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Exhibit 10-117
PURCHASE AND SALE AGREEMENT
BY AND AMONG
SPC (BERMUDA) LTD.
SPC ASIA, LTD.
AND
WESTVACO WORLDWIDE DISTRIBUTION S.A.
OCTOBER 16, 1998
REDACTED
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PURCHASE AND SALE AGREEMENT
PURCHASE AND SALE AGREEMENT dated as of the 16th day of
October, 1998 by and among SPC (Bermuda) Ltd., a Bermuda corporation and SPC
Asia, Ltd., a Bermuda corporation (together, "SPC"), each of which is a
wholly-owned subsidiary of Shorewood Packaging Corporation., a Delaware
corporation ("Shorewood"), Shorewood, Westvaco Worldwide Distribution S.A., a
Swiss corporation ("Purchaser") and a wholly-owned subsidiary of Westvaco Corp.,
a Delaware corporation ("Westvaco"), and Westvaco.
W I T N E S S E T H:
WHEREAS, Shorewood Asia Ventures, Ltd. is a private company
limited by shares organized under the laws of Bermuda ("Shorewood Asia");
Shorewood Packaging China Ventures Ltd. is a private company limited by shares
organized under the Laws of the Republic of Mauritius ("Shorewood Mauritius");
Shorewood Packaging (GUANGZHOU) Co., Ltd., is a company established in the
People's Republic of China ("Shorewood Guangzhou"); and SPC is the beneficial
and record owner of all of the issued and outstanding equity securities of
Shorewood Asia;
WHEREAS, Shorewood Guangzhou was formed to engage in the
business (the "China Business") of operating and maintaining a manufacturing
facility for paperboard folding carton packaging located in Guangzhou, Guangdong
Province, China (the "Facility"); the Facility is presently under construction,
and is scheduled to become operational in the Fall of 1998;
WHEREAS, on or prior to the Closing Date (as hereinafter
defined), Shorewood expects to cause (i) Shorewood Asia to become the sole
beneficial and record holder of all of the issued and outstanding equity
securities of Shorewood Mauritius and (ii) Shorewood Mauritius to become the
sole beneficial and record holder of all of the issued and outstanding equity
securities of
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Shorewood Guangzhou (the transaction described in clause (ii) to
be referred to herein as the "Guangzhou Ownership Change" and the transactions
described in clauses (i) and (ii) to be referred to herein jointly as the
"Corporate Restructuring");
WHEREAS, Purchaser wishes to purchase from SPC, and SPC wishes
to sell to Purchaser, that number of shares of capital stock of Shorewood Asia
(the "Shares") which shall, as at the Closing Date, represent in the aggregate
forty-five percent (45%) of the issued and outstanding shares of capital stock
of Shorewood Asia, on the terms and conditions set forth herein;
WHEREAS, Shorewood has advanced or loaned, or has committed to
advance or loan, various monies to Shorewood Guangzhou (such loans to be herein
referenced to as the "Shorewood Loans") which Shorewood expects to document
through a Shareholder's Expense Reimbursement Contract, a Shareholder's Term
Loan Facility Contract and a Shareholder's Revolving Loan Facility Contract,
each in substantially the form previously delivered to Purchaser (each, a "Loan
Document" and, together, the "Loan Documents");
WHEREAS, on or prior to the Closing Date, all rights under the
Loan Documents shall have been assigned to, and all obligations under the Loan
Documents shall have been assumed by, Shorewood Mauritius (said transaction, the
"Assignment and Assumption");
WHEREAS, and
WHEREAS, the parties hereto have mutually determined and
agreed that the Chinese Authority Approval (as defined herein) is required to
implement the Guangzhou Ownership Change and the , as described in
this Agreement.
1. PURCHASE AND SALE OF SHARES
1.1 Purchase Price. The purchase price (the "Purchase Price")
to be paid by Purchaser for the Shares is that amount which, as at the Closing
Date, is equal to forty-five percent
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(45%) of Shorewood's Project Costs (as defined in Section 9) to date plus US $5
Million; but in no event shall the Purchase Price exceed US $25.25 Million. The
Purchase Price shall be paid, and Westvaco shall cause Purchaser to pay the
Purchase Price, to SPC at the Closing in United States Dollars by wire transfer
of immediately available funds to an account(s) designated by Shorewood.
1.2 Additional Payments. (a) At the Closing, the Purchaser
shall, and Westvaco shall cause the Purchaser to, pay to SPC an amount equal to
forty-five percent (45%) of the Shorewood Override Contributions (as defined in
Section 9), if any, in United States Dollars by wire transfer of immediately
available funds to an account or accounts designated by Shorewood.
(b) Purchaser shall have no obligation to reimburse SPC or
Shorewood in respect of amounts loaned or contributed by Shorewood, directly or
indirectly through the other Shorewood Entities, prior to the Closing in
connection with the China Business which are neither Shorewood Override
Contributions nor Shorewood Project Costs.
(c) Notwithstanding anything to the contrary contained in this
Article 1, Purchaser may credit against the amounts otherwise payable by it at
Closing pursuant to this Section 1 an amount equal to forty-five percent (45%)
of the Net Operating Gains (as defined in Section 9), if any, of the Shorewood
China Entities (as defined in Section 3.3).
(d) The amounts to be paid to or credited against the various
parties at Closing shall be based upon the amounts of the Shorewood Project
Costs as of the Closing Date, Shorewood Override Contributions and Net Operating
Gains (Losses) shown in the Officer's Certificate, subject to adjustment after
the Closing pursuant to paragraph (e) below. Shorewood shall deliver to Westvaco
no later than ten (10) business days prior to the Closing a good faith estimate
of the amounts of the Shorewood Project Costs as of the Closing Date, Shorewood
Override Contributions and Net Operating Gains (Losses) which will be shown in
the Officer's
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Certificate (the "Estimated Officer's Certificate"). The amounts of the
Shorewood Project Costs as of the Closing Date, Shorewood Override Contributions
and Net Operating Gains (Losses) shown in the Officer's Certificate shall be
deemed to be acceptable to and shall become final and binding on the parties,
except to the extent that Westvaco shall have made a specific written objection
thereto as provided in paragraph (e) below.
(e) If Westvaco disagrees with the amounts set forth in the
Officer's Certificate, Westvaco shall notify Shorewood in writing of such
disagreements within thirty (30) days after the Closing Date, which written
notice shall specify the nature of the dispute and shall provide in reasonable
detail the facts or accounting principles upon which such dispute is based.
Thereafter, Westvaco and Shorewood shall use their best efforts to resolve such
disagreement with respect to the Officer's Certificate. If Westvaco and
Shorewood are unable to resolve any disagreement within twenty (20) days after
Shorewood's receipt of such notice of disagreement, then either Westvaco or
Shorewood (the "Submitting Party") may submit such disagreement to a certified
independent public accounting firm that is nationally recognized (the
"Independent Accounting Firm") and mutually agreeable to Westvaco and Shorewood
upon notice thereof (an "Arbitration Notice") to the other party. If Westvaco
and Shorewood cannot agree upon such election within ten (10) business days
after the Submitting Party's Arbitration Notice is received by the other party,
the Independent Accounting Firm shall be selected by lot from among the other
national public accounting firms in the United States, excluding Deloitte &
Touche LLP and PricewaterhouseCoopers LLP and their respective Affiliates. The
Independent Accounting Firm will be instructed to use its best efforts to render
its decision as to all items in dispute within thirty (30) days of submission.
The decision of the Independent Accounting Firm shall be final and binding upon
all parties hereto and the amounts paid by Purchaser at the Closing
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shall be adjusted, either upward or downward, and thus Purchaser shall either
pay to SPC additional consideration or receive from SPC a refund, in accordance
with any upward or downward adjustment in the amount of the Shorewood Project
Costs as of the Closing Date, Shorewood Override Contributions or Net Operating
Gains (Losses) as determined by the Independent Accounting Firm. Each party
shall bear its own expenses, including expenses of its accountants and attorneys
in connection with the resolution of any such dispute, and the fees and expenses
of the Independent Accounting Firm shall be paid by the parties as determined by
the Independent Accounting Firm.
(f) During the period beginning on the date Shorewood delivers
the Estimated Officer's Certificate to Westvaco and ending on the Closing Date
and during the period of any dispute within the contemplation of Section 1.2(e),
Shorewood shall: (i) provide Westvaco and its authorized representatives with
reasonable access, during normal business hours and upon reasonable prior
written notice, to all relevant books, records (including work papers, schedules
and memoranda), facilities and employees of Shorewood involved in the
preparation of the Estimated Officer's Certificate and the Officer's Certificate
and (ii) cooperate with Westvaco and its authorized representatives, as they may
reasonably request, including the provision on a timely basis of relevant
information used in preparing the Estimated Officer's Certificate and the
Officer's Certificate.
1.3 Instruments of Transfer. At the Closing, SPC shall, and
Shorewood shall cause SPC to, (a) deliver one or more certificates representing
the Shares purchased hereunder registered in the name of the Purchaser and (b)
execute and deliver to Purchaser and Purchaser shall execute and acknowledge
receipt of assignment and assumption documents duly transferring to Purchaser
all of SPC's right, title and interest in and to the Shares, in the form of
Exhibit 1.3 hereto.
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2. CLOSING
2.1 Closing. The closing (the "Closing") of the sale and
purchase of the Shares and the other transactions contemplated hereunder shall
occur as promptly as practicable, but not later than ten (10) business days
following satisfaction or waiver of the conditions set forth in Sections 6 and 7
(the "Closing Date"), at the offices of Xxxxx Xxxx LLP, 000 Xxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000 at or about 10:00 A.M. local time or at such other time and
place as is agreed to in writing by the parties hereto.
3. REPRESENTATIONS AND WARRANTIES OF SELLER. SPC and Shorewood,
jointly and severally, represent and warrant to the Purchaser as follows:
3.1 Due Formation and Qualification. Each of Shorewood, SPC,
Shorewood Mauritius, Shorewood Asia and Shorewood Guangzhou (together, the
"Shorewood Entities") is an entity duly formed, validly existing and in good
standing under the laws of the jurisdiction of its formation, and, has all
requisite power and authority to own, lease and operate its assets, properties
and business and to conduct its business as now being and as heretofore
conducted.
3.2 Authority to Execute and Perform Documents. Each of SPC
and Shorewood has the full legal right and power and all authority and approval
required to enter into, execute and deliver the "JV Documents" (as hereinafter
defined) and to perform fully its obligations thereunder including, without
limitation, the obligation to convey the Shares to Purchaser, free and clear of
all Liens (as hereinafter defined). The JV Documents have been, or will be at
the Closing, duly executed and delivered by SPC and Shorewood, if it is a party
thereto, and are, or will be when and as executed, the valid and binding
obligation of SPC and Shorewood, if it is a party thereto, enforceable in
accordance with its terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, moratorium, reorganization or similar laws
from time to time in effect which affect
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creditors' rights generally and by general principles of equity regardless of
whether such enforceability is considered in a proceeding in equity or at law.
The execution and delivery of the JV Documents, the consummation of the
transactions contemplated thereby and the performance by SPC and Shorewood of
each of the JV Documents to which it is a party in accordance with its terms and
conditions will not require the approval, consent of, waiver, order or
authorization of, or registration, declaration or filing with, any foreign,
federal, state, county, local or other governmental or regulatory body or the
approval or consent of any other person except for the Chinese Authority
Approval. Upon delivery of and payment for the Shares herein provided, Purchaser
will acquire good and valid title thereto, free and clear of any Lien.
3.3 Capitalization. As of the Closing Date, (a) SPC will be
the sole record and beneficial holder of all outstanding equity securities of
Shorewood Asia and no class of capital stock other than common shares will be
authorized or outstanding; (b) Shorewood Asia will be the sole record and
beneficial holder of all outstanding equity securities of Shorewood Mauritius
and no class of capital stock other than common shares will be authorized or
outstanding; (c) Shorewood Mauritius will be the sole record and beneficial
holder of all outstanding equity securities of Shorewood Guangzhou; and (d)
there will be as at that time no authorized or outstanding options, warrants,
subscription calls, rights, commitments, conversion rights, plans or other
agreements of any character obligating either SPC, Shorewood Asia, Shorewood
Mauritius or Shorewood Guangzhou (collectively, the "Shorewood China Entities")
to authorize, issue, deliver, sell or redeem any of their respective securities
or other instruments or rights or participations convertible thereto.
3.4 Compliance with Laws. To the best knowledge of SPC and
Shorewood, none of the Shorewood China Entities or Shorewood is in violation of
(i) any applicable order, judgment, injunction, award or decree where such
violation would have a Material Adverse Effect (as
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hereinafter defined) or (ii) any applicable law, ordinance or regulation or
permit or license or any other requirement of any governmental or regulatory
body, court or arbitrator applicable to the China Business where such violation
would have a Material Adverse Effect, , and other regulatory filings
may be required in connection with the Corporate Restructuring, which filings
have not yet been made.
3.5 No Breach. The execution, delivery and performance of the
JV Documents have not and the consummation of the transactions contemplated
thereby will not (i) violate, conflict with or result in a breach of any of the
provisions of the organizational documents or similar instruments of SPC or
Shorewood, (ii) violate, conflict with or result in the breach of any of the
terms of, result in a material modification of, or otherwise give any other
contracting party the right to terminate, or constitute (or with notice or lapse
of time or both constitute) a default (by way of substitution, notation or
otherwise) under, any instrument, contract or other agreement to which SPC or
Shorewood is or was a party or by or to which either of them or any of their
assets or properties may be bound or subject, (iii) violate any order, writ,
judgment, injunction, award or decree of any court, arbitrator or governmental
or regulatory body against, or binding upon, SPC or Shorewood or upon the
securities, properties or business of either SPC or Shorewood; or (iv) except
for the matters referenced in the last proviso of Section 3.4, violate any
statute, law or regulation of any jurisdiction as such statute, law or
regulation relates to SPC or Shorewood, the Shares, or, to the best knowledge of
SPC and Shorewood, the China Business.
3.6 Litigation; Actions and Proceedings. There are no
outstanding orders, judgments, injunctions, awards or decrees of any court,
governmental or regulatory body or arbitration tribunal against or involving
either Shorewood Asia, Shorewood Mauritius or Shorewood Guangzhou; and there are
no outstanding orders, judgments, injunctions, awards or decrees of any
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court, governmental or regulatory body or arbitration tribunal against Shorewood
which would have a material adverse effect on the ability of SPC or Shorewood to
consummate the transactions contemplated hereby. There are no actions, suits or
claims (including construction claims) or legal, administrative or arbitral
proceedings or, to the knowledge of SPC or Shorewood, investigations pending or,
to the knowledge of SPC, threatened in writing against or involving Shorewood,
Shorewood Asia, Shorewood Mauritius or Shorewood Guangzhou or any of their
respective properties or assets, that individually or in the aggregate, could
have a Material Adverse Effect.
3.7 Consents. Except for the Chinese Authority Approval, each
required filing or registration with, or consent, approval or other action of,
any governmental department, commission, board, bureau, agency or
instrumentality has been made, received, or taken, as the case may be, in
connection with the valid execution, delivery and performance of the JV
Documents by SPC and Shorewood.
3.8 Finders and Investment Bankers. None of the Shorewood
Entities, nor any of their respective managers, officers or directors, have
employed any broker or finder or incurred any liability for any brokerage fees,
commissions or finders' fees in connection with the transactions contemplated
hereby.
3.9 SPC Knowledge. Notwithstanding anything to the contrary
set forth in this Section 3 or elsewhere in this Agreement, the qualification of
any representation, warranty or statement made by or in respect of either SPC or
Shorewood or both SPC and Shorewood, whether set forth in this Section 3 or in
an exhibit or schedule referenced in this Section 3 or anywhere else in this
Agreement by use of the words "to SPC's knowledge", "to Shorewood's knowledge",
"to SPC's best knowledge", "to Shorewood's best knowledge", "known to SPC" or
"known to Shorewood" or words to that effect means that, after reasonable
inquiry with the personnel having supervisory
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responsibility over the matter at hand, no information has come to the knowledge
of either Xxxx X. Xxxxx, Xxxxxx Xxxxx, Xxxxxx Xxxxxxx, Xxxxxxx Xxxxx, Xxxxx
Xxxxxxxxx, Xxxxxx "Xxx" Xxxxxx or Xxxxx Xxxxxxxx.
4. REPRESENTATIONS AND WARRANTIES OF PURCHASER
The Purchaser and Westvaco jointly and severally represent and
warrant to SPC and Shorewood as follows:
4.1 Due Organization. Each of Purchaser and Westvaco is an
entity duly formed and validly existing under the laws of its jurisdiction of
incorporation and has full power and lawful authority to own, lease and operate
its assets, properties and business and to carry on its business as now being
and as heretofore conducted.
4.2 Purchase for Investment; Speculative Investment. Purchaser
is purchasing the Shares for its own account, for investment and not for resale
or distribution. Purchaser acknowledges that an investment in the Shares
involves special, speculative and substantial risk because, among other things,
the China Business is at a formative stage, the Facility has not yet commenced
operations and Shorewood Guangzhou presently has no customers or sales or
operating history and the political and economic climate in China remains
uncertain and unpredictable. Purchaser further represents that it has made the
determination to enter into this Agreement based upon its own independent
evaluation and assessment of the present and prospective business prospects of
the China Business and has not relied on, or been induced to enter into this
Agreement on account of, any representation or warranty of any kind, whether
oral or written, express or implied, except for such representations and
warranties of SPC and Shorewood as are specifically set forth in this Agreement
and the other JV Documents.
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4.3 Compliance with Laws. Neither Westvaco nor Purchaser is in
violation of any applicable order, judgment, injunction, award or decree where
such violation would have a material adverse effect on the ability of Purchaser
or Westvaco to consummate the transactions contemplated hereby. Neither Westvaco
nor Purchaser is in violation of any federal, state or local law, ordinance or
regulation or any other requirement of any governmental or regulatory body,
court or arbitrator applicable to its business where such violation would have a
material adverse effect on the ability of Purchaser or Westvaco to consummate
the transactions contemplated hereby.
4.4 No Breach. The execution, delivery and performance of the
JV Documents and the consummation of the transactions contemplated thereby will
not (i) violate, conflict with or result in a breach of any of the provisions of
the certificate of formation or other applicable instrument of the Purchaser or
Westvaco; (ii) violate, conflict with or result in the breach of any of the
terms of, result in a material modification of, or otherwise give any other
contracting party the right to terminate, or constitute (or with notice or lapse
of time or both constitute) a default (by way of substitution, novation or
otherwise) under, any instrument, contract or other agreement to which Purchaser
or Westvaco is a party or by or to which they or any of their respective assets
or properties may be bound or subject; (iii) violate any order, writ, judgment,
injunction, award or decree of any court, arbitrator or governmental or
regulatory body against, or binding upon, Purchaser or Westvaco; or (iv) violate
any statute, law or regulation of any jurisdiction as such statute, law or
regulation relates to the Purchaser or Westvaco.
4.5 Consents. Each required filing or registration with, or
consent, approval or other action of, any governmental department, commission,
board, bureau, agency or instrumentality has been made, received, or taken, as
the case may be, in connection with the valid execution, delivery and
performance of the JV Documents by Purchaser and Westvaco.
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4.6 Finders and Investment Bankers. Neither Purchaser nor
Westvaco has employed any broker or finder or incurred any liability for any
brokerage fees, commissions or finders' fees in connection with the transactions
contemplated hereby.
5. COVENANTS AND AGREEMENTS. The parties covenant and agree as follows:
5.1 Consent to Jurisdiction and Service of Process. Any legal
action, suit or proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby may be instituted in any state or federal court
located in New York County, State of New York, and each party agrees not to
assert, by way of motion, as a defense, or otherwise, in any such action, suit
or proceeding, any claim that it is not subject personally to the jurisdiction
of such court, that its property is exempt or immune from attachment or
execution, that the action, suit or proceeding is brought in an inconvenient
forum, that the venue of the action, suit or proceeding is improper or that this
Agreement or the subject matter hereof may not be enforced in or by such court.
Each party further irrevocably submits to the non-exclusive jurisdiction of any
such court in any such action, suit or proceeding. SPC hereby appoints Xxxxxx
Xxxxx, Esq., General Counsel, Shorewood Packaging Corporation, at its offices at
000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, and Purchaser hereby appoints Xxxx X.
Xxxxxxxxxxxx, Corporate Secretary, Westvaco Corp., Westvaco Building, 000 Xxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (or at each such person's or entity's office at
such other address as such person or entity hereafter furnishes to the other
parties) as such party's authorized agent to accept and acknowledge on such
party's behalf service of any and all process that may be served in any such
action, suit or proceeding. Any and all service of process and any other notice
in any such action, suit or proceeding shall be effective against any party if
given personally or by registered or certified mail, return receipt requested,
or by any other means of mail that requires a signed receipt, postage prepaid,
mailed to such party as herein provided. Nothing herein contained shall be
deemed
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to affect the right of any party to serve process in any manner permitted
by law or to commence legal proceedings or otherwise proceed against any other
party in any jurisdiction other than New York. Each of the parties hereto hereby
irrevocably waives the right to a jury trial in respect of any proceeding or
claim arising under the JV Documents.
5.2 Public Announcements. Neither Purchaser nor Westvaco nor
any Shorewood Entity shall, without the prior consent of the others, make any
public statement, announcement or release to trade publications or to the press,
or make any statements to any competitor, customer or any third party, with
respect to the JV Documents except to the extent that any party is advised by
its counsel that a public statement is required by law, in which event such
party may make appropriate public disclosure upon prior notice to the other
parties.
5.3 Further Assurances. Each of the parties shall execute such
documents or other papers and take such further actions as may be reasonably
required or desirable to carry out the provisions hereof and the transactions
contemplated hereby. Each such party shall use its reasonable efforts to fulfill
or obtain the fulfillment of the conditions to Closing.
5.4 Conduct of China Business Before Closing. From the date
hereof until the Closing Date, Shorewood shall, and shall cause each of the
other Shorewood Entities to, (a) operate the China Business in the ordinary
course and (b) refrain from taking any action which would require a material
change or addition to or a deletion from the disclosures of SPC and Shorewood
contained in Section 3. Shorewood shall not, without the prior written consent
of Purchaser, permit or cause any of the Shorewood China Entities to:
(a) except as may be required to effect the Corporate
Restructuring or to comply with any valid and mandatory government regulation,
amend its charter documents or by-laws;
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(b) except for the issuance of securities contemplated by the
Corporate Restructuring, issue stock;
(c) merge, consolidate, liquidate or dissolve;
(d) acquire or make a substantial investment in another
business;
(e) change the number of its directors;
(f) change its independent auditors;
(g) incur indebtedness in excess of US$500,000 in the
aggregate at anytime outstanding, other than purchases on credit in the ordinary
course of business and Shorewood Project Costs and Shorewood Override
Contributions;
(h) enter into transactions with Affiliates, except that
Shorewood or any of its Affiliates may provide services or personnel at cost or
goods or equipment at fair market value to such Shorewood China Entity without
restriction hereunder;
(i) sell a material portion of its assets;
(j) distribute property or cash to the holders of its equity;
or
(k) commence or settle litigation other than in the ordinary
course of business.
In connection with the continued operation of the China
Business between the date hereof and the Closing, Shorewood shall confer in good
faith, as Westvaco may reasonably request, with one or more representatives of
Westvaco designated in writing as Westvaco's representatives with respect to the
China Business. Shorewood agrees to use all reasonable efforts to deliver to
Westvaco true and complete copies of the instruments of formation and other
organizational documents of each of Shorewood China Entities as soon as is
reasonably practicable after the date hereof.
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6. DELIVERIES BY SPC TO PURCHASER AT CLOSING. At the Closing, the
following deliveries shall be made by SPC and Shorewood to Purchaser, and the
following conditions shall be satisfied, in connection with the execution and
delivery of this Agreement and the consummation of the transactions contemplated
by the JV Documents, except to the extent, if any, waived by Purchaser:
6.1 Delivery of Assignment of Shares. SPC shall have delivered
to Purchaser the certificate or certificates representing the Shares and duly
executed assignment and assumption documents in the form of Exhibit 1.3 hereto,
transferring to Purchaser all of SPC's right, title and interest in and to the
Shares. SPC shall have paid, or cause to be paid, all transfer and other taxes
required to be paid in connection with the sale and delivery to Purchaser of the
Shares owned by SPC.
6.2 Stockholders' Agreement. SPC shall have delivered to
Purchaser a duly executed counterpart copy of the Members Agreement of Shorewood
Asia Ventures, Ltd. (the "Stockholders' Agreement") attached hereto as Exhibit
6.2.
6.3 Representations, Warranties and Covenants. The
representations and warranties of SPC and Shorewood contained in the JV
Documents shall be true in all material respects on and as of the Closing Date
with the same force and effect as though made on and as of the Closing Date,
except for representations and warranties specifically relating to a time or
times other than the Closing Date (which shall be true and correct in all
material respects at such time or times). SPC and Shorewood shall have performed
and complied in all material respects with all covenants and agreements required
by the JV Documents to be performed or complied with by SPC and Shorewood on or
prior to the Closing Date. SPC shall have delivered to Purchaser a certificate,
dated
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the Closing Date and signed by each of them, to the foregoing effect and stating
that all conditions to Purchaser's obligations hereunder have been satisfied.
6.4 Transactions Completed; Approval Obtained. (a) The
Assignment and Assumption and the Corporate Restructuring shall have been
completed and (b) the China Authority Approval (as defined below) shall have
been obtained or waived. As used herein, the "China Authority Approval" shall
mean (i) with respect to the Guangzhou Ownership Change, the approval or written
waiver of the Ministry of Foreign Trade and Economic Cooperation of the People's
Republic of China (MOFTEC) or such lesser governmental or regulatory body of the
People's Republic of China or any of its political subdivisions as may be
empowered or authorized under applicable law and regulation then in effect to
grant such approval or waiver
6.5 CFO Certificate. Shorewood shall have delivered to
Purchaser (i) no later than ten (10) business days prior to the Closing the
Estimated Officer's Certificate; and (ii) at or prior to the Closing the
Officer's Certificate.
7. DELIVERIES BY PURCHASER TO SPC AT CLOSING. At the Closing, the
following deliveries shall be made by Purchaser and Westvaco to SPC, and the
following conditions shall be satisfied, in connection with the execution and
delivery of the JV Documents and the consummation of the transactions
contemplated by the JV Documents, except to the extent, if any, waived by SPC:
7.1 Deliverables. Purchaser shall have delivered to SPC a duly
executed counterpart copy of the Stockholders' Agreement signed by Purchaser.
7.2 Representations and Covenants. The representations and
warranties of Purchaser and Westvaco contained in the JV Documents shall be true
in all material respects on and
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as of the Closing Date with the same force and effect as though made on and as
of the Closing Date, except for representations and warranties specifically
relating to a time or times other than the Closing Date (which shall be true and
correct in all material respects at such time or times). Purchaser and Westvaco
shall have performed and complied in all material respects with all covenants
and agreements required by the JV Documents to be performed or complied with by
them on or prior to the Closing Date. Purchaser shall have delivered to SPC a
certificate, dated the Closing Date and signed by one of its officers, to the
foregoing effect and stating that all conditions to SPC's obligations hereunder
have been satisfied.
7.3 Purchase Price. Purchaser shall have delivered to SPC the
Purchase Price and any other payments required to be made by it in accordance
with Sections 1.1 and 1.2.
8. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; EARLY
TERMINATION; INDEMNIFICATION.
8.1 Survival of Representative and Warranties; Early
Termination. All representations and warranties contained in this Agreement
shall survive for a period of eighteen (18) months after the Closing Date. This
Agreement may be terminated at any time prior to the Closing Date (a) by mutual
agreement of Westvaco and Shorewood, (b) by Westvaco, by written notice to
Shorewood, if the conditions set forth in Section 6, or any of them, are not
complied with or performed or waived on or before the eighteen (18) month
anniversary of the date hereof (through no fault of Westvaco) or (c) by
Shorewood, by written notice to Westvaco, if the conditions set forth in Section
7, or any of them, are not complied with or performed or waived on or before the
eighteen (18) month anniversary of the date hereof (through no fault of
Shorewood).
8.2 Indemnification. (a) Westvaco and Purchaser and their
respective managers, directors, representatives and officers (individually, a
"Westvaco Indemnitee") shall be indemnified
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and held harmless by Shorewood from and against any and all losses, claims,
damages, liabilities, expenses (including reasonable legal fees and expenses),
judgments, fines, settlements and other amounts arising from any and all claims,
demands, actions, suits or proceedings, civil, criminal, administrative or
investigative, in which the Westvaco Indemnitee may be involved, or threatened
to be involved, as a party or otherwise by reason of any breach of any
representation or warranty made by Shorewood and SPC contained in Section 3 of
this Agreement and (b) Shorewood and SPC and each of their respective managers,
directors, representatives and officers (individually, a "Shorewood Indemnitee")
shall be indemnified and held harmless by Westvaco from and against any and all
losses, claims, liabilities, expenses (including reasonable legal fees and
expenses), judgments, fines, settlements and other amounts arising from any and
all claims, demands, actions, suits or proceedings, civil, criminal,
administrative or investigative, in which the Shorewood Indemnitee may be
involved or threatened to be involved, as a party or otherwise, by reason of any
breach of any representation or warranty of Westvaco and Purchaser contained in
Section 4 of this Agreement.
9. CERTAIN DEFINITIONS. As used in this Agreement, the following terms
shall have the definitions hereinafter ascribed to them:
The term "Affiliate" means, with respect to any
party, any entity or individual that directly or indirectly controls, is
controlled by or is under common control with such entity.
(a) "JV Documents" shall mean (i) this Agreement and
(ii) the Stockholders' Agreement. Any reference to a JV Document with respect to
a party means any JV Document to be executed by such party.
(b) "Lien" shall mean any lien, pledge, mortgage,
security interest, claim, lease, charge, option, right of first refusal,
easement, servitude, transfer restriction under any
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operating or similar agreement, encumbrance, judgment, order, writ, injunction,
award, decree or any other similar restriction or limitation whatsoever.
(c) "Material Adverse Effect" shall mean a material
adverse effect upon the assets, properties, business, operations, or condition
(financial or otherwise) of the China Business taken as a whole.
(d) "Officer's Certificate" means a certificate of
Shorewood executed by the Chief Financial Officer of Shorewood, dated the
Closing Date, certifying as to the amount of the Shorewood Project Costs,
Shorewood Override Contributions, and Net Operating Gains (Losses), and
containing a summary description setting forth in reasonable detail how the
respective amounts were derived.
(e) "Interim Period Working Capital Contributions"
means all sums up to an aggregate amount of $15,000,000 loaned or contributed by
Shorewood, directly or indirectly through the other Shorewood Entities, after
the Shorewood Project Costs have been funded in full and prior to the Closing
Date to fund the working capital requirements of the China Business.
(f) "Net Operating Gains (Losses)" means the combined
EBITDA (earnings (losses) before interest, taxes, depreciation and amortization)
of the Shorewood Chinese Entities for the period commencing on the date hereof
and ending on the Closing Date, as reflected in the audited, to the extent
available, and the unaudited, unconsolidated financial statements of the
Shorewood Chinese Entities for the applicable period or periods, and certified
by the Chief Financial Officer of Shorewood as at the Closing Date in the
Officer's Certificate.
(g) "Shorewood Override Contributions" means all
Interim Period Working Capital Contributions plus all other amounts, if any,
loaned or contributed by Shorewood, directly or indirectly through the other
Shorewood Entities, after the Shorewood Project Costs have
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been funded in full and prior to the Closing Date (i) to fund capital
expenditures of the China Business, up to an aggregate amount of $750,000 per
quarter or (ii) otherwise in connection with the China Business pursuant to a
budget or other instrument or consent jointly approved by Shorewood and
Westvaco.
(h) "Shorewood Project Costs" means all direct and
indirect, hard and soft, costs and expenses up to an aggregate amount of
$45,000,000 paid or incurred by Shorewood and the other Shorewood Entities at
any time in connection with the formation and organization of the Shorewood
China Entities, the acquisition of the land rights underlying the Facility and
the construction, build-out, equipping, roll-out and operation of the Facility,
including, without limitation, fees paid to outside consultants, reasonable
travel expenses, deposits, fees paid to attorneys, due diligence expenses,
capitalized interest, working capital, pre-operational SGA, construction costs,
professional fees, acquisition costs, equipment costs and purchases, personnel
recruitment and training costs, capital improvement work, and governmental fees
and assessments.
10. MISCELLANEOUS.
10. Notices. Any notice or other communication required or
permitted hereunder shall be in writing and shall be delivered personally,
telegraphed, telexed, sent by confirmed facsimile transmission or sent by
certified, registered or express mail, postage prepaid. Any such notice shall be
deemed given when so delivered personally, telegraphed, telexed or sent by
facsimile transmission or, if mailed, two days after the date of deposit in the
United States mails, as follows:
(i) if to SPC, to:
c/o Shorewood Packaging
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxx, Esq., Vice President and
General Counsel
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Facsimile No.: (000) 000-0000
and a copy to:
Xxxxx Xxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxx X. Xxxxxxxxx, Esq.
Facsimile No.: (000) 000-0000
(ii) If to Purchaser, to:
Westvaco Corp.
Westvaco Building
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: General Counsel
Facsimile No: (000) 000-0000
Any party may by notice given in accordance with this Section
to the other parties designate another address or person for receipt of notices
hereunder.
10.2 Entire Agreement. The JV Documents (including the
schedules) and the collateral agreements executed in connection with the
consummation of the transactions contemplated herein contain the entire
agreement among the parties with respect to the purchase of the Shares and
related transactions, and supersedes all prior agreements, written or oral, with
respect thereto.
10.3 Waivers and Amendments; Non-Contractual Remedies;
Preservation of Remedies. The JV Documents may be amended, superseded, canceled,
renewed or extended, and the terms hereof may be waived, only by a written
instrument signed by the parties or, in the case of a waiver, by the party
waiving compliance. No delay on the part of any party in exercising any right,
power or privilege hereunder shall operate as a waiver thereof, nor shall any
waiver on the part of any party of any such right, power or privilege, nor any
single or partial exercise of any such right, power or privilege, preclude any
further exercise thereof or the exercise of any other such right, power or
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privilege. The rights and remedies herein provided are cumulative and are not
exclusive of any rights or remedies that any party may otherwise have at law or
in equity.
10.4 Governing Law. The JV Documents shall be governed and
construed in accordance with the laws of the State of New York applicable to
agreements made and to be performed entirely within such State (without giving
effect to conflicts of law principles thereof).
10.5 Binding Effect; No Assignment; No Third Party
Beneficiaries. The JV Documents shall be binding upon and inure to the benefit
of the parties and their respective successors, assigns and legal
representatives. Nothing contained herein is intended or shall be construed as
creating third party beneficiaries to. None of the JV Documents is assignable,
except by operation law or as permitted in accordance with the express terms of
any such document or with the consent of all parties thereto.
10.6 Variations in Pronouns. All pronouns and any variations
thereof refer to the masculine, feminine or neuter, singular or plural, as the
context may require.
10.7 Counterparts. The JV Documents may be executed by the
parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute one and the same instrument. Each counterpart may consist of a number
of copies hereof each signed by less than all, but together signed by all of the
parties hereto.
10.8 Exhibits and Schedules The Exhibits and Schedules are a
part of this Agreement as if fully set forth herein. All references herein to
Sections, subsections, clauses, Exhibits and Schedules shall be deemed
references to such parts of this Agreement, unless the context shall otherwise
require.
10.9 Headings. The headings in this Agreement are for
reference only, and shall not affect the interpretation of this Agreement.
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10.10 Expenses. Each of the SPC and the Purchaser shall pay
its expenses incident to preparing, entering into and performing the JV
Documents and the transactions contemplated therein, except for an amount equal
to $10,000 constituting the expenses incurred by Shorewood in connection with
the initial draft of the Stockholders' Agreement, which amount shall be treated
for all purposes under the JV Documents as a Shorewood Project Cost.
[INTENTIONALLY BLANK]
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IN WITNESS WHEREOF, each of the parties hereto has executed
this Agreement as of the date first above written.
SELLER:
SPC (BERMUDA) LTD.
By: S/
--------------------------
Name: Xxxx Xxxxx
Title: CEO/Pres
SPC ASIA, LTD.
By: S/
--------------------------
Name: Xxxx Xxxxx
Title: CEO/Pres
SHOREWOOD PACKAGING CORPORATION
By: S/
--------------------------
Name: Xxxx Xxxxx
Title: CEO/Pres
WESTVACO WORLDWIDE DISTRIBUTION S.A.
By: S/
--------------------------
Name: X.X. Xxxxxxxxx
Title: Senior Vice President
WESTVACO CORPORATION
By: S/
--------------------------
Name: X.X. Xxxxxxxxx
Title: Senior Vice President
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