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EXHIBIT 10.9
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CONTRIBUTION AGREEMENT
DATED AS OF SEPTEMBER 5, 1997
BY AND AMONG
ROCK-TENN COMPANY,
ROCK-TENN PARTITION COMPANY
AND
RTS PACKAGING, LLC
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EXHIBITS
Exhibit 1.1(a)(i) Real Property
Exhibit 1.1(a)(ii) Real Property Leases
Exhibit 1.1(a)(iii) Equipment
Exhibit 1.1(a)(v) Leases
Exhibit 1.1(a)(xi) Intangible Property
Exhibit 1.1(a)(xii) Licenses
Exhibit 1.2(a)(i) Excluded Real Property
Exhibit 1.2(a)(ii) Excluded Equipment
Exhibit 1.2(a)(iii) Excluded Intangible Property
Exhibit 1.4(a)(2) Certain Assumed Liabilities
Exhibit 2.6 Excluded Necessary Intangible Property
Exhibit 2.8 Contracts
Exhibit 2.11 Permits
Exhibit 2.12 Litigation
Exhibit 2.13(a) Compliance with Applicable Permits and Law
Exhibit 2.13(b) Notice of Failure to Comply with Law
Exhibit 2.14 Environmental Matters
Exhibit 2.14(g) Fines for Environmental Matters
Exhibit 2.15 Customers
Exhibit 3.10(c) Sketch of Real Property
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CONTRIBUTION AGREEMENT
THIS CONTRIBUTION AGREEMENT (this "Agreement"), dated as of
September 5, 1997 by and among ROCK-TENN COMPANY, a Georgia corporation
("Rock-Tenn"), ROCK-TENN PARTITION COMPANY, a Georgia corporation ("Rock-Tenn
Partition"), and RTS PACKAGING, LLC, a Delaware limited liability company (the
"Company");
W I T N E S S E T H:
WHEREAS, Rock-Tenn is engaged in the solid fiber partition
business (the "Solid Fiber Partition Business");
WHEREAS, Rock-Tenn and Rock-Tenn Partition have entered into
the Joint Venture Agreement, dated as of the date hereof (the "Joint Venture
Agreement"), with Sonoco Products Company and Sonoco Partitions, Inc.,
providing for the formation of the Company to engage in the Solid Fiber
Partition Business on a worldwide basis; and
WHEREAS, Rock-Tenn Partition has agreed to contribute to the
Company certain of its assets related to the Solid Fiber Partition Business;
NOW, THEREFORE, in consideration of the premises and the
representations, warranties, covenants and agreements contained herein and in
the Joint Venture Agreement, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties intending
to be legally bound, hereby agree as follows:
ARTICLE 1.
CONTRIBUTION OF ASSETS BY ROCK-TENN PARTITION
Section 1.1 Contribution of the Assets.
(a) Subject to the terms and conditions of the Joint
Venture Agreement, the Operating Agreement and this Agreement, effective as of
the date hereof (the "Contribution Date"), Rock-Tenn Partition hereby assigns,
transfers and delivers to the Company, as a contribution to the capital of the
Company, free and clear of all title defects, objections, liens, pledges,
claims, rights of first refusal, options, charges, security interests,
mortgages and other encumbrances of any nature whatsoever (collectively,
"Encumbrances"), other than "Permitted Encumbrances" (as defined in Section
1.1(b) of this Agreement), all of the assets, properties and business
(excepting only the "Excluded Assets," as defined in Section 1.2 of this
Agreement) of every kind and description, wherever located, real, personal or
mixed, tangible or intangible, owned or used or held for use primarily in the
conduct of the Solid Fiber Partition Business by Rock-Tenn Partition and its
Affiliates as the same shall exist on the Contribution Date (collectively, the
"Assets"), including, without limitation, all right, title, and interest of
Rock-Tenn Partition in, to, and under:
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(i) Subject to Section 3.10(c) of this Agreement, the
parcels of land described in Exhibit 1.1(a)(i) hereto used or held for
use primarily in connection with the Solid Fiber Partition Business
(collectively, the "Real Property") and all buildings, fixtures and
improvements located thereon (collectively, the "Improvements");
(ii) The leases described in Exhibit 1.1(a)(ii)
(collectively, the "Real Property Leases") with respect to the parcels
of land described therein (the "Leased Real Property") and the
Improvements located thereon (the Real Property, the Leased Real
Property and the Improvements together with the Xxxxxx Site and the
Home Office Site (as such terms are defined in Section 1.2 hereof) and
the improvements thereon are hereinafter collectively referred to as
the "Subject Property");
(iii) The machinery, equipment, furniture, vehicles and other
tangible property (including, without limitation, maintenance and
operating supplies, fuel and spare parts for such machinery and
equipment) located at the Subject Property or otherwise used or held for
use primarily in connection with the Solid Fiber Partition Business and
described in Exhibit 1.1(a)(iii) of this Agreement (collectively, the
"Equipment");
(iv) The raw materials, finished goods, work-in-process,
supplies and inventories located at the Subject Property or otherwise
used or held for use primarily in connection with the Solid Fiber
Partition Business (collectively, the "Inventory");
(v) The leases described in Exhibit 1.1(a)(v) (collectively,
the "Leases") with respect to office equipment, furnishings, furniture
and other tangible property located at the Subject Property or otherwise
used or held for use primarily in connection with the Solid Fiber
Partition Business (collectively, the "Leased Property");
(vi) All rights, claims, credits, causes of action and rights
of setoff against third parties relating to the assets used or held for
use primarily in connection with the Solid Fiber Partition Business,
including, without limitation, unliquidated rights under manufacturers'
and vendors' warranties but excluding all amounts representing
reimbursements for items paid by Rock-Tenn Partition or its Affiliates
(collectively, the "Claims");
(vii) All contracts, agreements, licenses and other
instruments, arrangements and commitments primarily relating to the
Solid Fiber Partition Business (collectively, the "Contracts");
(viii) All certificates of occupancy and other transferable
licenses, permits, registrations, authorizations, use agreements, orders
and approvals of governmental and quasi-governmental agencies and
authorities (whether federal, state, local, municipal or foreign) or
private parties relating to the Solid Fiber Partition Business
(collectively, the "Permits");
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(ix) All prepaid rentals and other prepaid expenses (other
than prepaid insurance premiums) arising from payments made by Rock-Tenn
Partition or its Affiliates in the ordinary and usual course of the
operation of the Solid Fiber Partition Business for goods and services
prior to the close of business on the Contribution Date;
(x) Originals or copies of all books, records, files and
papers, whether in hard copy or computer format, used or held for use
primarily in connection within the Solid Fiber Partition Business,
including without limitation, engineering information, manuals and data,
sales and advertising materials, sales and purchase correspondence,
lists of present and, to the extent available, former suppliers
(collectively, "Files and Records");
(xi) All patents, copyrights, trademarks, trade names,
technology, know-how, processes, trade secrets, inventions, proprietary
data and other intangible properties, and all applications for the same,
used or held for use primarily in connection with the Solid Fiber
Partition Business and listed in Exhibit 1.1(a)(xi) (collectively, the
"Intangible Property");
(xii) All licenses with respect to the Intangible Property and
described in Exhibit 1.1(a)(xii) (collectively, the "Licenses");
(xiii) The lists of present and, to the extent available,
former customers and goodwill associated with the Solid Fiber Partition
Business; and
(xiv) All accounts receivable existing on the Contribution
Date and arising out of the ordinary and usual course of the operation
of the Solid Fiber Partition Business prior to the close of business on
the Contribution Date (collectively, the "Accounts Receivable").
(b) For purposes of this Agreement, "Permitted Encumbrances"
shall mean (i) the "Assumed Liabilities" (as defined in Section 1.4 of this
Agreement); (ii) liens for current "Taxes" (as defined in Section 4.1 of this
Agreement) not yet due and payable; (iii) the Real Property Leases and the
Leases; and (iv) in the case of the Real Property and the Improvements thereon,
items subsequently disclosed pursuant to title reports and surveys to be
obtained pursuant to Section 3.10(c) of this Agreement, building and use
restrictions and other easements, right of ways, encumbrances or restrictions of
any nature whatsoever which do not interfere in any material respect with the
current use made of the Real Property or such Improvements in connection with
the Solid Fiber Partition Business.
Section 1.2 Excluded Assets.
(a) The Company expressly understands and agrees that
there shall be excluded from the Assets the following assets and properties (or
rights with respect thereto) of Rock-Tenn Partition and its Affiliates which
are used or held for use in connection with the Solid Fiber Partition Business:
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(i) The parcels of land described in Exhibit 1.2(a)(i)
hereto (the "Xxxxxx Site" and the "Home Office Site" and collectively
referred to herein as the "Excluded Real Property") and the buildings,
fixtures and improvements erected on the Excluded Real Property
(collectively, the "Excluded Improvements") (the Excluded Real Property
and Excluded Improvements hereinafter sometimes collectively referred to
as the "Excluded Facilities")
(ii) All machinery, equipment and other tangible property
described in Exhibit 1.2(a)(ii) (collectively, the "Excluded
Equipment");
(iii) The trademarks and trade names described in Exhibit
1.2(a)(iii) hereto, and all goodwill associated with such trademarks and
trade names (collectively, the "Excluded Intangible Property");
(iv) All claims against third parties relating to the
Excluded Assets and the related unliquidated rights under manufacturers'
and vendors' warranties, including all amounts representing
reimbursements for items paid by Rock-Tenn Partition or its Affiliates;
(v) All of the capital stock issued by Rock-Tenn Recycling
Company ("Rock-Tenn Recycling"), a corporation organized under the laws
of Quebec (formerly known as Dominion Paperboard Product, Ltd.), and all
of the assets of Rock-Tenn Recycling; and
(vi) Refunds relating to prepaid insurance.
(b) The Excluded Facilities, Excluded Equipment, Excluded
Intangible Property and other assets described in Section 1.2(a) not being
contributed to the Company by Rock-Tenn Partition pursuant to this Agreement are
herein collectively referred to as the "Excluded Assets."
Section 1.3 Conveyance Instruments. In order to effectuate the
contribution of the Assets as contemplated by this Article 1, Rock-Tenn
Partition has, or will hereafter, execute and deliver, or cause to be executed
and delivered, all such documents or instruments of assignment, transfer or
conveyance, in each case dated as of the Contribution Date (collectively, the
"Conveyance Instruments"), as the Company and its counsel shall reasonably deem
necessary or appropriate to vest in or confirm title to the Assets to the
Company.
Section 1.4 Assumed Liabilities.
(a) General. Subject to the terms and conditions of this
Agreement, the Operating Agreement and the Joint Venture Agreement, in reliance
on the representations, warranties, covenants and agreements of the parties
contained herein, effective as of the Contribution Date, the Company hereby
assumes and agrees to pay, discharge or fulfill the following liabilities and
obligations relating to the Solid Fiber Partition Business: (1) all of the
liabilities and obligations in
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respect of the Contracts, the Real Property Leases and the Leases; (2) the
liabilities and obligations listed in Exhibit 1.4(a)(2); and (3) all of the
liabilities and obligations described in Section 1.4(b) (collectively, the
"Assumed Liabilities")
(b) PIUMPF Withdrawal Liability.
(i) General. Rock-Tenn, Rock-Tenn Partition and the Company
intend that the contribution of assets by Rock-Tenn and Rock-Tenn
Partition to the Company as contemplated in this Agreement in exchange
for the ownership interest in the Company described in the Joint Venture
Agreement shall constitute a sale of assets by Rock-Tenn and Rock-Tenn
Partition to the Company under Section 4204 of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), and that neither Rock
Tenn nor Rock-Tenn Partition shall have a complete withdrawal or a
partial withdrawal from the Paper Industry Union-Management Pension Fund
("PIUMPF") by reason of the application of ERISA Section 4204 to such
contribution of assets to the Company and the transactions related to
such contribution of assets to the Company.
(ii) PIUMPF. Rock-Tenn and Rock-Tenn Partition immediately
prior to the Contribution Date have terminated the employment of all
Rock-Tenn and Rock-Tenn Partition employees who are represented by the
United Paperworkers International Union, AFL-CIO, Local Union Number 826
at the Merced, California Plant and Local Union Number 1106 at the
Xxxxx, Indiana Partition Plant ("PIUMPF Participants") and who have been
transferred to the Company as part of the contribution of assets
contemplated in this Agreement and on whose behalf Rock-Tenn or
Rock-Tenn Partition made contributions to PIUMPF, the Company has
offered employment to all such PIUMPF Participants effective as of the
Contribution Date and the Company has assumed as of the Contribution
Date Rock-Tenn's obligation and Rock-Tenn Partition's obligation to make
contributions to PIUMPF on and after the Contribution Date for all such
PIUMPF Participants who have accepted the Company's offer of employment.
(iii) Bond. Subject to the grant of a variance requested
under Section 1.4(b)(v), the Company shall purchase and maintain a bond
sufficient to satisfy the requirements of ERISA Section 4204(a)(1)(B).
(iv) Secondary Liability. Subject to the grant of a variance
requested under Section 1.4(b)(v), Rock-Tenn and Rock-Tenn Partition
shall remain secondarily liable for any withdrawal liability that either
Rock-Tenn or Rock-Tenn Partition would have had to PIUMPF with respect
to the transactions described in this Section 1.4(b) if the Company
withdraws from PIUMPF in a complete withdrawal during the five plan
years of PIUMPF which immediately follow the Contribution Date or has a
partial withdrawal with respect to the transaction described in this
Section 1.4(b) during such five plan year period if the Company's
liability to PIUMPF with respect to any such withdrawal or partial
withdrawal is not paid. Further, if the Company withdraws from PIUMPF
before the last day of the five
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plan year period of PIUMPF which begins after the Contribution Date and
the Company fails to make any withdrawal liability payment when due,
Rock-Tenn and Rock-Tenn Partition shall pay to PIUMPF an amount equal to
the payment that would have been due from Rock-Tenn or Rock-Tenn
Partition but for the application of ERISA Section 4204 to the
transaction described in this Section 1.4(b).
(v) Variance. Rock-Tenn and the Company shall decide
whether to request a variance from PIUMPF from the bond requirement
described in Section 1.4(b)(iii) or the secondary liability requirement
described in Section 1.4(b)(iv), or both, and, if a decision is made to
request a variance, Rock-Tenn and the Company agree to cooperate in the
preparation and filing of any such request and, further, agree to take
such further action, if any, as Rock-Tenn and the Company agree is
reasonable and appropriate under the circumstances to secure any
variance which is requested from PIUMPF.
(vi) Interpretation and Implementation. Rock-Tenn, Rock-Tenn
Partition and the Company agree that this Section 1.4(b) shall be
interpreted and implemented such that ERISA Section 4204 shall apply to
the transaction described in this Section 1.4(b).
Section 1.5 Excluded Liabilities. Notwithstanding any provision
of this Agreement or any Conveyance Instrument to the contrary, the Company is
assuming only the Assumed Liabilities and is not assuming any other liability
or obligation of Rock-Tenn Partition or any of its Affiliates (or any
predecessor owner of all or part of the Solid Fiber Partition Business or the
Assets) of whatever nature whether presently in existence or arising hereafter
with respect to the Solid Fiber Partition Business, and Rock-Tenn Partition and
its Affiliates shall retain responsibility for all of their respective
liabilities and obligations accrued as of the date hereof arising from the
operation of the Solid Fiber Partition Business prior to the date hereof (all
of such liabilities and obligations not being assumed hereinafter referred to
as the "Excluded Liabilities"). By way of example only, none of the following
shall be "Assumed Liabilities" for purposes of this Agreement:
(a) Any liability for "Tax" (as defined in Section 4.1 of
this Agreement) arising from or with respect to the Assets or the operation of
the Solid Fiber Partition Business, other than as described in Section
1.4(a)(2) hereof, which is incurred in or attributable to the "Tax
Indemnification Period" (as defined in Section 4.1 of this Agreement) (the
"Excluded Tax Liabilities");
(b) Any liabilities or obligations relating to employee
benefits or compensation, including, without limitation, any liabilities or
obligations under any employee benefit agreements, plans or other arrangements
of Rock-Tenn Partition or any of its Affiliates; or
(c) Any liabilities relating to the Excluded Assets (it
being understood that any Tax Liability relating to the Excluded Assets shall
be an Excluded Tax Liability for purposes of this Agreement).
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If the Company pays or performs any such Excluded Liability relating
to the Solid Fiber Partition Business, then Rock-Tenn and Rock-Tenn Partition,
jointly and severally, shall indemnify and hold harmless the Company for such
payment or performance and any costs or expenses incurred in connection
therewith.
ARTICLE 2.
REPRESENTATIONS AND WARRANTIES OF ROCK-TENN
AND ROCK-TENN PARTITION
Rock-Tenn and Rock-Tenn Partition hereby jointly and severally
represent to the Company as follows:
Section 2.1 Sufficiency of Assets. The Assets, together with (i)
the assets of Rock-Tenn Recycling, (ii) the assets to be made available to the
Company pursuant to the Trademark License Agreement and the Rock-Tenn Services
Agreement and (iii) the Excluded Assets, comprise all of the assets (or rights
with respect thereto) necessary for the Company to conduct the Solid Fiber
Partition Business as it is presently conducted. As a result of the delivery
to the Company of the Conveyance Instruments, all of the Assets (or rights with
respect thereto) are owned by the Company free and clear of all Encumbrances,
except Permitted Encumbrances and except as provided in Section 3.10 with
respect to the Real Property.
Section 2.2 Condition of Assets. The plants, structures and
equipment owned, operated or leased by Rock- Tenn Partition which are included
in the Assets are, to the knowledge of Rock-Tenn and Rock-Tenn Partition,
structurally sound and in good repair and operating condition, normal wear and
tear excepted, have been maintained in accordance with normal industry practice
and are, to the knowledge of Rock-Tenn and Rock-Tenn Partition, adequate for
the continued conduct of the Solid Fiber Partition Business as it is presently
conducted.
Section 2.3 Subject Property. With respect to the Subject
Property included in the Assets, (i) there are no pending or, to the knowledge
of Rock-Tenn and Rock-Tenn Partition, threatened condemnation actions, suits or
proceedings relating to the Subject Property or other matters adversely
affecting the present use, occupancy or value thereof; (ii) there are no
leases, subleases, licenses, concessions or other agreements, written or oral,
granting to any person the right of occupancy or use thereof or any part
thereof, other than the Real Property Leases and the Leases; (iii) there are
no outstanding options or rights of first refusal to purchase the Subject
Property or any right therein; and (iv) the Subject Property has water supply,
storm and sanitary sewer facilities, access to telephone, gas and electrical
connections, fire protection, drainage, means of ingress and egress to and from
public highways and, without limitation, other public utilities, all of which
are adequate for the continued conduct of the Solid Fiber Partition Business as
it is presently conducted.
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Section 2.4 Accounts Receivable. The Accounts Receivable
included in the Assets have arisen from bona fide transactions in the ordinary
course of the operation of the Solid Fiber Partition Business and, to the
knowledge of Rock-Tenn and Rock-Tenn Partition, are good and collectible in
accordance with their terms at the recorded amounts thereof, and are not
subject to any counterclaims or set-offs.
Section 2.5 Inventory. The Inventory included in the Assets
consist of items which are good and merchantable within normal trade tolerances
and of a quality and quantity presently usable or salable in the ordinary
course of business. To the knowledge of Rock-Tenn and Rock-Tenn Partition,
neither Rock-Tenn Partition nor any of its Affiliates is under any liability or
obligation with respect to the return of any Inventory in the possession of
wholesalers, distributors or other customers other than in the ordinary course
of business.
Section 2.6 Patents, Trademarks and Trade Names. Except as
described in Exhibit 2.6, the patents, trademarks, trade names, copyrights,
technology, know-how, processes, trade secrets, inventions, proprietary data
and other intangible property included in the Assets constitute all patents,
trademarks, trade names, copyrights, technology, know-how, processes, trade
secrets, inventions, proprietary data and other intangible property used in or
necessary for the continued conduct of the Solid Fiber Partition Business as it
is presently conducted. No claims have been asserted during the past year by
any person against the use of any such intangible property or any license
related thereto, and to the knowledge of Rock-Tenn and Rock-Tenn Partition,
there is no valid basis for any such claim.
Section 2.7 Real Property Leases and Leases.
(a) Rock-Tenn and Rock-Tenn Partition heretofore have
delivered to the Company a true and complete copy of each Real Property Lease
and Lease.
(b) Each of the Real Property Leases and the Leases is
valid and in full force and effect in accordance with its terms; no Lease has
been modified or amended in writing or otherwise; there are no existing
defaults or claims of default by Rock-Tenn Partition or any of its Affiliates
under any Real Property Lease or Lease or, to the knowledge of Rock-Tenn and
Rock-Tenn Partition, by any other party to any such Real Property Lease or
Lease. To the knowledge of Rock-Tenn and Rock-Tenn Partition, no event has
occurred which (whether with notice, lapse of time or both) would constitute a
default by Rock-Tenn Partition or any of its Affiliates under any Real Property
Lease or Lease or, to the knowledge of Rock-Tenn and Rock-Tenn Partition, by
any other party to any such Real Property Lease or Lease and, to the knowledge
of Rock-Tenn and Rock-Tenn Partition, no party to any such Real Property Lease
or Lease intends to cancel, terminate or exercise any option under any such
Real Property Lease or Lease.
Section 2.8 Contracts. Except as set forth in Exhibit 2.8, with
respect to the Solid Fiber Partition Business only:
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(a) Neither Rock-Tenn nor Rock-Tenn Partition is a party
to or subject to any "Material Contract" (as hereinafter defined) (which does
not terminate, or is not terminable by the Company or Rock-Tenn Partition or
their respective Affiliates without payment of any penalty or other amount to
any third party, prior to December 31, 1997);
(b) Neither Rock-Tenn nor Rock-Tenn Partition is a party
to or subject to any collective bargaining agreement that covers any employee
of Rock-Tenn Partition.
(c) Neither Rock-Tenn nor Rock-Tenn Partition is a party
to or subject to any Contract involving the sharing of profits;
(d) Neither Rock-Tenn nor Rock-Tenn Partition is a party
to or subject to any Material Contract for the sale of its products or any
sales agency, broker, distribution or similar contracts;
(e) Neither Rock-Tenn nor Rock-Tenn Partition is bound by
any Contract restricting it or otherwise limiting its freedom to compete in any
line of business or with any person, or from otherwise carrying on its business
anywhere in the world; and
(f) There are no persons holding powers of attorney from
Rock-Tenn Partition or any of its Affiliates.
Rock-Tenn and Rock-Tenn Partition heretofore have delivered to the Company a
true and correct copy of each of the Contracts. Each of the Contracts is valid
and is in full force and effect in accordance with its terms; no Contract has
been modified or amended in writing or otherwise; there are no outstanding
defaults or claims of default by Rock-Tenn Partition or any of its Affiliates
under any Contract or, to the knowledge of Rock-Tenn and Rock-Tenn Partition,
by any other party to any such Contract. To the knowledge of Rock-Tenn and
Rock-Tenn Partition, no event has occurred which (whether with notice, lapse of
time or both) would constitute a default by Rock-Tenn Partition or any of its
Affiliates under any Contract or, to the knowledge of Rock-Tenn and Rock-Tenn
Partition, by any other party to any such Contract and, to the knowledge of
Rock-Tenn and Rock-Tenn Partition, no party to any such Contract intends to
cancel, terminate or exercise any option under any such Contract. As used
herein, "Material Contract" shall mean any Contract with respect to the Solid
Fiber Partition Business that could reasonably be anticipated to involve sales
by Rock-Tenn Partition or any of its Affiliates in any twelve (12) month period
in excess of an aggregate of $50,000, or any Contract that by its terms
requires Rock-Tenn Partition or any of its Affiliates to make payments
thereunder in any twelve (12) month period in excess of an aggregate of
$50,000.
Section 2.9 Licenses.
(a) Rock-Tenn and Rock-Tenn Partition heretofore have
delivered to the Company a true and correct copy of each License.
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(b) Each of the Licenses is valid and in full force and
effect in accordance with its terms; no License has been modified or amended in
writing or otherwise; there are no existing defaults or claims of default by
Rock-Tenn Partition or any of its Affiliates under any License or, to the
knowledge of Rock-Tenn and Rock-Tenn Partition, by any other party to any such
License. To the knowledge of Rock-Tenn and Rock-Tenn Partition, no event has
occurred which (whether with notice, lapse of time or both) would constitute a
default by Rock-Tenn Partition or any of its Affiliates under any License or,
to the knowledge of Rock-Tenn and Rock-Tenn Partition, by any other party to
any such License and, to the knowledge of Rock-Tenn and Rock-Tenn Partition, no
party to any such License intends to cancel, terminate or exercise any option
under any such License.
Section 2.10 Assumed Liabilities. The Assumed Liabilities consist
only of liabilities incurred by Rock-Tenn and its Affiliates in the ordinary
course of conducting the Solid Fiber Partition Business.
Section 2.11 Permits. The Permits listed on Exhibit 2.11 are
current and in good standing and constitute all material licenses, permits,
registrations, authorizations, use agreements, orders or approvals of
Governmental Authorities (whether federal, state, local, municipal or foreign)
or third parties necessary for the continued conduct of the Solid Fiber
Partition Business as it is presently conducted.
Section 2.12 Litigation. Except as set forth in Exhibit 2.12,
there are no actions, suits or proceedings before or by any court or
Governmental Authority pending or, to the knowledge of Rock-Tenn and Rock-Tenn
Partition, threatened by or against or involving Rock-Tenn or any of its
Affiliates or any directors, officers or employees thereof in their capacity as
such, which question or challenge the validity of this Agreement, the Joint
Venture Agreement or any other Operative Agreement or any action taken or to be
taken by Rock-Tenn Partition or any of its Affiliates pursuant to this
Agreement or which would, if adversely decided, have a material adverse affect
on the Solid Fiber Partition Business or affect the ability of the Company to
continue to conduct the Solid Fiber Partition Business as it is presently
conducted.
Section 2.13 Compliance With Applicable Law. Except as and to the
extent set forth in Exhibit 2.13(a), with respect to the Solid Fiber Partition
Business only, the operations of Rock-Tenn and Rock-Tenn Partition have been
and are being conducted in material compliance with (i) all applicable Permits,
orders, writs, injunctions, judgments, decrees or awards of all courts and
Governmental Authorities, and (ii) to the knowledge of Rock-Tenn and Rock-Tenn
Partition, all laws (statutory or otherwise), ordinances, rules, regulations,
bylaws and codes of all Governmental Authorities, whether federal, state,
local or foreign (collectively, "Laws"), which are applicable to, and have a
material effect on, the Solid Fiber Partition Business. Except as and to the
extent set forth in Exhibit 2.13(b), neither Rock-Tenn nor Rock-Tenn Partition
has received any written notification of any asserted present failure to comply
with any Law, except for failures which will not, in the reasonable judgment of
Rock-Tenn and Rock-Tenn Partition, have any material adverse effect on the
Solid Fiber Partition Business. Rock-Tenn and Rock-Tenn Partition heretofore
have
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delivered to the Company a true and correct copy of each Permit, order, writ,
injunction, judgment, decree and award of any court or governmental or
regulatory agency applicable to the Solid Fiber Partition Business.
Section 2.14 Environmental Matters. Except as set forth in
Exhibit 2.14:
(a) Rock-Tenn Partition and its Affiliates possess, and
are in material compliance with, all permits, licenses and government
authorizations and have filed all material notices that are required under any
Environmental Law in respect of the Solid Fiber Partition Business of
Rock-Tenn, and Rock-Tenn and Rock-Tenn Partition are in material compliance
with all applicable limitations, restrictions, conditions, standards,
prohibitions, requirements, obligations, schedules and timetables contained in
those laws or contained in any law, regulation, code, plan, order, decree,
judgment, notice, permit or demand letter issued, entered, promulgated or
approved thereunder in respect of the Solid Fiber Partition Business of
Rock-Tenn;
(b) Neither Rock-Tenn Partition nor any of its Affiliates
have received notice of actual or threatened liability under "CERCLA" (as
hereinafter defined) or any similar state or local statute or ordinance from
any Governmental Authority or any third party, and, to the knowledge of
Rock-Tenn Partition and its Affiliates, there are no facts or circumstances
which would reasonably be expected to form the basis for the assertion of any
claim against Rock-Tenn Partition or its Affiliates under any Environmental
Laws in respect of the Solid Fiber Partition Business of Rock-Tenn, including,
without limitation, the Federal Comprehensive Environmental Response,
Compensation and Liability Act ("CERCLA") or any similar local, state or
foreign law with respect to any on-site or off-site location;
(c) Neither Rock-Tenn Partition nor any of its Affiliates
have entered into, agreed to or contemplates entering into any consent decree
or order in respect of the Solid Fiber Partition Business of Rock-Tenn, and
neither Rock-Tenn Partition nor any of its Affiliates are subject to any
judgment, decree or judicial or administrative order relating to compliance
with, or the cleanup of hazardous materials under, any applicable Environmental
Laws in respect of the Solid Fiber Partition Business of Rock-Tenn;
(d) To the knowledge of Rock-Tenn Partition and its
Affiliates, none of the Subject Property is subject to any, and neither
Rock-Tenn Partition nor any of its Affiliates is alleged to be in violation of
any, administrative or judicial proceeding pursuant to applicable Environmental
Laws or regulations;
(e) To the knowledge of Rock-Tenn Partition and its
Affiliates, none of the Subject Property is subject to any material claim,
obligation, liability, loss, damage or expense of whatever kind or nature,
contingent or otherwise, incurred or imposed or based upon any provision of any
Environmental Law and arising out of any act or omission of Rock-Tenn Partition
or its Affiliates or their respective employees, agents or representatives or
arising out of the ownership, use, control or operation by any of Rock-Tenn
Partition or its Affiliates of any plant, facility, site,
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area or property (including, without limitation, any plant, facility, site,
area or property currently or previously owned or leased by Rock-Tenn Partition
or its Affiliates) in respect of the Solid Fiber Partition Business of
Rock-Tenn, from which any Hazardous Materials were released into the
environment (the term "release" meaning any spilling, leaking, pumping,
pouring, emitting, emptying, discharging, injecting, escaping, leaching,
dumping or disposing into the environment, and the term "environment" meaning
any surface or ground water, drinking water supply, soil, surface or subsurface
strata or medium, or the ambient air);
(f) To the knowledge of Rock-Tenn Partition and its
Affiliates, none of the Subject Property contains any friable asbestos, PCBs or
underground storage tanks.
(g) Exhibit 2.14(g) sets forth the amount of all fines,
penalties or assessments paid within the last five years by Rock-Tenn Partition
and its Affiliates with respect to environmental matters relating to the Solid
Fiber Partition Business of Rock-Tenn, including the date of payment and the
basis for the assertions of liability; and
Section 2.15 Customers, etc. Except as set forth in Exhibit 2.15,
since December 31, 1996, there has not been any adverse change in the business
relationship of Rock-Tenn Partition or any of its Affiliates with any customer,
distributor or supplier which is material to the Solid Fiber Partition
Business.
Section 2.16 No Brokers. Neither Rock-Tenn nor Rock-Tenn
Partition has incurred or will incur any broker's, finder's, investment banking
or similar fee in connection with the transactions contemplated by this
Agreement, and neither Rock-Tenn nor Rock-Tenn Partition has made any statement
or representation that could form the basis for any claim for any such fee.
ARTICLE 3.
COVENANTS
Section 3.1 Indemnification.
(a) Except as provided herein, the remedies provided in
Section 7.1 of the Joint Venture Agreement, and the enforcement of such
remedies pursuant to Section 9.1 of the Joint Venture Agreement, shall
constitute the sole and exclusive remedies for recovery by a Party against the
other for any breach of any representation, warranty, covenant or agreement
contained in this Agreement by such other Party.
(b) All representations, warranties, covenants and
agreements contained herein shall survive without limitation as to time,
subject to Applicable Law (including any applicable statute of limitations),
except that the representations in Section 2.14 shall survive without
limitation as to time and without regard to any limitation as to time under
Applicable Law.
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(c) In no event shall either Party be liable for
consequential, special, incidental or punitive losses, damages or expenses
(including lost profits and opportunity costs).
Section 3.2 Tax Indemnification and Other Tax Matters.
(a) Notwithstanding Section 3.1, Rock-Tenn and Rock-Tenn
Partition jointly and severally shall indemnify and hold harmless each
"Indemnitee" (as defined in Section 4.1 of this Agreement) from:
(i) Any liability for Tax of Rock-Tenn and Rock-Tenn
Partition which is incurred in or attributable to the Tax
Indemnification Period; and
(ii) Any liability, cost, expense (including, without
limitation, reasonable expenses of investigation and reasonable
attorneys' fees and expenses), loss, damages, assessment, settlement,
or judgment arising out of or incident to the imposition, assessment
or assertion of any liability described in subclause (i) hereof,
including those incurred in the contest in good faith of appropriate
proceedings for the imposition, assessment or assertion of any Tax
(subject to the provisions of Section 3.2(e) hereof), and any
liability of any Indemnitee by reason of being a transferee of the
Assets of Rock-Tenn and Rock-Tenn Partition which is incurred or
attributable to the Tax Indemnification Period.
The sum of (i) and (ii) above is referred to herein as a "Tax Loss."
(b) In the case of any Taxes that are imposed, assessed
or asserted on a periodic basis and are payable with respect to the Solid Fiber
Partition Business or the Assets for a taxable period that includes (but does
not end on) the Contribution Date, the portion of such Taxes related to the
portion of such taxable period ending on the Contribution Date and the portion
of such Taxes that is incurred in or attributable to the Pre-Contribution Tax
Period shall (i) in the case of any Tax other than a Tax imposed on, measured
by, or related to revenues, gross or net income, receipts, gains or
compensation from the operation of the Solid Fiber Partition Business, be
deemed to be the amount of such Tax for the entire taxable period multiplied by
a fraction, the numerator of which is the number of days in the
Pre-Contribution Tax Period and the denominator of which is the number of days
in the entire taxable period, and (ii) in the case of any Tax imposed on,
measured by, or related to revenues, gross or net income, receipts, gains or
compensation from the operation of the Solid Fiber Partition Business, be
deemed equal to the amount of such Tax for the entire taxable period multiplied
by a fraction, the numerator of which is the revenues, gross or net income,
receipts, gains or compensation, as the case may be, attributable to the Tax
Indemnification Period and the denominator of which is the total amount of
revenues, gross or net income, receipts, gains or compensation for the entire
taxable period.
(c) Upon the incurrence by any Indemnitee of any Tax Loss
or any Loss relating to an "Excluded Tax Liability" (as defined in Section
1.5(a) hereof), Rock-Tenn and Rock-Tenn Partition jointly and severally shall
discharge its obligations to indemnify such Indemnitee against
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such Tax Loss or Loss by paying to the Indemnitee in cash an amount equal to
the amount of such Tax Loss or Loss. Any payment pursuant to this Section
3.2(c) relating to an Excluded Tax Liability shall be delivered no later than
five (5) days prior to the first date on which such Indemnitee is required
(without incurring interest or penalties) under applicable Law to make any
payment with respect to or as a result of such Tax Loss or Loss. The Company
shall deliver to Rock-Tenn and Rock-Tenn Partition, upon the incurrence of a
Tax Loss or any Loss relating to an Excluded Tax Liability by any Indemnitee,
written notice describing such Tax Loss or Loss and stating the amount thereof,
the amount of the indemnity payment requested, and the first date on which such
Indemnitee is required (without incurring interest or penalties) to make any
payment with respect to or as a result of such Tax Loss or Loss. Any payment
required under this Section 3.2(c) or any Loss relating to an Excluded Tax
Liability and not made when due shall bear interest at the federal short-term
rate under Section 1274 of the Code for each day until paid.
(d) If any Indemnitee receives a refund or reduces its
Tax Liability by using a credit of any Tax in respect of the Tax
Indemnification Period or any Excluded Tax Liability, such Indemnitee shall pay
to Rock-Tenn and Rock-Tenn Partition the amount of such refund or credit within
thirty (30) days of the date on which such refund or credit is received or used
by such Indemnitee. The Company agrees that, upon the request of Rock-Tenn or
Rock-Tenn Partition, the Company shall file, or cause an Indemnitee to file, a
claim for refund in such form as Rock-Tenn or Rock-Tenn Partition may
reasonably request of any Tax in respect of the Tax Indemnification Period or
any Excluded Tax Liability, provided that the Company or an Indemnitee shall
not be required to file such a claim if such claim would adversely affect the
Tax liability of the Company or any of its Affiliates. The Company agrees that
it will cooperate, and cause each Indemnitee to cooperate, fully with Rock-Tenn
and Rock-Tenn Partition and its counsel in connection therewith.
(e) (i) If any adjustments shall be made to any Tax
return relating to Rock-Tenn or Rock-Tenn Partition in respect of the Solid
Fiber Partition Business or the Assets for any Pre-Contribution Tax Period
which result in any Tax detriment to Rock-Tenn or any Affiliate thereof with
respect to such period and any Tax benefit to the Company or any Affiliate
thereof for any Taxable period ending after the Contribution Date, Rock-Tenn
shall be entitled to the benefit of such Tax benefit, and the Company shall pay
to Rock-Tenn and Rock-Tenn Partition the amount of such Tax benefit at such
time or times as and to the extent that the Company or any Affiliate thereof
actually realizes such benefit through a refund of Tax or reduction in the
amount of Tax which the Company or any Affiliate thereof otherwise would have
had to pay if such adjustment had not been made.
(ii) If any adjustments (including any adjustment
arising by reason of a refund claim) shall be made to any Tax return relating
to the Company for any Taxable period after the Contribution Date which result
in any Tax detriment to the Company or any Affiliate thereof with respect to
such period and any Tax benefit to Rock-Tenn or any Affiliate thereof for any
Pre-Contribution Tax Period, the Company shall be entitled to the benefit of
such Tax benefit, and Rock-Tenn and Rock-Tenn Partition shall be obligated
jointly and severally to pay to the Company the amount of such Tax benefit at
such time or times as and to the extent that Rock-Tenn or any
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Affiliate thereof actually realizes such benefit through a refund of Tax or
reduction in the amount of Tax which Rock-Tenn or any such Affiliate otherwise
would have had to pay if such adjustment had not been made.
(f) If the Company or any Affiliate thereof realizes a
Tax benefit in a Taxable period as described in Section 3.2(e) ending after the
Contribution Date with respect to a Tax Loss through a refund of Tax or
reduction in the amount of Tax which the Company or any Affiliate thereof
otherwise would have to pay then, (i) if such benefit is actually realized
prior to the indemnity payment being made, the amount of such benefit shall
reduce the amount of the indemnity payment otherwise required to be made
hereunder, and (ii) if such benefit is actually realized subsequent to the
indemnity payment or contribution being made, the Company or such Affiliate
shall pay the amount of such benefit to Rock-Tenn and Rock-Tenn Partition at
such time as such benefit is actually realized.
(g) With respect to liability for Tax of Rock-Tenn or any
of its Affiliates incurred in or attributable to the Pre-Contribution Tax
Period in respect of any item which gave rise to an amount included in the
provision for deferred income taxes on Rock-Tenn's consolidated financial
statements as of the Contribution Date, Rock-Tenn and Rock-Tenn Partition
shall be obligated jointly and severally to pay to an Indemnitee an amount
equal to the amount of such Tax liability, minus the present value of (i) any
deduction, amortization, exclusion from income, or tax credit allowable to such
Indemnitee which would not be allowable but for an adjustment with respect to
which Rock-Tenn and Rock-Tenn Partition are obligated to indemnify such
Indemnitee ("the Tax Benefit"), multiplied (ii) by the maximum applicable tax
rate in effect at such time or, in the case of a credit, by 100 percent (the
product of (i) and (ii) in the preceding clause shall be referred to as the
"Hypothetical Tax Benefit"). The present value of the Hypothetical Tax Benefit
shall be determined based on the federal mid-term rate under Section 1274 of
the Code in effect at the time the indemnification payment is made, compounded
annually for the number of years between the year to which the adjustment
relates and the year on which such Tax Benefit would be allowable under Law
whether or not the Indemnitee could derive any actual Tax savings as a result
thereof.
Section 3.3 Control of Litigation.
(a) The Indemnitees agree to give prompt notice to the
Indemnitors of the assertion of any claim and the commencement of any suit,
action or proceeding in respect of which indemnity may be sought under Section
3 of this Agreement and of any Loss in respect of which indemnity may be sought
under Section 3 of this Agreement (specifying with reasonable particularity the
basis therefor) and will give the Indemnitors such information with respect
thereto as the Indemnitors may reasonably request. The Indemnitors may, at
their own expense, participate in and, upon notice to such Indemnitee, assume
the defense of any such suit, action or proceeding; provided that the
Indemnitors' counsel is reasonably satisfactory to such Indemnitee. The
Indemnitors shall thereafter consult with such Indemnitee upon such
Indemnitee's reasonable request for such consultation from time to time with
respect to such suit, action or proceeding, and the Indemnitors shall not,
without such Indemnitee's consent, which consent shall not be unreasonably
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withheld, settle or compromise any such suit, action or claim. If the
Indemnitors assume such defense, such Indemnitees shall have the right (but not
the duty) to participate in the defense thereof and to employ counsel, at their
own expense, separate from the counsel employed by the Indemnitors. For any
period during which the Indemnitors have not assumed the defense thereof, the
Indemnitors shall be liable for the fees and expenses of counsel employed by
any Indemnitee; provided, however, that the Indemnitors shall not be liable for
the fees or expenses of more than one counsel employed for all Indemnitees. If
the Indemnitees assume the defense thereof, the Indemnitees shall thereafter
consult with the Indemnitors upon the Indemnitors' reasonable request for such
consultation from time to time with respect to such suit, action or proceeding
and the Indemnitees shall not, without the Indemnitors' consent, which consent
shall not be unreasonably withheld, settle or compromise any such suit, action
or claim. Whether or not the Indemnitors choose to defend or prosecute any
claim, all of the parties hereto shall cooperate in the defense or prosecution
thereof.
(b) The Indemnitors shall not be liable under Section
3.2(a) hereof with respect to any Loss resulting from a claim or demand the
defense of which the Indemnitors were not offered the opportunity to assume as
provided under Section 3.2(a) hereof to the extent the Indemnitors' liability
under Section 3 hereof is prejudiced as a result thereof. No investigation by
any Indemnitee prior to the Contribution Date shall relieve any Indemnitor of
any liability hereunder.
Section 3.4 Transfer Taxes. Rock-Tenn and Rock-Tenn Partition
shall be obligated jointly and severally to pay, or cause to be paid, all Taxes
or recording fees imposed on any transfers of the Assets contemplated by this
Agreement and all sales and use Taxes applicable to transfers by Rock-Tenn or
Rock-Tenn Partition of the Assets contemplated by this Agreement.
Section 3.5 Cooperation on Tax Matters. Rock-Tenn, Rock-Tenn
Partition and the Company shall cooperate fully, as and to the extent
reasonably requested by the other party, in connection with any audit,
litigation or other proceeding with respect to Taxes. Such cooperation shall
include the retention and (upon the other party's request) the provision of
records and information which are reasonably relevant to any such audit,
litigation or other proceeding and making employees available on a mutually
convenient basis to provide additional information and explanation of any
material provided hereunder. The Company, Rock-Tenn and Rock-Tenn Partition
agree (a) to retain all books and records which are relevant to the
determination of the Tax liabilities relating to the Solid Fiber Partition
Business or the Assets in respect of any Pre-Contribution Tax Period until the
expiration of the applicable statute of limitations and to abide by all record
retention agreements entered into with any Taxing Authority, and (b) to give
the other party reasonable written notice prior to destroying or discarding any
such books and records and, if the other party so requests, the Company (on the
one hand) or Rock-Tenn or Rock-Tenn Partition (on the other) shall allow the
other party to take possession of such books and records.
Section 3.6 Elections. Without the prior written consent of the
Company, neither Rock-Tenn nor any Affiliate of Rock-Tenn shall surrender any
right to claim a refund of Taxes, consent to any extension or waiver of the
limitation period applicable to an Tax claim or assessment relating
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to Rock-Tenn or any such Affiliate take any other action, or omit to take any
action, if any such election, adoption, change, amendment, agreement,
settlement, surrender, consent or other action or omission had (or will have)
the effect of increasing the Tax liability of the Company or any Affiliate of
the Company.
Section 3.7 Reserved.
Section 3.8 Tax Returns of Rock-Tenn. With respect to any Tax
return required to be filed by the Company for its Taxable period which
includes (but does not end on) the Contribution Date, the Company shall provide
Rock-Tenn and its authorized representatives with copies of such completed Tax
return and a statement (with which the Company will supply supporting schedules
and information) setting forth the amount of Tax shown on such Tax return that
is allocable to Rock-Tenn pursuant to Section 3.2 hereof (the "Statement") at
least forty-five (45) business days prior to the due date (including any
extension thereof) for the filing of such Tax return. Reasonable costs, fees
and expenses relating to the preparation of such Tax return shall be borne
equally by Rock-Tenn and the Company. Rock-Tenn shall have the right at its
own expense to review such Tax return and Statement prior to the filing of such
Tax return. If Rock-Tenn, within ten (10) business days after delivery of the
Statement, notifies the Company in writing that it objects to any items on such
Statement, specifying with particularity any such item and stating the specific
factual or legal basis for any such objection, the Company and Rock-Tenn shall
resolve in good faith and use their best efforts to resolve such items. If the
dispute is not resolved within twenty (20) days after receipt by the Company of
such notice, the disputed items shall be resolved pursuant to Section 3.9
hereof and such Tax return shall be filed consistently therewith. Not later
than the later of five (5) days before the due date for payment of Taxes with
respect to such Tax return or, in the event of a dispute, five (5) days after
notice to Rock-Tenn of the resolution thereof, Rock-Tenn shall contribute to
the Company or the Company shall distribute to Rock-Tenn, as the case may be,
an amount equal to the difference between (a) the Taxes shown on the Statement
as being allocable to Rock-Tenn pursuant to this Section 3.8 or in such notice
(as the case may be) and (b) any payment made by Rock-Tenn or any Affiliate
thereof prior to the Contribution Date in respect of such Taxes.
Section 3.9 Certain Disputes. To the extent provided in Section
3.8 hereof, disputes arising under such Section and not resolved by mutual
agreement as stated therein shall be resolved by a nationally recognized
accounting firm with no affiliation or relationship whatsoever with the Company
or Rock-Tenn or any of their respective Affiliates (the "Accounting Referee"),
chosen and mutually acceptable to both the Company and Rock-Tenn within five
(5) days of the date on which the need to choose the Accounting Referee arises.
The Accounting Referee shall resolve any disputed items within thirty (30) days
of having the item referred to it pursuant to such procedures as it may
require. The costs, fees and expenses of the Accounting Referee shall be borne
equally by the Company and Rock-Tenn.
Section 3.10 Covenants Regarding Certain Assets.
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(a) Notwithstanding anything contained herein to the
contrary, this Agreement does not constitute an agreement by Rock-Tenn or
Rock-Tenn Partition to contribute to the Company any Asset to the extent that
such contribution would violate Applicable Law, require the consent of a third
party or Governmental Authority which has not been obtained as of the date
hereof, or require completion of ministerial formalities to perfect the
transfer of title to such Asset to the Company until, in any such event, such
time as such contribution would not violate Applicable Law or such third party
consent or consent of such Governmental Authority shall have been obtained or
such ministerial formality shall have been completed. Following the date
hereof, Rock-Tenn, Rock-Tenn Partition and the Company shall cooperate with
each other to obtain any necessary third party consent or consent of
Governmental Authority or to complete any required ministerial formalities at
the earliest practicable date. Until any such necessary consent has been
obtained or any such required ministerial formalities have been completed,
Rock-Tenn shall take all appropriate steps to provide the Company with the
benefits of the Assets.
(b) From and after the date hereof, Rock-Tenn and
Rock-Tenn Partition may notify the Company in writing that an asset which was
not intended to be included in the Assets was mistakenly transferred to the
Company pursuant to Section 1.1 hereof. The Company shall, within thirty (30)
days following the receipt of such notice, take such steps as may be reasonably
necessary to transfer such asset to Rock-Tenn or Rock-Tenn Partition (as the
case may be), unless, prior to the end of such thirty (30)-day period, the
Company delivers a notice to Rock-Tenn, Rock-Tenn Partition stating that such
asset should have been included in the Assets that were transferred to the
Company on the date hereof. If such a notice is delivered, Rock-Tenn,
Rock-Tenn Partition and the Company shall discuss in good faith the appropriate
disposition of the matter. It shall not be deemed a breach of this Agreement
for Rock-Tenn, Rock-Tenn Partition to fail or otherwise make available any such
asset in dispute pursuant to this Section, unless Rock-Tenn or Rock-Tenn
Partition and the Company shall have failed to come to an agreement as to the
appropriate disposition of such matter within ninety (90) days following the
date hereof. The reasonable out-of-pocket expenses incurred by the Company in
connection with any such disputed asset shall be reimbursed to the Company by
Rock-Tenn and Rock-Tenn Partition.
(c) As promptly as practicable after the date hereof, but
in any event within ninety (90) days after the date hereof, Rock-Tenn and
Rock-Tenn Partition shall deliver to the Company with respect to each of those
parcels of Real Property described on Exhibit 1.1(a)(i) hereto and identified
as being located in Indiana, Texas, California and Maine (i) a current title
report and (ii) a new or recent, as reasonably determined by the Company,
survey of each such parcel of the Real Property prepared by a licensed surveyor
reasonably acceptable to the Company, which survey shall contain a metes and
bounds description of the Real Property. The descriptions of the parcels of
Real Property set forth in such title reports and surveys shall conform in all
material respects with the descriptions attached hereto as Exhibit 1.1(a)(i)
(or with respect to the Real Property located in Xxxxx, Indiana with the sketch
attached hereto as Exhibit 3.10(c)), subject only to such changes in the
boundaries of the Real Property and to such encumbrances such as easements or
rights of way as do not materially interfere with the conduct of the Solid
Fiber Partition Business on the Real Property as it is presently conducted.
Promptly after delivery of such title reports and surveys, Rock-
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Tenn and Rock-Tenn Partition shall deliver to the Company such Conveyance
Instruments as are necessary to convey the Real Property to the Company free and
clear of all Encumbrances, except Permitted Encumbrances.
ARTICLE 4.
MISCELLANEOUS PROVISIONS
Section 4.1 Definitions. Capitalized terms used herein and not
otherwise defined herein shall have the meanings ascribed thereto in the Joint
Venture Agreement. As used in this Agreement, the following terms have the
meanings specified below:
"Affiliate" with respect to any person shall mean (i) any
other person directly, or indirectly through one or more intermediaries,
controlling, controlled by or under common control with such person; (ii) any
officer, director, partner, employer or direct or indirect beneficial owner of
any 10% or greater equity or voting interest of such person; or (iii) any other
person for which a person described in clause (ii) acts in any such capacity.
"Code" means the Internal Revenue Code of 1986, as amended.
"Indemnitee" means the Company and the Members other than
Rock-Tenn, Rock-Tenn Partition and their respective Indemnitee Affiliates,
officers, directors and employees.
"Indemnitee Affiliate" means the employees, successors and
assigns of each Indemnitee and, with respect to each corporate Indemnitee, its
directors, officers and shareholders.
"Parties" shall mean Rock-Tenn, Rock-Tenn Partition and the
Company, and upon any Transfer of a Venture Interest pursuant to Article 10 of
the Operating Agreement, such permitted transferee.
"Pre-Contribution Tax Period" means any Tax Period ending on
or before the close of business on the Contribution Date or, in the case of any
Tax period which includes, but does not end on, the Contribution Date, the
portion of such period up to and including the Contribution Date.
"Tax" means any net income, alternative or add-on minimum tax,
gross income, gross receipts, sales, use, ad valorem, franchise, capital,
paid-up capital, profits, greenmail, license, withholding, payroll, employment,
excise, severance, stamp, occupation, premium, property, environmental or
windfall profit tax, custom, duty or other tax, governmental fee or other like
assessment or charge of any kind whatsoever, together with any interest or any
penalty, addition to tax or additional amount imposed by any Governmental
Authority (a "Taxing Authority") responsible for the imposition of any such tax
(domestic or foreign).
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"Tax Asset" means any net operating loss or other Tax loss,
net capital loss, investment Tax credit, foreign Tax credit, charitable
deduction or any other credit or Tax attribute of Rock-Tenn or any of its
Affiliates which could reduce Taxes (including, without limitation, deductions
and credits related to alternative minimum Taxes) with respect to the Solid
Fiber Partition Business or the Assets.
"Tax Indemnification Period" means (i) any Pre-Contribution
Tax Period and (ii) with respect to any Tax described in clause (ii) of the
definition of "Tax" in this Section 4.1, the survival period of the
indemnification obligation under the applicable contract.
Section 4.2 Notices. Except as expressly provided herein,
notices and other communications provided for herein shall be in writing and
shall be delivered by hand or courier, service, mail or sent by telex, graphics
scanning or other telegraphic communications equipment of the sending Party, as
follows:
If to Rock-Tenn or Rock-Tenn Company
Rock-Tenn Partition: 000 Xxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attn: Chief Financial Officer
Tel: 000-000-0000
Fax: 000-000-0000
with a copy to: Rock-Tenn Company
000 Xxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attn: General Counsel
Tel: 000-000-0000
Fax: 000-000-0000
If to the Company: RTS Packaging, LLC
000X Xxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attn: Chief Executive Officer
Tel: 800/000-0000
Fax: 770/000-0000
with a copy to: Sonoco Products Company
Xxx Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attn: President
Tel: 000-000-0000
Fax: 000-000-0000
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or to such other address or attention of such other Person as such Party shall
advise the other Parties in writing. All notices and other communications
given to the Parties hereto and accordance with the provisions of this
Agreement shall be deemed to have been given on the date of receipt.
Communications sent by telex, graphics scanning or other telegraphic
communications equipment shall be deemed to have been received when
confirmation of their delivery is received by the sender.
Section 4.3 Applicable Law. The validity, construction and
performance of this Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware, regardless of the laws that might
otherwise govern under applicable principles of conflicts of law.
Section 4.4 Severability. If any provision of this Agreement
shall be held to be illegal, invalid or unenforceable, the Parties agree that
such provision will be enforced to the maximum extent permissible so as to
effect the intent of the Parties, and the validity, legality and enforceability
of the remaining provisions of this Agreement shall not in any way be affected
or impaired thereby. If necessary to affect the intent of the Parties, the
Parties will negotiate in good faith to amend this Agreement to replace the
unenforceable language with enforceable language which as closely as possible
reflects such intent.
Section 4.5 Amendments. This Agreement may be modified only by a
written amendment signed by all of the Parties.
Section 4.6 Waiver. The waiver by a Party of any instance of any
other Party's non-compliance with any obligation or responsibility herein shall
be in writing and signed by the waiving Party and shall not be deemed a waiver
of other instances of such other Party's non-compliance.
Section 4.7 Counterparts. This Agreement may be executed in one
or more counterparts, all of which shall be considered one and the same
agreement, and shall become effective when one or more counterparts shall have
been signed by each Party and delivered to the other Parties.
Section 4.8 Entire Agreement. The provisions of this Agreement
set forth the entire agreement and understanding among the Parties as to the
subject matter hereof and supersede all prior agreements, oral or written, and
all other prior communications between the Parties relating to the subject
matter hereof, other than those written agreements executed and delivered
contemporaneously herewith.
Section 4.9 No Assignment.
(a) Except as specifically provided herein, no Party
shall, directly or indirectly, assign this Agreement or any of its rights or
obligations hereunder without the prior written consent of the other Parties.
(b) Any attempted assignment of this Agreement in
violation of this Section 4.9 shall be void and of no effect.
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(c) This Agreement shall be binding upon, inure to the
benefit of and be enforceable by the Parties and their respective successors
and permitted assigns.
Section 4.10 Expenses. Except as otherwise provided in this
Agreement, all costs and expenses (including the fees and expenses of any
attorneys, accountants, investment bankers, brokers, finders or other
intermediaries) incurred in connection with this Agreement and the other
Operative Agreements and the consummation of the transactions contemplated by
Article 5 of the Joint Venture Agreement to be consummated on the date hereof
shall be paid by the Party incurring such cost or expense.
Section 4.11 Further Assurances. From time to time, at the
request of Rock-Tenn or Rock-Tenn Partition or the Company and without further
consideration, each party, at its own expense, will execute and deliver such
other documents, and take such other action, as Rock-Tenn or Rock-Tenn
Partition or the Company may reasonably request in order to consummate more
effectively the transactions contemplated hereby and to vest in the Company
good and marketable title to the Assets (or rights with respect thereto).
Section 4.12 Publicity. No Party will issue any press release or
make any other public announcement relating to the existence of this Agreement
or the transactions contemplated by this Agreement or any of the Operative
Agreements, except that a Party may make any disclosure required to be made
under Applicable Law or the rules of the New York Stock Exchange or any other
applicable stock exchange if such Party determines in good faith that it is
necessary to do so and gives prior notice to the other Parties.
Section 4.13 Construction. This Agreement shall be interpreted
and construed in accordance with Section 1.3 of the Joint Venture Agreement.
Section 4.14 Specific Performance. Each of the Parties
acknowledge that money damages would not be a sufficient remedy for any breach
of this Agreement and that irreparable harm would result if this Agreement were
not specifically enforced. Therefore, the rights and obligations of the
Parties under this Agreement shall be enforceable by a decree of specific
performance issued by any court of competent jurisdiction, and appropriate
injunctive relief may be applied for and granted in connection therewith. A
Party's right to specific performance shall be in addition to all other legal
or equitable remedies available to such Party.
Section 4.15 Headings. The article and section headings contained
in this Agreement are for reference purposes only and shall not affect in any
way the meaning or interpretation of this Agreement.
Section 4.16 Inconsistency or Conflict. In the event of any
inconsistency or conflict between any provision of this Agreement and any
provision of the Operating Agreement, the provision of the Operating Agreement
shall govern.
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Section 4.17 Exhibits. All Exhibits attached hereto are hereby
incorporated in and made a part as if set forth in full herein.
Section 4.18 No Third-Party Beneficiaries. This Agreement is for
the sole benefit of the Parties and their permitted assigns, and nothing herein
expressed or implied shall give or be construed to give to any Person, other
than the Parties and such assigns, any legal or equitable rights hereunder.
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
ROCK-TENN COMPANY
By:
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Name:
-----------------------------
Title:
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ROCK-TENN PARTITION COMPANY
By:
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Name:
-----------------------------
Title:
----------------------------
RTS PACKAGING, LLC
By:
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Name:
-----------------------------
Title:
----------------------------
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