in accordance with
Section 1924(b)(1)(ii) of the PBCL, as soon as reasonably practicable after
such acquisition, without a meeting of the shareholders of the Company.

 

Section
6.11.                             Proxy Statement.  If required under applicable law, the Company and Parent shall
prepare the Proxy Statement, file it with the SEC under the Exchange Act as
promptly as practicable after Purchaser purchases Company Common Stock pursuant
to the Offer, and use all reasonable efforts to have it cleared by the
SEC.  As promptly as practicable after
the Proxy Statement has been cleared by the SEC, the Company shall mail the
Proxy Statement to the shareholders of the Company as of the record date for
the Shareholder Meeting.

 

48

 

Section
6.12.                             Public Announcements.  Parent and the Company will consult with
each other before issuing any press release or otherwise making any public
statements with respect to the Offer, the Merger or the other Transactions and
shall not issue any such press release or make any such public statement without
the prior consent of the other party, except as the disclosing party reasonably
believes may be required by law or by obligations pursuant to any listing
agreement with any exchanges or the National Association of Securities Dealers,
Inc., in which case Parent or Company, as the case may be, will use its
reasonable efforts to provide the other party with reasonable time to promptly
comment on such release or statement in advance of its issuance.  The parties agree that they will file a
current report on Form 8-K announcing the execution of this Agreement and
attaching copies of this Agreement and the jointly approved press release.

 

Section
6.13.                             Shareholder Litigation.  The Company shall give Parent the
opportunity to participate in the defense or settlement of any shareholder
litigation against the Company and its directors relating to any of the
Transactions until the purchase of shares of Company Common Stock pursuant to
the Offer, and thereafter, shall give Parent the opportunity to direct the
defense of such litigation and, if Parent so chooses to direct such litigation,
Parent shall give the Company and its directors an opportunity to participate
in such litigation; provided, however, that no such settlement shall be agreed
to without Parent’s or the Company’s consent, which consent shall not be
unreasonably withheld; and provided further that no settlement requiring a
payment by a director shall be agreed to without such director’s consent.

 

Section
6.14.                             FIRPTA.  The
Company shall deliver to Purchaser prior to the expiration of the Offer a
certified statement, prepared in accordance with Treasury Regulation Section
1.1445-2(c), that the shares of Company Common Stock are not “United States
real property interests” within the meaning of Section 897 of the Code.

 

ARTICLE VII

 

CONDITIONS TO
CONSUMMATION OF THE MERGER

 

Section
7.1.                                   Conditions to Each Party’s
Obligation to Effect the Merger.  The respective obligations of each party to effect the Merger are
subject to the satisfaction or waiver, where permissible, prior to the
Effective Time, of the following conditions:

 

(a)                                  if
required by the PBCL, this Agreement shall have been approved by the requisite
affirmative vote of the shareholders of the Company in accordance with
applicable law;

 

(b)                                 no
statute, rule, regulation, executive order, decree or injunction shall have
been enacted, entered, promulgated, or enforced by any court or Governmental
Entity which is in effect and has the effect of prohibiting the consummation of
the Merger; and

 

(c)                                  (x)
in the case of the Company’s obligations, all governmental consents, orders and
approvals legally required for the consummation of the Merger and the
transactions contemplated hereby shall have been obtained and be in effect at
the Effective Time, except where the failure to obtain any such consent would
not reasonably be expected to subject

 

49

 

any officer, director, employee or shareholder of the Company to civil
or criminal liability in respect of the failure to obtain such consent, and (y)
in the case of Parent’s and Purchaser’s obligations, (A) all governmental
consents, orders and approvals legally required for the consummation of the
Merger and the transactions contemplated hereby shall have been obtained and be
in effect at the Effective Time, and (B) there shall not be threatened or
pending any suit, action, or proceeding by any Governmental Entity, or by any
other person which has a reasonable possibility of success, with respect to
this Agreement or the Transactions, except where the failure to obtain any such
consent or the existence of any such suit, action or proceeding would not
reasonably be expected to (i) have a Material Adverse Effect on the Company or
Parent, (ii) materially impede or limit the ownership, operation or use of any
of the Company’s or any of its subsidiaries’ assets or business after the
Closing, or to compel the Company or Parent or any of their respective
subsidiaries or affiliates to dispose of or hold separate any of their businesses
or assets as a result of the Offer, the Merger or any of the Transactions,
(iii) impose material limitations on the ability of Parent or Purchaser to
acquire or hold, or exercise full rights of ownership of, any shares of Company
Common Stock accepted for payment pursuant to the Offer including, without
limitation, the right to vote the shares of Company Common Stock accepted for
payment by it on all matters properly presented to the shareholders of the
Company, (iv) prohibit Parent or any of its subsidiaries or affiliates from
effectively controlling the businesses of the Company and its subsidiaries in
any material respect, or (v) require divestiture by Purchaser or any of its
affiliates of any shares of Company Common Stock; provided, however,
that Parent shall be deemed to have waived this condition with respect to any
failure to obtain or be in effect any such consent, order or approval or the
existence of any such suit, action or proceeding, which failure or existence
existed prior to the acceptance for payment by Purchaser of shares of Company
Common Stock pursuant to the Offer.

 

Section
7.2.                                   Conditions to Obligations of
Parent and Purchaser to Effect the Merger.  The obligations of Parent and Purchaser to
effect the Merger are further subject to the satisfaction or waiver pursuant to
Section 1.1, prior to the Effective Time, of the condition that the Purchaser
shall have accepted for payment and paid for shares of Company Common Stock
tendered pursuant to the Offer.

 

ARTICLE VIII

 

TERMINATION; AMENDMENT;
WAIVER

 

Section
8.1.                                   Termination. 
This Agreement may be terminated and the Merger contemplated hereby may
be abandoned at any time (notwithstanding approval thereof by the shareholders
of the Company) prior to the Effective Time:

 

(a)                                  by
mutual written consent duly authorized by the Boards of Directors of the
Company, Parent and Purchaser;

 

(b)                                 by
Parent, Purchaser or the Company if any court of competent jurisdiction or
other Governmental Entity shall have issued a final order, decree or ruling or
taken any other final action restraining, enjoining or otherwise prohibiting
the consummation of the Offer or the Merger and such order, decree or ruling or
other action is or shall have become nonappealable;

 

50

 

(c)                                  by
Parent or Purchaser, if due to an occurrence or circumstance (except where
Parent’s or Purchaser’s breach of any of their respective obligations under
this Agreement is the cause of or directly resulted in such occurrence or
circumstance) which would result in the occurrence and continued existence of
any of the conditions set forth in Annex A hereto, Purchaser shall have (i)
failed to commence the Offer in accordance with Section 1.1 hereof, (ii)
terminated the Offer without purchasing any shares of Company Common Stock
pursuant to the Offer or (iii) failed to accept for payment shares of Company
Common Stock pursuant to the Offer prior to January 31, 2004;

 

(d)                                 by
the Company if there shall not have been and be continuing a material breach of
any representation, warranty, covenant or agreement on the part of the Company,
and Purchaser shall have (A) failed to commence the Offer in violation of
Section 1.1 hereof, (B) terminated the Offer without purchasing all the shares
of Company Common Stock validly tendered and not withdrawn pursuant to the
Offer, or (C) failed to accept for payment shares of Company Common Stock
pursuant to the Offer prior to January 31, 2004;

 

(e)                                  by
Parent or Purchaser prior to the purchase of shares of Company Common Stock
pursuant to the Offer, if (i) (x) any representations and warranties of the
Company contained in this Agreement which are qualified by materiality shall
not be true and correct at any time prior to the acceptance for payment of
shares of Company Common Stock pursuant to the Offer (without regard to any
knowledge qualifications therein), (y) the representations and warranties of
the Company contained in this Agreement which are not qualified by materiality
shall not be true and correct in any material respect at any time prior to the
acceptance for payment of shares of Company Common Stock pursuant to the Offer
(without regard to any knowledge qualifications therein) or (z) the
representations and warranties of the Company in the Agreement shall not be true
and correct at any time prior to the acceptance for payment of shares of
Company Common Stock pursuant to the Offer (determined without regard to any
materiality or knowledge qualifications therein) except to the extent any
failures of the representations or warranties to be true and correct in the
aggregate could not reasonably be expected to have a Material Adverse Effect on
the Company (other than to the extent such representations and warranties
expressly relate to an earlier date, in which case such representations and
warranties shall not be true and correct as of such date), or (ii) the Company
shall not have performed and complied with, in all material respects (without
reference to any materiality qualifications therein), each covenant or agreement
contained in the Agreement and required to be performed or complied with by it,
and which breach, in the case of clause (i) and (ii) above, shall not have been
cured prior to the earlier of (A) 10 business days following notice of such
breach to the Company by Parent or Purchaser and (B) January 31, 2004; provided,
however, that the Company shall have no right to cure and Parent and
Purchaser may immediately terminate this Agreement in the event that such
breach by the Company was willful, in the event of a material breach of Section
6.1 (whether or not willful), or in the event that such breach is not
reasonably capable of being cured within such period of time or (iii) the Board
of Directors of the Company or any committee thereof shall have withdrawn, or modified,
amended or changed (including by amendment of the Schedule 14D-9) in a manner
adverse to Parent or Purchaser its approval or recommendation of the Offer, the
Merger, any of the Transactions or this Agreement, or shall have approved or
recommended to the Company’s shareholders an Acquisition Proposal or any other
acquisition of shares of Company Common Stock other than the Offer and the
Merger, or shall have adopted any resolutions to effect any of the foregoing or

 

51

 

(iv) the Board of Directors of the Company shall have failed to
publicly reaffirm their approval or recommendation of the Offer, the Merger,
the Transactions or this Agreement within two business days following Parent’s
or Purchaser’s written request to do so;

 

(f)                                    by
the Company prior to the purchase of any shares of Company Common Stock
pursuant to the Offer if (i) there shall have been a material breach of any
representation or warranty in this Agreement on the part of Parent or Purchaser
which materially adversely affects (or materially delays) the consummation of
the Offer or the Merger or (ii) Parent or Purchaser shall not have performed or
complied with, in all material respects (without reference to any materiality
qualifications therein), each covenant or agreement contained in this Agreement
and required to be performed or complied with by them, and such breach
materially adversely affects the Company, its shareholders generally or its
employees generally or which materially adversely affects (or materially
delays) the consummation of the Offer or the Merger, and which breach, in the
case of both clause (i) and clause (ii) above, shall not have been cured prior
to the earlier of (A) 10 business days following notice of such breach to
Parent and Purchaser by the Company and (B) January 31, 2004; provided, however,
that Parent and Purchaser shall have no right to cure such breach and the
Company may immediately terminate this Agreement in the event that such breach
by Parent or Purchaser was willful or in the event such breach is not
reasonably capable of being cured within such period of time;

 

(g)                                 by
Parent or Purchaser prior to the purchase of shares of Company Common Stock
pursuant to the Offer if any person or group (which includes a “person” or
“group” as such terms are defined in Section 13(d)(3) of the Exchange Act)
other than Parent, Purchaser, any of their affiliates, or any group of which
any of them is a member, shall have acquired beneficial ownership of more than
20% of the outstanding shares of Company Common Stock or shall have consummated
or entered into a definitive agreement or an agreement in principle with the
Company or any of its subsidiaries to consummate an Acquisition Proposal or if
any person or group which, prior to the date of this Agreement, had a
Schedule 13D or 13G on file with the SEC shall have acquired beneficial
ownership of additional shares of any class or series of capital stock of the
Company, through the acquisition of stock, the formation of a group or
otherwise, which together with the shares of capital stock of the Company
previously beneficially owned by such person or group, constitutes 20% or more
of any such class or series, or shall have been granted any option, right or
warrant, conditional or otherwise, to acquire beneficial ownership of
additional shares of any class or series of capital stock of the Company
(including the Company Common Stock) which together with the shares of capital
stock of the Company previously beneficially owned by such person or group,
constitutes 20% or more of any such class or series (it being understood that
the execution of the Tender and Option Agreement by the Company shareholders
that are parties thereto and the performance of their obligations thereunder shall
not, in itself, be deemed to constitute such an acquisition of beneficial
ownership triggering this provision);

 

(h)                                 by
Parent or Purchaser if the Company or any shareholder party to the Tender and
Option Agreement shall have breached in any material respect any of its or
their obligations under the Tender and Option Agreement and such breach shall
not have been cured, provided that there shall be no right to cure in respect
of breaches that are not reasonably capable of cure;

 

52

 

(i)                                     by
Parent or Purchaser due to the occurrence of (x) any of the events or
circumstances specified in subsection (c) of Annex A which, to the extent
curable, is not cured within 60 days, (y) any of the events or circumstances
specified in subsection (d) of Annex A which, to the extent curable, is not
cured within 30 days if involving a Governmental Entity or 60 days if not
involving a Governmental Entity or (z) any of the events or circumstances
specified in subsection (e) of Annex A which, to the extent curable, is not
cured within 30 days;

 

(j)                                     by
the Company prior to the purchase of any shares of Company Common Stock
pursuant to the Offer and not earlier than 5 business days after the Company
gives Parent prior written notice if (i) after the date hereof the Board of
Directors of the Company shall receive an unsolicited bona fide Acquisition
Proposal and the Board of Directors determines reasonably and in good faith
(after receiving a fairness opinion of B&S or another financial advisor of
nationally recognized standing with respect to the Acquisition Proposal) that
the Acquisition Proposal is a Superior Proposal (after considering any changes
made to Parent’s Offer within the 5 business day notice period); provided,
that such Superior Proposal was not solicited by the Company after the date
hereof and did not otherwise result from a breach of Section 6.1; provided,
further, that the Company’s ability to terminate this Agreement pursuant
to this (j) is conditioned upon the payment by the Company to Parent of any
amounts owed by it pursuant to Section 8.3(b) and 8.3(c); or

 

(k)                                  by
Parent, Purchaser or the Company if the Share Acquisition Date shall not have
occurred by March 31, 2004.

 

Section
8.2.                                   Effect of Termination.  In the event of the termination and
abandonment of this Agreement pursuant to Section 8.1, this Agreement, except
for the provisions of Sections 6.3, 8.2, 8.3, 9.3, 9.4 and 9.7 and the last
sentence of Section 1.3, shall forthwith become void and have no effect,
without any liability on the part of any party or its affiliates, directors,
officers or shareholders except as provided in Sections 8.3 and 9.3 of this
Agreement.  Notwithstanding anything
herein to the contrary, to the extent the Company then owes Parent a
Termination Fee (as defined herein) pursuant to the provisions of Section 8.3
hereof at the time of such termination, termination by the Company pursuant to
Section 8.1 shall not be effective unless prior to or simultaneously therewith
such Termination Fee is paid to the Parent.

 

Section
8.3.                                   Expenses; Termination Fee.

 

(a)                                  Except
as provided in Section 8.3(b) and 8.3 (c) of this Agreement, all fees and
expenses incurred by the parties hereto shall be borne solely and entirely by
the party which has incurred such fees and expenses.

 

(b)                                 If:

 

(i)                                     (x)
Parent or Purchaser terminates this Agreement pursuant to Section 8.1(c),
8.1(i) or 8.1(k),  or the Company terminates this Agreement pursuant to Section
8.1(d), in either case, in circumstances when, prior to such termination any
third party shall have acquired beneficial ownership of 20% or more of the
outstanding shares of Company Common Stock (or any person or group with a
Schedule 13D or 13G on file with the SEC (including the

 

53

 

shareholders party to the Tender and Option Agreement except as
expressly permitted in that agreement) shall have acquired beneficial ownership
of additional shares of any class or series of capital stock of the Company
(including Company Common Stock), through the acquisition of stock, the
formation of a group or otherwise, which together with the shares of capital
stock of the Company previously beneficially owned by such person or group,
constitutes 20% or more of any such class or series, or shall have been granted
any option, right or warrant, conditional or otherwise, to acquire beneficial
ownership of additional shares of any class or series of capital stock of the
Company (including the Company Common Stock) which together with the shares of
capital stock of the Company previously beneficially owned by such person or
group, constitutes 20% or more of any such class or series (it being understood
that the execution of the Tender and Option Agreement by the Company
shareholders that are parties thereto and the performance of their obligations
thereunder shall not, in itself, be deemed to constitute such an acquisition of
beneficial ownership triggering this provision)) or shall have made or
consummated or announced an intention to make or consummate an Acquisition
Proposal (or with respect to any proposal that may be existing on the date
hereof, not withdrawn such Acquisition Proposal) or (y) Parent or Purchaser
terminates this Agreement pursuant to Section 8.1(g), and, in any such case
described in clauses (x) or (y) in this Section 8.3(b)(i), within 12 months
after such termination the Company or any of its subsidiaries enters into or
publicly announces an intention to enter into a definitive agreement with
respect to an Acquisition Proposal, or consummates or publicly announces an
intention to consummate an Acquisition Proposal;

 

(ii)                                  Parent
or Purchaser terminates this Agreement pursuant to (x) clauses (i) or (ii) of
Section 8.1(e) as a result of a willful and material breach of this Agreement
by the Company or any material breach of Section 6.1 (whether or not willful),
(y) clauses (iii) or (iv) of Section 8.1(e) or (z) Section 8.1(h);

 

(iii)                               the Company terminates
this Agreement pursuant to Section 8.1(f) in circumstances when Parent or
Purchaser shall also have the right to terminate this Agreement pursuant to the
circumstances described in Section 8.3(b)(i) or 8.3(b)(ii); or

 

(iv)                              the
Company terminates this Agreement pursuant to Section 8.1(j)

 

then, in each case, the
Company shall pay to Parent, within two business days following the execution
and delivery of such agreement or such occurrence, as the case may be, or prior
to or simultaneously with such termination by the Company as contemplated by
8.3(b)(i), (b)(iii) or (b)(iv), a fee, in cash, of $1.1 million (a “Termination
Fee”); provided, that the Company in no event shall be obligated to pay
more than one such Termination Fee with respect to all such agreements and
occurrences and such termination.  Any
payment required to be made pursuant to this subsection (b) shall be made to
Parent by wire transfer of immediately available funds to an account designated
by Parent.  The provisions of this
Section 8.3 shall not derogate from any other rights or remedies which Parent
or Purchaser may possess under this Agreement (including as provided in Section
9.3) or under applicable law, and the payment of the Termination Fee shall not
be deemed to constitute liquidated damages.

 

54

 

(c)                                  Subject
to and without limiting the rights set forth in Section 9.3, if a party
breaches this Agreement and such breach is not a material and willful breach by
the breaching party or a material breach by the Company of Section 6.1 of this
Agreement whether or not such breach is willful, the breaching party shall not
be liable in any amount in excess of the non-breaching party’s reasonable costs
and expenses incurred in connection with the negotiation and execution of this
Agreement and the consummation of the transactions contemplated hereby,
including all fees and expenses of counsel, accountants, investment bankers,
printers, experts and consultants to the non-breaching party and its affiliates
(collectively, the “Expenses”), except to the extent that a Termination
Fee is payable pursuant to Section 8.3(b) (which shall be payable in addition
to any amount owing under this Section 8.3(c)); provided, however,
that in no event shall Expenses payable pursuant to this Section 8.3(c) under
any circumstances by any party exceed $500,000 in the aggregate.

 

Section
8.4.                                   Amendment. 
To the extent permitted by applicable law, this Agreement may be amended
by action taken by or on behalf of the Boards of Directors of the Company,
Parent and Purchaser (in accordance with the provisions of Section 1.4(c)) at
any time before or after approval of this Agreement by the shareholders of the
Company but, after any such shareholder approval, no amendment shall be made
that by law requires the further approval of such shareholders without the
approval of such shareholders.  This
Agreement may not be amended except by an instrument in writing signed on
behalf of all the parties.

 

Section
8.5.                                   Extension; Waiver.  At any time prior to the Effective Time and subject to the
provisions of Section 1.4(c), a party may (a) extend the time for the
performance of any of the obligations or other acts of the other parties
hereto, (b) waive any inaccuracies in the representations and warranties of the
other parties contained herein or in any documents, certificate or writing
delivered pursuant hereto, and (c) waive compliance with any of the agreements
or conditions of the other parties hereto contained herein; provided that after
the approval of the Merger by the shareholders of the Company, no extensions or
waivers shall be made that by law require further approval by such shareholders
without the approval of such shareholders. 
Any agreement on the part of any party to any such extension or waiver
shall be valid only if set forth in an instrument in writing signed on behalf
of such party.

 

ARTICLE IX

 

MISCELLANEOUS

 

Section
9.1.                                   Non-Survival of Representations
and Warranties.  None of
the representations and warranties made in this Agreement shall survive after
the Effective Time.  This Section 9.1
shall not limit any covenant or agreement of the parties hereto which by its
terms contemplates performance after the Effective Time.  Notwithstanding anything to the contrary
contained in this Agreement, (i) to the extent Purchaser acquires shares of Company
Common Stock on the Share Acquisition Date in an amount equal to or greater
than the amount required by the Minimum Condition as in effect on the date of
this Agreement or (ii) to the extent after the Share Acquisition Date the
Parent or Purchaser, or any director of the Company appointed by Parent after
the Share Acquisition Date (or any officer of the Company appointed after the
Share Acquisition Date by the Board assuming Purchaser’s designees constitute
at least a majority of the Board of Directors), consents to or instructs the
Company to take the action in

 

55

 

question, the Company shall not be deemed to be in breach of any
representations, warranties or covenants contained in this Agreement due to
actions so taken by the Company after the Share Acquisition Date.

 

Section
9.2.                                   Entire Agreement; Assignment.  This Agreement (including the Company
Disclosure Schedule), the Tender and Option Agreement, the Top-up Option
Agreement and, to the extent contemplated in Section 6.3, the Confidentiality
Agreement, (a) constitute the entire agreement among the parties with respect
to the subject matter hereof and supersede all other prior agreements and
understandings, both written and oral, among the parties or any of them with
respect to the subject matter hereof and (b) shall not be assigned by operation
of law or otherwise, provided that Parent or Purchaser may assign any of their
rights and obligations to any direct or indirect wholly owned subsidiary of Parent,
but no such assignment shall relieve Parent or Purchaser of its obligations
hereunder.  Any of Parent, Purchaser or
any direct or indirect wholly owned subsidiary of Parent may purchase shares of
Company Common Stock under the Offer. 
Any attempted assignment in violation of this Section 9.2 shall be
void.  Subject to the preceding
sentences, this Agreement will be binding upon, inure to the benefit of, and be
enforceable by, the parties and their respective successors and assigns.

 

Section
9.3.                                   Enforcement of the Agreement.  The Company agrees that irreparable damage
could occur to Parent and Purchaser in the event that any of the provisions of
this Agreement were not performed by the Company in accordance with their
specific terms or were otherwise breached. 
It is accordingly agreed that Parent and Purchaser shall be entitled to
seek an injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions hereof, this being in addition to
any other remedy to which they are entitled at law or in equity including those
set forth in Section 8.3 of this Agreement. 
The Company further agrees to waive any requirement for the securing or
posting of any bond in connection with obtaining any such injunction or other
equitable relief.

 

Section
9.4.                                   Severability. 
If any term or other provision of this Agreement is invalid, illegal or
incapable of being enforced by any rule of law or public policy, all other
conditions and provisions of this Agreement shall nevertheless remain in full
force and effect so long as the economic and legal substance of the
Transactions is not affected in any manner materially adverse to any
party.  Upon such determination that any
term or other provision is invalid, illegal or incapable of being enforced, the
parties hereto shall negotiate in good faith to modify this Agreement so as to
effect the original intent of the parties as closely as possible in an
acceptable manner to the end that the Transactions contemplated hereby are
fulfilled to the extent possible.  The
invalidity or unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other provisions of this
Agreement, which shall remain in full force and effect.

 

Section
9.5.                                   Notices.  All
notices and other communications hereunder shall be in writing and shall be
deemed to have been duly given upon receipt if delivered personally, mailed by
registered or certified mail (postage prepaid, return receipt requested) to the
respective parties at the following addresses or sent by electronic
transmission to the facsimile number specified below (or at such other address
or facsimile number of a party as shall be specified by like notice):

 

56

 

if to Parent or
Purchaser:

 

Euramax International,
Inc.

5445
Triangle Parkway, Suite 350

Norcross,
Georgia 30092

Attention:  Chief Executive Officer

Facsimile:  (770) 263-8031

 

with a copy to:

 

Dechert LLP

4000 Bell Atlantic Tower

1717 Arch Street

Philadelphia, PA  19103

Attention:  Geraldine A. Sinatra

Facsimile:  215-994-2222

 

if to the Company:

 

Berger Holdings, Ltd.

805 Pennsylvania
Boulevard

Feasterville, PA  19053

Attention:  President

Facsimile:  215-953-7750

 

with a copy to:

 

Wolf, Block, Schorr and
Solis-Cohen LLP

1650 Arch Street

Philadelphia, PA  19103

Attention:  Jason M. Shargel

Facsimile:  215-977-2334

 

Notice given by facsimile
shall be deemed received on the day the sender receives facsimile confirmation
that such notice was received at the facsimile number of the addressee.  Notice given by mail as set out above shall
be deemed received three days after the date the same is postmarked.

 

Section
9.6.                                   Failure or Indulgence Not Waiver;
Remedies Cumulative.  No
failure or delay on the part of any party hereto in the exercise of any right
hereunder shall impair such right or be construed to be a waiver of, or
acquiescence in, any breach of any representation, warranty or agreement
herein, nor shall any single or partial exercise of any such right preclude
other or further exercise thereof or of any other right.

 

Section
9.7.                                   Governing Law; Consent to
Jurisdiction.  This Agreement
shall be governed by and construed in accordance with the substantive laws of
the Commonwealth of

 

57

 

Pennsylvania regardless of the laws that might otherwise govern under
principles of conflicts of laws applicable thereto.  In addition, the Company, Parent and Purchaser hereby (i) consent
to submit to the exclusive jurisdiction of the United States District Court for
the Eastern District of Pennsylvania and, in the absence of Federal
jurisdiction, to the exclusive jurisdiction of the state courts located in
Philadelphia County in the event any dispute arises out of this Agreement or
any of the Transactions, (ii) agree not to attempt to deny or defeat such
jurisdiction by motion or other request for leave from any such court, (iii)
subject to the terms of the Tender and Option Agreement, agree not to bring any
action relating to this Agreement or any of the Transactions in any court other
than the United States District Court for the Eastern District of Pennsylvania
and, in the absence of Federal jurisdiction, the state courts located in
Philadelphia County and (iv) waive any right to trial by jury with respect to
any claim or proceeding related to or arising out of this Agreement or any of
the Transactions.  In furtherance of the
foregoing, the Company, Parent and Purchaser hereby irrevocably and
unconditionally waive any objection to the laying of venue of any action, suit
or proceeding arising out of this Agreement or the Transactions in the courts
of the United States District Court for the Eastern District of Pennsylvania
and, in the absence of Federal jurisdiction, the state courts located in
Philadelphia County, and hereby further irrevocably and unconditionally waive
and agree not to plead or claim in any such court that any such action, suit or
proceeding brought in any such court has been brought in an inconvenient forum.

 

Section
9.8.                                   Descriptive Headings.  The descriptive headings herein are inserted
for convenience of reference only and are not intended to be part of or to
affect the meaning or interpretation of this Agreement.

 

Section
9.9.                                   Parties in Interest.  This Agreement shall be binding upon and
inure solely to the benefit of each party hereto, and nothing in this
Agreement, express or implied, is intended to confer upon any other person any
rights or remedies of any nature whatsoever under or by reason of this Agreement
(except as set forth in Section 6.5 hereof which is intended to and shall
create third party beneficiary rights if the Offer and the Merger are
consummated).

 

Section
9.10.                             Counterparts. 
This Agreement may be executed in two or more counterparts, each of
which shall be deemed to be an original, but all of which shall constitute one
and the same agreement.

 

Section
9.11.                             Certain Definitions.  For purposes of this Agreement (including
Annex A hereto), the following terms shall have the meanings ascribed to them
below:

 

(a)                                  “affiliate”
of a person shall mean (i) a person that directly or indirectly, through one or
more intermediaries, controls, is controlled by, or is under common control
with, the first-mentioned person and (ii) an “associate”, as that term is
defined in Rule 12b-2 promulgated under the Exchange Act as in effect on the
date of this Agreement.

 

(b)                                 “beneficial
owner” (including the term “beneficially own” or correlative terms) shall
have the meaning ascribed to such term under Rule 13d-3(a) under the Exchange
Act.

 

58

 

(c)                                  “business
day” shall have the meaning ascribed to such term under Rule 14d-1 of the
Exchange Act.

 

(d)                                 “Company
Disclosure Schedule” shall mean a letter dated the date of the Agreement
delivered by the Company to Parent and Purchaser concurrently with the
execution of the Agreement, which, among other things, shall identify
exceptions to the Company’s representations and warranties contained in Article
III and covenants contained in Article V by specific section and subsection
references.

 

(e)                                  “control”
(including the terms “controlling,” “controlled by” and “under common control
with” or correlative terms) shall mean the possession, directly or indirectly
or as trustee or executor, of the power to direct or cause the direction of the
management and policies of a person, whether through ownership of voting
securities or as trustee or executor, by contract or credit arrangement, or
otherwise.

 

(f)                                    “Fully
Diluted Shares” means all outstanding shares of Company Common Stock on a
fully diluted basis, after giving effect to the exercise and conversion of all
outstanding options, warrants and securities exercisable or convertible into
Company Common Stock (but excluding any Options for which under the Tender and
Option Agreement Parent has a valid Purchase Option (as defined in the Tender
and Option Agreement) which has not been disputed or disavowed by the holder of
such Options; provided, that the Options are not deemed exercisable
if their ability to be exercised is suspended until termination of the Merger
Agreement or consummation of the Merger); provided further, that
Parent may, at its option exercisable in its sole discretion, exclude at any
time from the above calculation any or all other Options.

 

(g)                                 “group”
shall have the meaning ascribed to such term under Rule 13d-3(a) under the
Exchange Act.

 

(h)                                 “Material
Adverse Effect” shall mean (i) any adverse change or effect in the
condition (financial or otherwise), assets (including intangible assets),
liabilities, business, properties, or results of operations of a specified
person or its subsidiaries, which change or effect is material, individually or
in the aggregate with any other changes or effects, to the specified person and
its subsidiaries taken as a whole, or (ii) any event, matter, condition or
effect which materially impairs the ability of a specified person to perform on
a timely basis its obligations under this Agreement, the Tender and Option
Agreement, or the consummation of the Transactions; provided that in no
event shall any of the following, alone or in combination, be deemed to
constitute, nor shall any of the following be taken into account in determining
whether there has been or will be, a Material Adverse Effect on the Company:
(a) any change in the Company’s stock price or trading volume, in and of itself
(but not any change or effect underlying such decrease to the extent such
change or effect would otherwise constitute a Material Adverse Effect on the
Company); or (b) any change, event, circumstance or effect that results from
changes affecting the United States economy or the Company’s industry
generally, which change, event, circumstance or effect does not
disproportionately affect the Company in any material respect.  For purposes of analyzing whether any
change, effect, event, matter or condition constitutes a “Material Adverse
Effect” under this definition, the parties agree that (A) materiality shall be
analyzed from the viewpoint of whether there is a reasonable likelihood that

 

59

 

the disclosure of such change, effect, event, matter or condition could
be reasonably viewed as having altered the total mix of information if the
total mix of information had consisted solely of the representations and
warranties of the Company contained in this Agreement, (B) the analysis of
materiality shall not be limited to the viewpoint of a long-term investor, and
(C) the words of the definition of “Material Adverse Effect” are intended to be
read literally without any regard to the holding or reasoning of IBP, Inc.
v. Tyson Foods, Inc., No. 18373, 2001 Del. Ch. LEXIS 81 (Del. Ch. June 18,
2001).

 

(i)                                     “person”
shall mean a natural person, company, corporation, partnership, association,
trust or any unincorporated organization.

 

(j)                                     “subsidiary”
shall mean, when used with reference to a person, any corporation or other
business entity of which such person directly or indirectly owns (i) the
majority of the outstanding voting securities or (ii) voting securities or
equity interests which give such person the power to elect a majority of the
board of directors or similar governing body of such entity.

 

Section
9.12.                             Interpretation.  (a) The words “hereof,” “herein” and “herewith” and words of
similar import shall, unless otherwise stated, be construed to refer to this
Agreement as a whole and not to any particular provision of this Agreement, and
article, section, paragraph, exhibit and schedule references are to the articles,
sections, paragraphs, exhibits and schedules of this Agreement unless otherwise
specified.  Whenever the words
“include,” “includes” or “including” are used in this Agreement they shall be
deemed to be followed by the words “without limitation.”  All terms defined in this Agreement shall
have the defined meanings contained herein when used in any certificate or
other document made or delivered pursuant hereto unless otherwise defined
therein.  The definitions contained in
this Agreement are applicable to the singular as well as the plural forms of
such terms and to the masculine as well as to the feminine and neuter genders
of such terms.  Any agreement,
instrument, statute or rule defined or referred to herein or in any agreement
or instrument that is referred to herein means such agreement, instrument,
statute or rule as from time to time amended, modified or supplemented,
including (in the case of agreements and instruments) by waiver or consent and
(in the case of statutes and rules) by succession of comparable successor
statutes and rules and all attachments thereto and instruments incorporated
therein.  References to a person are
also to its permitted successors and assigns.

 

(b)                                 The
parties have participated jointly in the negotiation and drafting of this
Agreement.  In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the parties and no presumption or burden of proof
shall arise favoring or disfavoring any party by virtue of the authorship of
any provisions of this Agreement.

 

60

 

IN
WITNESS WHEREOF, each of the parties has caused this Agreement to be executed
on its behalf by its officers thereunto duly authorized, on the day and year
first above written.

 

	
   

  	
  EURAMAX INTERNATIONAL,
  INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ J. David Smith

  	
   

  
	
   

  	
   

  	
  Name:  J. David Smith

  
	
   

  	
   

  	
  Title:  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  AMERIMAX PENNSYLVANIA,
  INC.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ J. David Smith

  	
   

  
	
   

  	
   

  	
  Name:  J. David Smith

  
	
   

  	
   

  	
  Title:  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  BERGER HOLDINGS, LTD.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Joseph F. Weiderman

  	
   

  
	
   

  	
   

  	
  Name:  Joseph F. Weiderman

  
	
   

  	
   

  	
  Title:  President and Chief Executive

  Officer

  

 

61

 

ANNEX A

to

Agreement and Plan
of Merger

 

Conditions
to the Offer.  Notwithstanding any other
provision of the Offer or the Merger Agreement, in addition to (and not in
limitation of) Purchaser’s rights pursuant to the Agreement to extend and amend
the Offer in accordance with the Merger Agreement, Purchaser shall not be
required to accept for payment or, subject to Rule 14e-1(c) of the Exchange
Act, pay for and may delay the acceptance for payment of or, subject to Rule
14e-1(c) of the Exchange Act, the payment for, any shares of Company Common
Stock not theretofore accepted for payment or paid for, and Purchaser may
terminate or amend the Offer (subject to Section 1.1 of the Merger Agreement)
if in the sole judgment of Purchaser (i) a number of shares of Company Common
Stock representing at least 80% of the Fully Diluted Shares shall not have been
validly tendered and not withdrawn immediately prior to the expiration of the
Offer or otherwise acquired by Parent or any of its affiliates prior to the
expiration of the Offer (the “Minimum Condition”) or (ii) at any time on
or after the date of the Merger Agreement and prior to the time of acceptance
of such shares of Common Stock for payment or the payment therefor, any of the
following conditions has occurred and continues to exist:

 

(a)                                  (x)
any representations and warranties of the Company in the Agreement which are
qualified by materiality shall not be true and correct (determined without
regard to any knowledge qualifications therein) as of such time, (y) the
representations and warranties of the Company in the Agreement which are not
qualified by materiality shall not be true and correct (determined without
regard to any knowledge qualifications therein) in any material respect, as of
such time or (z) the representations and warranties of the Company in the
Agreement shall not be true and correct (determined without regard to any
materiality or knowledge qualifications therein), as of such time, except to
the extent the failure of any representations or warranties to be true and
correct in the aggregate could not reasonably be expected to have a Material
Adverse Effect on the Company, (other than to the extent such representations
and warranties expressly relate to an earlier date, in which case such
representations and warranties shall not be true and correct as of such date)
and which breach or breaches shall not have been cured prior to the earlier of
(i) 10 business days following notice of such breach and (ii) January 31, 2004;
provided, however, that the Company shall have no right to cure
such breach in the event that such breach by the Company was willful or in the
event such breach is not reasonably capable of being cured within such period
of time;

 

(b)                                 the
Company shall not have performed and complied with, in all material respects
(without reference to any materiality qualifications therein), each covenant or
agreement contained in the Agreement and required to be performed or complied
with by it and which breach shall not have been cured prior to the earlier of
(i) 10 business days following notice of such breach and (ii) January 31, 2004;
provided, however, that the Company shall have no right to cure
such breach in the event that such breach by the Company was willful, if such
breach involves a material breach of Section 6.1 of the Agreement (whether or
not such breach was willful) or in the event such breach is not reasonably
capable of being cured within such period of time;

 

 

(c)                                  there
shall have occurred and be continuing (i) any general suspension of trading in,
or limitation on prices for, securities on the New York Stock Exchange
(excluding any coordinated trading halt triggered as a result of a specified
decrease in a market index), (ii) any material adverse change in the financial
markets in the United States, (iii) a declaration of a banking moratorium or
any suspension of payments in respect of banks in the United States by any
Governmental Entity, (iv) any mandatory limitation, by any Governmental Entity
on, or other event that materially affects, the extension of credit by banks or
other lending institutions, (v) a commencement of a war, armed hostilities or
other national or international calamity directly or indirectly involving the
United States which could reasonably be expected to have a Material Adverse
Effect on the Company or materially adversely affect or delay the consummation
of the Offer, (vi) in the case of any of the foregoing existing on the date of
the Agreement, a material acceleration or worsening thereof, or (vii) a decline
in the Standard & Poor’s Index of 500 Industrial Companies by an amount in
excess of 25%, measured from the close of business on the date of the Merger
Agreement;

 

(d)                                 there
shall be threatened or pending any suit, action, or proceeding by any
Governmental Entity, or there shall be pending any suit, action or proceeding
by any other person which has a reasonable possibility of success,
(i) challenging the acquisition by Parent or Purchaser of the shares of
Company Common Stock, seeking to make illegal, materially delay, make
materially more costly or otherwise directly or indirectly restrain or prohibit
the making or consummation of the Offer and the Merger or the performance of
any of the other Transactions or seeking to obtain from the Company, Parent or
Purchaser any damages that are material in relation to the Company and its
subsidiaries taken as whole, (ii) seeking to prohibit or materially limit the
ownership or operation by the Company, Parent or any of their respective
subsidiaries or affiliates of any of the businesses or assets of the Company,
Parent or any of their respective subsidiaries or affiliates, or to compel the
Company, Parent or any of their respective subsidiaries or affiliates to
dispose of or hold separate any of the material businesses or assets of the
Company, Parent or any of their respective subsidiaries or affiliates, as a
result of the Offer, the Merger or any of the other Transactions, (iii) seeking
to impose material limitations on the ability of Parent or Purchaser to acquire
or hold, or exercise full rights of ownership of, any shares of Company Common
Stock accepted for payment pursuant to the Offer including, without limitation,
the right to vote the shares of Company Common Stock accepted for payment by it
on all matters properly presented to the shareholders of the Company, (iv)
seeking to prohibit Parent or any of its subsidiaries or affiliates from
effectively controlling in any material respect the business or operations of
the Company or its subsidiaries, (v) requiring divestiture by Purchaser or any
of its affiliates of any shares of Company Common Stock or (vi) which otherwise
could reasonably be expected to have a Material Adverse Effect on the Company
or Parent;

 

(e)                                  there
shall be any statute, rule, regulation, judgment, order or injunction
(including with respect to competition or antitrust matters) enacted, entered,
enforced, promulgated or issued, or any statute, rule or regulation which has
been proposed by the relevant legislative or regulatory body and is reasonably
likely to be enacted, with respect to or deemed applicable to, or any material
consent or approval withheld or any other action shall be taken with respect to
(i) Parent, the Company or any of their respective subsidiaries or affiliates
or (ii) the Offer or the Merger or any of the other Transactions by any
Governmental Entity or court, that has resulted or could reasonably be expected
to result, directly or indirectly, in any of the consequences referred to in
clauses (i) though (vi) of paragraph (d) above;

 

2

 

(f)                                    (i)
the Board of Directors of the Company or any other committee thereof shall have
(A) withdrawn, or modified, amended or changed (including by amendment of the
Schedule 14D-9) in a manner materially adverse to Parent or Purchaser; its
approval or recommendation of the Offer, the Merger Agreement and the Merger or
any of the other Transactions, (B) approved or recommended to the Company’s
shareholders an Acquisition Proposal or any other acquisition of shares of
Company Common Stock other than the Offer and the Merger, or (C) adopted any
resolution to effect any of the foregoing, or (ii) the Board of Directors of
the Company shall have failed to publicly reaffirm their approval or
recommendation of the Offer, the Merger, the Transactions or this Agreement
within two business days following Parent’s or Purchaser’s written request to
do so;

 

(g)                                 the
Merger Agreement shall have been terminated in accordance with its terms;

 

(h)                                 any
person or group (which includes a “person” or “group” as such terms are defined
in Section 13(d)(3) of the Exchange Act) other than Parent, Purchaser, any of
their affiliates, or any group of which any of them is a member, shall have
acquired beneficial ownership of more than 20% of the outstanding shares of Company
Common Stock or shall have consummated or entered into a definitive agreement
or an agreement in principle with the Company or any of its subsidiaries to
consummate an Acquisition Proposal or if any person or group which, prior to
the date of the Merger Agreement, had a Schedule 13D or 13G on file with
the SEC shall have acquired beneficial ownership of additional shares of any
class or series of capital stock of the Company, through the acquisition of
stock, the formation of a group or otherwise, which together with the shares of
capital stock of the Company previously beneficially owned by such person or
group, constitutes 20% or more of any such class or series, or shall have been
granted any option, right or warrant, conditional or otherwise, to acquire
beneficial ownership of additional shares of any class or series of capital
stock of the Company (including the Company Common Stock) which together with
the shares of capital stock of the Company previously beneficially owned by
such person or group, constitutes 20% or more of any such class or series (it
being understood that the execution of the Tender and Option Agreement by the
Company shareholders that are parties thereto shall not, in itself, be deemed
to constitute such an acquisition of beneficial ownership triggering this
provision);

 

(i)                                     the
Company or any shareholder shall have breached in any material respect any of
its or their obligations under the Tender and Option Agreement;

 

(j)                                     (i)
all consents and approvals of and notices to or filings with Governmental
Entities and third parties required in connection with the Offer, the Merger
and any of the other Transactions shall not have been obtained or made other
than those the absence of which, individually or in the aggregate, would not have
a Material Adverse Effect or prevent or materially delay consummation of any of
the Offer, the Merger or any of the other Transactions, or (ii) all consents
and approvals of third parties required in connection with the Offer, the
Merger and any of the other Transactions and listed on Section 3.7 of the
Company Disclosure Schedule pursuant to agreements marked with an asterisk (*)
on Section 3.7 of the Company Disclosure Schedule shall not have been obtained
or made;

 

3

 

which, in the sole judgment of Purchaser, in any such
case, and regardless of the circumstances giving rise to any such condition
(including any action or inaction by Parent or any of its affiliates not in
violation of this Agreement), makes it inadvisable to proceed with the Offer or
with such acceptance for payment, purchase of, or payment for shares of Company
Common Stock.

 

The
foregoing conditions are for the sole benefit of Purchaser and Parent and may
be asserted by Purchaser or Parent regardless of the circumstances giving rise
to any such condition and may be waived by Purchaser or Parent, in whole or in
part, at any time and from time to time, in the sole discretion of Purchaser or
Parent.  The failure by Purchaser or
Parent or any of their respective affiliates at any time to exercise any of the
foregoing rights will not be deemed a waiver of any right, the waiver of any
such right with respect to particular facts and circumstances shall not be
deemed a waiver with respect to any other facts and circumstances and each
right will be deemed an ongoing right which may be asserted at any time and
from time to time.

 

4Exhibit
10.2

 

Execution
Copy

 

TENDER AND OPTION AGREEMENT

 

TENDER AND OPTION AGREEMENT, dated as of
October 10, 2003 (the “Agreement”), among Euramax International,
Inc., a Delaware corporation (“Parent”), Amerimax Pennsylvania, Inc., a
Pennsylvania corporation and an indirect wholly owned subsidiary of Parent (“Purchaser”),
Berger Holdings, Ltd., a Pennsylvania corporation (the “Company”), and
the persons listed on Schedule A hereto (each a “Shareholder” and,
collectively, the “Shareholders”).

 

WHEREAS, Parent, Purchaser and the Company propose to
enter into an Agreement and Plan of Merger dated as of the date hereof (as the
same may be amended or supplemented, the “Merger Agreement”) providing
for, among other things, the making of a cash tender offer (as such offer may
be amended from time to time as permitted under the Merger Agreement, the “Offer”)
by Purchaser for all of the issued and outstanding shares of common stock, par
value $.01 per share, of the Company (the “Company Common Stock” or the
“Shares”) and the merger of the Company and Purchaser on the terms and
conditions set forth in the Merger Agreement (the “Merger”);

 

WHEREAS, each Shareholder is the beneficial owner (as
hereinafter defined) of the Shares set forth opposite such Shareholder’s name
on Schedule A hereto; such Shares, as such may be adjusted by stock
dividend, stock split, recapitalization, combination or exchange of shares,
merger, consolidation, reorganization or other change or transaction of or by
the Company, together with Shares that may be acquired after the date hereof by
such Shareholder, including shares of Company Common Stock issuable upon the
exercise of options (including the Options set forth in Schedule A), being
collectively referred to herein as the “Securities” of such Shareholder;
and

 

WHEREAS, as a condition to their willingness to enter
into the Merger Agreement, Parent and Purchaser have required that the
Shareholders enter into this Agreement;

 

NOW, THEREFORE, to induce Parent and Purchaser to
enter into, and in consideration of their entering into, the Merger Agreement,
and in consideration of the premises and the representations, warranties and
agreements contained herein and intending to be legally bound hereby, the
parties agree as follows:

 

Section 1.                                            Certain
Definitions.  Capitalized terms used
but not otherwise defined herein have the meanings ascribed to such terms in
the Merger Agreement.

 

Section 2.                                            Representations
and Warranties of the Shareholders. 
Each Shareholder, severally and not jointly, represents and warrants to
Parent and Purchaser, as of the date hereof and as of any Closing (as defined
herein), as follows:

 

(a)                                  Such
Shareholder is the beneficial owner (as defined in Rule 13d-3 under the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), which
meaning will apply for all purposes of this Agreement) of, and has good title
to, all of such Shareholder’s

 

 

Securities,
free and clear of any mortgage, pledge, hypothecation, rights of others, claim,
security interest, charge, encumbrance, title defect, title retention
agreement, voting trust agreement, interest, option, lien, charge or similar
restriction or limitation, including any restriction on the right to vote, sell
or otherwise dispose of the Securities (each, a “Lien”), except as set
forth in this Agreement.

 

(b)                                 The
Securities set forth opposite his, her or its name on Schedule A
constitute all of the securities (as defined in Section 3(a)(10) of the
Exchange Act, which definition will apply for all purposes of this Agreement) of
the Company beneficially owned, directly or indirectly, by such Shareholder.

 

(c)                                  Except
for such Securities, such Shareholder does not, directly or indirectly, other
than as disclosed on Schedule A, beneficially own or have any option,
warrant or other right to acquire any securities of the Company that are or may
by their terms become entitled to vote or any securities that are convertible
or exchangeable into or exercisable for any securities of the Company that are
or may by their terms become entitled to vote, nor is such Shareholder subject
to any Contract, commitment, arrangement, understanding, restriction or
relationship, other than this Agreement, that provides for such Shareholder to
vote or acquire any securities of the Company. 
Such Shareholder holds exclusive power to vote the Securities and has
not granted a proxy to any other person (as defined in the Merger Agreement,
which meaning will apply for all purposes of this Agreement) to vote the
Securities, subject to the limitations set forth in this Agreement.

 

(d)                                 Such
Shareholder has full legal capacity, power and authority to execute and deliver
this Agreement and to perform his, her or its obligations hereunder and such
execution, delivery and performance have been authorized by such Shareholder,
and no other proceedings or actions by such Shareholder are necessary therefor.

 

(e)                                  This
Agreement has been duly executed and delivered by such Shareholder and,
assuming this Agreement constitutes a valid and binding agreement of Parent,
Purchaser and the Company, is a valid and binding obligation of such
Shareholder enforceable against such Shareholder in accordance with its terms.

 

(f)                                    Neither
the execution and delivery of this Agreement nor the performance by such
Shareholder of his, her or its obligations hereunder will conflict with, result
in a violation or breach of, or constitute a default (or an event that, with
notice or lapse of time or both, would result in a default) or give rise to any
right of termination, amendment, cancellation, or acceleration or result in the
creation of any Lien on any Securities under, (i) any Contract, commitment,
agreement, understanding, arrangement or restriction of any kind to which such
Shareholder is a party or by which such Shareholder is bound or (ii) any
injunction, judgment, writ, decree, order or ruling applicable to the
Shareholder; except for conflicts, violations, breaches, defaults,
terminations, amendments, cancellations, accelerations or Liens, disclosed on
Section 3.1(c) of the Company Disclosure Schedule, that could not
individually or in the aggregate be reasonably expected to prevent or
materially impair or delay the performance by such Shareholder of his, her or
its obligations hereunder.

 

2

 

(g)                                 Neither
the execution and delivery of this Agreement nor the performance by such
Shareholder of his, her or its obligations hereunder will violate any law,
decree, statute, rule or regulation applicable to the Shareholder or require
any order, consent, authorization or approval of, filing or registration with,
or declaration or notice to, any court, administrative agency or other
governmental body or authority, the violation of which or failure to take any
such action could, individually or in the aggregate, be reasonably expected to
prevent or materially impair or delay the performance by such Shareholder of
its obligations hereunder, other than any required notices or filings pursuant
to federal or state securities laws.

 

(h)                                 Except
as set forth in Section 3.8 of the Merger Agreement, no broker, finder or
investment banker is entitled to any brokerage, finder’s or other fee or
commission in connection with the transactions contemplated by this Agreement
or the Merger Agreement based upon arrangements made by or on behalf of such
Shareholder that is or will be payable by the Company or any of its
subsidiaries.

 

(i)                                     Such
Shareholder understands and acknowledges that Parent is entering into, and
causing Purchaser to enter into, the Merger Agreement in reliance upon such
Shareholder’s execution, delivery and performance of this Agreement.

 

(j)                                     To
the extent such Shareholder is a trust, such Shareholder has supplied or made
available to Parent or Purchaser true and correct copies of all documents
establishing, organizing, governing or controlling such trust including any
order, decree or other judicial pronouncement affecting such trust documents,
and all such documents remain in full force and effect.

 

(k)                                  Neither
the Company nor any of its subsidiaries has any outstanding liabilities or
obligations to such Shareholder that were not fully reflected or reserved
against in the most recent financial statements included in the Filed Company
SEC Documents, except for immaterial travel and other expenses related to
service as an employee, officer or director and obligations relating to service
as an employee, officer or director.

 

Section 3.                                            Representations
and Warranties of the Company.  The
Company represents and warrants to Parent and Purchaser, as of the date hereof
and as of any Closing, as follows:

 

(a)                                  The
Company is a corporation duly organized, validly existing and in good standing
under the laws of the Commonwealth of Pennsylvania, has the requisite corporate
power and corporate authority to execute and deliver this Agreement and to
perform its obligations hereunder, and has taken all necessary corporate action
to authorize the execution, delivery and performance of this Agreement.

 

(b)                                 This
Agreement has been duly executed and delivered by the Company and, assuming
this Agreement constitutes the valid and binding agreement of each of the
Shareholders, Parent and Purchaser, is a valid and binding obligation of the
Company, enforceable against it in accordance with its terms.

 

3

 

(c)                                  Neither
the execution and delivery of this Agreement nor the performance by the Company
of its obligations hereunder will conflict with, result in a violation or
breach of, or constitute a default (or an event that, with notice or lapse of
time or both, would result in a default) or give rise to any right of
termination, amendment, cancellation, or acceleration or result in the creation
of any Lien on the assets or properties of the Company under, (i) its articles
of incorporation or bylaws, (ii) any Contract, commitment, agreement,
understanding, arrangement or restriction of any kind to which the Company is a
party or by which the Company is bound or (iii) any judgment, writ, decree,
order or ruling applicable to the Company; except in the case of clause (ii)
for conflicts, violations, breaches or defaults that would not individually or
in the aggregate be reasonably expected to prevent or materially impair or
delay the performance by the Company of its obligations hereunder.

 

(d)                                 Neither
the execution and delivery of this Agreement nor the performance by the Company
of its obligations hereunder will violate any law, decree, statute, rule or
regulation applicable to the Company or require any order, consent,
authorization or approval of, filing or registration with, or declaration or
notice to, any court, administrative agency or other governmental body or
authority, the violation of which or failure to take any such action could,
individually or in the aggregate, be reasonably expected to prevent or
materially impair or delay the performance by the Company of its obligations
hereunder, other than any required notices or filings pursuant to federal or
state securities laws.

 

(e)                                  The
Company has taken all necessary corporate or other action (including approval
by the Board of Directors of the Company) to render the provisions of Sections
2538 through 2588, inclusive, of the PBCL and any other applicable
anti-takeover statutes, rules or regulations inapplicable to this Agreement and
the Merger Agreement and the transactions contemplated hereby and thereby.

 

Section 4.                                            Representations
and Warranties of Parent and Purchaser. 
Parent and Purchaser represent and warrant to the Shareholders, as of
the date hereof and as of any Closing, as follows:

 

(a)                                  Each
of Parent and Purchaser is a corporation duly organized, validly existing and
in good standing under the laws of their respective jurisdiction of
incorporation, has the requisite corporate power and corporate authority to
execute and deliver this Agreement and to consummate the transactions
contemplated hereby, and has taken all necessary corporate action to authorize
the execution, delivery and performance of this Agreement.

 

(b)                                 This
Agreement has been duly executed and delivered by Parent and Purchaser and,
assuming this Agreement constitutes a valid and binding agreement of the
Company and each of the Shareholders, is a valid and binding obligation of each
of Parent and Purchaser, enforceable against each of them in accordance with
its terms.

 

(c)                                  Neither
the execution and delivery of this Agreement nor the performance by Parent and
Purchaser of their respective obligations hereunder will conflict with, result
in a violation or breach of, or constitute a default (or an event that, with
notice or lapse of

 

4

 

time or
both, would result in a default) or give rise to any right of termination,
amendment, cancellation, or acceleration under, (i) their respective
certificates of incorporation or bylaws, (ii) any contract, commitment,
agreement, understanding, arrangement or restriction of any kind to which
Parent or Purchaser is a party or by which Parent or Purchaser is bound or
(iii) any judgment, writ, decree, order or ruling applicable to Parent or Purchaser;
except in the case of clause (ii) for conflicts, violations, breaches or
defaults that would not individually or in the aggregate be reasonably expected
to prevent or materially impair or delay the performance by Parent or Purchaser
of their obligations hereunder.

 

(d)                                 Neither
the execution and delivery of this Agreement nor the performance by Parent and
Purchaser of their respective obligations hereunder will violate any law,
decree, statute, rule or regulation applicable to Parent or Purchaser or
require any order, consent, authorization or approval of, filing or
registration with, or declaration or notice to, any court, administrative
agency or other governmental body or authority, the violation of which or
failure to take any such action would not individually or in the aggregate be
reasonably expected to prevent or materially impair or delay the performance by
Parent or Purchaser of their obligations hereunder, other than any required
notices or filings pursuant to federal or state securities laws.

 

(e)                                  Any
Securities acquired upon exercise of the Purchase Option (as defined herein)
will be acquired for Parent’s or Purchaser’s own account, and will not be, and
the Purchase Option is not being, acquired by Parent and Purchaser with a view
to public distribution thereof in violation of any applicable provisions of the
Securities Act of 1933, as amended (the “Securities Act”).

 

Section 5.                                            Transfer
of the Shares.  During the term of
this Agreement, except with the written consent of Parent or Purchaser or as
otherwise expressly provided herein, each Shareholder agrees that such
Shareholder will not (a) tender into any tender or exchange offer or otherwise
sell, transfer, pledge, assign, hypothecate or otherwise dispose of, or
encumber with any Lien, any of the Securities, except for (i) transfers to any
spouse or descendant of such Shareholder, or any trust or retirement plan or
account for the benefit of such Shareholder, spouse or descendant; provided
that any such transfer shall not release the transferring Shareholder of any of
its obligations under this Agreement and any such transferee agrees in writing
to be bound by the terms of this Agreement and (ii) transfers by operation of
law provided that any such transferee shall be bound by the terms of this
Agreement, (b) purchase or otherwise voluntarily acquire any Securities
(otherwise than in connection with a transaction of the type described in
Section 6 or by exercising any of the Options), (c) deposit the Securities
into a voting trust, enter into a voting agreement or arrangement with respect
to the Securities or grant any proxy or power of attorney with respect to the
Shares, (d) enter into any Contract, option or other arrangement (including any
profit sharing arrangement) or undertaking with respect to the direct or
indirect sale, transfer, pledge, assignment, hypothecation or other disposition
of any interest in or the voting of any Securities or any other securities of
the Company or (e) take any other action that would in any way destroy, materially
diminish or impair the voting power or economic rights or other rights
attributable to such Shareholder’s Shares or materially restrict, limit or
interfere with the performance of such Shareholder’s

 

5

 

obligations
hereunder or the transactions contemplated hereby or which would otherwise
materially diminish the benefits of this Agreement to Parent or Purchaser.

 

Section 6.                                            Adjustments.

 

(a)                                  In
the event (i) of any stock dividend, stock split, recapitalization,
reclassification, combination or exchange of shares of capital stock or other
securities of the Company on, of or affecting the Shares or the like or any
other action that would have the effect of changing a Shareholder’s ownership
of the Company’s capital stock or other securities or (ii) a Shareholder
becomes the beneficial owner of any additional Shares of or other securities of
the Company, then the terms of this Agreement will apply to the shares of
capital stock held by such Shareholder immediately following the effectiveness
of the events described in clause (i) or such Shareholder becoming the
beneficial owner thereof, as described in clause (ii), as though they were
Securities hereunder.

 

(b)                                 Each
Shareholder hereby agrees, during the term of this Agreement, to promptly
notify Parent and Purchaser of the number of any new Securities acquired by
such Shareholder, if any, after the date hereof, provided that the acquisition
of Company Common Stock upon the exercise of Options set forth on
Schedule A shall not require such notification.  The Company agrees that it shall promptly notify Parent and
Purchaser upon the exercise of Options set forth on Schedule A.

 

Section 7.                                            Tender
of Securities.  Unless this
Agreement has been terminated, each Shareholder hereby agrees that such
Shareholder will validly tender (or cause the record owner of such shares to
validly tender) and sell (and not withdraw, except in the event the Purchase
Option is exercised, in which case such withdrawal shall be for the limited
purpose of consummating the Purchase Option) pursuant to and in accordance with
the terms of the Offer as promptly as reasonably practicable and in any event
not later than the tenth business day after commencement of the Offer (or the
earlier of the expiration date of the Offer and the fifth business day after
such Shares, as the case may be, are acquired by such Shareholder if the
Shareholder acquires Shares after the date hereof), all of the then outstanding
Shares beneficially owned by such Shareholder (including the shares of Company
Common Stock outstanding as of the date hereof and set forth on Schedule A
opposite such Shareholder’s name).  In
the event, notwithstanding the provisions of the first sentence of this
Section 7, during the term of this Agreement, any Shares beneficially
owned by a Shareholder are for any reason withdrawn from the Offer or are not
purchased pursuant to the Offer, such Shares will remain subject to the terms
of this Agreement.  Each Shareholder
acknowledges that Purchaser’s obligation to accept for payment and pay for
Shares tendered in the Offer is subject to all the terms and conditions of the
Offer.

 

Section 8.                                            Voting
Agreement.  Each Shareholder, by
this Agreement and during its term, does hereby (a) agree that at any annual,
special, postponed or adjourned meeting of the Shareholders of the Company it
will cause the Shares such Shareholder beneficially owns to be counted as
present (or absent if requested by Parent or Purchaser) thereat for purposes of
establishing a quorum in order to vote or consent and (b) constitute and
appoint Parent and Purchaser, or any nominee thereof, with full power of
substitution, during and for the term of this

 

6

 

Agreement,
as his, her or its true and lawful attorney and proxy for and in his, her or
its name, place and stead, to vote all the Shares such Shareholder beneficially
owns at the time of such vote, at any annual, special, postponed or adjourned
meeting of the Shareholders of the Company (and this appointment will include
the right to sign his, her or its name (as Shareholder) to any consent,
certificate or other document relating to the Company that the laws of the
Commonwealth of Pennsylvania may require or permit), in the case of both (a)
and (b) above, (x) in favor of approval and adoption of the Merger Agreement
and approval and adoption of the Merger and the other transactions contemplated
thereby and (y) against (1) any Acquisition Proposal, (2) any action or
agreement that could reasonably be expected to result in a breach in any
respect of any covenant, agreement, representation or warranty of the Company
under the Merger Agreement or this Agreement and (3) the following actions
(other than the Merger and the other transactions contemplated by the Merger
Agreement): (i) any extraordinary corporate transaction, such as a merger,
consolidation or other business combination involving the Company or any of its
subsidiaries; (ii) a sale, lease or transfer of a material amount of assets of
the Company or any of its subsidiaries, or a reorganization, recapitalization,
dissolution or liquidation of the Company or any of its subsidiaries; (iii) (A)
any change in a majority of the persons who constitute the board of directors
of the Company or any of its subsidiaries as of the date hereof; (B) any change
in the present capitalization of the Company or any amendment of the Company’s
or any of its subsidiaries’ articles or certificate of incorporation or bylaws,
as amended to date; (C) any other material change in the Company’s or any of
its subsidiaries’ corporate structure or business; or (D) any other action that
is intended, or could reasonably be expected, to impede, interfere with, delay,
postpone, or adversely affect the Offer, the Merger and the other transactions
contemplated by this Agreement and the Merger Agreement. This proxy and power
of attorney is a proxy and power coupled with an interest, and each Shareholder
declares that it is irrevocable until this Agreement shall terminate in
accordance with its terms.  Each
Shareholder hereby revokes all and any other proxies with respect to the Shares
that such Shareholder may have heretofore made or granted.  For Shares as to which a Shareholder is the
beneficial but not the record owner, such Shareholder shall use his, her or its
reasonable best efforts to cause any record owner of such Shares to grant to
Parent a proxy to the same effect as that contained herein.  Each Shareholder hereby agrees to permit
Parent and Purchaser to publish and disclose in the Offer Documents and the
Proxy Statement and related filings under the securities laws such
Shareholder’s identity and ownership of Securities and the nature of his, her
or its commitments, arrangements and understandings under this Agreement.

 

Section 9.                                            No
Solicitation.  Each Shareholder
agrees that neither such Shareholder (in his, her or its capacity as such) nor
any of such Shareholder’s officers, directors, employees, trustees (in their
capacities as such), representatives, agents or affiliates (including, without
limitation, any investment banker, attorney or accountant retained by any of
them) will directly or indirectly initiate, solicit or encourage (including by
way of furnishing non-public information or assistance), or take any other
action to facilitate, any inquiries or the making or submission of any
Acquisition Proposal, or enter into or maintain or continue discussions or
negotiate with any person or entity in furtherance of such inquiries or to
obtain or induce any person to make or submit an Acquisition Proposal or agree
to or endorse any Acquisition Proposal or assist or participate in, facilitate
or encourage, any effort or attempt by any other person or entity to do or seek
any of the foregoing or authorize or permit any of its officers, directors,
employees, trustees

 

7

 

(in
their capacities as such) or any of its affiliates or any investment banker,
financial advisor, attorney, accountant or other representative or agent
retained by any of them to take any such action.  Each Shareholder shall promptly (and in any event within one
business day) advise Parent in writing of the receipt of request for
information or any inquiries or proposals relating to an Acquisition
Proposal.  The terms of this
Section 9 shall not restrict or limit the effect of Section 24
hereof.

 

Section 10.                                      Grant
of Purchase Option.

 

(a)                                  Each
Shareholder hereby grants to Parent and Purchaser an irrevocable option (the “Purchase
Option”) to purchase for cash, in a manner set forth below, any or all of
the Shares (and including Shares acquired after the date hereof by such
Shareholder) beneficially owned by the Shareholder at a price (the “Exercise
Price”) per Share equal to $3.90 per share of Company Common Stock.  In the event of any stock dividends, stock
splits, recapitalizations, combinations, exchanges of shares or the like, the
Exercise Price will be appropriately adjusted for the purpose of this Section 10.

 

(b)                                 In
the event that (i) the Purchase Option has been exercised, in whole or in part
with respect to any Shareholder, (ii) the Merger is consummated and (iii)
Parent and Purchaser have increased the price per share of either the Company
Common Stock payable in the Merger above the Exercise Price set forth in
Section 10(a) (it being understood that the payment of any amounts
pursuant to the exercise of dissenters’ rights will not be considered for this
purpose), Parent shall pay to each Shareholder from whom Parent or Purchaser
purchased Purchase Option Shares, within two business days following the
Effective Time of the Merger, by certified check or official bank check in
immediately available funds or by wire transfer of immediately available funds,
as such Shareholder may direct, an amount equal to the excess of (A) the price
per share paid for the Company Common Stock in the Merger over (B) the Exercise
Price of the Company Common Stock, purchased by Parent or Purchaser from such
Shareholder upon exercise of the Purchase Option.

 

Section 11.                                      Exercise
of Purchase Option.

 

(a)                                  Subject
to the conditions set forth in Section 13 hereof, the Purchase Option may
be exercised by Parent or Purchaser, in whole or in part, at any time or from
time to time after the occurrence of any Trigger Event (as defined below).  The Company shall notify Parent promptly in
writing of the occurrence of any Trigger Event, it being understood that the
giving of such notice by the Company or the Shareholder is not a condition to
the right of Parent or Purchaser to exercise the Purchase Option.  In the event Parent or Purchaser wishes to
exercise the Purchase Option, Parent shall deliver to each Shareholder a
written notice (an “Exercise Notice”) specifying the total number of
Shares it wishes to purchase from such Shareholder.  Each closing of a purchase of Shares (a “Closing”) will
occur at a place, on a date and at a time designated by Parent or Purchaser in
an Exercise Notice delivered at least five business days prior to the date of
the Closing.

 

(b)                                 A
“Trigger Event” means any one of the following: (i) the Offer has
expired but, due to the failure of the Shareholder in breach of this Agreement
to validly

 

8

 

tender
and not withdraw all of the then outstanding Shares beneficially owned by such
Shareholder, the Purchaser has not accepted for payment or paid for any Shares
pursuant to the Offer or (ii) the Offer has expired and the Parent or Purchaser
has waived the Minimum Condition and accepted any Shares for purchase pursuant
to the Offer.

 

(c)                                  If
requested by Parent and Purchaser in the Exercise Notice and only if necessary
and sufficient to achieve the Minimum Condition (together with other similarly
placed Shareholders), such Shareholder shall exercise all Options (to the
extent exercisable) and other rights (including conversion or exchange rights)
beneficially owned by such Shareholder and shall sell the Shares acquired
pursuant to such exercise to Parent or Purchaser as provided in this Agreement.

 

(d)                                 The
Company agrees that immediately upon the purchase of any Shares by Purchaser or
any of its affiliates pursuant to the Purchase Option, Purchaser shall be
entitled to designate such number of directors, rounded up to the next whole
number, on the Board of Directors of the Company as will give Purchaser
representation on the Board of Directors of the Company equal to the product of
(i) the total number of directors on the Board of Directors of the Company
(giving effect to the increase in the size of such Board pursuant to this
Section 11) and (ii) the percentage that the number of votes
represented by Shares beneficially owned by Purchaser and its affiliates
(including Shares so purchased pursuant to the Purchase Option) bears to the
number of votes represented by Shares then outstanding.  In furtherance thereof, the Company
covenants to Parent and Purchaser that it and its Board of Directors shall,
upon the request of Parent, use their best efforts promptly either to increase
the size of its Board of Directors or to secure the resignations of such number
of its incumbent directors, or both, as is necessary to enable such designees
of Parent to be so elected or appointed to the Company’s Board of Directors,
and, subject to applicable law, the Company shall take all actions available to
the Company to cause such designees of Parent to be so elected or appointed
(including by calling a special meeting of its shareholders if so requested by
Parent or Purchaser).  At such time, the
Company shall, if requested by Parent, subject to applicable law, also take all
action necessary to cause persons designated by Parent to constitute at least
the same percentage (rounded up to the next whole number) as is on the
Company’s Board of Directors of (i) each committee of the Company’s Board of
Directors, (ii) each board of directors (or similar body) of each subsidiary of
the Company and (iii) each committee (or similar body) of each such board.  Such designees of Purchaser shall be
assigned to the classes of directors having the latest possible expiration
dates for their terms of office at the time of such election.

 

Section 12.                                      Termination
of Purchase Option.  The Purchase
Option will terminate upon the earliest of: (i) the Effective Time; (ii)
termination of the Merger Agreement; or (iii) the exercise in full of the
Purchase Option and consummation of the Closing with respect thereto.  Upon the giving by Parent or Purchaser to a
Shareholder of the Exercise Notice and the tender of the aggregate Exercise
Price, Parent or Purchaser, as the case may be, subject to applicable law and
the conditions of Section 13, will be deemed to be the holder of record of
the Shares transferable upon such exercise, notwithstanding that the stock
transfer books of the Company are then closed or that certificates representing
such Shares have not been actually delivered to Parent.

 

9

 

Section 13.                                      Conditions
To Closing.  The obligation of each
Shareholder to sell such Shareholder’s Shares to Parent or Purchaser hereunder
is subject to the condition that no preliminary or permanent injunction or
other order by any court of competent jurisdiction prohibiting or otherwise
restraining such sale or acquisition is in effect.

 

Section 14.                                      Closing.  At any Closing with respect to Shares
beneficially owned by a Shareholder, (i) such Shareholder will deliver to
Parent or Purchaser, as the case may be, a certificate or certificates in
definitive form representing the number of the Shares specified by Parent or
Purchaser, as the case may be, in its Exercise Notice, such certificate to be
registered in the name of Parent or Purchaser, as the case may be, and (ii)
Parent or Purchaser, as the case may be, will deliver to the Shareholder the
aggregate Exercise Price (and if a Specified Shareholder, less any Incentive
Payments owed by such Specified Shareholder in accordance with
Section 19(b) hereof) for the Shares so specified and being purchased by
wire transfer of immediately available funds. 
Such Shareholder will pay all Shareholder’s expenses, and any and all
United States federal, state and local transfer taxes and other similar charges
that may be payable in connection with the preparation, issue and delivery of
stock certificates under this Section 14 in the name of Parent or
Purchaser, as the case may be.  At the
Closing, each Shareholder shall deliver to Parent or Purchaser, as the case may
be, good title to all of the Securities beneficially owned by it, free and
clear of any Liens.

 

Section 15.                                      No
Impairment.  The Company will not
take any action that will in any way destroy or materially diminish or impair
the rights and preferences attributable to the Shares (including the voting
rights and power, economic rights and the percentage ownership interest
represented by the Shares) purchased pursuant to or subject to the Purchase
Option, including, without limitation, issuance of additional capital stock of
the Company or securities convertible, exercisable or representing a right to
such capital stock, amending the Articles of Incorporation or Bylaws of the
Company, declaring a stock dividend, declaring a stock split, recapitalizing
the Company, reclassifying the capital stock of the Company, reorganizing the
Company, or combining or exchanging shares of capital stock or other securities
of the Company.

 

Section 16.                                      No
Inconsistent Agreements.  No
Shareholder shall enter into any agreement or understanding with any person or
entity the effect of which would be inconsistent or violative of the provisions
of this Agreement.

 

Section 17.                                      Termination.  Subject to Section 26(a), this
Agreement will terminate (a) upon the earlier to occur of (i) the termination
of the Purchase Option pursuant to clause (i) of Section 12, (ii) 90 days
after the final Closing, except for Sections 12, 18 and 19 hereof, which will
only terminate, if at all, as and when provided therein, or (iii) the
termination of the Merger Agreement or (b) by the mutual consent of each
Shareholder as to its rights and obligations hereunder, the Board of Directors
of the Company and the Board of Directors of Parent.

 

Section 18.                                      Specified
Shareholder Obligations.

 

(a)                                  Messrs.
Joseph Weiderman and Theodore Schwartz hereby waive and release all rights,
payments or other benefits which may be payable to them in connection with or
as a result of the consummation of the Offer or Merger, in any way related to
their

 

10

 

respective
roles as employees and directors of the Company or its subsidiaries, including
without limitation, under the Change of Control Agreements, dated
January 1, 2001, by and between the Company and each of Joseph Weiderman
and Theodore Schwartz, or any other change in control agreements, severance
agreements, employment agreements and other agreements.  Messrs. Joseph Weiderman and Theodore
Schwartz expressly acknowledge that the only payments, benefits or other
compensation that may be payable to them by any of Parent, Purchaser, the
Company or any of their subsidiaries or affiliates in connection with or as a
result of the transactions contemplated by the this Agreement or the Merger
Agreement, is the Common Stock Price in the Offer, the Merger Consideration in
the Merger or the Exercise Price upon exercise of the Purchase Option, as
applicable, except for miscellaneous benefits granted to or conferred upon
either of them by the Company after the date of this Agreement and prior to the
Effective Time that will not exceed $25,000 in the aggregate for each
individual.

 

(b)                                 In
order to induce Parent and Purchaser to enter into this Agreement and the
Merger Agreement and to consummate the transactions relating to the Options
contemplated by the Merger Agreement, immediately prior to (and subject to) the
acceptance of any shares of Company Common Stock for payment by Purchaser or
Parent under the Offer, or with respect to a given Specified Shareholder (as
defined below), concurrently with Purchaser’s exercise of the Purchase Option
with respect to Shares held by such Specified Shareholder, the Shareholders
listed on Schedule B hereto (the “Specified Shareholders”)
shall be obligated to make the payments (the “Incentive Payments”) to
Parent as set forth on Schedule B hereto.  Purchaser is hereby authorized to reduce the Cash Payment to be
made to the Specified Shareholders by the amount of their respective Incentive
Payments.  If Parent or Purchaser shall
fail to purchase any Shares validly tendered and not withdrawn in the Offer by
a Specified Shareholder, in accordance with the terms of the Offer Documents
and applicable law, or if not so tendered, if Purchaser shall fail to
consummate the Merger and the Merger Agreement shall terminate, Purchaser shall
be obligated to refund to any Specified Shareholder any such Incentive Payments
that were actually made by such Specified Shareholder (except to the extent
such Incentive Payment is paid in connection with the exercise of the Purchase
Option).

 

(i)                                     The
parties hereto intend for the Incentive Payments to be treated as a reduction
in the Cash Payments payable for such Shareholder’s Options in accordance with
Section 2.10 of the Merger Agreement for accounting and tax purposes.

 

Section 19.                                      Covenant
Not To Compete.  In order to induce
Parent and Purchaser to enter into this Agreement and the Merger Agreement and
to consummate the transactions contemplated hereby and thereby, Messrs. Joseph
Weiderman and Theodore Schwartz (the “Specified Executives”) hereby
agree as follows:

 

(a)                                  Each
Specified Executive agrees that, from the date of acceptance of any Shares
pursuant to the Offer or the purchase of any Shares pursuant to the Purchase
Option and for five years thereafter, such Specified Executive shall not
directly or indirectly, anywhere in the United States, engage in any business
which is the same as, similar to, or in competition with the business of the
Company and the Surviving Corporation or any of its subsidiaries.  Each Specified Executive acknowledges that
the restrictions contained herein, in

 

11

 

view of
the nature of the business in which such Specified Executive is or has been
engaged, are reasonable and necessary to protect the legitimate interest of the
Company and the Surviving Corporation or any of its subsidiaries, that Parent
and Purchaser would not have entered into this Agreement or the Merger
Agreement or been willing to consummate the transactions contemplated thereby
without the benefit of such restrictions, and that any violation of any of
these restrictions would result in irreparable injury to Parent, Company and
the Surviving Corporation or any of its subsidiaries.  Each Specified Executive acknowledges that in the event of a
violation of any such restrictions, the Company and the Surviving Corporation
will be entitled to preliminary and permanent injunctive relief as well as an
equitable accounting of all earnings, profits and other benefits arising from
such violation which rights shall be cumulative and in addition to any other
rights or remedies to which Company and the Surviving Corporation may be entitled.  In the event that any such Specified
Executive shall engage, directly or indirectly, in any business in competition
with the business of the Company and the Surviving Corporation, the
non-competition time period referred to above shall be extended by a period of
time equal to that period beginning when such violation commenced, and ending
when the activities constituting such violation shall have finally been
terminated in good faith.

 

(b)                                 In
addition, at all times after the date of this Agreement, each Specified
Executive shall not disclose confidential information of the Company or the
Surviving Corporation in violation of the Merger Agreement to any other person,
entity, corporation, trust, association or partnership.  For the purposes hereof, the term
“confidential information” shall include, but not be limited to, all lists or
the identity of any customers, suppliers, creditors or contacts of the Company,
the Surviving Corporation or any of their subsidiaries.  It shall also include any and all information
pertaining to any formulas, business opportunities, processes, techniques,
plans, contracts, sales or other financial data of Company or Surviving
Corporation.

 

(c)                                  Notwithstanding
anything to the contrary contained herein, in the event that any court of
equity determines that time period, geographic scope and/or business scope of
this restrictive covenant is held to be unenforceably long or broad, as the
case may be, then, and either such event, neither the enforceability nor the
validity of this section as a whole shall be affected.  Rather, the time period and/or scope of the
restriction so affected shall be reduced to the maximum permitted by law.

 

Section 20.                                      Expenses.  Except as otherwise expressly provided
herein or in the Merger Agreement, all costs and expenses incurred by any of
the parties hereto will be borne by the party incurring such costs and
expenses.  Parent and Purchaser, on the
one hand, and the Company and the Shareholders, on the other hand, will
indemnify and hold harmless the other from and against any and all claims or
liabilities for finder’s fees or brokerage commissions or other like payments
incurred by reason of action taken by him, her or it or any of them, as the
case may be, provided that a Shareholder shall only be obligated to so
indemnify and hold harmless Parent or Purchaser from and against any such
claims by reason of any action taken by such Shareholder.

 

Section 21.                                      Further
Assurances.  Each party hereto will
execute and deliver all such further documents and instruments and take all
such further action as may be reasonably necessary in order to consummate the
transactions contemplated hereby.  The
Company

 

12

 

covenants
to Parent and Purchaser that it and its Board of Directors shall (i) use its
reasonable best efforts to ensure that no state takeover statute or similar
statute or regulation is or becomes applicable to the Purchase Option and the
Transactions and (ii) if any state takeover statute or similar statute or
regulation becomes applicable to any of the Transactions, use its reasonable
best efforts to ensure that the Purchase Option and the other Transactions may
be consummated as promptly as practicable on the terms contemplated by this
Agreement and the Merger Agreement and otherwise to minimize the effect of such
statute or regulation on the Purchase Option and the other Transactions.

 

Section 22.                                      Publicity.  A Shareholder shall not issue any press
release or otherwise make any public statements with respect to this Agreement
or the Merger Agreement or the other transactions contemplated hereby or
thereby without the consent of Parent and Purchaser, except as may be required
by law or applicable stock exchange or NASDAQ rules.

 

Section 23.                                      Stop
Transfer Order.  The Company agrees
with, and covenants to, Parent and Purchaser that the Company shall not
register the transfer of any certificate representing any Shareholder’s
Securities unless such transfer is made in accordance with the terms of this
Agreement.  The Company and such
Shareholder agree to take all reasonable steps to place with the Company’s
transfer agent a stop transfer order on such Securities.

 

Section 24.                                      Shareholder
Capacity.  No person executing this
Agreement makes any agreement or understanding herein in such Shareholder’s
capacity as a director or officer of the Company or any subsidiary of the
Company.  Each Shareholder signs solely
in such Shareholder’s capacity as the beneficial owner of such Shareholder’s
Shares and nothing herein shall limit or affect any actions taken by a
Shareholder in such Shareholder’s capacity as an officer or director of the
Company or any subsidiary of the Company to the extent specifically permitted
by the Merger Agreement (including Section 6.1 of the Merger
Agreement).  Each Shareholder agrees not
to take any action that will violate Section 6.1 of the Merger Agreement.

 

Section 25.                                      Enforcement.  Each Shareholder and the Company acknowledge
that irreparable damage would occur in the event that any of the provisions of
this Agreement were not performed in accordance with their specific terms or
were otherwise breached by any Shareholder or the Company.  It is accordingly agreed that Parent and
Purchaser will be entitled to an injunction or injunctions to prevent breaches
of this Agreement and to enforce specifically the terms and provisions hereof
in any court of the United States or any state having jurisdiction, this being
in addition to any other remedy to which they are entitled at law or in equity.  Each Shareholder and the Company further
agree to waive any requirement for the securing or posting of any bond in
connection with the obtaining of any such injunctive or other equitable
relief.  The provisions of this paragraph
are without prejudice to any other rights that another party hereto may have
against another party hereto for any failure to perform its obligations under
this Agreement.  In addition, each
Shareholder hereto (i) consents to submit to the personal jurisdiction of the
United States District Court for the Eastern District of Pennsylvania and, in
the absence of Federal jurisdiction, the state courts located in Philadelphia
County in the event any dispute arises out of this Agreement or any of the
transactions contemplated hereby, (ii) agrees not to attempt to deny or defeat
such personal jurisdiction by motion or other request for leave from any such
court, (iii) agrees not to bring any action relating to this Agreement or any
of the

 

13

 

transactions
contemplated hereby in any court other than the courts specified in clause (i)
above and (iv) waives any right to trial by jury with respect to any claim or
proceeding related to or arising out of this Agreement or any of the
Transactions.  In furtherance of the
foregoing, each Shareholder and the Company hereby irrevocably and
unconditionally waives any objection to the laying of venue of any action, suit
or proceeding arising out of this Agreement or the transactions contemplated
hereby in the courts specified in clause (i) above, and hereby further
irrevocably and unconditionally waives and agrees not to plead or claim in any
such court that any such action, suit or proceeding brought in any such court
has been brought in an inconvenient forum. 
The Company and each Shareholder hereby designates, appoints and
empowers the Company as their true and lawful agent and attorney in-fact in
their name, place and stead to receive and accept on their behalf service of
process in any action, suit or proceeding with respect to any matters as to
which it has submitted to jurisdiction as set forth above.

 

Section 26.                                      Miscellaneous.

 

(a)                                  All
representations and warranties contained herein will terminate as provided in
Section 17(a), except that the representations and warranties contained in
Section 2 (a) shall survive for three years after the date of this
Agreement and the representations and warranties contained in Sections
2(b)-(g), inclusive, and Section 3 and Section 4 will survive for one
year after the termination of the Purchase Option as set forth in
Section 12.  The covenants and
agreements made herein will survive in accordance with their respective
terms.  The representations and
warranties given by each Shareholder herein are not in derogation or limitation
of the representations and warranties given by such Shareholder in any letters
of transmittal or similar documents executed and delivered by such Shareholder
pursuant to the Offer or the Merger.

 

(b)                                 Each
Shareholder approves and consents to the cancellation of their Options in
exchange for the Cash Payments subject to the terms and conditions set forth in
the Merger Agreement.

 

(c)                                  Any
provision of this Agreement may be waived at any time by the party that is
entitled to the benefits thereof.  No such
waiver, amendment or supplement will be effective unless in writing and signed
by the party or parties sought to be bound thereby.  Any waiver by any party of a breach of any provision of this
Agreement will not operate as or be construed to be a waiver of any other
breach of such provision or of any breach of any other provision of this
Agreement.  The failure of a party to
insist upon strict adherence to any term of this Agreement or one or more
sections hereof will not be considered a waiver or deprive that party of the
right thereafter to insist upon strict adherence to that term or any other term
of this Agreement.

 

(d)                                 This
Agreement, together with the Merger Agreement and the other agreements referred
to herein and therein, constitute the entire agreement among the parties hereto
with respect to the subject matter hereof, and supersedes all prior agreements
among the parties with respect to such matters.

 

14

 

(e)                                  This
Agreement will be governed by and construed in accordance with the laws of the
Commonwealth of Pennsylvania, without regard to the conflicts of laws
principles thereof.

 

(f)                                    The
words “hereof,” “herein” and “herewith” and words of similar import shall,
unless otherwise stated, be construed to refer to this Agreement as a whole and
not to any particular provision of this Agreement, and article, section,
paragraph, exhibit and schedule references are to the articles, sections,
paragraphs, exhibits and schedules of this Agreement unless otherwise
specified.  Whenever the words
“include,” “includes” or “including” are used in this Agreement they shall be
deemed to be followed by the words “without limitation.”  All terms defined in this Agreement shall
have the defined meanings contained herein when used in any certificate or
other document made or delivered pursuant hereto unless otherwise defined
therein.  The definitions contained in
this Agreement are applicable to the singular as well as the plural forms of
such terms and to the masculine as well as to the feminine and neuter genders
of such term.  Any agreement,
instrument, statute or rule defined or referred to herein or in any agreement
or instrument that is referred to herein means such agreement, instrument,
statute or rule as from time to time amended, modified or supplemented,
including (in the case of agreements and instruments) by waiver or consent and
(in the case of statutes and rules) by succession of comparable successor
statutes and rules and all attachments thereto and instruments incorporated
therein.  References to a person are
also to its permitted successors and assigns.

 

(g)                                 All
notices and other communications hereunder will be in writing and will be given
(and will be deemed to have been duly given upon receipt) by delivery in
person, by telecopy, or by registered or certified mail, postage prepaid,
return receipt requested, addressed as follows:

 

If to the Company to:

 

Berger
Holdings, Ltd.

805
Pennsylvania Boulevard

Feasterville,
PA  19053

Attention:  President

Facsimile:  215-953-7750

 

With a copy to:

 

Wolf,
Block, Schorr and Solis-Cohn LLP

1650
Arch Street

Philadelphia,
PA  19103

Attention:  Jason M. Shargel

Telecopy:  215-977-2334

 

15

 

If to Parent or Purchaser
to:

 

Euramax International,
Inc.

5445 Triangle Parkway,
Suite 350

Norcross, Georgia 30092

Attention:  Chief Executive Officer

Facsimile:  (770) 263-8031

 

with copies to:

 

Dechert LLP

4000 Bell Atlantic Tower

1717 Arch Street

Philadelphia, PA  19103

Attention:  Geraldine A. Sinatra

Telecopy:  215-994-2222

 

If to a Shareholder, at
the address set forth on the signature pages hereto or, if no such address is
specified, c/o the Company to the Company’s address as set forth above; or in
each case to such other address as any party may have furnished to the other
parties in writing in accordance herewith.

 

(h)                                 This
Agreement may be executed in any number of counterparts, each of which will be
deemed to be an original, but all of which together will constitute one
agreement.

 

(i)                                     This
Agreement is binding upon and is solely for the benefit of the parties hereto
and their respective successors, legal representatives and assigns. Neither
this Agreement nor any of the rights, interests or obligations under this
Agreement will be assigned by any of the parties hereto without the prior
written consent of the other parties, except that Parent and Purchaser will
have the right to assign to any direct or indirect wholly owned subsidiary of
Parent or Purchaser permitted to be substituted for Purchaser or Parent under
the Merger Agreement any or all rights and obligations of Parent or Purchaser
under this Agreement, provided that any such assignment will not relieve either
Parent or Purchaser from any of its obligations hereunder.

 

(j)                                     In
the event any term or provision of this Agreement is determined to be invalid,
illegal or incapable of being enforced by any rule of law or public policy, all
other terms and provisions of this Agreement will nevertheless remain in full
force and effect. Upon any such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties hereto will
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in an acceptable manner to the end
that the transactions contemplated by this Agreement are consummated to the
fullest extent possible.

 

16

 

(k)                                  All
rights, powers and remedies provided under this Agreement or otherwise
available in respect hereof at law or in equity will be cumulative and not
alternative, and the exercise of any thereof by either party will not preclude
the simultaneous or later exercise of any other such right, power or remedy by
such party.

 

(l)                                     The
parties have participated jointly in the negotiation and drafting of this
Agreement.  In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the parties and no presumption or burden of proof
shall arise favoring or disfavoring any party by virtue of the authorship of
any provisions of this Agreement.

 

17

 

IN WITNESS WHEREOF, each of the Company, Parent and
Purchaser has caused this Agreement to be signed by its officer or director
thereunto duly authorized and each Shareholder has signed this Agreement, all
as of the date first written above.

 

	
   

  	
  EURAMAX INTERNATIONAL,
  INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ J. David Smith

  	
   

  
	
   

  	
   

  	
  Name: J. David Smith

  
	
   

  	
   

  	
  Title: President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  AMERIMAX PENNSYLVANIA,
  INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ J. David Smith

  	
   

  
	
   

  	
   

  	
  Name: J. David Smith

  
	
   

  	
   

  	
  Title: President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  BERGER HOLDINGS, LTD.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Joseph F. Weiderman

  	
   

  
	
   

  	
   

  	
  Name: Joseph F.
  Weiderman

  
	
   

  	
   

  	
  Title: President and
  Chief Executive Officer

  
						

 

18

 

	
   

  	
  SHAREHOLDERS:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Theodore A.
  Schwartz

  	
   

  
	
   

  	
  Theodore A. Schwartz

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Joseph F. Weiderman

  	
   

  
	
   

  	
  Joseph F. Weiderman

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Paul L. Spiese, III

  	
   

  
	
   

  	
  Paul L. Spiese, III

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Francis E. Wellock,
  Jr.

  	
   

  
	
   

  	
  Francis E. Wellock, Jr.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Jacob I. Haft

  	
   

  
	
   

  	
  Jacob I. Haft, M.D.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Larry Falcon

  	
   

  
	
   

  	
  Larry Falcon

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Jay Seid

  	
   

  
	
   

  	
  Jay Seid

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ John P. Kirwin, III

  	
   

  
	
   

  	
  John P. Kirwin, III

  

 

19

 

	
   

  	
  /s/ Jon M. Kraut,
  D.M.D.

  	
   

  
	
   

  	
  Jon M. Kraut, D.M.D.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  IRVING KRAUT Q-TIP TRUST

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/Jon M. Kraut, D.M.D.

  	
   

  
	
   

  	
   

  	
  Jon M. Kraut, D.M.D.,
  co-trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  IRVING KRAUT FAMILY TRUST

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jon M. Kraut, D.M.D.

  	
   

  
	
   

  	
   

  	
  Jon M. Kraut, D.M.D.,
  co-trustee

  
					

 

20

 

SCHEDULE A

 

	
  Shareholder

  	
   

  	
  Common Stock

  	
   

  	
  Exercisable

  Options

  	
   

  	
  Unexercisable

  Options

  	
   

  
	
  Theodore A. Schwartz

  	
   

  	
  234,045

  	
   

  	
  375,000

  	
   

  	
  —

  	
   

  
	
  Joseph F. Weiderman

  	
   

  	
  159,124

  	
   

  	
  347,500

  	
   

  	
  —

  	
   

  
	
  Paul
  L. Spiese, III

  	
   

  	
  147,883

  	
   

  	
  405,000

  	
   

  	
  —

  	
   

  
	
  Francis
  E. Wellock, Jr.

  	
   

  	
  31,000

  	
   

  	
  319,000

  	
   

  	
  —

  	
   

  
	
  Irving
  Kraut Q-TIP Trust

  	
   

  	
  59,931

  	
   

  	
  105,000

  	
   

  	
  —

  	
   

  
	
  Irving
  Kraut Family Trust

  	
   

  	
  200,000

  	
   

  	
  —

  	
   

  	
  —

  	
   

  
	
  Jon
  M. Kraut, D.M.D.

  	
   

  	
  99,500

  	
   

  	
  25,000

  	
   

  	
  —

  	
   

  
	
  Jacob
  I. Haft, M.D.

  	
   

  	
  125,366

  	
   

  	
  130,000

  	
   

  	
  —

  	
   

  
	
  Larry
  Falcon

  	
   

  	
  37,791

  	
   

  	
  115,000

  	
   

  	
  —

  	
   

  
	
  Jay
  Seid

  	
   

  	
  21,500

  	
   

  	
  65,000

  	
   

  	
  —

  	
   

  
	
  John
  Paul Kirwin, III

  	
   

  	
  8,300

  	
   

  	
  65,000

  	
   

  	
  —

  	
   

  

 

21

 

SCHEDULE B

 

	
  Shareholder

  	
   

  	
  Incentive
  Payment

  	
   

  
	
  Theodore
  A. Schwartz

  	
   

  	
  $

  	
  48,750

  	
   

  
	
  Joseph
  F. Weiderman

  	
   

  	
  $

  	
  45,175

  	
   

  
	
  Paul
  L. Spiese, III

  	
   

  	
  $

  	
  52,650

  	
   

  
	
  Francis
  E. Wellock, Jr.

  	
   

  	
  $

  	
  41,470

  	
   

  
	
  Irving
  Kraut Q-TIP Trust

  	
   

  	
  $

  	
  13,650

  	
   

  
	
  Jon
  M. Kraut, D.M.D.

  	
   

  	
  $

  	
  3,250

  	
   

  
	
  Jacob
  I. Haft, M.D.

  	
   

  	
  $

  	
  16,900

  	
   

  
	
  Larry
  Falcon

  	
   

  	
  $

  	
  14,950

  	
   

  
	
  Jay
  Seid

  	
   

  	
  $

  	
  8,450

  	
   

  
	
  John
  Paul Kirwin, III

  	
   

  	
  $

  	
  8,450

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  TOTAL:

  	
   

  	
  $

  	
  253,695

  	
   

  
						

 

22

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00057-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00057-of-00352.parquet"}]]