Exhibit 10.3
EXECUTION COPY
ASSET PURCHASE AGREEMENT
BY AND BETWEEN
DURANGO GEORGIA CONVERTING LLC
AND
STONE CONTAINER CORPORATION
--------------------------------------------------------------------------------
Dated as of May 16, 2001
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS...................................................1
1.1. Certain Defined Terms.........................................1
1.2. Certain Rules of Construction.................................8
ARTICLE II PURCHASE AND SALE.............................................8
2.1. Purchase and Sale.............................................8
2.2. Assumed Liabilities...........................................9
2.3. Purchase Price ..............................................10
2.4. Purchase Price Adjustment....................................10
2.5. Allocation of Purchase Price.................................11
2.6. Taxes........................................................11
2.7. The Closing..................................................12
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE SELLER.................12
3.1. Organization; Power..........................................12
3.2. Authorization, Effect of Agreement...........................13
3.3. Subsidiaries.................................................13
3.4. Consents.....................................................13
3.5. Financial Statements.........................................13
3.6. Conduct in the Ordinary Course; Absence of Certain
Changes, Events and Conditions...............................14
3.7. No Undisclosed Liabilities...................................16
3.8. Title to Assets..............................................16
3.9. Permits......................................................16
3.10. Real Property................................................17
3.11. Compliance with Laws.........................................17
3.12. Contracts....................................................18
3.13. No Violations................................................19
3.14. Intellectual Property........................................19
3.15. Litigation...................................................20
3.16. Employee Benefit Plans.......................................20
3.17. Tax Matters..................................................20
3.18. Environmental Matters........................................21
3.19. Labor Matters................................................22
3.20. Receivables..................................................22
3.21. Inventories..................................................22
3.22. Certain Interests............................................23
3.23. Brokers......................................................23
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE BUYER..................24
4.1. Organization; Power..........................................24
4.2. Authorization; Effect of Agreement...........................24
4.3. Consents.....................................................24
4.4. No Violations................................................24
4.5. Litigation...................................................25
4.6. Availability of Funds........................................25
4.7. Brokers......................................................25
ARTICLE V COVENANTS OF THE SELLER......................................25
5.1. Action by the Seller.........................................25
5.2. Conduct of the Xxxxxxx Division's Business...................25
5.3. Access.......................................................26
5.4. Publicity....................................................26
5.5. Notices of Certain Events....................................26
5.6. Exclusivity..................................................26
5.7. Closing of the XxXxxxxx Division.............................27
ARTICLE VI COVENANTS OF THE BUYER.......................................27
6.1. Action by the Buyer..........................................27
6.2. Publicity....................................................27
6.3. Confidentiality..............................................27
6.4. Notice.......................................................27
ARTICLE VII ADDITIONAL COVENANTS.........................................28
7.1. Further Assurances...........................................28
7.2. Books and Records............................................28
7.3. Insurance....................................................28
7.4. Payments from Third Parties..................................28
7.5. Tax Matters..................................................28
7.6. Covenant Not to Compete......................................28
7.7. Assignment of Accounts Receivable and Other Receivables
and Finished Goods Inventory.................................29
ARTICLE VIII CONDITIONS TO THE BUYER'S OBLIGATIONS........................30
8.1. Representations and Warranties; Performance..................30
8.2. Consents.....................................................30
8.3. Absence of Certain Proceedings...............................30
8.4. Opinion of Counsel...........................................30
8.5. Release of Encumbrances......................................30
8.6. Transition Services Agreement................................30
8.7. Permits......................................................31
8.8. Xxxx of Sale.................................................31
ARTICLE IX CONDITIONS TO THE SELLER'S OBLIGATIONS.......................31
9.1. Representations and Warranties; Performance..................31
9.2. Absence of Certain Proceedings...............................31
9.3. Releases.....................................................31
9.4. Paper Supply Agreement.......................................31
9.5. Opinion of Counsel...........................................31
ARTICLE X EMPLOYMENT AND EMPLOYEE BENEFITS ARRANGEMENTS................32
10.1. Retained Employees; Terminations on Closing Date.............32
10.2. Employment of Sales Personnel................................32
10.3. Employment of Retained Employees and Disabled Employees......33
10.4. Employee Benefit Plans.......................................34
10.5. WARN Act.....................................................35
10.6. Worker's Compensation........................................36
10.7. Transition Services Agreement................................36
10.8. Liabilities, Indemnity and Payments with Respect to
Retained Employees and Designated Sales Personnel............36
ARTICLE XI TERMINATION..................................................38
11.1. Termination and Abandonment..................................38
11.2. Effect of Termination........................................38
ARTICLE XII SURVIVAL AND INDEMNIFICATION.................................38
12.1. Survival.....................................................38
12.2. Indemnification by the Seller................................39
12.3. Indemnification by the Buyer.................................42
12.4. Procedure for Indemnification................................42
12.5. Payment......................................................43
12.6. Adjustment Amounts...........................................43
12.7. Limitation on Seller's Indemnification.......................43
12.8. Exclusivity..................................................43
12.9. Tax Treatment................................................44
12.10. Guarantee....................................................44
ARTICLE XIII MISCELLANEOUS................................................44
13.1. Fees and Expenses............................................44
13.2. Amendments...................................................44
13.3. Entire Agreement.............................................44
13.4. Assignment, Binding Effect; Benefit..........................44
13.5. Headings.....................................................45
13.6. Governing Law; Arbitration...................................45
13.7. Notices......................................................46
13.8. Counterparts.................................................47
13.9. Bulk Transfer Laws...........................................47
13.10. Schedules....................................................47
13.11. Severability.................................................47
SCHEDULES
Schedule 2.1(h) Permits
Schedule 2.1(i) Contracts
Schedule 2.4 Closing Statement
Schedule 2.5 Allocation of Purchase Price
Schedule 3.4 Consents
Schedule 3.5 Financial Statements
Schedule 3.6 Conduct in the Ordinary Course; Absence of Certain Changes,
Events and Conditions
Schedule 3.7 No Undisclosed Liabilities
Schedule 3.8 Title to Assets
Schedule 3.9 Permits
Schedule 3.10 Leases
Schedule 3.11 Compliance with Laws
Schedule 3.12(a) Material Contracts
Schedule 3.12(b) Material Contracts (Enforceability)
Schedule 3.12(c) Material Contracts (Breach/Default)
Schedule 3.13 No Violations
Schedule 3.14 Intellectual Property
Schedule 3.15 Litigation
Schedule 3.16 Employee Benefit Plans
Schedule 3.18(a) Environmental Matters
Schedule 3.18(b) Environmental Permits
Schedule 3.19 Labor Matters
Schedule 3.21 Inventories
Schedule 3.22 Certain Interests
Schedule 5.2 Conduct of the Xxxxxxx Division's Business
Schedule 7.6 Multiwall Bag Customers
Schedule 10.1(a) List of Employees
Schedule 10.1(b) Non-Retained Employees
Schedule 10.2 Designated Sales Personnel
Schedule 10.4 Employment, Consulting, Retention and Severance Agreements
EXHIBITS
Exhibit A-1 Form of Trademark Assignment
Exhibit A-2 Form of Assignment of Lease and Note Financing Agreement
Exhibit A-3 Form of Assignment of Note
Exhibit A-4 Form of Assignment of Warehouse Lease
Exhibit A-5 Form of Assignment of Contracts
Exhibit A-6 Form of Quitclaim Deed
Exhibit B-1 Lease and Note Financing Agreement
Exhibit B-2 Warehouse Lease
Exhibit C Form of Opinion of Seller's Counsel (White & Case LLP)
Exhibit D Form of Transition Services Agreement
Exhibit E Form of Paper Supply Agreement
Exhibit F Form of Opinion of Buyer's Counsel (E. Xxxxxxx Xxxxxxxx)
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement, dated as of May 16, 2001 (this
"Agreement"), by and between Durango Georgia Converting LLC, a Delaware limited
liability company (the "Seller"), and Stone Container Corporation, a Delaware
corporation (the "Buyer"). The Buyer and the Seller are referred to collectively
herein as the "Parties."
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Seller owns and operates a multi-wall bag converting
facility located in Xxxxxxx, Georgia (the "Xxxxxxx Division") and a multi-wall
bag converting facility located in Memphis, Tennessee (the "XxXxxxxx Division");
and
WHEREAS, upon the terms and subject to the conditions contained in
this Agreement, the Seller desires to sell to the Buyer, and the Buyer desires
to purchase from the Seller, the Xxxxxxx Division and certain customer lists and
contracts associated with the XxXxxxxx Division;
NOW, THEREFORE, in consideration of the mutual representations,
warranties, covenants and agreements contained in this Agreement, the Parties
hereby agree as follows:
ARTICLE I
DEFINITIONS
1.1. Certain Defined Terms. As used in this Agreement, the following
terms shall have the following meanings:
"Acquired Assets" shall have the meaning set forth in Section 2.1.
"Action" shall mean any action, suit, claim, arbitration, inquiry,
proceeding or investigation by or before any court or Governmental Authority.
"Affiliate" shall mean, with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under common control with
such Person. A Person shall be deemed to control another Person if such Person
possesses, directly or indirectly, the power to direct or cause the direction of
the management and policies of such other Person, whether through the ownership
of voting securities, by contract or otherwise.
"Agreement" shall have the meaning set forth in the Preamble.
"Ancillary Documents" shall mean the Paper Supply Agreement and the
Transition Services Agreement.
"Arbiter" shall have the meaning set forth in Section 2.4(b).
"Assumed Liabilities" shall have the meaning set forth in Section
2.2(a).
"Business Day" shall mean any day that is not a Saturday, a Sunday or
other day on which banks are required or authorized by law to be closed in New
York, New York.
"Business Intellectual Property" shall mean all patents, trademarks,
servicemarks, tradenames and copyrights and each registration and application
for any of the foregoing owned, used or held by the Seller for use primarily or
exclusively in connection with the conduct of the business of the Xxxxxxx
Division.
"Buyer" shall have the meaning set forth in the Preamble.
"Buyer Indemnitees" shall have the meaning set forth in Section
12.2(a).
"Buyer Material Adverse Effect" shall mean a material adverse effect
on (a) the business, operations, results of operations or condition (financial
or otherwise) of the Buyer or (b) the ability of the Buyer to perform its
obligations under this Agreement or the Ancillary Documents or to consummate the
transactions contemplated hereby or thereby.
"Claimant" shall have the meaning set forth in Section 13.6(b)(ii).
"Claims Notice" shall have the meaning set forth in Section
12.2(b)(ii)(A).
"Closing" shall have the meaning set forth in Section 2.7.
"Closing Date" shall have the meaning set forth in Section 2.7.
"Closing Statement" shall have the meaning set forth in Section
2.4(a).
"COBRA" shall mean the Consolidated Omnibus Budget Reconciliation Act
of 1985, as amended.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Commercially Reasonable" shall have the meaning set forth in Section
12.2(b)(i)(A).
"Consents" shall mean any consent, approval, authorization or other
order of, or action or exemption by, or filing with or notification of, any
Governmental Authority or third party.
"Contract" shall mean any agreement, contract, instrument, license,
lease, sublease, or binding understanding, arrangement or commitment.
"Deferral Period" shall have the meaning set forth in Section 10.2(a).
"Designated Sales Personnel" shall have the meaning set forth in
Section 10.2(a).
"Xxxxxxx Division" shall have the meaning set forth in the Recitals.
"Employee Benefit Plan" shall mean any: (a) "employee benefit plan"
within the meaning of Section 3(3) of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"); (b) bonus, stock option, stock purchase,
restricted stock, incentive, fringe benefit, voluntary employees' beneficiary
associations under Section 501(c)(9) of the Code, profit-sharing, pension, or
retirement, deferred compensation, medical, life, disability, accident, salary
continuation, severance, accrued leave, vacation, sick pay, sick leave,
supplemental retirement and unemployment benefit plans (whether or not insured);
and (c) employment, consulting, termination, and severance contracts or
agreements, in each case maintained or contributed to by the Seller or its
Affiliates on behalf of Employees or directors of the Xxxxxxx Division.
"Employees" shall mean all current employees (including those on
layoff, disability or leave of absence, whether paid or unpaid), former
employees and retired employees of the Xxxxxxx Division.
"Encumbrance" shall mean any lien, security interest, mortgage,
pledge, adverse claim, title defect or other encumbrance.
"Environmental Laws" shall mean the Comprehensive Environmental
Response, Compensation and Liability Act, 42 U.S.C. Sections 9601 et seq., the
Emergency Planning and Community Right-to-Know Act of 1986, 42 U.S.C.ss.ss.11001
et seq., the Resource Conservation and Recovery Act, 42 U.S.C.ss.ss.6901 et seq.
("RCRA"), the ---- Toxic Substances Control Act, 15 U.S.C.ss.ss.2601 et seq.,
the Federal Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C.ss.ss.136 et
seq., the Clean Air Act, 42 U.S.C.ss.ss.7401 et seq., the Clean Water Act
(Federal Water Pollution Control Act), 33 U.S.C.ss.ss.1251 et seq., the Safe
Drinking Water Act, 42 U.S.C.ss.ss.300f et seq., the Occupational Safety and
Health Act, 29 U.S.C.ss.ss.641, et seq., the Hazardous Materials Transportation
Act, 49 U.S.C.ss.ss.1801, et seq., the rules and regulations promulgated
pursuant to any of the above statutes, and any other Laws governing
Environmental Matters, as the same have been amended and as in effect as of the
Closing Date.
"Environmental Matters" shall mean any matter arising out of or
relating to pollution, Hazardous Materials, or protection of the environment,
natural resources, human health or safety of employees.
"Environmental Permits" shall mean all Permits issued, granted, given
or otherwise made available by or under any Governmental Authority pursuant to
applicable Environmental Laws.
"Excluded Assets" shall mean: (a) all cash, cash equivalents,
securities, bank accounts and insurance policies and rights thereunder; (b) all
assets or properties of the Seller that are not used or held for use in
connection with the Xxxxxxx Division; (c) all rights of the Seller arising under
this Agreement or the transactions contemplated hereby; (d) all assets or
properties of the Seller that are sold or otherwise disposed of in the ordinary
course of business, consistent with the Seller's obligations hereunder, or as
otherwise permitted by this Agreement during the period from the date hereof
until the Closing Date; (e) all intercompany receivables (other than those
arising through product sales); (f) all accounts receivable and other
receivables over ninety (90) days past due; (g) all refunds, credits and claims
for refunds of any Taxes of the Seller or any of its Affiliates except as
otherwise provided in Section 2.6; and (h) all items of Business Intellectual
Property which incorporate "Xxxxxxx," "Durango," "Xxxxxx," "Converting" or any
derivation in whole or in part thereof, individually or in combination.
"Facility" shall mean any real property or leasehold operated by the
Seller in connection with the Xxxxxxx Division.
"Financial Statements" shall have the meaning set forth in Section
3.5(a).
"Governmental Authority" shall mean any governmental, administrative,
public or self-regulatory body or authority.
"Governmental Order" shall mean any order, judgment, injunction,
decree or stipulation entered by or with a Governmental Authority.
"Hazardous Materials" shall mean any substance or material which is
defined as, or considered to be, a "hazardous waste," "hazardous substance,"
"pollutant," "extremely hazardous substance," "toxic substance," "hazardous
material," "oil," or "contaminant" under any Environmental Law, or which is
otherwise regulated by any Environmental Laws, including, without limitation,
petroleum and petroleum products, including crude oil and fractions thereof,
natural gas, radioactive materials, polychlorinated biphenyls and asbestos and
asbestos containing material.
"Income Tax" shall mean any federal, state, local or foreign income
tax, including any interest, penalty or addition thereto, whether disputed or
not.
"Indebtedness" of any Person shall mean at any date, without
duplication, (a) all obligations of such Person for borrowed money, (b) all
obligations of such Person evidenced by bonds, debentures, notes or similar
instruments, (c) all obligations of such Person to pay the deferred purchase
price of property or services, except trade accounts payable or accruals arising
in the ordinary course of business, (d) all obligations of such Person as lessee
that are capitalized in accordance with applicable generally accepted accounting
principles, (e) all Indebtedness of others secured by an Encumbrance on any
asset of such Person, whether or not such Indebtedness is assumed by such
Person, and (f) all obligations of such Person in the nature of guarantees of
the obligations described in clauses (a) through (e) above of any other Person.
"Indemnifiable Environmental Losses" shall mean any Losses relating to
Environmental Matters which are indemnifiable under Section 12.2.
"Indemnitee" shall have the meaning set forth in the definition of
"Losses."
"Indemnitor" shall have the meaning set forth in the definition of
"Losses."
"Interim Employment Period" shall have the meaning set forth in
Section 10.3(a).
"Knowledge" shall mean, with respect to any Person, the knowledge,
after reasonable investigation, of any executive officer or director of such
Person and, in the case of the Seller, Xxx Xxxxxxxx, the General Manager of the
Xxxxxxx Division and, for purposes of Section 3.18, Xxxxx Xxxxxx, the
Environmental Manager of the Seller, and Xxxxx Xxxxxx, the shipping supervisor
of the Xxxxxxx Division.
"Law" shall mean any federal, state, local or foreign statute, law,
ordinance, regulation, rule, judgment, injunction, decree, code, order, other
requirement or rule of law.
"Lease and Note Financing Agreement" means that certain Lease and Note
Financing Agreement among The Development Authority of Dodge County, as Lessor,
Xxxxxx Paper Company, as Lessee and Xxxxxx Paper Company, as owner of the Note,
dated August 1, 1988, recorded in Deed Book 320, Page 258 and as transferred and
assigned by Assignment of Lease dated January 14, 1999, recorded in Deed Book
320, Page 318.
"Leased Real Property" shall have the meaning set forth in Section
3.10(b).
"Leases" means the Lease and Note Financing Agreement and the
Warehouse Lease. ------ "Loss" or "Losses" shall mean all claims, losses (net of
any third party insurance recovery ---- ------ received), liabilities,
obligations, payments, actual damages, judgments, fines, penalties, Taxes,
amounts paid in settlement, and any related costs and expenses (including,
without limitation, interest which may be imposed in connection therewith, costs
and expenses of investigation, and remediation, actions, suits, proceedings,
demands, assessments and reasonable fees and disbursements of counsel,
environmental consultants and other experts) incurred by the Person seeking
indemnification (the "Indemnitee") (whether relating to claims asserted by or
against third parties or to claims asserted against the Person providing
indemnification (the "Indemnitor")).
"Material Contracts" shall have the meaning set forth in Section
3.12(a).
"XxXxxxxx Division" shall have the meaning set forth in the Recitals.
"Note" shall mean that certain Industrial Development Revenue Note,
dated October 20, 1988, made by The Development Authority of Dodge County in the
aggregate principal amount of $3,000,000 in favor of Xxxxxx Paper Company.
"Notice" shall have the meaning set forth in Section 12.4.
"Notification" shall have the meaning set forth in Section
12.2(b)(i)(B).
"Officer" shall mean each Senior or Executive Vice President or
President or director of the Seller or the Xxxxxxx Division.
"Paper Supply Agreement" shall have the meaning set forth in Section
9.4.
"Parties" shall have the meaning set forth in the Preamble.
"Permit" shall mean any permit, license or authorization issued,
granted or given or otherwise made available by or under any Governmental
Authority.
"Permitted Encumbrances" shall mean (a) Encumbrances set forth on
Schedule 3.8, (b) liens of Taxes not yet due and payable or due but not
delinquent or being contested in good faith by appropriate proceedings and (c)
Encumbrances which individually or in the aggregate could not reasonably be
expected to have a Seller Material Adverse Effect.
"Person" shall mean any individual, firm, corporation, partnership,
limited liability company, trust, joint venture, association, unincorporated
organization, Governmental Authority or other entity.
"Preliminary Amount" shall mean US$15,555,000.
"Purchase Price" shall mean the amount of the current assets included
in the Acquired Assets as at the Closing Date less the amount of the current
liabilities included in the Assumed Liabilities as at the Closing Date, in each
case as set forth on the Closing Statement that is deemed to be final, plus
$4,653,000.
"Purchase Price Adjustment" shall mean the difference between the
Preliminary Amount and the Purchase Price, whether a positive or negative
number.
"Purchase Price Allocation" shall have the meaning set forth in
Section 2.5.
"Reference Balance Sheet" shall have the meaning set forth in Section
3.5(a).
"Request" shall have the meaning set forth in Section 13.6(b)(ii).
"Respondent" shall have the meaning set forth in Section 13.6(b)(ii).
"Response Action" shall mean any action to investigate, test, monitor
or remediate any Hazardous Materials.
"Retained Employees" shall have the meaning set forth in Section
10.1(a).
"Seller" shall have the meaning set forth in the Preamble.
"Seller Indemnitees" shall have the meaning set forth in Section 12.3.
"Seller Material Adverse Effect" shall mean a material adverse effect
on (a) the business, operations, results of operations or condition (financial
or otherwise) of the Xxxxxxx Division or (b) the ability of the Seller to
perform its obligations under this Agreement or the Ancillary Documents or to
consummate the transactions contemplated hereby or thereby.
"Seller's 401(k) Plan" shall have the meaning set forth in Section
10.4(e).
"Straddle Taxes" shall have the meaning set forth in Section 2.6(a).
"Subsidiary" shall mean any Person, with respect to which a specified
Person owns 50% or more of the capital stock or other equity interests of such
Person, the holders of which are generally entitled to vote for the election of
the board of directors or other governing body of such Person, directly or
through one or more Subsidiaries.
"Tangible Personal Property" shall mean all machinery, equipment,
vehicles, office furniture, tools and other tangible property owned, used or
held by the Seller for use primarily or exclusively in connection with the
business of the Xxxxxxx Division.
"Tax or Taxes" shall mean any taxes, assessments, duties, fees,
levies, imposts, deductions, withholdings or other governmental charges of any
nature whatsoever imposed by any taxing authority of any country or political
subdivision of any country, including any interest, penalties, additions to tax
or additional amounts imposed by any taxing authority with respect thereto.
"Tax Return" shall mean any return, declaration, report, claim for
refund or information return or statement relating to Taxes, including any
schedule or attachment thereto.
"Third-Party Claim" shall have the meaning set forth in Section 12.4.
"Transfer Taxes" shall mean all transfer, documentary, sales, use,
stamp, registration and other similar Taxes and fees (including penalties,
interest and additions to tax attributable thereto and costs and expenses
relating to such Taxes).
"Transferred Employee" shall have the meaning set forth in Section
10.3(g).
"Transition Services Agreement" shall have the meaning set forth in
Section 8.6.
"U.S. GAAP" shall mean United States generally accepted accounting
principles applied on a basis consistent with the past practices of the Xxxxxxx
Division.
"Warehouse Lease" means that certain Lease Agreement dated March 29,
1999 between Xxxxx X. Xxxxxx, Xx., as "Landlord" and Xxxxxx Paper Company, a New
Hampshire corporation, as "Tenant," recorded in Deed Book 341 pages 237-242, as
amended by Amendment to Lease Agreement dated December 1, 1999 and recorded in
Deed Book 341, pages 243-244 and as transferred and assigned by Assignment and
Assumption Agreement and Consent dated as of December 18, 1999, recorded in Deed
Book 373, Page 324-327.
"WARN Act" shall mean the Worker Adjustment and Retraining
Notification Act of 1988, as amended.
1.2. Certain Rules of Construction.
(a) When used herein, the words "hereof," "herein" and "hereunder" and
words of similar import shall refer to this Agreement as a whole and not to any
particular provision of this Agreement. References to the Preamble, Recitals,
Articles, Sections, Schedules or Exhibits shall refer respectively to the
Preamble, Recitals, Articles, Sections, Schedules or Exhibits of this Agreement,
unless otherwise expressly provided.
(b) When used herein, the terms "include", "includes", and "including"
are not limiting.
(c) Unless the context requires otherwise, derivative forms of any
term defined herein shall have a comparable meaning to that of such term.
(d) When a Party's consent is required hereunder, such Party's consent
may be granted or withheld in such Party's sole discretion, unless otherwise
specified.
ARTICLE II
PURCHASE AND SALE
2.1. Purchase and Sale. Upon the terms and subject to the conditions
of this Agreement, the Seller shall sell, convey, transfer, assign and deliver
to the Buyer, and the Buyer shall purchase from the Seller, at the Closing, all
of the Seller's right, title and interest in, to and under all of the assets and
properties constituting the Xxxxxxx Division (other than the Excluded Assets),
along with the customer lists and customer contracts of the XxXxxxxx Division,
(each and all of such assets and properties being herein referred to as the
"Acquired Assets"), including, without limitation, all right, title and interest
of the Seller in, to and under the following:
(a) all Tangible Personal Property;
(b) all raw materials, inventories, including inventories of work
in process, samples and finished goods, spare parts and supplies
relating to manufacturing equipment, products and supplies owned, used
or held by the Seller for use primarily or exclusively in connection
with the business of the Xxxxxxx Division;
(c) all Leased Real Property;
(d) all claims, deposits, prepayments, refunds, and rights of
recovery, set off and recoupment;
(e) all accounts, notes and other receivables (other than
accounts receivable and other receivables over ninety (90) days past
due and intercompany receivables, except those intercompany
receivables arising through product sales);
(f) the Note;
(g) all Business Intellectual Property;
(h) all rights arising or otherwise relating to any period on or
after the Closing Date in respect of all Permits set forth on Schedule
2.1(h);
(i) all rights arising or otherwise relating to any period on or
after the Closing Date in respect of all Contracts set forth on
Schedule 2.1(i); and
(j) all of the Seller's files, papers, documents and records
relating primarily or exclusively to the Xxxxxxx Division and the
business of the XxXxxxxx Division included in the Acquired Assets, and
all other miscellaneous assets of the Seller relating primarily or
exclusively to the Xxxxxxx Division, wherever located, including,
without limitation, credit, sales and accounting records, price
sheets, catalogues and sales literature, books, processes, formulae,
manufacturing data, advertising material, stationery, office supplies,
forms, catalogues, manuals, correspondence, production records,
environmental records, employment records and any other information
reduced to writing relating primarily or exclusively to the Xxxxxxx
Division.
2.2. Assumed Liabilities. (a) The Buyer shall assume on and as of the
Closing Date, and shall thereafter pay, perform and discharge when due (or cause
to be paid, performed and discharged when due), the following liabilities and
obligations of the Seller, relating to or arising out of the conduct of the
Xxxxxxx Division's business (collectively, the "Assumed Liabilities"):
(i) all liabilities and obligations of the Seller arising or
otherwise relating to any period on or after the Closing Date under or
primarily related to the Contracts and the Permits included in the
Acquired Assets;
(ii) all accounts payable of the Seller in respect of the Xxxxxxx
Division (in each case, other than intercompany payables, except those
arising through product sales);
(iii) all liabilities and obligations relating to employment and
employee benefit arrangments assumed by the Buyer under Article X
hereof; and
(iv) all other accrued current liabilities of the Xxxxxxx
Division.
(b) The Buyer shall not assume or be responsible for the payment,
performance and discharge of any obligations or liabilities of the Seller,
whether or not relating to the Xxxxxxx Division, other than the Assumed
Liabilities. Specifically, without limiting the foregoing, the Buyer shall not
assume:
(i) any Action pending as of the Closing Date, notwithstanding
the disclosure thereof in the Schedules hereto, or any subsequent
Action arising out of or relating to any such pending Action;
(ii) any liability arising out of or relating to the Excluded
Assets;
(iii) any liability of the Seller for any Income Taxes for any
periods prior to or at the Closing, whether or not relating to the
Xxxxxxx Division;
(iv) any obligation or liability arising from product warranty
claims, with respect to products sold or services rendered by the
Seller on or prior to the Closing Date; and
(v) any other obligation or liability other than the Assumed
Liabilities arising prior to the Closing Date.
2.3. Purchase Price . The Buyer shall pay to the Seller or its
designees at the Closing the Preliminary Amount by wire transfer of immediately
available funds to an account specified in writing by the Seller to the Buyer
not less than three Business Days prior to the Closing Date.
2.4. Purchase Price Adjustment. (a) As promptly as practicable but in
any event within 45 days following the Closing Date, the Seller shall prepare
and deliver to the Buyer an unaudited statement, substantially in the form of
Schedule 2.4, setting forth the current assets included in the Acquired Assets
and current liabilities included in the Assumed Liabilities as at the Closing
Date (the "Closing Statement"). The Closing Statement shall be prepared
(including, without limitation, the taking of inventory) using the same
accounting methods, policies, practices and procedures, with consistent
classification, judgments, and estimation methodology, as used in the
preparation of the Financial Statements, except that the Closing Statement shall
not include (i) any current Tax assets or any current Tax liabilities, or (ii)
any LIFO reserve or any intercompany profit on inventory reserve, except to the
extent included on the balance sheet of the Seller as at September 30, 2000. In
preparing the Closing Statement, (x) storeroom inventory and spare parts will be
determined on the day immediately preceding the Closing Date and (y) all
inventory shall be valued based on the lower of market value or the Seller's
cost of such inventory.
(b) The Buyer shall have 15 days after receiving the Closing Statement
to accept the Closing Statement or to object to all or any part of the Closing
Statement, setting forth the bases for its objections. If the Buyer does not
notify the Seller in writing of any objections to the Closing Statement within
such 15 days, the Closing Statement shall be deemed to be final, conclusive and
binding upon the Parties. If the Buyer notifies the Seller in writing of any
objections to the Closing Statement within such 15 days, the Parties shall
negotiate in good faith to resolve such objections. If such objections are
resolved within 15 days following the Seller's receipt of written notice of the
Buyer's objections, the Buyer and the Seller shall jointly prepare a revised
Closing Statement which shall be deemed to be final, conclusive and binding upon
the Parties. If the Buyer and the Seller are unable to resolve such objections
within such 15 days, then as promptly as practicable, the Buyer and the Seller
shall retain Xxxxxx Xxxxxxxx (the "Arbiter") (i) to review the Closing Statement
and the Buyer's objections and (ii) to prepare a revised Closing Statement based
upon its review and deliver such revised Closing Statement to the Buyer and the
Seller within 30 days of the date of its retention.
(c) If the Arbiter is retained, the Closing Statement delivered by the
Arbiter to the Buyer and the Seller shall be deemed to be final, conclusive and
binding upon the Parties, absent manifest error. The fees, costs and expenses of
the Arbiter shall be borne equally by the Buyer and the Seller. The Arbiter
shall make available to the Buyer and the Seller its work papers generated in
connection with the preparation or review of the Closing Statement.
(d) If the Purchase Price exceeds the Preliminary Amount, the Buyer
shall pay to the Seller the dollar amount of the Purchase Price Adjustment in
accordance with the provisions of paragraph (e) of this Section 2.4. If the
Purchase Price is less than the Preliminary Amount, the Seller shall pay to the
Buyer the dollar amount of the Purchase Price Adjustment in accordance with the
provisions of paragraph (e) of this Section 2.4.
(e) Any amount payable as the Purchase Price Adjustment shall be paid
by wire transfer of immediately available funds to an account designated in
writing by the Buyer or the Seller, as the case may be. The payments
contemplated in this Section 2.4(e) shall be made on the third Business Day
following the date on which the Closing Statement is deemed to be final.
2.5. Allocation of Purchase Price. The Seller and the Buyer shall use
their reasonable best efforts to agree upon an allocation of the Purchase Price
and other relevant items (the "Purchase Price Allocation") for Federal, state,
local and foreign tax purposes on or prior to the Closing, which allocation
shall be annexed as Schedule 2.5 of this Agreement at the Closing. The Seller
shall deliver to the Buyer a proposed allocation of the Purchase Price and other
relevant items for the Seller's review and approval and the Buyer shall promptly
review and approve or disapprove of such allocation. If the Buyer and the Seller
agree upon an allocation pursuant to this Section 2.5, neither the Buyer nor the
Seller shall take any position inconsistent with such allocation, except as may
be required by law, without the consent of the other Party. The Purchase Price
Allocation determined in accordance with this Section 2.5 shall be appropriately
adjusted to reflect any subsequent adjustment to the Purchase Price based upon
the particular tax asset to which such adjustment relates. Such adjusted
Purchase Price Allocation shall be determined in a manner consistent with the
procedures set forth in this Section 2.5.
2.6. Taxes. (a) Taxes that are imposed on a periodic basis with
respect to the Xxxxxxx Division and the Acquired Assets and are payable for any
taxable period that begins before but ends after the Closing Date, other than
Taxes based on (or measured by) net income ("Straddle Taxes"), shall (i) in the
case of any sales, use, employment, payroll and other similar Straddle Taxes
which are based on or related to sales, receipts or disbursements, be allocated
between the Seller and the Buyer based upon the amount which would be payable if
the relevant taxable period ended on the Closing Date, and (ii) in the case of
all other Straddle Taxes (including real property and personal property Taxes),
be allocated between the Seller and the Buyer based upon the relative number of
days in the portion of the taxable period up to and including the Closing Date
and the relative number of days in the portion of the taxable period subsequent
to the Closing Date. Any refund or credit of Straddle Taxes shall be allocated
between the Seller and the Buyer in a manner consistent with the preceding
sentence. In the case of any Straddle Taxes prepaid by the Seller, the Buyer
shall pay to the Seller at the Closing, the Seller's allocable share of such
Straddle Taxes. In the case of all other Straddle Taxes, the Party paying such
Straddle Taxes shall provide a written notice to the other Party indicating the
amount of such Straddle Taxes so paid (including a copy of any return relating
to, and evidence of payment of, such Straddle Taxes) and such other Party shall
promptly pay to the paying Party such other Party's allocable share of such
Straddle Taxes.
(b) All Transfer Taxes incurred in connection with the consummation of
the transactions contemplated by this Agreement shall be borne equally by the
Seller and the Buyer. The Seller shall prepare and timely file all necessary tax
returns and other documentation with respect to all such Transfer Taxes. The
Buyer shall reasonably cooperate with the Seller in the preparation and filing
of any such tax returns and other documentation.
2.7. The Closing. The closing of the transactions contemplated by this
Agreement (the "Closing") shall take place at the offices of White & Case LLP,
000 Xxxxx Xxxxxxxx Xxxxxxxxx, Xxxxx, Xxxxxxx 00000, at 10:00 A.M. local time, on
May 29, 2001, or at such other place, time and/or date as the Parties may
mutually agree (the date of the Closing, the "Closing Date"). At the Closing,
(a) the Seller shall deliver to the Buyer the various certificates, instruments
and documents referred to in Article VIII, (b) the Buyer shall deliver to the
Seller the various certificates, instruments and documents referred to in
Article IX, (c) the Seller shall execute, acknowledge (if appropriate) and
deliver to the Buyer (i) assignments, substantially in the forms of Exhibits A-1
through A-5, (ii) a quitclaim deed, substantially in the form of Exhibit A-6,
and (ii) such other instruments of sale, transfer conveyance and assignment as
the Buyer may reasonably request, (d) the Buyer shall execute, acknowledge (if
appropriate) and deliver to the Seller such instruments of assumption as the
Seller may reasonably request, and (e) the Buyer will pay the Purchase Price to
the Seller.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE SELLER
The Seller represents and warrants to the Buyer as follows:
3.1. Organization; Power. The Seller is a limited liability company
duly organized, validly existing and in good standing under the laws of the
State of Delaware, and has all requisite limited liability company power and
authority to carry on its business as it is now being conducted, to execute,
deliver and perform this Agreement and the Ancillary Documents, to carry out its
obligations hereunder and thereunder and to consummate the transactions
contemplated hereby and thereby. The Seller is duly licensed or qualified to do
business and is in good standing in each jurisdiction in which the properties
owned or leased by it or the operation of its business makes such licensing or
qualification necessary, except to the extent that the failure to be so licensed
or qualified would not adversely affect the ability of the Seller to conduct the
business as currently conducted or to carry out its obligations under, and to
consummate the transactions contemplated by, this Agreement and the Ancillary
Documents.
3.2. Authorization, Effect of Agreement. The execution, delivery and
performance by the Seller of this Agreement and the Ancillary Documents, the
performance by the Seller of its obligations hereunder and thereunder and the
consummation by the Seller of the transactions contemplated hereby and thereby
have been duly authorized by all requisite limited liability company action on
the part of the Seller. This Agreement has been, and upon its execution each of
the Ancillary Documents shall have been, duly and validly executed and delivered
by the Seller. This Agreement constitutes (assuming due authorization, execution
and delivery by the Buyer), and upon its execution each of the Ancillary
Documents will constitute (assuming due authorization execution and delivery by
all parties other than the Seller), a valid and binding obligation of the
Seller, enforceable against the Seller in accordance with its terms, except to
the extent that such enforceability (i) may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating to
creditors' rights generally, and (ii) is subject to general principles of
equity.
3.3. Subsidiaries. There are no Subsidiaries of the Seller included
within the Xxxxxxx Division.
3.4. Consents. Except as set forth on Schedule 3.4, no Consent is
required to be obtained or made by the Seller in connection with the execution,
delivery and performance by the Seller of this Agreement or the Ancillary
Documents or the consummation by it of the transactions contemplated hereby or
thereby.
3.5. Financial Statements. (a) The Seller has delivered to the Buyer
(i) the unaudited combined statements of net assets of the Xxxxxxx Division as
of December 31, 1999, December 31, 1998 and December 31, 1997; (ii) the
unaudited combined statements of revenues and expenses of the Xxxxxxx Division
for each of the years ended December 31, 1999, December 31, 1998 and December
31, 1997; (iii) an unaudited combined balance sheet of the Xxxxxxx Division as
of September 30, 2000 (the "Reference Balance Sheet"); and (iv) an unaudited
statement of revenues and expenses of the Xxxxxxx Division for the period ended
September 30, 2000 (collectively, with the notes and supplementary information
thereto, the "Financial Statements"), copies of which are included on Schedule
3.5. Except as set forth on Schedule 3.5 or in the notes to the Financial
Statements, the Financial Statements (x) were prepared in accordance with the
books of account and other financial records of the Xxxxxxx Division, (y)
present fairly the combined financial condition and results of operations of the
Xxxxxxx Division as of the dates thereof or for the periods covered thereby, (z)
have been prepared in accordance with U.S. GAAP and (xx) include all adjustments
(consisting only of normal recurring accruals) that are necessary for a fair
presentation of the financial condition and the results of the operations
(subject, in the case of the statements referred to in clauses (iii) and (iv),
to normal year-end adjustments) of the Xxxxxxx Division as of the dates therefor
or for the periods covered thereby.
(b) The books of account and other financial records of the Xxxxxxx
Division are in all material respects complete and correct.
3.6. Conduct in the Ordinary Course; Absence of Certain Changes,
Events and Conditions. Except as permitted or contemplated by this Agreement,
since September 30, 2000 (a) the Xxxxxxx Division has conducted its business in
all material respects in the ordinary and usual course consistent with past
practice and there has not been any development or combination of developments
that, individually or in the aggregate, could reasonably be expected to have a
Seller Material Adverse Effect and (b) the Seller has not:
(i) permitted or allowed any of the assets or properties used or
held for use in connection with the Xxxxxxx Division (whether tangible
or intangible) to be subjected to any Encumbrance, except for
Permitted Encumbrances;
(ii) except as set forth on Schedule 3.6, permitted the Eastman
Division to enter into any Contract creating any liability of the
Xxxxxxx Division in excess of $100,000 that has not been satisfied as
of the date hereof, other than in the ordinary course of business;
(iii) permitted the Xxxxxxx Division to make any capital
investment in, any loan to, or any acquisition of the securities or
assets, of any other Person outside the ordinary course of business;
(iv) permitted the Xxxxxxx Division to delay or postpone the
payment of any accounts payable or liabilities outside the ordinary
course of business;
(v) made any capital expenditure or contract for any capital
expenditure in connection with the Xxxxxxx Division in excess of
$100,000 individually or $500,000 in the aggregate;
(vi) issued any sales orders or otherwise agreed to make any
purchases in connection with the Xxxxxxx Division, other than in the
ordinary course of business, involving exchanges in value in excess of
$50,000 individually or $250,000 in the aggregate;
(vii) sold, transferred, leased, subleased, licensed or otherwise
disposed of any properties or assets used or held for use in
connection with the Xxxxxxx Division, real, personal or mixed
(including, without limitation, leasehold interests and intangible
assets) having a value in excess of $50,000 individually or $250,000
in the aggregate, other than the sale of inventories or obsolete
equipment in the ordinary course of business;
(viii) except as set forth on Schedule 3.6, hired or agreed to
hire any individual with a salary, wages or other compensation in
excess of $100,000, increased the wages, salaries, compensation,
pension or other benefits payable, or to become payable by the Xxxxxxx
Division, to any of its officers, employees or agents, including,
without limitation, any bonus payments or severance or termination
pay, other than increases in wages and salaries required by employment
arrangements existing on the date hereof or otherwise in the ordinary
course of business;
(ix) allowed any Permit or Environmental Permit that was issued
or relates to the Xxxxxxx Division or otherwise relates to any
Acquired Asset to lapse or terminate or failed to renew any such
Permit or Environmental Permit or any insurance policy that is
scheduled to terminate or expire prior to the Closing Date, except for
any lapse, termination or failure to renew that individually or in the
aggregate could not reasonably be expected to have a Seller Material
Adverse Effect;
(x) materially amended, modified or consented to the termination
of any Material Contract or any of the Xxxxxxx Division's rights
thereunder to the extent arising or otherwise relating to any period
on or after the Closing Date;
(xi) terminated, discontinued, closed or disposed of any plant,
facility or other business operation relating to the Xxxxxxx Division,
or laid off any employees (other than layoffs of less than 50
employees in any six-month period in the ordinary course of business
consistent with past practice) or implemented any early retirement,
separation or program providing early retirement window benefits
within the meaning of Section 1.401(a)-4 of the Treasury Regulations
promulgated under Section 401 of the Code or announced or planned any
such action or program for the future;
(xii) permitted to lapse or go abandoned any Business
Intellectual Property (or any registration or grant thereof or any
application relating thereto) to which, or under which, the Xxxxxxx
Division has any right, title, interest or license, except for lapses
that individually or in the aggregate could not reasonably be expected
to have a Seller Material Adverse Effect;
(xiii) suffered any casualty loss or material damage with respect
to any of the Acquired Assets which has a replacement cost of more
than $100,000, whether or not such loss or damage shall have been
covered by insurance;
(xiv) changed any accounting practices (including, without
limitation, any change in depreciation or amortization policies or
rates) used with respect to the Xxxxxxx Division; or
(xv) agreed, whether in writing or otherwise, to take any of the
actions specified in this Section 3.6 or granted any options to
purchase, rights of first refusal, rights of first offer or any other
similar rights or contracts with respect to any of the actions
specified in this Section 3.6.
3.7. No Undisclosed Liabilities. The Seller does not have any debt,
obligation or other liability of any kind or nature, whether absolute, accrued,
contingent, fixed or otherwise, or whether due or to become due, affecting the
Xxxxxxx Division or any Acquired Asset, other than liabilities (i) reflected or
reserved against on the Reference Balance Sheet, (ii) disclosed on Schedule 3.7,
(iii) incurred or arising since the date of this Agreement in the ordinary
course of business of the Xxxxxxx Division or (iv) that are not material to the
Xxxxxxx Division.
3.8. Title to Assets. (a) The Seller owns, leases or has the legal
right to use the Acquired Assets. Except as set forth on Schedule 3.8, the
Seller has good and marketable title to all of the properties and assets
included in the Acquired Assets which it purports to own (including, without
limitation, those properties and assets included in the Acquired Assets which
are reflected as owned by the Seller on the balance sheet as of September 30,
2000 included in the Financial Statements, except for properties and assets
sold, consumed or otherwise disposed of in the ordinary course of business or
otherwise as permitted by this Agreement since September 30, 2000) or, in the
case of the Leased Real Property and any other leased property included in the
Acquired Assets, valid and subsisting leasehold interests in such property free
and clear of all Encumbrances other than the encumbrances set forth on Schedule
3.8 and Permitted Encumbrances.
(b) The Acquired Assets constitute all properties, assets and rights
which are necessary to conduct the business of the Xxxxxxx Division in the
manner conducted as of the date hereof, and the Tangible Personal Property is in
such physical condition and state of repair, ordinary wear and tear excepted, as
to enable the Buyer to conduct the operations of the Xxxxxxx Division as
currently conducted without material disruption after the Closing.
(c) Immediately following the Closing (and assuming the obtaining of
all Consents), the Buyer will own, free and clear of all Encumbrances (other
than Permitted Encumbrances and Encumbrances imposed at the direction of the
Buyer), or lease, under valid and subsisting leases, the interest of the Seller
in, to and under the Acquired Assets.
3.9. Permits. The Seller has all Permits that are required for the
operation of the Xxxxxxx Division as presently conducted or for the ownership of
the Acquired Assets, except where the absence thereof individually or in the
aggregate could not reasonably be expected to have a Seller Material Adverse
Effect. The Seller has not received any written notice from any Governmental
Authority revoking, canceling, rescinding, materially modifying or refusing to
renew any Permit or advising of violations under any Law which individually or
in the aggregate could reasonably be expected to have a Seller Material Adverse
Effect. Except as set forth on Schedule 3.9, the Xxxxxxx Division is in
compliance with the Permits and the requirements of the Permits, except where
the failure to comply therewith individually or in the aggregate could not
reasonably be expected to have a Seller Material Adverse Effect. Schedule 3.9
identifies all material Permits that are nontransferable or which will require
the consent of any Governmental Authority in the event of the consummation of
the transactions contemplated by this Agreement.
3.10. Real Property. (a) As of the date hereof, the Seller does not
own any real property in respect of the Xxxxxxx Division, but has the right to
purchase the Project (as defined in the Lease and Note Financing Agreement) in
fee simple in accordance with Section 8.2 of the Lease and Note Financing
Agreement.
(b) The only leases of real property in respect of the Xxxxxxx
Division (the "Leased Real Property") to which the Seller is a party on the date
hereof are the Lease and Note Financing Agreement and the Warehouse Lease. Each
of the Leases attached hereto as Exhibits B-1 and B-2 is the entire Lease with
respect to the premises described therein and there are no amendments or other
modifications of such Leases. Each Lease is in full force and effect and
represents the entire agreement between the respective landlord and the Seller
with respect to the use and occupancy of such Leased Real Property. In addition,
the Seller has performed each of its obligations under the Leases and has not
(i) received any notice of cancellation or termination under any such Lease,
(ii) received any notice of a breach or default under such Lease, which breach
or default has not been cured, and (iii) other than as set forth on Schedule
3.10, granted to any other Person any rights, adverse or otherwise, under any
such Lease.
(c) The original lessee under the Lease and Note Financing Agreement
was Xxxxxx Paper Company, a New Hampshire corporation. All right, title and
interest of such lessee in and to the Lease and Note Financing Agreement were
assigned to the Seller pursuant to an Assignment of Lease dated as of January
14, 1999. The original owner of the Note was Xxxxxx Paper Company, a New
Hampshire Corporation. The Note was assigned to the Seller pursuant to an
Assignment dated as of January 14, 1999. The original lessee under the Warehouse
Lease was Xxxxxx Paper Company, a Georgia corporation. All right, title and
interest of such lessee in and to the Warehouse Lease were assigned to the
Seller pursuant to an Assignment and Assumption Agreement and Consent dated as
of December 18, 1999.
(d) (i) The Seller has received no notice of any condemnation or
eminent domain proceedings relating to the Facility, (ii) to the Seller's
Knowledge, there are no such contemplated or threatened proceedings with respect
to the Facility, and (iii) the Seller has received no notice of default under,
violation of, or breach of any of the covenants, restrictions, rights-of-way,
licenses, agreements, or easements affecting title to or relating to use of the
Facility which, in the case of clauses (i) through (iii) above, could reasonably
be expected to have a Seller Material Adverse Effect. The Seller has received no
notice of, nor to the Seller's Knowledge is there, any, fence dispute, boundary
dispute, boundary line question, water dispute, or drainage dispute concerning
or affecting the Facility which could reasonably be expected to have a Seller
Material Adverse Effect.
(e) There are no defaults under the Note nor any prepayments or
interest owing thereon.
3.11. Compliance with Laws. Except as set forth on Schedule 3.11, the
Xxxxxxx Division is in compliance with all applicable Laws, in each case, as in
effect as of the date hereof, except where the failure to comply therewith
individually or in the aggregate could not reasonably be expected to have a
Seller Material Adverse Effect.
3.12. Contracts. (a) Schedule 3.12(a) sets forth a list of each of the
following Contracts of the Xxxxxxx Division (such Contracts, being the "Material
Contracts"):
(i) each Contract for the purchase of inventory, spare parts,
other materials or personal property with any supplier or for the
furnishing of services to the Seller related to the Xxxxxxx Division:
(A) under the terms of which the Seller is likely to pay or otherwise
give consideration of more than $100,000 in the aggregate over the
remaining term of such Contract and (B) which cannot be canceled by
the Seller without penalty and without more than 90 days' notice;
(ii) each Contract for the sale of inventory or other personal
property or for the furnishing of services by the Seller related to
the Xxxxxxx Division: (A) under the terms of which the Seller is
likely to pay or otherwise give consideration of more than $100,000 in
the aggregate over the remaining term of such Contract and (B) which
cannot be canceled by the Seller without penalty and without more than
90 days' notice;
(iii) all broker, distributor, dealer, manufacturer's
representative, franchise, agency, sales promotion, market research,
marketing consulting and advertising contracts related to the Xxxxxxx
Division: (A) under the terms of which the Seller is likely to pay or
otherwise give consideration of more than $50,000 in the aggregate
over the remaining term of such Contract and (B) which cannot be
canceled by the Seller without penalty and without more than 90 days'
notice;
(iv) all management Contracts and Contracts with independent
contractors or consultants (or similar arrangements) related to the
Xxxxxxx Division: (A) under the terms of which the Seller is likely to
pay or otherwise give consideration of more than $50,000 in the
aggregate over the remaining term of such Contract and (B) which
cannot be canceled by the Seller without penalty and without more than
90 days' notice;
(v) each Contract relating to the operation of the Leased Real
Property: (A) under the terms of which the Seller is likely to pay or
otherwise give consideration of more than $100,000 in the aggregate
over the remaining term of such Contract and (B) which cannot be
canceled by the Seller without penalty and without more than 90 days'
notice;
(vi) all Contracts relating any Indebtedness of the Xxxxxxx
Division;
(vii) all Contracts related to the Xxxxxxx Division with any
Governmental Authority to which the Seller is a party;
(viii) all Contracts related to the Xxxxxxx Division that limit
or purport to limit the ability of the Xxxxxxx Division to compete
with any Person or in any geographic area or during any period of
time;
(ix) all Contracts related to the Xxxxxxx Division between or
among the Seller or any Affiliate of the Seller; and
(x) all Contracts related to the Xxxxxxx Division which are not
made in the ordinary course of business, and which are material to the
conduct of the Xxxxxxx Division's business.
(b) Except as disclosed on Schedule 3.12(b), each Material Contract:
(i) is valid and binding and enforceable against the Seller, except to the
extent that such enforceability (A) may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to creditors' rights
generally, and (B) is subject to general principles of equity, (ii) is in full
force and effect, and (iii) upon consummation of the transactions contemplated
by this Agreement, except to the extent that any Consents set forth on Schedule
3.4 are not obtained, shall continue in full force and effect without penalty or
other adverse consequence. The Seller is not in breach of, or default under, any
Material Contract, except for breaches or defaults which individually or in the
aggregate could not reasonably be expected to have a Seller Material Adverse
Effect.
(c) Except as disclosed on Schedule 3.12(c), to the Seller's
Knowledge, no other party to any Material Contract is in breach thereof or
default thereunder, except for breaches or defaults which individually or in the
aggregate could not reasonably be expected to have a Seller Material Adverse
Effect.
3.13. No Violations. Except as set forth on Schedule 3.13, the
execution, delivery and performance by the Seller of this Agreement and the
Ancillary Documents and the consummation by the Seller of the transactions
contemplated hereby and thereby will not, with or without the giving of notice
or the lapse of time, or both, (a) violate, conflict with or result in breach of
any provisions of the Certificate of Formation or the Limited Liability Company
Agreement of the Seller, (b) conflict with or violate any Law or Governmental
Order applicable to the Seller or any of its respective assets, properties or
businesses, including, without limitation, the Acquired Assets and the Xxxxxxx
Division, or (c) assuming the obtaining of all Consents set forth on Schedule
3.4, conflict with, result in any breach of, constitute a default (or event
which with the giving of notice or lapse of time, or both, would become a
default) under, or give to others any right of termination or acceleration
under, or result in the creation of any Encumbrance on any of the Acquired
Assets pursuant to, any Contract to which the Seller is a party or by which any
of the Acquired Assets is bound or affected, other than Permitted Encumbrances.
3.14. Intellectual Property. Schedule 3.14 sets forth a list of all
items of Business Intellectual Property. Except as disclosed on Schedule 3.14,
or except as could not reasonably be expected to have a Seller Material Adverse
Effect: (a) the Seller owns or possesses rights to use all Business Intellectual
Property and the Closing will not affect the Buyer's rights to use the Business
Intellectual Property; (b) the Seller has not received notice from any third
party questioning the validity of any Business Intellectual Property or the
Xxxxxxx Division's title thereto; and (c) the conduct of the Xxxxxxx Division
does not infringe upon any intellectual property rights of third parties. The
Seller has not licensed or entered into any agreement or otherwise granted any
third party any rights in or to the Business Intellectual Property.
3.15. Litigation. Except as set forth on Schedule 3.15 (which with
respect to each Action disclosed therein sets forth the parties, nature of the
proceeding and status thereof), there are no pending Actions by or against the
Seller affecting any of the Acquired Assets or the Xxxxxxx Division (or, to the
Seller's Knowledge, threatened to be brought against the Seller). None of the
matters disclosed on Schedule 3.15 could reasonably be expected to have a Seller
Material Adverse Effect or could reasonably be expected to affect the legality,
validity or enforceability of this Agreement or the Ancillary Documents. Neither
the Xxxxxxx Division nor any of the Acquired Assets is subject to any
Governmental Order (nor, to the Seller's Knowledge, are there any such
Governmental Orders threatened to be imposed by any Governmental Authority)
which could reasonably be expected to have a Seller Material Adverse Effect.
3.16. Employee Benefit Plans. (a) Schedule 3.16 sets forth a list of
each Employee Benefit Plan. No Employee Benefit Plan is subject to Title IV of
ERISA.
(b)(i) The execution of this Agreement and the consummation of the
transactions contemplated hereby do not constitute a triggering event under any
Employee Benefit Plan which will result in any acceleration of the payment or
vesting of any benefits to any Employee or in any increase in benefits provided
under the Employee Benefit Plans; (ii) no liability, claim, action, litigation,
audit, examination, investigation or administrative proceeding has been made,
commenced or, to the Seller's Knowledge, threatened with respect to any Employee
Benefit Plan (other than routine claims for benefits payable in the ordinary
course) which could result in a material liability for which Buyer could
reasonably expected to be liable.
(c) The Seller has delivered or caused to be delivered to the Buyer or
its counsel true and complete copies of each Employee Benefit Plan, together
with all amendments thereto, and, to the extent applicable, all current summary
plan descriptions.
3.17. Tax Matters. (a) The Seller has filed all Tax Returns that it
was required to file, and has paid all Taxes due, with respect to the Xxxxxxx
Division and the Acquired Assets except where the failure to file Tax Returns or
to pay Taxes could not reasonably be expected to have a Seller Material Adverse
Effect. The Seller has not paid any ad valorem taxes with respect to the Xxxxxxx
Division or the Acquired Assets, and no such taxes are due or payable by the
Seller.
(b) Neither the Seller nor any of its Affiliates has waived any
statute of limitations in respect of Taxes relating to the Xxxxxxx Division or
the Acquired Assets or agreed to any extension of time with respect to any Tax
assessment or deficiency relating to the Xxxxxxx Division or the Acquired
Assets.
(c) Neither the Seller nor any of its Affiliates is a party to any
Income Tax allocation or sharing agreement which relates to the Xxxxxxx Division
or the Acquired Assets.
3.18. Environmental Matters. (a) Except as set forth in Schedule
3.18(a) or except for such of the following as individually or in the aggregate
could not reasonably be expected to have a Seller Material Adverse Effect: (i)
the Xxxxxxx Division and the Acquired Assets are, and since December 17, 1999,
have been in compliance with all applicable Environmental Laws; (ii) the Seller
has all Environmental Permits required under applicable Environmental Laws for
the operation of the Xxxxxxx Division as presently conducted; (iii) all of such
Environmental Permits are in full force and effect; (iv) to the Seller's
Knowledge, all past non-compliance with Environmental Laws or Environmental
Permits by the Xxxxxxx Division has been resolved or remedied without any
pending, ongoing or future obligation, cost or liability; (v) the Seller has not
received any order or notice or other communication with respect to the Xxxxxxx
Division or the Acquired Assets from any (A) Governmental Authority, (B) Person
purporting to act pursuant to any citizen suit provision of any Environmental
Law, (C) current or prior owner or operator of any Facility, or (D) other third
party; in each case alleging injury to human health or the environment, damage
to property, or the violation of or failure to comply with any Environmental Law
or Environmental Permit; (vi) there are no pending or, to the Seller's
Knowledge, threatened Actions, in each case relating to any Environmental
Matters with respect to the Xxxxxxx Division or the Acquired Assets; (vii) there
has been no release of any Hazardous Materials into the environment (A) at or
from any Acquired Assets, including, without limitation, the Leased Real
Property, or (B) at or from any other location where the Xxxxxxx Division
generated, transported, stored or disposed of Hazardous Materials; in each case
requiring investigation, remediation or other action under any Environmental
Law; (viii) none of the Acquired Assets, including, without limitation, the
Leased Real Property and the improvements and equipment thereon, contains, and
since December 17, 1999, has contained any (A) asbestos or asbestos-containing
materials, (B) polychlorinated biphenyls, (C) underground storage tanks, (D)
septic systems or drywells, (E) pits, ponds, sumps, lagoons or (F) landfills,
dumps, or other disposal areas; (ix) to the Seller's Knowledge, there are no
environmental conditions, facts or circumstances which are reasonably expected
to give rise to or result in any environmental claim, liability, loss, damage,
cost or expense of whatever kind or nature with respect to the Xxxxxxx Division
or the Acquired Assets; (x) the Seller is not required to maintain any financial
guaranties or other financial assurances with respect to the Xxxxxxx Division or
the Acquired Assets pursuant to Environmental Laws; (xi) to the Seller's
Knowledge, there is no requirement currently promulgated under any Environmental
Law or Environmental Permit that is reasonably expected to result in material
liability for the Xxxxxxx Division or the Acquired Assets; (xii) the Seller has
removed the underground spill containment tank at the Facility in accordance
with all applicable Laws, including, without limitation, applicable requirements
for post-removal sampling and proper disposal of all materials resulting from
the removal work, and has provided the Buyer with copies of all analytical data
and reports developed in connection with the removal work; and (xiii) since
December 17, 1999, no hazardous waste, as that term is defined in RCRA and its
implementing regulations or by comparable Laws of the State of Georgia, or other
Hazardous Material has been spilled or released in the underground spill
containment tank.
(b) The Seller has made available to the Buyer true and complete
copies of any reports, studies, analyses, assessment reports, audit reports,
tests, monitoring and other information in the possession of the Seller, in each
case relating to any Environmental Matters with respect to the Xxxxxxx Division
and the Acquired Assets. Schedule 3.18(b) contains a true, correct and complete
description of all pending or existing Environmental Permits required by
Environmental Laws with respect to the Xxxxxxx Division and the Acquired Assets.
3.19. Labor Matters. Except as set forth on Schedule 3.19 and except
as may result from the permitted announcement of the execution of this
Agreement: (a) the Seller is not a party to any collective bargaining agreement
or other labor union contract applicable to persons employed by the Eastman
Division and currently, to the Seller's Knowledge, there are no organizational
campaigns, petitions or other unionization activities seeking recognition of a
collective bargaining unit which could reasonably be expected to have a Seller
Material Adverse Effect; (b) there are no controversies, strikes, slowdowns or
work stoppages pending or, to the Seller's Knowledge, threatened between the
Xxxxxxx Division and any of its respective employees, and the Xxxxxxx Division
has not experienced any such controversy, strike, slowdown or work stoppage
within the past twelve months; (c) the Xxxxxxx Division has not breached or
otherwise failed to comply with the provisions of any collective bargaining or
union contract and there are no grievances outstanding against the Xxxxxxx
Division under any such agreement or contract which could have a Seller Material
Adverse Effect; (d) there are no unfair labor practice complaints pending
against the Xxxxxxx Division before the National Labor Relations Board or any
other Governmental Authority involving employees of the Xxxxxxx Division which
could reasonably be expected to have a Seller Material Adverse Effect; and (e)
the Xxxxxxx Division is currently, and since December 17, 1999, has been in
compliance in all material respects with all applicable Laws relating to the
employment of labor, including those related to wages, hours, collective
bargaining and the payment and withholding of taxes as required by the
appropriate Governmental Authority and has withheld and paid to the appropriate
Governmental Authority or are holding for payment not yet due to such
Governmental Authority all amounts required to be withheld from employees of the
Xxxxxxx Division and is not liable for any material arrears of wages, taxes,
penalties or other sums for failure to comply with any of the foregoing.
3.20. Receivables. Except to the extent, if any, reserved for on the
Reference Balance Sheet, all accounts receivable and other receivables reflected
on the Reference Balance Sheet arose from, and the accounts receivable and other
receivables existing on the Closing Date will have arisen from, the sale of
inventory or services to Persons not affiliated with the Xxxxxxx Division and in
the ordinary course of the business of the Xxxxxxx Division. All receivables
reflected on the Reference Balance Sheet or arising from the date thereof until
the Closing (subject to the reserve for bad debts, if any, reflected on the
Reference Balance Sheet or the Closing Statement (which reserves shall not be
proportionately greater than the reserves reflected on the Reference Balance
Sheet)) are or will be good and have been or will be collected or are or will be
collectible through the use of commercially reasonable collection efforts,
without resort to litigation or extraordinary collection activity, within 120
days of the Closing Date.
3.21. Inventories. (a) Subject to amounts reserved therefor on the
Reference Balance Sheet, the values at which all inventories are carried on the
Reference Balance Sheet reflect the inventory valuation policy of the Xxxxxxx
Division of stating such inventories at the lower of cost (determined on the
last-in, first-out method) or market value. Except as set forth on Schedule
3.21, the Xxxxxxx Division has good and marketable title to the inventories free
and clear of all Encumbrances other than Permitted Encumbrances. The inventories
do not consist of any items held on consignment. The Xxxxxxx Division is under
no obligation or liability with respect to accepting returns of items of
inventory or merchandise in the possession of its customers other than in the
ordinary course of business consistent with past practice. No clearance sale of
the inventories has been conducted since September 30, 2000. The Xxxxxxx
Division has not acquired or committed to acquire or manufacture inventory for
sale which is not of a quality and quantity usable in the ordinary course of the
business of Xxxxxxx Division, nor has the Xxxxxxx Division changed the price of
any inventory except for (i) price reductions to reflect any reduction in the
cost thereof to the Xxxxxxx Division, (ii) reductions and increases responsive
to normal competitive conditions and consistent with the Xxxxxxx Division's past
sales practices and (iii) increases to reflect any increase in the cost thereof
to the Xxxxxxx Division.
(b) The inventories are in good and merchantable condition in all
material respects, are suitable and usable for the purposes for which they are
intended and are in a condition such that they can be sold in the ordinary
course of the business of the Xxxxxxx Division.
(c) The finished goods inventories are supported by binding purchase
orders, are in good and merchantable condition and have been manufactured in
accordance with the specifications contained in any purchase orders related
thereto, and the Seller has not been advised by any customer that such inventory
will not be accepted.
3.22. Certain Interests. Except as set forth on Schedule 3.22, no
Officer of the Seller or the Xxxxxxx Division and no relative or spouse (or
relative of such spouse) who resides with, or is a dependent of, any such
Officer:
(a) has any direct or indirect financial interest in any competitor,
supplier or customer of the Xxxxxxx Division (other than the interests of such
Persons in Durango Paper Company and its Affiliates); provided, however, that
ownership of shares representing less than 5% of the outstanding voting power of
any competitor, supplier or customer, which are listed on any national
securities exchange or traded actively in the national over-the-counter market,
shall not be deemed to be a "financial interest" so long as the Person owning
such securities has no other connection or relationship with such competitor,
supplier or customer; or
(b) owns, directly or indirectly, in whole or in part, or has any
other interest in any tangible or intangible property which the Seller uses or
has used in the conduct of the business of the Xxxxxxx Division or otherwise, or
has any other business relationship (as lessor, supplier, customer, or
otherwise), with the Xxxxxxx Division.
3.23. Brokers. Except for the fees payable to Banc of America
Securities LLC, which are the sole responsibility of the Seller, the Seller has
not paid or become obligated to pay any fee or commission to any broker, finder,
or intermediary in connection with the transactions contemplated hereby. The
Buyer shall not, through the transfer of the Acquired Assets, the assumption of
the Assumed Liabilities or otherwise, have any obligations in respect of any
such fees or commissions.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE BUYER
The Buyer represents and warrants to the Seller as follows:
4.1. Organization; Power. The Buyer is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation and has all requisite corporate power and authority to carry on
its business as it is now being conducted, to execute, deliver and perform this
Agreement and the Ancillary Documents, to carry out its obligations hereunder
and thereunder and to consummate the transactions contemplated hereby and
thereby.
4.2. Authorization; Effect of Agreement. The execution, delivery and
performance by the Buyer of this Agreement and each of the Ancillary Documents,
the performance by the Buyer of its obligations hereunder and thereunder and the
consummation by the Buyer of the transactions contemplated hereby and thereby
have been duly authorized by all requisite corporate action on the part of the
Buyer. This Agreement has been, and upon its execution each of the Ancillary
Documents shall have been, duly and validly executed and delivered by the Buyer.
This Agreement constitutes (assuming due authorization, execution and delivery
by the Seller), and upon its execution each of the Ancillary Documents will
constitute (assuming due authorization execution and delivery by all parties
other than the Buyer), a valid and binding obligation of the Buyer, enforceable
against the Buyer in accordance with its terms, except to the extent that such
enforceability (i) may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to creditors' rights generally, and
(ii) is subject to general principles of equity.
4.3. Consents. No Consent is required to be obtained or made by the
Buyer in connection with the execution, delivery and performance by the Buyer of
this Agreement or the Ancillary Documents or the consummation by it of the
transactions contemplated hereby or thereby.
4.4. No Violations. The execution, delivery and performance by the
Buyer of this Agreement and the Ancillary Documents and the consummation by the
Buyer of the transactions contemplated hereby and thereby will not, with or
without the giving of notice or the lapse of time, or both, (a) violate,
conflict with or result in the breach of any provision of the Certificate of
Incorporation or By-laws of the Buyer, (b) conflict with, or violate any Law or
Governmental Order applicable to the Buyer or any of its respective assets,
properties or businesses, or (c) assuming the obtaining of all Consents,
conflict with, result in any breach of, constitute a default (or event which
with the giving of notice or lapse of time, or both, would become a default)
under, or give to others any right of termination or acceleration under, or
result in the creation of any Encumbrance on any of the Acquired Assets pursuant
to, any Contract to which the Buyer is a party.
4.5. Litigation. There are no pending Actions by or against the Buyer
(or, to the Buyer's Knowledge, threatened to be brought against the Buyer) which
could reasonably be expected to have a Buyer Material Adverse Effect or could
reasonably be expected to affect the legality, validity or enforceability of
this Agreement or the Ancillary Documents. The Buyer is not subject to any
Governmental Order (nor, to the Buyer's Knowledge, are there any such
Governmental Orders threatened to be imposed by any Governmental Authority)
which could reasonably be expected to have a Buyer Material Adverse Effect or
could reasonably be expected to affect the legality, validity or enforceability
of this Agreement or the Ancillary Documents.
4.6. Availability of Funds. The Buyer has available and will have
available sufficient funds on the Closing Date to enable it to pay the Purchase
Price.
4.7. Brokers. The Buyer has not paid or become obligated to pay any
fee or commission to any broker, finder or intermediary in connection with the
transactions contemplated hereby.
ARTICLE V
COVENANTS OF THE SELLER
The Seller hereby covenants and agrees with the Buyer as follows:
5.1. Action by the Seller. From the date hereof until the Closing, the
Seller will use commercially reasonable efforts, and the Buyer will cooperate
with the Seller, to secure all Consents of the Seller from third parties as
shall be required, on behalf of the Seller, in order to enable the Seller to
effect the transactions contemplated hereby and by the Ancillary Documents, and
the Seller will otherwise use commercially reasonable efforts to cause the
consummation of such transactions in accordance with the terms and conditions
hereof and thereof.
5.2. Conduct of the Xxxxxxx Division's Business. Except as otherwise
permitted by this Agreement or consented to by the Buyer (which consent shall
not be unreasonably withheld or delayed), from the date hereof until the
Closing, the Seller shall not conduct the business of the Xxxxxxx Division other
than in the ordinary course and consistent with the Seller's prior practice.
Without limiting the generality of the foregoing, except as set forth on
Schedule 5.2, the Xxxxxxx Division shall (i) continue its advertising and
promotional activities, and pricing and purchasing policies, substantially in
accordance with past practice; (ii) not materially shorten or lengthen the
customary payment cycles for any of its payables or receivables; (iii) use
commercially reasonable best efforts to (A) preserve intact the business
organization of the Xxxxxxx Division, (B) retain the services of the employees
(as a group) of the Xxxxxxx Division, (C) continue in full force and effect
without material modification all existing policies or binders of insurance
currently maintained in respect of the Xxxxxxx Division and (D) preserve its
current relationships with its customers, suppliers and other persons with which
it has significant business relationships, (iv) exercise, but only after notice
to the Buyer and receipt of the Buyer's prior consent, any rights of renewal
pursuant to the terms of any of the leases or subleases set forth on Schedule
3.10 which by their terms would otherwise expire; and (v) not engage in any
practice, take any action, fail to take any action or enter into any transaction
which could cause any representation or warranty of the Seller under this
Agreement to be untrue or result in a breach of any covenant made by the Seller
in this Agreement. Notwithstanding the foregoing, the Buyer agrees and
understands, that the Seller is entitled to (i) transfer cash out of the Xxxxxxx
Division and that it is intended that at the Closing there shall be a cash
balance of zero in the accounts of the Xxxxxxx Division and (ii) terminate,
satisfy and/or settle any and all transactions with any Affiliate of the Xxxxxxx
Division.
5.3. Access. From the date hereof until the Closing, the Seller shall
provide the Buyer with such information as the Buyer may from time to time
reasonably request with respect to the Xxxxxxx Division and the transactions
contemplated by this Agreement and the Ancillary Documents, and shall provide
the Buyer and its accountants, counsel, consultants and other representatives
access during regular business hours and upon reasonable notice to the
personnel, properties, books and records of the Xxxxxxx Division as the Buyer
may from time to time reasonably request; provided, however, that such access
shall not unduly interfere with the conduct of the Xxxxxxx Division and the
Seller shall not be obligated to provide the Buyer with any information relating
to trade secrets or which would violate any Law or any term of any Contract of
the Seller or which may subject the Seller to risk of liability, or if the
provision thereof would adversely affect the ability of the Seller or any of its
Affiliates to assert attorney-client, attorney work product or other similar
privilege. Any disclosure whatsoever during such investigation by the Buyer
shall not constitute an enlargement of or additional representations or
warranties of the Seller or the Xxxxxxx Division beyond those specifically set
forth in this Agreement.
5.4. Publicity. The Seller will not release, generate or permit any
press release, public statement or other publicity concerning this Agreement or
the Ancillary Documents or the transactions contemplated hereunder or thereunder
nor submit this Agreement or any Ancillary Document or any document relating
hereto or thereto to any Governmental Authority, without first consulting with
and obtaining the consent of the Buyer, except as required by Law or legal
authorities.
5.5. Notices of Certain Events. From the date hereof until the Closing
Date, the Seller shall give prompt notice to the Buyer of any material adverse
development of which the Seller has Knowledge and which causes a breach of any
of the Seller's representations and warranties in Article III.
5.6. Exclusivity. The Seller shall not (and the Seller shall not cause
or permit the Xxxxxxx Division or any of its directors, officers, employees,
agents or representatives to) solicit, initiate or encourage the submission of
any proposal or offer from any Person relating to the acquisition of all or
substantially all of the assets of the Xxxxxxx Division.
5.7. Closing of the XxXxxxxx Division. The Seller shall within 120
days of the Closing wind up the operations of the XxXxxxxx Division. The Seller
shall be and remain liable for all costs and expenses incurred in connection
with the closing of the XxXxxxxx Division, including all severance and other
obligations of its employees.
ARTICLE VI
COVENANTS OF THE BUYER
The Buyer hereby covenants and agrees with the Seller as follows:
6.1. Action by the Buyer. From the date hereof until the Closing, the
Buyer will use commercially reasonable efforts, and the Seller will cooperate
with the Buyer, to secure all Consents, from third parties as shall be required,
on behalf of the Buyer, in order to enable the Buyer to effect the transactions
contemplated hereby and by the Ancillary Documents, and the Buyer will otherwise
use commercially reasonable efforts to cause the consummation of such
transactions in accordance with the terms and conditions hereof and thereof.
6.2. Publicity. The Buyer will not release, generate or permit any
press release, public statement or other publicity concerning this Agreement or
any Ancillary Document or the transactions contemplated hereunder or thereunder
nor submit this Agreement or the Ancillary Documents or any document relating
hereto or thereto to any Governmental Authority, without first consulting with
and obtaining the consent of the Seller, except as required by Law or legal
authorities (provided that the Buyer shall give prior notice of such disclosure
to the Seller); and provided that in no event shall the Buyer disclose any
financial or other results of the Seller or the Xxxxxxx Division.
6.3. Confidentiality. The Buyer may disclose non-public information
relating to the Xxxxxxx Division and the Seller only (i) to those officers,
directors and employees of the Buyer who need to know such information for the
purpose of evaluating the Xxxxxxx Division and the transactions contemplated
hereby and by the Ancillary Documents and who agree to keep it confidential;
(ii) to those advisors of the Buyer who need to know such information for the
purpose of evaluating the Xxxxxxx Division and the transactions contemplated
hereby and the Ancillary Documents and whose names and the names of their
professional firms are disclosed to the Seller and who agree to keep such
information confidential; and (iii) to the extent required by any Law (provided
that the Buyer gives prior notice of such disclosure to the Seller). The Buyer
shall be responsible for any failure by any officer, director or employee of the
Buyer or any advisor of the Buyer to maintain the confidentiality of any such
information.
6.4. Notice. From the date hereof until the Closing, Buyer will give
prompt notice to the Seller of any material adverse development of which the
Buyer has Knowledge and which causes a breach of any of the Buyer's
representations and warranties in Article IV.
ARTICLE VII
ADDITIONAL COVENANTS
7.1. Further Assurances. The Buyer and the Seller shall each, from
time to time after the Closing, at the reasonable request of the other and at
their own expense and without further consideration, execute and deliver such
further documents and instruments of assignment, transfer, license or assumption
and take such further action in order more effectively to transfer, reduce to
possession and record title to any of the Acquired Assets, to permit the Buyer
to operate the Xxxxxxx Division or to implement the assumption of the Assumed
Liabilities.
7.2. Books and Records. The Buyer, on the one hand, and the Seller, on
the other hand, shall each, on the request of the other, make available to such
other Party from time to time on a reasonable basis records and other documents
substantially relating to the Acquired Assets and the Xxxxxxx Division
(including records or documents relating to Straddle Taxes or Transfer Taxes).
Such records and other documents shall be held by the Party in possession of
such documents for seven years after the Closing Date and copies shall be
delivered to the other Party upon such other Party's request at any time and at
such other Party's out-of-pocket expense.
7.3. Insurance. As of the Closing Date, the coverage under all
insurance policies related to the Xxxxxxx Division shall continue in force only
for the benefit of the Seller, and not for the benefit of the Buyer or the
Xxxxxxx Division. As of the Closing Date, the Buyer shall arrange for new
insurance policies with respect to the Xxxxxxx Division covering all periods
from and after the Closing Date and agrees not to seek, through any means, to
benefit from any of the Seller's insurance policies which may provide coverage
for claims relating in any way to the Xxxxxxx Division arising on or prior to
the Closing Date.
7.4. Payments from Third Parties. In the event that, on or after the
Closing Date, either the Buyer or the Seller shall receive any payments or other
funds due to another Party pursuant to the terms hereof or otherwise, then the
Party receiving such funds shall promptly forward such funds to the proper
Party.
7.5. Tax Matters. After the Closing Date, the Parties shall cooperate
with one another in connection with the preparation and filing of tax returns
and any audits or proceedings relating to Straddle Taxes or Transfer Taxes,
including furnishing or making available books and records relating to such
Taxes and making employees, available on a mutually convenient basis to provide
explanations of any such books and records.
7.6. Covenant Not to Compete. (a) For a period of two years from and
after the Closing Date, neither the Seller nor Corporacion Durango shall
directly or indirectly engage in the business of producing, marketing or selling
multi-wall bags in any state of the United States other than through the
XxXxxxxx Division; provided, however, that no owner of less than 5% of the
outstanding capital stock of any publicly traded corporation shall be deemed to
engage in such business solely by reason of such ownership in such corporation.
Notwithstanding anything in the foregoing to the contrary, the Buyer
acknowledges (i) that Corporacion Durango, through one or more of its
Subsidiaries, operates paper xxxxx and other businesses in the United States and
has shipped products to customers located in the United States, and (ii) that
continuing to operate such paper xxxxx and other businesses or to ship products,
including multi-wall bags, to the customers set forth on Schedule 7.6 for
themselves and their customers located in Texas or California and customers of
Central Bag Company located in Texas and California shall not constitute a
violation of this Section 7.6. In addition, the Buyer agrees that Corporacion
Durango may acquire businesses that include divisions or assets that compete
with the Xxxxxxx Division in the multi-wall bag market in the United States and
that no such acquisition shall constitute a violation of this Section 7.6,
provided that Corporacion Durango uses commercially reasonable efforts to
dispose of such competitive divisions or assets within one year after such
acquisition.
(b) The Seller acknowledges that the remedy at law for any breach of
the provisions of paragraph (a) above would be inadequate. Accordingly, the
Seller hereby consents to the granting by any court of an injunction or other
equitable relief, without the necessity of actual monetary loss being proved or
the necessity of posting bond, in order that any breach or threatened breach of
such provisions may be effectively restrained.
(c) It is the intention of the Seller and the Buyer that the
provisions of paragraph (a) be enforced to the fullest extent permissible under
the laws and policies of the State of New York and that the unenforceability of
any provision hereof shall not render unenforceable or impair the remainder of
such provisions. Accordingly, if any provision of paragraph (a) shall be
determined to be invalid or unenforceable in the State of New York, either in
whole or in part, this Section 7.6 shall be deemed amended to delete or modify,
as necessary, the offending provision in order to render this Section 7.6 valid
and enforceable in the State of New York.
(d) Any Action with respect to paragraph (a) may be brought in the
courts of the State of Georgia sitting in Xxxxxx County or of the United States
for the Northern District of Georgia, and each of the Parties hereto hereby
irrevocably accepts for itself and in respect of its property, generally and
unconditionally, the non-exclusive jurisdiction of the aforesaid courts with
respect to any such Action.
7.7. Assignment of Accounts Receivable and Other Receivables and
Finished Goods Inventory. In the event that the Buyer is indemnified by the
Seller under Article XII for a breach of the representations and warranties set
forth in Section 3.20 or the Arbiter, in its preparation of the Closing
Statement, finds that (x) accounts receivable or other receivables which are
over ninety (90) days past due or (y) finished goods inventory that is not
supported by binding purchase orders or as to which the Seller has been advised
by the customer that such inventory will not be accepted have been included in
the assets transferred to the Buyer pursuant hereto, the Buyer shall immediately
assign to the Seller all accounts receivable and other receivables and finished
goods inventory which are the subject of such indemnification or such finding by
the Arbiter, pursuant to documentation in form and substance reasonably
satisfactory to the Seller. In addition, the Buyer shall (i) unless otherwise
directed by the Seller, immediately cease all collection efforts with respect to
such accounts receivable or other receivables, (ii) promptly provide to the
Seller information relating to the collection of such accounts receivable and
other receivables and all documentation relating thereto and (iii) shall hold
all proceeds collected with respect thereto in trust for the Seller and shall
promptly remit such proceeds to the Seller.
ARTICLE VIII
CONDITIONS TO THE BUYER'S OBLIGATIONS
The obligations of the Buyer hereunder to purchase the Acquired Assets
and assume the Assumed Liabilities shall be subject to the satisfaction (or
waiver by the Buyer) on or prior to the Closing Date of all of following
conditions:
8.1. Representations and Warranties; Performance. All representations
and warranties made by the Seller in this Agreement and the Ancillary Documents
shall be true in all material respects at and as of the time when made, and at
and as of the time of the Closing as though such representations and warranties
were made at and as of said time. The Seller shall have performed and complied
in all material respects with all the terms, provisions and conditions of this
Agreement and the Ancillary Documents to be complied with and performed by the
Seller at or before the Closing. The Buyer shall have received a certificate of
the President, a Vice President or the Treasurer of the Seller dated the Closing
Date in form and substance reasonably satisfactory to the Buyer, certifying to
such effect.
8.2. Consents. All Consents specified in Schedule 3.4 shall have been
obtained.
8.3. Absence of Certain Proceedings. No Action in effect preventing or
rendering illegal consummation of the transactions contemplated by this
Agreement and the Ancillary Documents shall be pending.
8.4. Opinion of Counsel. The Buyer shall have received an opinion of
counsel, dated as of the Closing Date, from White & Case LLP (or appropriate
local counsel), counsel to the Seller, as to the authorization, execution,
delivery and enforceability of this Agreement and the Ancillary Documents,
substantially in the form of Exhibit C.
8.5. Release of Encumbrances. The liens created by Loan and Security
Agreement dated January 31, 2001 among Bank of America, N.A. and Durango Paper
Company and its Subsidiaries shall be unconditionally released or terminated
simultaneously with the Closing and the Buyer shall have received copies of
releases and other evidence, reasonably satisfactory to the Buyer, of such
release and termination.
8.6. Transition Services Agreement. The Seller shall have executed and
delivered to the Buyer a Transition Services Agreement (the "Transition Services
Agreement") substantially in the form of Exhibit D.
8.7. Permits. The Buyer shall have obtained the reissuance of the
Environmental Permits set forth on Schedule 3.18(b) to the Buyer upon terms
substantially similar to the terms of such Environmental Permits.
8.8. Xxxx of Sale. The Seller shall have executed and delivered to the
Buyer a Xxxx of Sale, in form and substance reasonably acceptable to the Buyer,
conveying all of Seller's right, title and interest in and to the rail siding
and switch servicing the Xxxxxxx facility, the vehicles to be transferred to the
Buyer and the other Tangible Personal Property to be conveyed in connection
herewith.
ARTICLE IX
CONDITIONS TO THE SELLER'S OBLIGATIONS
The obligations of the Seller hereunder to sell the Acquired Assets
shall be subject to the satisfaction (or waiver by the Seller) on or prior to
the Closing Date of all of the following conditions:
9.1. Representations and Warranties; Performance. All representations
and warranties made by the Buyer in this Agreement and in the Ancillary
Documents shall be true in all material respects at and as of the time when
made, and at and as of the time of the Closing as though such representations
and warranties were made at and as of said time. The Buyer shall have performed
and complied in all material respects with all the terms, provisions and
conditions of this Agreement and the Ancillary Documents to be complied with and
performed by the Buyer at or before the Closing. The Seller shall have received
a certificate of an Officer of the Buyer dated the Closing Date in form and
substance reasonably satisfactory to the Seller, certifying to such effect.
9.2. Absence of Certain Proceedings. No Action in effect preventing or
rendering illegal consummation of the transactions contemplated by this
Agreement and the Ancillary Documents shall be pending.
9.3. Releases. The Seller and its Affiliates shall be released from
all of their obligations under the Contracts as of the Closing Date.
9.4. Paper Supply Agreement. The Buyer shall have executed and
delivered to the Seller a Paper Supply Agreement (the "Paper Supply Agreement"),
substantially in the form of Exhibit E.
9.5. Opinion of Counsel. The Seller shall have received an opinion of
counsel, dated as of the Closing Date, from E. Xxxxxxx Xxxxxxxx, senior counsel
to the Buyer, as to the authorization, execution, delivery and enforceability of
this Agreement and the Ancillary Documents, substantially in the form of Exhibit
F.
ARTICLE X
EMPLOYMENT AND EMPLOYEE BENEFITS ARRANGEMENTS
10.1. Retained Employees; Terminations on Closing Date. (a) Schedule
10.1(a) set forth a list of all of the Employees as of the date hereof. The
Buyer shall prepare and deliver Schedule 10.1(b) to the Seller not later than
four days prior to the Closing Date and such Schedule shall be attached hereto
and shall become a part hereof for all purposes. On the Closing Date, the Seller
shall terminate those Employees listed on Schedule 10.1(b). Employees who are
set forth on Schedule 10.1(a), but not Schedule 10.1(b), shall be referred to as
"Retained Employees."
(b) The Seller shall be solely responsible for and hereby covenants
and agrees to pay (i) any severance claims asserted by any Employee set forth on
Schedule 10.1(b) and any Employees on disability or leave of absence as of the
Closing Date not hired by the Buyer or continued to be employed by the Seller
thereafter (except to the extent that the Buyer or the Seller had a legal
obligation to hire or continue to employ, as applicable, any such Employee), and
(ii) all obligations arising on or prior to the Closing to such Employees of
group insurance coverage required under state and federal law with respect to
the Employees set forth on Schedule 10.1(b) and the Designated Sales Personnel,
including but not limited to post-termination obligations under COBRA.
(c) The Seller shall remain solely responsible in accordance with its
Employee Benefit Plans for the satisfaction of all claims for medical, dental,
life insurance, health, accident or disability benefits brought by or in respect
of Employees of the Xxxxxxx Division under any of the Seller's Employee Benefit
Plans which claims relate to events or injuries incurred prior to the Closing,
regardless of when any such claim is filed.
(d) As of the Closing, with respect to former and retired Employees of
the Xxxxxxx Division who have terminated employment or retired on or prior to
the Closing, the Seller shall be liable for all liabilities and obligations in
connection with claims for benefits brought by or in respect of such former or
retired Employees of the Xxxxxxx Division under any of the Seller's Employee
Benefit Plans with respect to pension, medical, dental, life insurance, health,
accident or disability benefits.
10.2. Employment of Sales Personnel. (a) The Buyer shall prepare and
deliver Schedule 10.2 to the Seller not later than four days prior to the
Closing Date and such Schedule shall be attached hereto and shall become a part
hereof for all purposes. Notwithstanding Section 10.1, the Seller shall continue
to employ the persons set forth on Schedule 10.2 (the "Designated Sales
Personnel") for a period of 14 days following the Closing Date (the "Deferral
Period") and during the Deferral Period the Seller shall permit the Designated
Sales Personnel to continue to render to the Xxxxxxx Division the services they
customarily rendered to the Xxxxxxx Division prior to the Closing Date. The
Buyer and the Seller shall cooperate with one another with respect to the day to
day management of the Designated Sales Personnel.
(b) During the Deferral Period, the Seller shall continue to pay the
salaries and provide the benefits to the Designated Sales Personnel which the
Seller has paid and provided prior to the Closing. Without limiting the
foregoing, the Designated Sales Personnel shall continue to be covered during
the Deferral Period by the Seller's Employee Benefit Plans in which they
participate as of the date hereof.
(c) The Buyer covenants and agrees to reimburse the Seller, in
accordance with Section 10.8(b) hereof, for all costs associated with the
employment of the Designated Sales Personnel during the Deferral Period,
including, without limitation, the costs of salaries, wages, pension accruals,
savings plan contributions, severance benefits, welfare and fringe benefits and
all other direct or indirect payroll costs, including taxes and insurance costs.
10.3. Employment of Retained Employees and Disabled Employees. (a)
From the Closing Date until August 1, 2001, or such earlier date as the Buyer
may elect on at least 15 days prior written notice to the Seller (the "Interim
Employment Period"), all Retained Employees shall continue to be Employees of
the Seller and the Seller shall permit the Retained Employees to continue to
render to the Xxxxxxx Division the services they customarily rendered to the
Xxxxxxx Division prior to the Closing Date. The Buyer and the Seller shall
cooperate with one another with respect to the day to day management of the
Retained Employees.
(b) So long as the Retained Employees are Employees of the Seller, the
Seller shall continue to pay the salaries and provide the benefits to the
Retained Employees which the Seller has paid and provided prior to the Closing.
Without limiting the foregoing, the Retained Employees shall continue to be
covered by the Seller's Employee Benefit Plans in which they participate as of
the date hereof.
(c) Any Employee who is disabled or is on leave of absence as of the
Closing Date will continue to be the responsibility of the Seller and may,
during the Interim Employment Period, apply to the Seller, and within twelve
(12) months following the Closing Date, apply to the Buyer for employment when
such Employee is capable of returning to work. During the Interim Employment
Period, the Seller shall, if required by applicable law or at the written
request of the Buyer, continue to employ any such Employee at the time of his or
her application and such Employee shall be deemed a Retained Employee upon his
or her return to active employment. Following the expiration of the Interim
Employment Period, the Buyer shall, in its sole discretion, but subject to
applicable law, determine whether to hire any such Employee at the time of his
or her application and, if hired, such Employee shall be deemed a Transferred
Employee upon his or her return to active employment.
(d) Any decisions with respect to termination, transfer, a material
change in job responsibilities or a change in compensation and/or benefits of
any Retained Employee shall be made only at the Buyer's request.
(e) (i) The Buyer shall be solely responsible for and hereby covenants
and agrees to promptly reimburse the Seller for (i) any severance claims
asserted by any Retained Employee terminated during the Interim Employment
Period at the request of the Buyer, and (ii) all obligations arising on or prior
to the expiration of the Interim Employment Period to such Employees of group
insurance coverage required under state and federal law with respect to the
Retained Employees, including but not limited to post-termination obligations
under COBRA.
(ii) In determining the benefits that the Seller shall provide
under Section 10.3(e)(i) during the Interim Employment Period, (A)
each salaried Retained Employee who, as of the Closing Date, has at
least one year of service with the Seller or any prior owner of the
Xxxxxxx Division business, and (B) each non-salaried Retained Employee
who, as of the Closing Date, has at least ten years of service with
the Seller or any prior owner of the Xxxxxxx Division business, shall
be entitled to severance benefits equal to one week's pay per year of
service with the Seller or any prior owner, plus an additional four
weeks, with a minimum severance benefit equal to eight weeks' pay.
During the Interim Employment Period, salaried Retained Employees with
less than one year of service with the Seller or any prior owner of
the Xxxxxxx Division business as of the Closing Date shall be entitled
to severance benefits equal to two weeks' pay. The severance
obligations set forth in this clause 10.3(d)(ii) shall apply only to
Retained Employees severed from employment with no expectation of
reemployment by the Buyer.
(f) The Buyer covenants and agrees to reimburse the Seller, in
accordance with Section 10.8(b) hereof, for all costs associated with the
employment of the Retained Employees during the Interim Employment Period,
including, without limitation, the costs of salaries, wages, pension accruals,
savings plan contributions, severance benefits, welfare and fringe benefits and
all other direct or indirect payroll costs, including taxes and insurance costs.
(g) Upon the expiration of the Interim Employment Period, the Buyer
shall offer employment to all Retained Employees. Such Employees who are offered
and accept employment with the Buyer shall be referred to as "Transferred
Employees."
10.4. Employee Benefit Plans. (a) Following the expiration of the
Interim Employment Period until at least the first anniversary of the Closing
Date, the Buyer shall provide or cause to be provided to all Transferred
Employees (i) a salary or wage level and bonus opportunity at least equal to the
salary or wage level and bonus opportunity to which they were entitled
immediately prior to the Closing Date, and (ii) benefits, perquisites and other
terms and conditions of employment that are, in the aggregate, at least
equivalent to the benefits, perquisites and other terms and conditions that they
were entitled to receive immediately prior to the Closing Date. Without limiting
the foregoing, upon the expiration of the Interim Employment Period, the Buyer
will extend group health and life insurance coverage to all Transferred
Employees who are actively employed as of the expiration of the Interim
Employment Period on a full-time basis as defined within the Buyer's employee
benefit plans as working 30 or more hours per week. The Buyer shall waive any
pre-existing condition exclusions and actively-at-work requirements and (so long
as reasonable and customary documentation relating thereto is provided by the
Seller to the Buyer) provide that any expenses incurred on or before the Closing
Date by an Employee or an Employee's covered dependent shall be taken into
account for purposes of satisfying applicable deductible, coinsurance and
maximum out-of-pocket provisions under the Buyer's employee benefit plans in
which Transferred Employees will be eligible to participate.
(b) The Buyer shall be solely responsible for any severance benefits
of Transferred Employees terminated by the Buyer after the Closing Date.
Notwithstanding the foregoing, for a period of 18 months following the Closing
Date, the Buyer and its Affiliates shall provide (i) each salaried Transferred
Employee who, as of the Closing Date, has at least one year of service with the
Seller or any prior owner of the Xxxxxxx Division business, and (ii) each
non-salaried Transferred Employee who, as of the Closing Date, has at least ten
years of service with the Seller or any prior owner of the Xxxxxxx Division
business, severance benefits equal to one week's pay per year of service with
the Seller or any prior owner, plus an additional four weeks, with a minimum
severance benefit equal to eight weeks' pay. During such 18 month period,
salaried Transferred Employees with less than one year of service with the
Seller or any prior owner of the Xxxxxxx Division business as of the Closing
Date shall receive a severance benefit equal to two weeks' pay. The severance
obligations set forth in this Section 10.4(b) shall apply only to Transferred
Employees severed from employment with no expectation of reemployment by the
Buyer.
(c) The Closing Statement shall set forth an accrual as a current
liability for any vacation or holiday pay and sick pay earned on or prior to the
Closing Date by the Transferred Employees. Following the expiration of the
Interim Employment Period, the Buyer agrees to assume, honor and perform and to
cause its Affiliates to assume, honor and perform all vacation, holiday and sick
pay and other paid time off plans, policies or arrangements maintained or
contributed to by the Seller and any employment, consulting, retention,
severance or similar agreement to which the Seller is a party with Transferred
Employees, in each case, in accordance with the terms thereof in effect
immediately prior to the date hereof. Schedule 10.4 sets forth each employment,
consulting, retention, severance or similar agreement in effect immediately
prior to the date hereof to which the Seller is a party with any Employee.
(d) Transferred Employees will be included in the Buyer's existing
employee benefit plans and will be subject to the Buyer's existing employment
policies, as applicable to the Buyer's employees who are similarly situated.
(e) Transferred Employees shall receive credit for all service with
the Seller and its Affiliates (and any prior owner of the Xxxxxxx Division
business to the extent recognized under the Seller's 401(k) Plan (the "Seller's
401(k) Plan")) for purposes of eligibility and vesting under the Buyer's 401(k)
and pension plans. The Seller's 401(k) Plan shall retain all assets and
liabilities with respect to the accounts of Employees who are not Transferred
Employees, including retirees or other former Employees. Unless otherwise agreed
to by Seller and Buyer, the Seller's 401(k) Plan shall retain all assets and
liabilities with respect to the accounts of Transferred Employees and
distributions shall be made therefrom in accordance with the terms of the
Seller's 401(k) Plan as in effect from time to time.
10.5. WARN Act. Unless the Seller is otherwise required to do so by
applicable Law, the Buyer agrees to provide any required notice under the WARN
Act, and any similar statute, and otherwise to comply with any such statute with
respect to any "plant closing" or "mass layoff" (as defined in the WARN Act) or
similar event affecting Retained Employees, Designated Sales Personnel or former
Employees (to the extent required by the WARN Act or any similar statute to be
aggregated with Retained Employees or Designated Sales Personnel in determining
whether a plant closing, mass layoff or similar event has occurred) and
occurring after the Closing.
10.6. Worker's Compensation. The Buyer shall assume the responsibility
for, and shall indemnify and hold the Seller harmless for any loss, damage or
expense the Seller suffers as a result of, any and all worker's compensation
claims, both medical and disability, or other government mandated programs made
by (i) the Retained Employees arising from events occurring after the Closing
and (ii) the Designated Sales Personnel arising from events occurring during the
Deferral Period. The Seller shall retain the responsibility for all worker's
compensation claims, both medical and disability, or other government mandated
programs made by its Employees or former Employees (whether or not Retained
Employees or Designated Sales Personnel) that arise from events that occurred
before the Closing, whether the claim is filed before or after the Closing.
10.7. Transition Services Agreement. In connection with the provision
of the services of the Retained Employees and the Designated Sales Personnel,
Durango Paper Company has agreed to provide certain payroll and benefits
administration services to the Buyer during the Interim Employment Period. The
Buyer covenants and agrees to pay the fees and expenses related to the
administration of payroll and benefits of the Retained Employees and the
Designated Sales Personnel as set forth in the Transition Services Agreement.
10.8. Liabilities, Indemnity and Payments with Respect to Retained
Employees and Designated Sales Personnel. (a) Without limiting the foregoing, as
of the Closing Date, the Buyer shall assume and be responsible for, and
indemnify the Seller and its Affiliates and hold them harmless from and against
any Losses which the Seller or any of its Affiliates may sustain or incur
arising out of or relating to:
(i) any claim, demand, suit or cause of action asserted or filed
by any Retained Employees or Designated Sales Personnel as a result of
actions taken by the Buyer, at the request of the Buyer, by the Seller
with the prior written consent of the Buyer or by any Retained
Employee during the Interim Employment Period or Deferral Period, as
applicable, including, but not limited to, claims under federal, state
and/or municipal civil rights and/or employment law statutes
including, without limitation, Title VII of the Civil Rights Acts of
1964, the Americans with Disabilities Act, the Age Discrimination in
Employment Act, the Fair Labor Standards Act, the Occupational Health
& Safety Act, the National Labor Relations Act;
(ii) any claim, demand, suit or cause of action asserted or filed
by any third party allegedly arising out of any action or omission of
any Retained Employee or Designated Sales Personnel during the Interim
Employment Period or Deferral Period, as applicable;
(iii) obligations under the WARN Act, arising out of, or relating
to, any actions taken by the Seller at the written request of the
Buyer or by the Buyer after the Closing;
(iv) all obligations arising on or after the Closing to Retained
Employees of group insurance coverage required under state and federal
law, including but not limited to post-termination obligations under
COBRA;
(v) any claim made by any Retained Employee or Designated Sales
Personnel including, without limitation, for any severance pay
(excluding claims made by Designated Sales Employees) or other
compensation or benefit entitlements by reason of any termination or
deemed termination of employment of any Retained Employee or
Designated Sales Personnel as a result of the transactions
contemplated hereby which arises on or after the Closing Date; or
(vi) the Buyer's failure to comply with any of the provisions of
this Article X.
The Buyer shall be consulted with respect to all material decisions
relating to claims which it may be required to indemnify pursuant to this
Section 10.8, and the Buyer's consent shall be required prior to the settlement
of any such claims.
(b) The Buyer covenants and agrees to pay to the Seller the amounts
due pursuant to Sections 10.2(c), 10.3(f) and 10.8(a) as follows:
(i) two Business Days prior to issuing payroll checks to the
Retained Employees or the Designated Sales Personnel, the Seller shall
provide the Buyer with the necessary detail on the amounts to be paid,
and the Buyer shall wire transfer funds sufficient to pay such payroll
to an account designated by the Seller on or prior to the date such
payroll checks are issued and/or direct deposits are credited; and
(ii) with respect to all other amounts due pursuant to Sections
10.2(c), 10.3(f) or 10.8(a), the Seller shall furnish the Buyer with a
schedule (and reasonable detail to support such schedule) setting
forth the amount due and, unless the Buyer reasonably disputes such
schedule, the Buyer shall wire transfer funds sufficient to pay such
amount within two Business Days of the Buyer's receipt of the
schedule. If the Buyer has a dispute with respect to a schedule, the
Buyer shall pay all undisputed amounts and the Buyer and the Seller
shall negotiate in good faith to resolve such disputes.
(c) The Seller shall not have any liability to the Buyer for any Loss,
including without limitation, any special, indirect, consequential or punitive
damages, of the Buyer allegedly arising out of the Seller's performance of its
obligations under Sections 10.2 and 10.3 or the Seller's acts or omission in
connection with its performance of such obligations; provided that this
provision shall not apply if: (i) such Loss arises out of (A) an act of fraud,
embezzlement or serious criminal activity by the Seller or (B) willful
misconduct by the Seller.
ARTICLE XI
TERMINATION
11.1. Termination and Abandonment. This Agreement may be terminated
and the transactions contemplated by this Agreement may be abandoned at any time
prior to the Closing:
(a) by mutual written consent of the Parties; or
(b) by the Buyer, on the one hand, or the Seller, on the other hand,
if the Closing shall not have occurred on or before the 30th day following the
date hereof, provided, however, that the right to terminate this Agreement under
this Section 11.1(b) shall not be available to any Party whose failure to
fulfill any obligations under this Agreement has been the cause of, or resulted
in, the failure of the Closing to occur on or before such date; or
(c) by the Buyer by giving notice to the Seller at any time prior to
the Closing in the event that the Seller has breached any material
representation, warranty or covenant contained in this Agreement in any material
respect, the Buyer has notified the Seller of such breach and the breach has
continued without cure for a period of 30 days after the notice of breach; or
(d) by the Seller by giving notice to the Buyer at any time prior to
the Closing in the event that the Buyer has breached any material
representation, warranty or covenant contained in this Agreement in any material
respect, the Seller has notified the Buyer of such breach and the breach has
continued without cure for a period of 30 days after the notice of breach.
11.2. Effect of Termination. In the event of the termination of this
Agreement pursuant to Section 11.1, this Agreement shall forthwith cease to be
of any further force and effect (except for Section 6.3, this Article XI and
Article XII, which shall survive such termination), and there shall be no
liability or obligation on the part of any Party.
ARTICLE XII
SURVIVAL AND INDEMNIFICATION
12.1. Survival. The representations and warranties of the Seller
contained in Article III of this Agreement shall survive the Closing until the
second anniversary of the Closing Date and shall thereupon expire, together with
any right to indemnification in respect thereof; provided, however, that the
representations and warranties of the Seller set forth in Section 3.18 with
respect to Environmental Matters and Section 3.11 with respect to compliance
with Environmental Laws shall survive the Closing Date until the fifth
anniversary of the Closing Date and the representations and warranties in
Section 3.17 with respect to Tax Matters shall survive until expiration of the
applicable statute of limitations relating thereto. The representations and
warranties of the Buyer contained in Article IV of this Agreement shall survive
the Closing until the second anniversary of the Closing Date and shall thereupon
expire, together with any right to indemnification in respect thereof. Neither
the period of survival nor the liability of a Party with respect to its
representations and warranties shall be reduced by any investigation made at any
time by or on behalf of the other Party. The covenants and agreements contained
herein to be performed or complied with prior to the Closing shall expire at the
Closing. The covenants and agreements contained herein to be performed or
complied with at or after the Closing shall survive the Closing until the
expiration of the applicable statute of limitations. If notice of a claim has
been given prior to the expiration of the applicable survival period by a Party
to the other Party, then the relevant representations, warranties and covenants
shall survive as to such claim, until such claim has been finally resolved.
12.2. Indemnification by the Seller. (a) From and after the Closing
Date, the Seller shall indemnify and hold harmless the Buyer, its Affiliates,
and their respective officers, directors, employees, agents, consultants,
representatives and successors (collectively, the "Buyer Indemnitees") from and
against any and all Losses, including Losses relating to Environmental Matters,
incurred by any of them arising out of or resulting from (i) any breach by the
Seller of the representations and warranties of the Seller contained in this
Agreement, (ii) any failure by the Seller to perform any of its covenants or
agreements contained in this Agreement or any Ancillary Document, (iii) any and
all debts, liabilities and obligations not assumed by the Buyer under Section
2.2, including, without limitation, any liabilities to third parties, including
employees of the Seller and Transferred Employees, product liability,
liabilities for damage to property or injuries (including death) to persons, and
liabilities arising out of or relating to Environmental Matters as of the
Closing Date with respect to the Facility, the Xxxxxxx Division or Acquired
Assets, or (iv) any Straddle Tax or Transfer Tax payable by the Seller pursuant
to Section 2.6.
(b)(i) The Seller's indemnification obligations under this Article XII
with respect to any Indemnifiable Environmental Losses shall be subject to the
following:
(A) the Seller shall have no indemnification obligations with
respect to any Indemnifiable Environmental Losses resulting solely
from any voluntary actions by any of the Buyer Indemnitees (or their
agents) to investigate soil or groundwater on the leased real property
for the sole and exclusive purpose of discovering environmental
conditions that may be covered under this Article XII; provided,
however, that the limitation contained in this Section 12.2(b)(i)(A)
shall not apply to Indemnifiable Environmental Losses which result
from (1) the discovery of Hazardous Materials in the soil or
groundwater on or under any of the Facility or Acquired Assets in the
ordinary course of any excavation activities conducted for the purpose
of demolition, repair, renovation, expansion or other modification of
the Facility or Acquired Assets or (2) the discovery by any of the
Buyer Indemnitees (or their agents) of Hazardous Materials in the
soil, groundwater or any other environmental media, in, on, under or
surrounding any of the Facility or Acquired Assets in the course of
any "Commercially Reasonable" voluntary investigation. "Commercially
Reasonable" shall be determined from the perspective of a reasonable
person acting to achieve compliance with Laws, including, without
limitation, Environmental Laws, to avoid or mitigate a loss or
liability or potential loss or liability, including, without
limitation, losses or liabilities with respect to Environmental Laws
or Environmental Matters, or to protect or enhance the economic value
of the Facility, the Xxxxxxx Division or any Acquired Assets.
(B) the Seller shall have no indemnification obligations with
respect to any Indemnifiable Environmental Losses resulting, in whole
or in part, from any disclosure, report or other communication
(whether oral or written) ("Notification") from any of the Buyer
Indemnitees (or their agents) to any Governmental Authority, unless
such Notification was, in the opinion of Buyer Indemnitees' counsel
(which may include in-house counsel), required by Environmental Law at
the time it was made. In addition, the Seller shall have no
indemnification obligations with respect to any Indemnifiable
Environmental Losses resulting, in whole or in part, from any
Notification from any of the Buyer Indemnitees to any third party
other than a Governmental Authority, unless such Notification was
Commercially Reasonable or, in the opinion of Buyer Indemnitees'
counsel (which may include in-house counsel), required by
Environmental Law at the time it was made;
(C) the Seller's indemnification obligations with respect to any
Indemnifiable Environmental Losses shall be reduced to the extent that
any negligence of any of the Buyer Indemnitees on or after the Closing
Date adversely affects such obligations; and
(D) the Seller shall have no indemnification obligations with
respect to Indemnifiable Environmental Losses, unless such
Indemnifiable Environmental Losses are the subject of a Claims Notice
given in accordance with Section 12.2(b)(ii) within five years of the
Closing Date.
(ii) As a condition to the Seller's indemnification obligations under
this Article XII:
(A) In the event that any Buyer Indemnitee incurs or suffers an
Indemnifiable Environmental Loss, such Buyer Indemnitee shall promptly
give notice thereof (a "Claims Notice") to the Seller, and the Claims
Notice shall describe the Indemnifiable Environmental Loss in
reasonable detail and shall indicate, to the extent that may be
reasonably determined, the amount (estimated, if necessary) thereof
that has been or may be incurred by any of the Buyer Indemnitees;
provided, however, that the failure to give prompt notice to the
Seller shall not affect rights to indemnification hereunder, except to
the extent that the Seller is actually prejudiced by such failure. The
Buyer shall have no obligation to make any claim against any insurance
policy of the Buyer before giving such Claims Notice.
(B) the Seller shall have thirty (30) days after delivery of a
Claims Notice to assume the defense (including litigation or
negotiation) of any Indemnifiable Environmental Loss through counsel
reasonably satisfactory to the Buyer Indemnitee; provided, however,
that following any such assumption, the Seller shall have no
indemnification obligation hereunder to pay any costs or expenses of
consultants, experts or legal counsel of the Buyer Indemnitees
thereafter expended or incurred by any of the Buyer Indemnitees in
connection with such defense. No compromise or settlement with respect
to any Indemnifiable Environmental Loss may be agreed to by the Seller
without the Buyer Indemnitees' prior consent, which consent shall not
be unreasonably withheld or delayed. A Buyer Indemnitee may
participate in the defense of any Indemnifiable Environmental Loss at
the Buyer Indemnitee's own expense; provided, however, that the Seller
shall pay for the costs and expenses of such separate counsel if the
Seller's counsel determines that it cannot represent both the Seller
and the Buyer Indemnitees. Notwithstanding anything in the foregoing
to the contrary, a Buyer Indemnitee shall have the right to control
the defense of an Indemnifiable Environmental Loss at the Seller's
expense if such Indemnifiable Environmental Loss is reasonably
expected to materially adversely affect the conduct by the Buyer of
its business at the Facility or the operation of the Acquired Assets;
(C) the Buyer Indemnitees and the Seller shall cooperate with and
render each other assistance as may reasonably be requested in order
to insure the proper and adequate defense of any such Indemnifiable
Environmental Loss, which assistance shall include making appropriate
personnel reasonably available for any discovery, trial or the
completion of any Response Action, and the Seller shall reimburse the
Buyer for all of its reasonable out-of-pocket expenses in connection
therewith. The Buyer shall provide access to the Seller necessary for
the performance of any Response Action; provided, however, that the
Seller shall not unreasonably interfere with the normal business
operations of the Buyer, and the Seller shall execute an appropriate
site access agreement setting forth the terms and conditions pursuant
to which the Response Action will be performed;
(D) if the Seller elects not to defend any Indemnifiable
Environmental Loss within thirty (30) days after delivery of a Claims
Notice, or, if after assuming such defense, the Seller fails to defend
any such Indemnifiable Environmental Loss for a period of thirty (30)
days, the Buyer Indemnitees may assume the defense (including
litigation or negotiation) of any such Indemnifiable Environmental
Loss, and the Seller shall promptly pay all reasonable costs and
expenses thereof. The Seller shall have no indemnification obligation
hereunder with respect to any settlement effected without the Seller's
prior consent, which consent shall not be unreasonably withheld. If no
settlement of an Indemnifiable Environmental Loss is made, the Seller
shall satisfy any judgment rendered with respect to such Indemnifiable
Environmental Loss before a Buyer Indemnitee is required to do so, and
shall pay all expenses, legal or otherwise, reasonably and necessarily
incurred by a Buyer Indemnitee in the defense of such Indemnifiable
Environmental Loss; and
(E) the Buyer Indemnitees' rights with respect to Indemnifiable
Environmental Losses under this Article XII shall be reduced to the
extent that actions undertaken by them are not Commercially Reasonable
and such actions (1) increase the amount of Indemnifiable
Environmental Losses, or (2) result in Indemnifiable Environmental
Losses which, but for such actions, would not have been expended or
incurred.
12.3. Indemnification by the Buyer. From and after the Closing Date,
the Buyer shall indemnify and hold harmless the Seller, its Affiliates, and
their respective officers, directors, employees, agents, consultants,
representatives and successors (collectively, the "Seller Indemnitees") from and
against any and all Losses incurred by any of them arising out of or resulting
from (i) any breach by the Buyer of the representations and warranties of the
Buyer contained in this Agreement, (ii) any failure by the Buyer to perform any
of its covenants or agreements contained in this Agreement or any Ancillary
Document, (iii) any failure to pay when due the Assumed Liabilities, (iv) any
Straddle Tax or Transfer Tax payable by the Buyer pursuant to Section 2.6, or
(v) any operations or activities of the Buyer in connection with the ownership
or use of the Xxxxxxx Division or the Acquired Assets after the Closing.
12.4. Procedure for Indemnification. In the event that any Indemnitee
shall incur or suffer any Losses in respect of which indemnification (other than
by the Seller pursuant to Section 12.2 with respect to Environmental Matters)
may be sought hereunder by the Seller, on the one hand, or the Buyer, on the
other hand, the Indemnitee shall assert a claim for indemnification by notice
(the "Notice") to the Indemnitor stating the nature and basis of such claim. The
Indemnitee shall have no obligation to make any claim against any insurance
policy of the Buyer before giving such Notice. Promptly after receipt by an
Indemnitee of Notice of the assertion of a claim or the commencement of any
action, litigation or proceeding by any third party (a "Third-Party Claim") with
respect to a matter for which indemnification is or may be owing pursuant to
Section 12.2 or 12.3, the Indemnitee shall give Notice to the Indemnitor and
shall thereafter keep the Indemnitor informed of all other information it
receives with respect thereto; provided, however, that failure of the Indemnitee
to give the Indemnitor prompt Notice and such other information as provided
herein shall not relieve the Indemnitor of any of its obligations hereunder
unless and then only to the extent that the Indemnitor shall have been actually
prejudiced thereby. The Indemnitor shall have the right, at its option and at
its own expense, to participate in or, by giving written notice to the
Indemnitee no later than thirty (30) days after delivery of the Notice, to take
exclusive control of, the defense, negotiations and/or settlement of any such
Third-Party Claim, with counsel chosen by the Indemnitor and reasonably
satisfactory to the Indemnitee. After the Indemnitor takes exclusive control of
the defense, negotiation and/or settlement of any such Third-Party Claim, the
Indemnitee shall have the right to participate therein, at its own expense and
with counsel of its own choosing; provided, however, that the Indemnitor shall
pay for the costs and expenses of such separate counsel if the Indemnitor's
counsel determines that it cannot represent both the Indemnitor and the
Indemnitee. The Parties each shall cooperate and shall cause each Indemnitor to
cooperate with and render such assistance as may reasonably be requested in
order to insure the proper and adequate defense of any such Third-Party Claim or
proceeding, which assistance shall include, without limitation, making
appropriate personnel reasonably available for any discovery or trial, subject
to reimbursement of reasonable expenses by the Indemnitor. If the Indemnitor
fails or refuses to undertake the defense of any such Third-Party Claim within
thirty (30) days after delivery of the Notice, the Indemnitee shall have the
right to take exclusive control of the defense, negotiation and/or settlement of
such Third-Party Claim at the Indemnitor's expense. Neither the Indemnitor nor
the Indemnitee shall settle or compromise any Third-Party Claim without the
consent of the other, which consent shall not be unreasonably withheld or
delayed; provided, however, that any settlement or compromise includes an
unconditional release of the Indemnitee from all liabilities or obligations
relating to the Third-Party Claim.
12.5. Payment. With respect to Third-Party Claims for which
indemnification is payable under this Agreement, such indemnification shall be
paid by the Indemnitor promptly upon (i) the entry of a final judgment against
the Indemnitee and the expiration of any applicable appeal period; (ii) the
entry of a non-appealable judgment or final appellate decision against the
Indemnitee; (iii) the entering into of any settlement agreement in accordance
with the provisions of this Article XII; or (iv) the entry of any consent order
or decree binding upon the Indemnitee. Notwithstanding anything in the foregoing
to the contrary, all reasonable out-of-pocket costs and expenses incurred by the
Buyer Indemnitees as a result of the assumption of the defense of any
Indemnifiable Environmental Loss pursuant to Section 12.2(b)(ii)(D), including,
without limitation, reasonable attorneys' fees, shall be payable as incurred by
the Buyer Indemnitees.
12.6. Adjustment Amounts. Notwithstanding anything to the contrary set
forth herein, the Buyer shall not be deemed to have suffered or incurred any
Loss to the extent such Loss was included in the computation of the Purchase
Price Adjustment or any subsequent adjustment provided for in Section 2.4 and
the payment in respect thereof was made by the Seller to the Buyer.
12.7. Limitation on Seller's Indemnification. Notwithstanding any
other provision of this Article XII, (i) the aggregate liability of the Seller
under Section 12.2 shall in no event exceed the aggregate amount of the Purchase
Price, as adjusted, paid to the Seller hereunder and (ii) no amount shall be
payable for indemnification pursuant to Section 12.2 (other than (A) for breach
of Section 3.20 with respect to accounts receivable included in the Acquired
Assets that remain uncollected after 120 days following the Closing Date, and
(B) up to $90,000 in excess of the reserves set forth on the Closing Statement
for product warranty claims with respect to products sold or services rendered
by the Seller on or prior to the Closing Date) until the aggregate amount
payable under Section 12.2 exceeds $250,000, in which event all such amounts
shall be payable.
12.8. Exclusivity. Except as specifically set forth in this Agreement,
effective as of the Closing, the Buyer waives any rights and claims it may have
against the Seller and any of its Affiliates, whether in law or in equity,
relating to the Xxxxxxx Division or the Acquired Assets or the transactions
contemplated hereby or by the Ancillary Documents. The rights and claims waived
by the Buyer include, without limitation, claims for contribution or other
rights of recovery arising out of or relating to any Environmental Law, claims
for breach of contract, breach of representation or warranty, negligent
misrepresentation and all other claims for breach of duty. After the Closing,
the indemnification provisions of this Agreement shall provide the exclusive
remedy to the Buyer for any misrepresentation, breach of warranty, covenant or
other agreement or other claim arising out of this Agreement or the Ancillary
Documents or the transactions contemplated hereby or thereby.
12.9. Tax Treatment. The Parties shall treat all indemnification
payments made pursuant to this Agreement as adjustments to the Purchase Price
for all Tax purposes, except as otherwise required under applicable tax rules
and regulations.
12.10. Guarantee. In the event that the Seller fails to perform any of
its obligations to be performed under this Article XII, Durango Paper Company
agrees to perform such obligations which the Seller fails to perform.
ARTICLE XIII
MISCELLANEOUS
13.1. Fees and Expenses. Except as otherwise provided herein, each of
the Parties shall pay its own expenses incurred in connection with the
transactions contemplated hereby, including legal, accounting and other fees.
13.2. Amendments. This Agreement shall not be modified or otherwise
amended except pursuant to an instrument in writing executed and delivered by
each of the Parties.
13.3. Entire Agreement. This Agreement (including the Schedules,
Exhibits and other documents referred to herein) and the Ancillary Documents
constitute the entire understanding and agreement between the Parties with
respect to the subject matter hereof and supersede any and all prior agreements
and understandings, whether oral or written, between the Parties, with respect
to the subject matter, all of which are merged herein. The Parties acknowledge
that in deciding to enter into this Agreement and to consummate the transactions
contemplated hereby they have not relied upon any statements, promises or
representations, written or oral, express or implied, other than those
explicitly set forth in this Agreement or the Ancillary Documents. In
furtherance and not in limitation of the foregoing, the Buyer acknowledges that
the Seller has not made any representations or warranties, of any kind, either
express or implied, except as expressly set forth in Article III of this
Agreement. THE BUYER AGREES THAT THE REPRESENTATIONS AND WARRANTIES GIVEN HEREIN
BY THE SELLER ARE IN LIEU OF, AND THE BUYER HEREBY EXPRESSLY WAIVES ALL RIGHTS
TO, ANY IMPLIED WARRANTIES WHICH MAY OTHERWISE BE APPLICABLE BECAUSE OF THE
PROVISIONS OF THE UNIFORM COMMERCIAL CODE OR ANY OTHER STATUTE, INCLUDING,
WITHOUT LIMITATION, THE WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE.
13.4. Assignment, Binding Effect; Benefit. Neither this Agreement nor
any of the rights, interests or obligations hereunder shall be assigned by any
Party (whether by operation of law or otherwise) without the prior consent of
the other Party. Subject to the preceding sentence, this Agreement shall be
binding upon and shall inure to the benefit of the Parties and their respective
successors and assigns. Notwithstanding anything contained in this Agreement to
the contrary, nothing in this Agreement, express or implied, is intended to
confer on any Person other than the Parties or their respective heirs,
successors, executors, administrators and assigns any rights, remedies,
obligations or liabilities under or by reason of this Agreement.
13.5. Headings. The headings of the Articles, Sections, Schedules and
Exhibits of this Agreement are for the convenience of the Parties only, and
shall be given no substantive or interpretive effect whatsoever.
13.6. Governing Law; Arbitration. (a) This Agreement shall be governed
in all respects, including as to validity, interpretation and effect, by the
internal laws of the State of New York, without giving effect to its principles
or rules of conflict of laws (to the extent that such principles or rules would
require the application of the laws of another jurisdiction to the
interpretation of the Parties' rights and obligations hereunder).
(b) (i) Except as otherwise provided herein, any dispute, controversy
or claim arising out of, relating to, or in connection with, this Agreement, or
the breach, termination or validity thereof, shall be finally settled by
arbitration. The arbitration shall be conducted in accordance with the
Commercial Arbitration Rules of the American Arbitration Association in effect
at the time of the arbitration, except as they may be modified herein or by
mutual agreement of the Parties. The seat of the arbitration shall be Atlanta,
Georgia, and it shall be conducted in the English language, provided that either
Party may submit testimony or documentary evidence in Spanish and shall, on the
request of the other Party, furnish a translation or interpretation into the
other language of any such testimony or documentary evidence. Notwithstanding
Section 13.6(a), the arbitration and this clause shall be governed by the U.S.
Federal Arbitration Act, 9 U.S.C. xx.xx. 1 et seq.
(ii) The arbitration shall be conducted by three arbitrators. The
Party initiating arbitration (the "Claimant") shall appoint an arbitrator in its
request for arbitration (the "Request"). The other Party (the "Respondent")
shall appoint an arbitrator within ten (10) days of receipt of the Request and
shall notify the Claimant of such appointment in writing. If within ten (10)
days of receipt of the Request by the Respondent, either Party has not appointed
an arbitrator, then the arbitrator shall be appointed by the American
Arbitration Association. The first two arbitrators appointed in accordance with
this provision shall appoint a third arbitrator within ten (10) days after the
Respondent has notified Claimant of the appointment of the Respondent's
arbitrator or, in the event of a failure by a Party to appoint, within ten (10)
days after the American Arbitration Association has notified the Parties and any
arbitrator already appointed of its appointment of an arbitrator on behalf of
the Party failing to appoint. When the third arbitrator has accepted the
appointment, the two arbitrators making the appointment shall promptly notify
the Parties of the appointment. If the first two arbitrators appointed fail to
appoint a third arbitrator or so to notify the Parties of the appointment, the
American Arbitration Association shall appoint the third arbitrator and shall
promptly notify the Parties of the appointment. The third arbitrator shall act
as Chair of the tribunal.
(iii) The arbitral award shall be in writing, state the reasons for
the award, and be final and binding on the Parties. The award may include an
award of costs, including reasonable attorneys' fees and disbursements and the
expenses of any witnesses, to the prevailing Party, but may not include
consequential, punitive or exemplary damages of any kind or nature whatsoever.
Judgment upon the award may be entered by any court having jurisdiction thereof
or having jurisdiction over the relevant Party or its assets. A request for
interim measures by a Party to a court shall not be deemed incompatible with, or
a waiver of, this agreement to arbitrate.
(iv) Any Action to enforce an arbitral award may be brought in the
courts of the State of Georgia sitting in Xxxxxx County or of the United States
for the Northern District of Georgia, and each of the Parties hereto hereby
irrevocably accepts for itself and in respect of its property, generally and
unconditionally, the non-exclusive jurisdiction of the aforesaid courts with
respect to any such Action.
13.7. Notices. Any notice, consent, request, claim, instruction or
other communication to be given hereunder by any party hereto to any other party
shall be in writing and delivered personally, by telecopy or sent by registered
or certified mail (postage prepaid return receipt requested),
If to the Seller, to:
Durango Georgia Converting LLC
x/x Xxxxxxxxxxx Xxxxxxx
Xxxxxxx Xx. 000
Xxxxxx Xxxxxxxxxx
Xxxxxxx, Xxxxxxx
Xxxxxx CP 34220
Facsimile No.: 000-000-000-0000
Attention: C.P. Xxxxxx Xxxxxx xx Xxxxxxx
with a copy to:
White & Case LLP
000 X. Xxxxxxxx Xxxxxxxxx
Xxxxx 0000 Xxxxx, Xxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx-Xxxxx
Telecopier: (000) 000-0000
If to the Buyer, to:
Smurfit-Stone Container Corporation
000 X. Xxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: Xxxx Xxxxxxxxxxxx
Telecopier: (000) 000-0000
with a copy to:
Smurfit-Stone Container Corporation
0000 Xxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: E. Xxxxxxx Xxxxxxxx
Telecopier: (000) 000-0000
or at such other address for a party as shall be specified by like notice. Any
notice which is delivered in the manner provided herein shall be deemed to have
been duly given to the party to whom it is directed upon actual receipt by such
party (evidenced, in the case of a telecopy, by the receipt of the
confirmation).
13.8. Counterparts. This Agreement may be executed in any number of
counterparts, each of which, when executed, shall be deemed to be an original
and all of which together shall be deemed to be one and the same instrument.
13.9. Bulk Transfer Laws. The Buyer hereby waives compliance by the
Seller with the provisions of any so-called "bulk transfer law" in any
jurisdiction in connection with the transactions contemplated hereby. The Seller
shall defend and indemnify the Buyer and its successors and assigns against any
loss, liability or damage or claim resulting or arising from such waiver and/or
the Seller's failure to comply with any applicable bulk sales or bulk transfer
laws.
13.10. Schedules. Disclosure of any fact or item in any Schedule
referenced by a particular paragraph or Section in this Agreement shall, should
the existence of the fact or item or its contents be relevant to any other
paragraph or Section, be deemed to be disclosed with respect to that other
paragraph or Section whether or not a specific cross reference appears.
Disclosure of any fact or item in any Schedule shall not necessarily mean that
such item or fact is material to the Seller or the Xxxxxxx Division or would
have a Seller Material Adverse Effect.
13.11. Severability. If any provision of this Agreement or the
application of any such provision to any person or circumstances shall be held
invalid, illegal or unenforceable in any respect by a court of competent
jurisdiction, such invalidity, illegality or unenforceability shall not affect
any other provision hereof and this Agreement shall remain in force and be
effectuated as if such illegal, invalid or unenforceable provision is not part
of this Agreement.
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IN WITNESS WHEREOF, the Parties have entered into this Agreement as of
the date first above written.
DURANGO GEORGIA CONVERTING LLC
By:
-------------------------------------
Name:
Title:
STONE CONTAINER CORPORATION
By:
-------------------------------------
Name:
Title:
AGREED AND ACCEPTED with
respect to Section 7.6 only,
as of the 16th day of May 2001.
CORPORACION DURANGO
By:
-----------------------------
Name:
Title:
AGREED AND ACCEPTED with
respect to Section 12.10 only,
as of the 16th day of May 2001.
DURANGO PAPER COMPANY
By:
-----------------------------
Name:
Title:
