EXECUTION COPY
Exhibit 10.41
ASSET PURCHASE AGREEMENT (the "Agreement"), dated as of August 18,
2000, between Xxxxxxxx Engine Filtration, LLC, a Delaware limited liability
corporation (the "Purchaser"), and FiberMark, Inc., a Delaware corporation (the
"Seller").
W I T N E S S E T H:
WHEREAS, the Seller is in the business of manufacturing and
marketing impregnated filter paper for combustion engine filters in the United
States; and
WHEREAS, the Seller owns certain know how, process technology and
product design used in the manufacture of certain grades of lube oil, fuel, air,
hydraulic and miscellaneous engine filter papers such grades, as described in
more detail in Schedule 1.1(a)(i) to the Disclosure Letter attached hereto, the
("Specified Paper Grades") including, but not limited to: fiber formulation
("furnish"); raw material specifications; saturating resin and solvent recipes;
process parameters; specific grooving technologies; and in-process and finished
paper specifications and actual statistical measured characteristics associated
with the Specified Paper Grades (the "Specified Technology"); and
WHEREAS, the Purchaser wishes to purchase and acquire (directly or
indirectly through subsidiaries) from the Seller, and the Seller wishes to sell,
assign and transfer to the Purchaser, the Specified Technology, together with a
current order flow (including existing supply commitments by the Seller) for
sales of 4,200 metric tons ("MT") on an Annualized Basis (defined in Section
3.10 below) of the Specified Paper Grades (the "Transferred Order Flow") and
certain Specified Equipment (defined below), so that the Purchaser can
manufacture and offer for sale the Specified Paper Grades, all for the purchase
price and upon the terms and subject to the conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements and covenants hereinafter set forth, the Purchaser and the Seller
hereby agree as follows:
Article I
PURCHASE AND SALE
SECTION 1.1 Assets to Be Sold; Assets to Be Excluded. (a) On the
terms and subject to the conditions of this Agreement, the Seller shall on the
Closing Date, sell, assign, transfer, convey and deliver to the Purchaser or
cause to be sold, assigned, transferred, conveyed and delivered to the
Purchaser, and the Purchaser shall purchase from the Seller or cause to be
purchased from the Seller (i) the Specified Technology, which is described in
more detail on Schedule 1.1(a)(i) to the Disclosure Letter attached hereto
(including the recipes for the Specified Paper Grades being delivered
concurrently herewith), subject to the license to be granted to the Seller
pursuant to Section 2.3(d), (ii), the Transferred Order Flow, which is set forth
on Schedule 1.1(a)(ii) to the Disclosure Letter attached hereto, and (iii)
subject to Section 6.1, the laboratory and filter testing equipment and the
saturator cure oven and two rewinders/slitters used by the Seller in
manufacturing the Specified Paper Grades (in each case, including any related
spare
parts, manuals, and software) which are all currently located in the Seller's
Richmond, Virginia facility and described in more detail in Schedule 1.1(a)(iii)
to the Disclosure Letter attached hereto (the "Specified Equipment")
(collectively, the "Purchased Assets").
(b) The Specified Equipment shall not include any other assets
of the Seller (the "Excluded Equipment").
(c) In addition, the Seller will, at the Purchaser's written
request, use its commercially reasonable efforts to transfer or assign to the
Purchaser such pulp allocations related to the manufacture of the Specified
Paper Grades (a complete list of which is set forth on Schedule 1.1(c) to the
Disclosure Letter attached hereto) as are requested by the Purchaser, to the
extent that such pulp allocations are transferable or assignable; provided, that
contemporaneously with any such assignment, the Purchaser shall assume all of
the Seller's obligations with respect to any such allocation and shall use its
commercially reasonable efforts to obtain a novation under any such allocation
or commitment. Notwithstanding anything contained herein to the contrary, the
Seller shall not be required to make any payment or incur any liability to any
third party or to the Purchaser or agree or commit to do any of the foregoing in
connection with the performance of its obligations under this Section 1.1(c).
SECTION 1.2 Purchase Price; Escrow Arrangement.
(a) In consideration of the valid transfer to it of the
Purchased Assets, the Purchaser shall pay to the Seller aggregate consideration
of U.S.$11,000,000 as reduced pursuant to (i) the Early Transfer Incentive
Amounts described in Section 1.4(b), and (ii) amounts allocated to any Specified
Equipment which the Seller is unable to transfer to the Purchaser on the
Specified Equipment Date in accordance with Section 5.6 (as so adjusted, the
"Purchase Price").
(b) On August 21, 2000 (or at such later time as the parties
shall mutually agree), the Seller, the Purchaser and Chase Manhattan Bank, as
escrow agent (the "Escrow Agent"), shall enter into an Escrow Agreement
substantially in the form of Exhibit A hereto (the "Escrow Agreement") and the
Purchaser shall deliver to the Escrow Agent, by wire transfer of immediately
available funds to an account specified by the Escrow Agent (the "Escrow
Account"), $11,000,000 (the "Escrow Amount"). Any interest earned or accrued on
amounts in the Escrow Account from the date hereof shall be paid to the
Purchaser in accordance with the Escrow Agreement.
(c) The Purchase Price shall be allocated among the Purchased
Assets as set forth on Exhibit B.
SECTION 1.3 Closing.
On the terms and subject to the conditions of this Agreement, the
sale and purchase of the Purchased Assets contemplated by this Agreement shall
take place at the offices of Cleary, Gottlieb, Xxxxx & Xxxxxxxx, Xxx Xxxxxxx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 at 10:00 a.m. on September 1, 2000, or at such
other time or place as shall be mutually agreed by the
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parties hereto in writing, but, in no event later than September 7, 2000,
subject to the cure rights set forth in Section 2.4. The consummation of the
purchase and sale described in this Section 1.3(a) is hereinafter referred to
collectively as the "Closing." The date on which the Closing occurs is
hereinafter referred to as the "Closing Date." Title to and possession of the
Specified Technology and the Transferred Order Flow shall pass and transfer from
the Seller to the Purchaser as of 11:59 p.m. on the Closing Date. Subject to
Sections 5.6 and 6.1, title to the Specified Equipment shall pass and transfer
from the Seller to the Purchaser in accordance with Section 1.5(b) below.
SECTION 1.4 Payment of the Purchase Price. At the Closing:
(a) The Escrow Agent shall deliver to the Seller from the
Escrow Account an amount equal to $1,500,000.
(b) The Escrow Agent shall hold $2,000,000 of the Escrow
Amount (the "Early Transfer Incentive Amount") as security for any payments owed
by the Seller to the Purchaser under Sections 6.2 and 6.3 of the Tolling
Agreement (as defined in Section 2.2 (e) below). The Early Transfer Incentive
Amount shall be disbursed by the Escrow Agent in accordance with the terms of
the Tolling Agreement and the Escrow Agreement.
(c) The Escrow Agent shall hold $1,000,000 of the Escrow
Amount (the "Equipment Amount") as security for payments owed by the Purchaser
in respect of Specified Equipment to be transferred to the Purchaser in
accordance with Section 5.6 hereof. The Escrow Agent shall deliver the Equipment
Amount to the Seller (net of any amounts corresponding to Specified Equipment
that the Seller is unable to deliver) on the Specified Equipment Transfer Date
(as defined below in Section 1.5).
(d) The remaining $6,500,000 of the Escrow Amount (the
"Transfer Purchase Price Amount") will be paid from the Escrow Account to the
Seller pursuant to the terms and conditions described in Annex I hereto;
provided, that notwithstanding anything to the contrary contained herein, to the
extent that the remaining Transfer Purchase Price Amount has not been delivered
to the Seller on or before August 31, 2001 pursuant to Annex I hereto, the
Escrow Agent shall deliver the balance of the Transfer Purchase Price Amount to
the Seller.
SECTION 1.5 Bills of Sale. (a) At the Closing, the Seller shall
execute and deliver to the Purchaser a Xxxx of Sale, substantially in the form
of Exhibit C hereto (the "Initial Xxxx Of Sale"), which will provide for the
transfer of title of the Specified Technology and the Transferred Order Flow
effective at 11:59 p.m. on the Closing Date.
(a) At the Closing, the Seller shall execute and deliver to
the Purchaser a Xxxx of Sale, substantially in the form of Exhibit D hereto (the
"Equipment Xxxx Of Sale"), which will provide for the transfer of title of the
Specified Equipment (except for any Specified Equipment to which the Purchaser
elects not to take title pursuant to Section 6.1) effective at the time of
delivery of the Specified Equipment to a truck designated by the Purchaser in
accordance with Section 5.6 (the "Specified Equipment Transfer Date").
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Article II
CONDITIONS TO CLOSING
SECTION 2.1 Conditions to Obligations of Each Party. The respective
obligations of each of the Purchaser and the Seller to effect the Closing shall
be subject to the condition that (i) consummation of the transactions
contemplated hereby shall not have been restrained, enjoined, or otherwise
prohibited by any applicable law, including any order, injunction, decree or
judgment of any court or other governmental authority; (ii) no court or other
applicable governmental authority shall have determined that any applicable law
makes illegal the consummation of the transactions contemplated hereby; and
(iii) no proceeding with respect to the application of any such applicable law
to such effect shall be pending.
SECTION 2.2 Conditions to the Obligation of the Purchaser to Close.
The obligations of the Purchaser to purchase the Purchased Assets on the Closing
Date, and to effect the transactions contemplated hereby shall be subject to the
fulfillment or, in the Purchaser's sole discretion, waiver in writing at or
prior to the Closing Date, of the following conditions:
(a) delivery by the Seller of the Bills of Sale contemplated
by Section 1.05 on the Closing Date;
(b) delivery by the Seller of a certificate in form and
substance reasonably satisfactory to the Purchaser, signed by the Seller,
that (A) the representations and warranties made herein by the Seller that
are qualified as to materiality are accurate and complete, and the
representations and warranties of the Seller that are not so qualified are
accurate and complete in all material respects, as of the date hereof and
as of the Closing Date as if made on and as of the Closing Date, except
for any such representations or warranties that relate solely to an
earlier date (in which case such representations and warranties were
accurate and complete, or accurate and complete in all material respects,
as the case may be, as of such earlier date), and (B) the Seller has
performed or complied in all material respects with the agreements and
covenants required to be performed or complied with by the Seller under
this Agreement as of or prior to the Closing Date;
(c) as of the Closing Date, no circumstance, event or change
shall have occurred (including but not limited to tonnage being shifted to
an offshore location, tonnage moving to a substitute product or pulp
commitments or allocations being withdrawn) that has or would reasonably
be expected to have a material adverse effect on the current commitments
or prospects for sales of the Specified Paper Grades or the terms of sale
(including price) therefor, other than circumstances, events or changes
(i) affecting the market for the Specified Paper Grades (or the products
which are their end use) generally, (ii) affecting the United States
economy generally, or (iii) resulting solely from the transactions
contemplated by this Agreement or from the public announcement of such
transactions;
(d) as of the Closing Date, no action, proceeding or
litigation shall
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have been commenced or threatened against any party hereto seeking to
restrain or materially alter the transactions contemplated in this
Agreement which, if adversely determined, is likely to render it
commercially impracticable, impossible or unlawful, to consummate the
transactions contemplated hereby;
(e) the Seller shall have executed and delivered to the
Purchaser a Filtration Products Tolling Agreement substantially in the
form of Exhibit E hereto (the "Tolling Agreement");
(f) the Purchaser shall, in its good faith judgment, be
satisfied with the results of its due diligence investigation of the
Specified Paper Grades' sales and tonnage, product specifications
(including those representations made as to the audit samples of the
specified Paper Grades previously provided by the Seller to the
Purchaser), and Material Margins to confirm the representations by the
Seller in Section 3.10; and
(g) the Seller shall have delivered to the Purchaser evidence
reasonably satisfactory to the Purchaser that the Seller has acquired
title to all of the Specified Equipment, free and clear of all
Encumbrances and that the landlord of the Richmond Facility no longer has
any right, title or interest in or to such Specified Equipment.
SECTION 2.3 Conditions to the Obligations of the Seller to Close.
The obligations of the Seller to sell the Purchased Assets and to effect the
transactions contemplated hereby shall be subject to the fulfillment or, in the
Seller's sole discretion, waiver in writing at or prior to the Closing Date, of
the following conditions:
(a) delivery by the Purchaser of a certificate, in form and
substance reasonably satisfactory to the Seller, signed by the Purchaser,
that (A) the representations and warranties made herein by the Purchaser
that are qualified as to materiality are accurate and complete, and the
representations and warranties of the Purchaser that are not so qualified
are accurate and complete in all material respects, as of the Closing Date
as if made on and as of the Closing Date, except for any such
representations or warranties that relate solely to an earlier date (in
which case such representations and warranties were accurate and complete,
or accurate and complete in all material respects, as the case may be, as
of such earlier date), and (B) the Purchaser has performed or complied in
all material respects with the agreements and covenants required to be
performed or complied with by the Purchaser under this Agreement as of or
prior to the Closing Date;
(b) as of the Closing Date, no action, proceeding or
litigation shall have been commenced or threatened against the Purchaser
seeking to restrain or materially alter the transactions contemplated in
this Agreement which, if adversely determined, is likely to render it
commercially impracticable, impossible or unlawful to consummate the
transactions contemplated hereby;
(c) the Purchaser shall have executed and delivered to the
Seller the
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Tolling Agreement; and
(d) the Purchaser shall have executed and delivered to the
Seller a License Agreement, substantially in the form of Exhibit G hereto,
granting to the Seller (subject to the limitations in Section 5.1 of this
Agreement) an irrevocable, transferable (subject to the right to notice
and an invitation to bid on the Seller's Rochester facility and the
License Agreement in the circumstances set forth in Section 5.2(d)),
royalty-free license (the "License Agreement") to use the Specified
Technology.
SECTION 2.4 Substitute Tonnage. If the Purchaser determines that the
Transferred Order Flow (including the Material Margins) or Specified Technology
is not in compliance with the representations set forth in Section 3.10, the
Seller shall have the following cure rights (which may be exercised individually
or in combination):
(a) If the Transferred Order Flow does not equal or exceed
4,200 MT on an Annualized Basis (as defined in Section 3.10), the Seller
shall have the right to either (i) substitute other paper grades which
meet the Technical Specifications (as defined in Section 3.10) for one or
more of the Specified Paper Grades such that the Transferred Order Flow
for the Specified Paper Grades as so modified equals or exceeds 4,200 MT
on an Annualized Basis or (ii) supplement the Transferred Order Flow with
additional paper grades meeting the Technical Specifications and having
order flow on an Annualized Basis which is equal to or greater than the
deficiency.
(b) If the Transferred Order Flow does not generate gross
revenues equal to or greater than $12,000,000 on an Annualized Basis, the
Seller shall have the right to either (i) substitute other paper grades
which meet the Technical Specifications for one or more of the Specified
Paper Grades such that the Transferred Order Flow for the Specified Paper
Grades as so modified generates gross revenues on an Annualized Basis
which are equal to or greater than $12,000,000 or (ii) supplement the
Transferred Order Flow with additional paper grades meeting the Technical
Specifications with gross revenues which are equal to or greater than the
deficiency.
(c) If the specified Paper Grades included in the Transferred
Order Flow, taken as a whole, did not have a Material Margin (as defined
in Section 3.10) which was equal to or greater that $7,250,000 for the
period from July 1, 1999, through June 30, 2000, inclusive, the Seller
shall have the right to substitute other paper grades which meet the
Technical Specifications for one or more of the Specified Paper Grades so
that the Specified Paper Grades (as so modified) comprising the
Transferred Order Flow had a Material Margin for such period which equaled
or exceeded $7,250,000.
(d) If any of the Specified Paper Grades does not meet the
Technical Specifications, the Seller may substitute for such Specified
Paper Grade another paper grade or other paper grades meeting the
Technical Specifications and representing equal or greater tonnage and
gross revenues on an Annualized Basis and Material Margins equivalent to
the Material Margins.
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(e) If, due to unforeseen technical or mechanical
complications, the Transferred Order Flow does not satisfy the criteria
set forth in (a) and (b) above regarding tonnage, gross revenues and
Material Margins, and the Purchaser determines within 90 days after the
Closing that the remedy will require a capital expenditure that will
exceed $100,000 and have a payback period of more than three years based
on the Material Margins, the Seller shall use its commercially reasonable
efforts, subject to no loss of profit to the Seller, to substitute other
Specified Paper Grades for the tonnage in question.
(f) To the extent that the Seller exercises its right to
supplement the Transferred Order Flow with additional paper grades or to
substitute other paper grades for paper grades included within the
Specified Paper Grades, the Purchaser and the Seller shall execute an
amendment to this Agreement implementing such supplement or substitution
and amending the definitions of "Specified Paper Grades", "Specified
Technology", "Transferred Order Flow" and "Purchased Assets", as
appropriate.
(g) All substitute tonnage provided by the Seller under this
section shall have Material Margins equivalent to the Material Margins for
the Specified Paper Grades.
SECTION 2.5 Efforts to Close.
(a) The Purchaser and the Seller shall use their respective
commercially reasonable efforts to cause all necessary action to be taken in
order to have all the conditions precedent for the Closing to be fulfilled as
promptly as practicable.
(b) In the case of any firm supply contracts or commitments
included in the Transferred Order Flow which are not by their terms assignable
or which require the consent of a third party in connection with this
transaction, the Seller shall use its commercially reasonable efforts to cause
such assignment or to procure such consent. In those cases where consents have
not been obtained to the sale, conveyance, assignment or delivery to the
Purchaser of any such contracts (collectively, "Non-Conveyed Commitments"), the
Seller shall, at the Purchaser's request, cooperate in any arrangement
reasonably calculated to provide the Purchaser with the full economic benefit
(subject to the Purchaser's assumption of all related obligations) of such
Non-Conveyed Commitments (including, but not limited to, (i) enforcing, at the
request and expense of the Purchaser, any rights of the Seller arising with
respect thereto (including, without limitation, the right to terminate in
accordance with the terms thereof upon the advice of the Purchaser) or (ii)
permitting the Purchaser to enforce any rights arising with respect thereto) as
if such Non-Conveyed Commitments had been sold, conveyed, assigned and delivered
to the Purchaser); provided that the Seller will not be obligated to transfer to
the Purchaser any benefits that are not related to the Specified Paper Grades
or, in the case of pulp allocations or other raw material purchases, which
relate to general purchase programs of the Seller not specific to the Specified
Paper Grades.
SECTION 2.6 Costs. Except as otherwise provided herein, the Seller
and the Purchaser shall each bear their own expenses incurred in connection with
this Agreement and the
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transactions contemplated herein, whether or not such transactions are
consummated, including without limitation fees and expenses of counsel,
accountants or other advisors.
Article III
REPRESENTATIONS AND WARRANTIES OF THE SELLER
The Seller represents and warrants to the Purchaser as follows:
SECTION 3.1 Authority; Enforceability. The Seller has the corporate
power and authority to execute and deliver this agreement and to consummate the
transactions contemplated hereby and by each of the Escrow Agreement, the
Initial Xxxx of Sale, the Equipment Xxxx of Sale, the Tolling Agreement and the
License Agreement (the "Other Agreements"). This Agreement has been, and each of
the Other Agreements will, on the Closing Date, be duly and validly executed and
delivered by the Seller and constitutes or will constitute, as the case may be,
a valid and binding agreement of the Seller, enforceable against the Seller in
accordance with its terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium and similar laws
affecting the enforcement of creditor's rights generally, and by general
equitable principles, whether invoked in a proceeding in equity or at law.
SECTION 3.2 Organization. The Seller is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has all requisite corporate power and authority to own, lease and
operate its properties and to carry on its business as it has been, is currently
and is currently anticipated to be conducted. Except as would not materially
affect the ability of the Seller to consummate the transactions contemplated
hereby, the Seller is duly qualified or licensed and in good standing to do
business in each jurisdiction in which the property owned, leased or operated by
it or the nature of the business conducted by it makes such qualification
necessary.
SECTION 3.3 No Conflict. Except as disclosed on Schedule 3.3 to the
Disclosure Letter attached hereto, the execution, delivery and performance by
the Seller of this Agreement, and the consummation of the transactions
contemplated hereby and thereby, do not and will not (a) conflict with or
violate any order, writ, injunction, decree, judgment, permit, license,
ordinance, law, statute, rule or regulation ("Law") applicable to the Seller or
the Purchased Assets, (b) conflict with, or result in a breach or default under,
any terms or conditions of the by-laws or other organizational documents of the
Seller or (c) conflict with, result in any breach of, constitute a default (or
an event which, with the giving of notice or lapse of time or both, would become
a default) under, or give to others any rights of termination, amendment,
acceleration, suspension, revocation or cancellation of, or result in the
creation of any encumbrance on the Purchased Assets pursuant to, any note, bond,
mortgage or indenture, contract, agreement, lease, sublease, license, permit,
franchise or other instrument, agreement or arrangement to which the Seller is a
party or by which any of such assets or properties otherwise is bound, except,
with respect to clause (c) above such violations, breaches, defaults, conflicts
and encumbrances as, individually or in the aggregate would not have a material
adverse effect on the Seller's ability to consummate the transactions
contemplated by this Agreement.
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SECTION 3.4 Consents and Approvals. Except as set forth on Schedule
3.4 to the Disclosure Letter attached hereto and except for such filings,
notices, permits, consents and approvals the absence of which would not have a
material adverse effect on the consummation of the transactions contemplated by
this Agreement, the execution, delivery and performance by the Seller of this
Agreement and each Other Agreement does not and will not require any consent,
approval, authorization or other order of filing with or notification to any
governmental authority or any other person.
SECTION 3.5 Litigation.
(a) Other than as disclosed on Schedule 3.5(a) to the
Disclosure Letter attached hereto, there are no actions, disputes, claims or
proceedings pending or, to the knowledge of the Seller, threatened by or against
the Seller or the directors, officers or employees of the Seller relating to or
involving any of the Purchased Assets (including, but not limited to, the
Transferred Order Flow).
(b) None of the Seller, or any of the Purchased Assets is
subject to any Laws, and to the knowledge of the Seller there are no such Laws
threatened to be imposed, which could reasonably be expected to affect the
legality, validity or enforceability of this Agreement, or the Seller's ability
to consummate the transactions contemplated hereby.
SECTION 3.6 Assets. The Seller has good and marketable title to the
Purchased Assets, free and clear of all encumbrances, except for (i)
encumbrances arising by operation of law, (ii) inchoate encumbrances for taxes
not yet due and payable and (iii) other encumbrances that individually or in the
aggregate are not substantial in amount, in each case which do not materially
detract from the value of the property subject thereto or materially interfere
with the present or proposed use of such property or assets ("Permitted
Encumbrances").
SECTION 3.7 Customers.
(a) Schedule 3.7(a)(i) to the Disclosure Letter attached
hereto sets forth an accurate and complete list of the customers of the Seller
with respect to the Transferred Order Flow, which include all customers of the
Seller with respect to the Specified Paper Grades from and including July 1,
1999, through and including June 30, 2000. Schedule 3.7(a)(ii) to the Disclosure
Letter attached hereto sets forth an accurate and complete list of the 10
largest customers of the Seller in each of last 3 years with respect to the
Specified Paper Grades, determined based upon aggregate revenues generated from
such customers during the fiscal year. The Seller has not received any notice
that any such customer listed on Schedule 3.7(a)(ii) to the Disclosure Letter
attached hereto will cease and, to the knowledge of the Seller, no such customer
has reduced substantially or, to the knowledge of the Seller, intends to reduce
materially the quantities of Specified Paper Grades purchased by such customer.
(b) The Seller has no knowledge as of the date hereof of any
proposals by other manufacturers of the Specified Paper Grades, including as to
price or other terms, which could materially limit or materially decrease in any
manner the volume of the
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Transferred Order Flow that is actually transferred to the Purchaser.
SECTION 3.8 Intellectual Property. (a) The use of the Specified
Technology in the manner in which it is currently used in the conduct of the
Seller's business has not been alleged to conflict with, misappropriate or
infringe, and to the knowledge of the Seller such use does not conflict with,
misappropriate or infringe, any intellectual property rights or franchises of
any person. No current or former consultant, independent contractor, employee or
affiliate of the Seller or, to the knowledge of the Seller, any other Person has
any right, title or interest in any of the Specified Technology.
(b) There are no licenses, contracts or other agreements
pursuant to which the Seller (i) has agreed to grant or has granted rights to
any person with respect to any of the Specified Technology, or (ii) enjoys
rights in any of the Specified Technology owned by any other person. To the best
knowledge of the Seller, none of the Specified Technology is being infringed by
any person.
(c) The Specified Technology constitutes all of the
intellectual property necessary to enable the Purchaser to lawfully carry on the
manufacture of the Specified Paper Grades as it currently is, and as it
currently is anticipated to be, conducted.
SECTION 3.9 Brokers. Except for Corporate Development International,
no broker, finder or investment banker is entitled to any brokerage, finder's or
other fee or commission in connection with the transactions being contemplated
by this Agreement based upon arrangements or commitments made by or on behalf of
the Seller. The Seller is and shall be solely responsible for all fees and
expenses of Corporate Development International payable in connection with the
transactions contemplated by the Agreement.
SECTION 3.10 Transferred Order Flow. (a) As of June 30, 2000, the
Transferred Order Flow was all produced at the Richmond Facility, except for
Transferred Order Flow relating to the customer part numbers set forth on
Schedule 3.10(a) to the Disclosure Letter attached hereto, and represented
orders for 4200 MT of the Specified Paper Grades on an Annualized Basis. The
Seller has no knowledge that any of such customers will be unable to pay its
invoices from the Purchaser in respect of the Transferred Order Flow.
(b) The gross revenue from the Transferred Order Flow as of
June 30, 2000, was not less than $12,000,000 on an Annualized Basis and the
average payment period of accounts receivable that gave rise to such gross
revenue was 40 days after the invoice date. None of the customers listed on
Schedule 3.7(a)(i) had an average payment period of accounts receivable greater
than 60 days after the invoice date during the period from and including July 1,
1999, to and including June 30, 2000.
(c) The Material Margin of the Seller from the Transferred
Order Flow during the period from and including July 1, 1999, to and including
June 30, 2000, were not less than $7,250,000.
(d) The Specified Paper Grades comprising the Transferred
Order
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Flow conform to the technical specifications described on Schedule 3.10(d) to
the Disclosure Letter attached hereto (the "Technical Specifications").
(e) The Seller does not have any contracts or commitments with
any of the customers listed on Schedule 3.7(a)(i) to the Disclosure Letter
attached hereto that have a term extending beyond 60 days from the date hereof
or would in any way limit the ability of the Purchaser to adjust prices for the
Specified Paper Grades.
(f) As used herein, the term "Annualized Basis" shall mean (x)
when used with respect to order flow, (i) the volume of shipments (expressed in
MT) made by the Seller and its subsidiaries from and including July 1, 1999,
through and including June 30, 2000, or (ii) with respect to no more that 630 MT
of the Transferred Order Flow relating to the customer part numbers set forth on
Schedule 3.10(a) to the Disclosure Letter attached hereto, the volume of
shipments (expressed in MT) made by the Seller and its subsidiaries from and
including May 1, 2000, through and including July 31, 2000, multiplied by four
(4), and (y) when used with respect to gross revenues of any paper grade or
grades, (i) the gross revenues on a consolidated basis in respect of orders
received by the Seller and its subsidiaries with respect to such paper grade or
grades from and including July 1, 1999, through and including June 30, 2000 or
(ii) with respect to no more that 630 MT of the Transferred Order Flow, the
gross revenues on a consolidated basis in respect of Transferred Order Flow
relating to the customer part numbers set forth on Schedule 3.10(a) to the
Disclosure Letter attached hereto, from and including May 1, 2000, through and
including July 31, 2000, multiplied by four (4).
(g) As used herein, the term "Material Margin", when used with
respect to any paper grade, shall mean Net Sales less Net Material Costs. "Net
Sales", when used with respect to any paper grade, is defined as gross sales
minus early payment discounts, volume rebates and applicable freight costs. "Net
Material Costs", when used with respect to any Specified Paper Grade, is defined
as the product of Raw Material Furnish Cost Per Ton multiplied by the number of
MT of such Specified Paper Grade on an Annualized Basis included in the
Transferred Order Flow minus volume rebates with respect to such raw materials.
"Raw Material Furnish Cost Per Ton", when used with respect to any single paper
grade comprising a part of the Specified Paper Grades, is defined as the
aggregate price to the Seller at the Richmond Facility, determined as of the
last invoice prior to June 30, 2000, of the raw materials included in the recipe
for one MT of furnish for such paper grade.(1)
SECTION 3.11 Suppliers. The Seller has not received any notice that
any raw material supplier of the Seller with respect to the manufacture of the
Specified Paper Grades, and to the knowledge of the Seller no such supplier, has
ceased or intends to cease selling such raw materials and other related goods or
services to the Seller with respect to the manufacture of the Specified Paper
Grades at any time after the date hereof, on terms and conditions (including
quantities) substantially similar to those used in its current sales to the
Seller, including, without limitation, as a result of the transactions
contemplated herein.
Article IV
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(1) Xxx Xxxxxxx to confirm that this definition is OK on Friday morning.
11
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser represents and warrants to the Seller as follows:
SECTION 4.1 Authority; Enforceability. The Purchaser has the
corporate power and authority to execute and deliver this agreement and to
consummate the transactions contemplated hereby and by each of the Other
Agreements. This Agreement has been, and each of the Other Agreements will on
the Closing Date, be duly and validly executed and delivered by the Purchaser
and constitutes or will constitute, as the case may be, a valid and binding
agreement of the Purchaser, enforceable against the Purchaser in accordance with
its terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium and similar laws affecting
the enforcement of creditor's rights generally by general equitable principles,
whether invoked in a proceeding in equity or at law.
SECTION 4.2 Organization. The Purchaser 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 power and authority to own, lease
and operate its properties and to carry on its business as it has been, is
currently and is currently anticipated to be conducted. Except as would not
materially affect the ability of the Purchaser to consummate the transactions
contemplated hereby, the Purchaser is duly qualified or licensed and in good
standing to do business in each jurisdiction in which the property owned, leased
or operated by it or the nature of the business conducted by it makes such
qualification necessary.
SECTION 4.3 No Conflict. The execution, delivery and performance by
the Purchaser of this Agreement, and each Other Agreement and the consummation
of the transactions contemplated hereby and thereby, do not and will not (a)
conflict with or violate any Law applicable to the Purchaser, or (b) conflict
with, or result in a breach or default under, any terms or conditions of the
by-laws or other organizational documents of the Purchaser.
SECTION 4.4 Consents and Approvals. Except as set forth on Schedule
4.3 to the Disclosure Letter attached hereto, and for such filings, notices,
permits, consents and approvals the absence of which would not have a material
adverse effect on the consummation of the transactions contemplated by this
Agreement, the execution, delivery and performance by the Purchaser of this
Agreement and each Other Agreement does not and will not require any consent,
approval, authorization or other order of, filing with or notification to any
governmental authority or other person.
SECTION 4.5 Brokers. No broker, finder or investment banker is
entitled to any brokerage, finder's or other fee or commission in connection
with the transactions being contemplated by this Agreement based upon
arrangements or commitments made by or on behalf of the Purchaser, that is or
will be payable by the Purchaser.
Article V
COVENANTS OF THE SELLER
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SECTION 5.1 Non-Compete. The Seller covenants and agrees that the
Seller and its affiliates shall not use any of the Specified Technology for a
period of 15 years from the Closing Date except as expressly permitted by the
License Agreement; nor shall it sub-license the Specified Technology to any
other Person for any purpose except to the extent of the Licensed Use (as
defined and provided for in the License Agreement). "Person" shall mean any
individual, corporation, partnership, joint venture, trust, limited company, or
unincorporated organization.
SECTION 5.2 Right of First Refusal; Right of Notice and Invitation
to Bid. (a) The Purchaser shall have a right of first refusal to purchase the
crated Bela paper machine and saturator currently in storage at the Seller's
Brattleboro, Vermont facility until August 31, 2007.
(b) The Purchaser shall have a right of first refusal to
purchase the Excluded Equipment until the later of (i) June 30, 2001 and (ii) 30
days from the date of closure of the Richmond Facility; provided, however, that
the Seller shall have furnished the Purchaser with written notice of the
anticipated closure date of the Richmond Facility no less than 60 days prior to
the actual closure date of the Richmond Facility.
(c) In the event the Seller receives a bona fide offer from a
third party for the purchase of the crated Bela paper machine and saturator or
the Excluded Equipment (the "Option Assets") during the period set forth in
Section 5.2(a) or (b) as applicable, the Seller shall give the Purchaser written
notice of the terms of such offer whereupon the Purchaser may elect within 15
days after the receipt of such notice to purchase such Option Assets, or if the
Purchaser does not so elect within the 15-day period, the Seller shall have the
right to sell such Option Assets to the third party purchaser on the same terms
within 30 days after the Purchaser has declined or the 15-day period has
expired.
(d) The Seller shall provide the Purchaser with 15 days' prior
written notice of and an invitation to bid upon any proposed sale or transfer of
(i) the Seller's Rochester facility either (x) on a stand-alone basis, or (y)
together with the sale or transfer of the License Agreement or any idle
equipment of the Seller situated outside of the Rochester facility, or (ii) the
License Agreement.
SECTION 5.3 Costs of Closing Richmond Facility. (a) In the event the
Seller closes the Richmond facility, the Seller shall be responsible for all
costs associated with the closing of the Richmond facility. The Purchaser shall
have no liability with respect to unemployment or insurance claims and shall
have no pension or severance liability as a consequence of this transaction (or
otherwise) with respect to any such employees at the Seller's Richmond facility
or any employees engaged in the sale or marketing of the Specified Paper Grades
located outside of the Seller's Richmond facility.
(b) The Purchaser shall have the opportunity, in its sole
discretion, to offer employment to any of the employees of the Seller who are
responsible for the sale, marketing, development and/or production of the
Specified Paper Grades. The Seller shall cooperate with the Purchaser in
informing such employees, through a letter from the Seller to each of such
employees (a copy of which shall be furnished to the Purchaser), about the
13
opportunity to apply for employment with the Purchaser, and the Seller shall not
prohibit, discourage or prevent such employees from accepting new employment
with the Purchaser; provided, that nothing herein shall prevent the Seller from
offering the opportunity or permitting any such employees to transfer to another
of the Seller's facilities; and provided, further, that the Purchaser shall not
actively solicit the employment of the employees listed on Schedule 5.3(b) to
the Disclosure Letter attached hereto for a period from the date hereof until
120 days from the Closing.
(c) The Seller shall be solely responsible for, and shall pay,
any environmental costs associated with or resulting from removal of the
Specified Equipment (or, if applicable, the Excluded Equipment). Any such costs
shall not be the responsibility of, or otherwise be borne by, the Purchaser.
SECTION 5.4 Investigation of Records. From the date hereof up to the
Closing, the Seller shall make available to the Purchaser and the Purchaser's
auditors, analysts and other advisors, such records and information as are
needed for their independent investigation of the Specified Paper Grades and the
Transferred Order Flow (including the information set forth on Schedules
1.1(a)(i), (ii) and (iii) to the Disclosure Letter attached hereto), including
review of any source documents, suppliers invoices (including rebate programs),
customer invoices, cost data, production data and sales data useful to the
Purchaser in confirming the tonnage, prices, order size, order frequency, base
recipes and underlying cost data, operating margin and customers for the product
mix to be sold; provided, however, that only the information set forth in
Section 3.10 shall be subject to validation as a condition to the Purchaser's
obligations to purchase the Purchased Assets.
SECTION 5.5 Transitional Cooperation. From the date hereof until the
earlier of one year from the Initial Closing Date and the Notice Termination
Date, the Seller shall (i) allow the Purchaser access to the Richmond facility,
at reasonable times upon reasonable notice, to observe the manufacturing of the
Specified Paper Grades, and (ii) at the request of the Purchaser, and without
material disruption to the normal operations of the Seller, cause its technical
employees who are knowledgeable regarding the manufacture of the Specified Paper
Grades to visit the Purchaser's facilities engaged in the manufacturing of the
Specified Paper Grades for the purposes of assisting the Purchaser with the
integration of the Specified Technology into its manufacturing processes.
SECTION 5.6 Equipment. (a) The Seller shall remove all Specified
Equipment and deliver it to a truck designated by the Purchaser at the Richmond
facility no later than 60 days after the date of closure of the Richmond
Facility. The Specified Equipment (and any Excluded Equipment purchased pursuant
to Section 5.2) shall be delivered to the Purchaser in the same condition as it
was on the last day of its operation, free and clear of all Encumbrances, other
than Permitted Encumbrances. The Seller shall cause the Specified Equipment (and
any Excluded Equipment purchased pursuant to Section 5.2) to be insured at its
replacement value until the Specified Equipment Transfer Date (in the case of
Excluded Equipment, from and after the date the Purchaser elects to purchase
such Excluded Equipment). The Seller shall have no liability for any loss of or
damage to the Specified Equipment (or any Excluded Equipment purchased pursuant
to Section 5.2) after the Specified Equipment Transfer
14
Date (in the case of the Excluded Equipment, from and after the date the
Purchaser elects to purchase such Excluded Equipment). The Seller shall become
entitled to receive the Equipment Amount from the Escrow Account at such time as
the Seller has so removed and delivered the Specified Equipment (in
substantially the same operating condition as it was on the last day of its
operation, free and clear of all Encumbrances, other than Permitted
Encumbrances). The Seller shall provide the Purchaser with at least two written
estimates for the removal cost for the Specified Equipment to the truck
designated by the Purchaser no later than 30 days prior to the date such work is
to be performed. The Purchaser and the Seller shall mutually select the
contractor based on such estimates (which approval shall not be unreasonably
withheld by either party) and the Seller shall consult with the Purchaser on any
other material decisions regarding the scope or cost of the work to be
performed. The Purchaser or its contractors shall have the right to attend and
inspect the removal and delivery of the Specified Equipment.
(b) The Seller shall give to the Purchaser notice of an
anticipated closure date of the Richmond facility no later than 60 days prior to
such closure date and the Purchaser shall then notify the Seller of its written
election not to take title to any of the Specified Equipment within 30 days of
such notice.
Article VI
COVENANTS OF THE PURCHASER
SECTION 6.1 Removal of Equipment. Except as specified in Section
5.3(c) hereof, the Purchaser shall pay for all costs associated with removal of
Specified Equipment or any Excluded Equipment purchased by the Purchaser
pursuant to Section 5.2. Notwithstanding the foregoing and any other provision
in this Agreement, the Purchaser reserves the right to elect, by written notice
to the Seller, not to take title to any of the Specified Equipment and to leave
such Specified Equipment at the Seller's Richmond facility; provided that no
such election by the Purchaser shall have the effect of reducing the Equipment
Amount and the Seller shall immediately become entitled to receive that portion
of the Equipment Amount related to any such equipment.
Article VII
ADDITIONAL AGREEMENTS
SECTION 7.1 Access to Information and Assistance. The parties hereto
agree to provide access to information and assistance consistent with the other
relevant provisions hereof to the extent practicable.
SECTION 7.2 Confidentiality; Communication Strategy. (a) The
Purchaser and the Seller agree that neither one of them will issue any press
release or otherwise make any public statement or respond to any press inquiry
with respect to this Agreement or the transactions contemplated hereby without
the other party's prior written consent, except for such press releases or
public statements as may be required by applicable law or the rules of any stock
exchange on which such party's securities are listed, in which case the other
party shall
15
nonetheless be consulted prior to the issuance of any such press release or
public statement.
(b) The parties agree to develop and set forth in writing a
common communication strategy for customers of the Specified Paper Grades to
facilitate the successful consummation of the transactions prior to and after
the Closing Date. The Seller shall not, and shall use commercially reasonable
efforts to ensure that its salesmen and other employees do not, have any
communications with customers or others, directly or indirectly, that disparage
or would otherwise frustrate the successful consummation of the transactions
contemplated by this Agreement, including the transfer to the Purchaser of the
Transferred Order Flow.
SECTION 7.3 Further Action. Each of the parties hereto shall use all
reasonable efforts to take, or cause to be taken, all appropriate action, do or
cause to be done all things necessary, proper or advisable under applicable
Laws, and execute and deliver such documents and other papers, as may be
required to carry out the provisions of this Agreement and consummate and make
effective the transactions contemplated by this Agreement.
SECTION 7.4 Change of Purchaser. The parties agree that the
Purchaser may elect to effect the purchase of the Purchase Assets through one or
more wholly owned subsidiaries, in which event the Purchaser shall be
responsible for and guarantee the performance by each of such subsidiary of all
obligations of the Purchaser hereunder. Any reference to the "Purchaser" shall
be deemed to include a reference to the relevant subsidiary of the Purchaser
unless expressly agreed otherwise.
SECTION 7.5 Ordinary Course of Business. From the date hereof to the
Final Shipment Date, the Seller shall continue to conduct the business of the
Richmond facility and the manufacturing and sale of the Specified Paper Grades
in the ordinary course consistent with past practice.
Article VIII
GENERAL PROVISIONS
SECTION 8.1 Termination. This Agreement may be terminated and the
transactions contemplated hereby may be abandoned at any time prior to the
Closing Date:
(a) by the mutual agreement of the Seller and the Purchaser,
(b) by either party, without prejudice to any remedies
available to the parties hereunder or under applicable law, if the
conditions set forth in Section 2.1 herein shall not have been satisfied
and such non-satisfaction shall not have been cured or eliminated (or by
its nature cannot be cured or eliminated) by either party on or before
September 30, 2000, provided, however, that the failure to fulfill the
conditions to the Closing is not due to the breach of this Agreement by
the party seeking to terminate, or
(c) by the Purchaser, if the conditions set forth in Section
2.2 shall not have been satisfied on or before September 30, 2000.
16
(d) by the Seller, if the conditions set forth in Section 2.3
have not been satisfied on or before September 30, 2000.
SECTION 8.2 Knowledge Defined. The term "knowledge" or "to the
knowledge of", as used herein with reference to the Seller, shall mean the
actual knowledge, or knowledge that would reasonably be expected to have
been obtained in the performance of the functions and responsibilities, of
any of Xxxx Xxxxxx, Xxxxx Xxxxx, Xxxxx Xxxxxx, Xxxxx Xxxxx, Xxxxxx Xxxxxx,
Xxxxxx X. Xxxxx, X. Xxxxxxxxx Xxxxxxxxxx or Xxxxxx Xxxxxxxxxxx.
Article IX
SURVIVAL; GENERAL PROVISIONS
SECTION 9.1 Survival; Exclusivity.
(a) All of the representations and warranties contained in
this Agreement or in any certificate delivered pursuant to this Agreement will
survive the Closing and continue in full force and effect until two (2) years
after the Closing, except for those contained in Section 3.10 which will survive
the Closing and continue in full force and effect until nine (9) months after
the Closing (in each case, the "Survival Period"). If any claim is made in
writing during the applicable Survival Period, the representations and
warranties shall survive thereafter solely for purposes of resolving such claim.
The parties' respective obligations with respect to covenants shall not be
limited to the Survival Period. The parties' respective obligations under the
Tolling Agreement shall be governed thereby and shall not be limited to the
Survival Period or otherwise modified by this Agreement.
(b) In the event the Seller or the Purchaser breaches (or in
the event any third party alleges facts that, if true, would mean the Seller or
the Purchaser has breached, as the case may be) any of its representations and
warranties contained in this Agreement or in any certificate delivered pursuant
to this Agreement and provided that the claiming party makes a written claim for
indemnification within the Survival Period, then the other party agrees to
defend, indemnify and hold harmless the claiming party from and against all
Damages the claiming party suffered resulting from, arising from or out of,
relating to, or caused by such event (to the extent such Damages are in excess
of an aggregate amount of $75,000 (and only to the extent of such excess) and
subject to an aggregate limit of $11,000,000). "Damages" shall mean all losses,
amounts paid in settlement, claims, damages, liabilities, judgments, settlements
and reasonable out-of-pocket costs (including costs of investigation or
enforcement) and expenses (including reasonable attorneys' fees and expenses).
(c) Absent fraud, this Section 9.1 is the sole and exclusive
remedy of each party with respect to breaches of this Agreement, and the
Purchaser shall have no right to make any claim in respect thereof under any
theory of negligence, recklessness, or violation of law; provided, however, that
notwithstanding the foregoing, this Section 9.1 in no way limits remedies
(including equitable relief) with respect to breaches of covenants of the
parties.
SECTION 9.2 Waiver of Compliance; Consent. Except as otherwise
provided
17
in this Agreement, any failure of either of the parties to comply with any
obligation, covenant, agreement or condition herein may be waived by the party
entitled to the benefits thereof only by a written instrument signed by the
party granting such waiver, but such waiver or failure to insist upon strict
compliance with such obligation, covenant, agreement or condition shall not
operate as a waiver of, or estoppel with respect to, any subsequent or other
failure. Whenever this Agreement requires or permits consent by or on behalf of
a party, such consent shall be given in writing in a manner consistent with the
requirements for a waiver of compliance as set forth in this Section 9.02.
SECTION 9.3 Assignment. This Agreement and all of the provisions
hereof shall be binding upon and inure to the benefit of the parties hereto and
their respective successors and permitted assigns, but neither this Agreement
nor any of the rights, interests or obligations hereunder shall be assigned by
either of the parties hereto without the prior written consent of the other
party; provided, however, that the Purchaser may assign its rights to purchase
the Purchased Assets to one or more of its wholly owned subsidiaries as provided
in Section 9.4.
SECTION 9.4 Designated Subsidiary. Anything in this Agreement to the
contrary notwithstanding, the Seller agrees that the Purchaser may cause one or
more of its wholly owned subsidiaries designated by the Purchaser to carry out
all or part of the transactions contemplated by this Agreement; provided,
however, that no such designation shall affect or diminish the liability of the
Purchaser under this Agreement.
SECTION 9.5 Governing Law; Exclusive Jurisdiction; Venue; Agent.
(a) THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE
OF NEW YORK (REGARDLESS OF THE LAWS THAT MIGHT OTHERWISE GOVERN UNDER APPLICABLE
PRINCIPLES OF CONFLICTS OF LAW) AS TO ALL MATTERS, INCLUDING BUT NOT LIMITED TO
MATTERS OF VALIDITY, CONSTRUCTION, EFFECT, PERFORMANCE AND REMEDIES.
(b) Each Party hereto irrevocably submits to the nonexclusive
jurisdiction of the Courts of the State of New York and of the United States
sitting in the Borough of Manhattan in respect of any action or proceeding
arising out of or relating to this Agreement or the transactions contemplated
hereby.
(c) Each party irrevocably waives, to the fullest extent
permitted by applicable law, any objection that it may now or hereafter have to
the laying of venue of any proceeding in the Supreme Court of the State of New
York, County of New York, or the United States District Court for the Southern
District of New York, and any claim that any proceeding brought in any such
court has been brought in an inconvenient forum.
SECTION 9.6 Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
SECTION 9.7 No Third Party Beneficiary Rights. This Agreement is not
18
intended to and shall not be construed to give any person (other than the
parties to this Agreement) any interest or rights (including, without
limitation, any third party beneficiary rights) with respect to or in connection
with any agreement or provision contained herein or contemplated hereby.
SECTION 9.8 Notices. All notices and other communications hereunder
shall be in writing and shall be deemed given if delivered personally or mailed
by registered or certified mail (return receipt requested), postage prepaid,
telecopied (and which is confirmed) or sent by reputable courier (providing
proof of delivery) to the parties at the following addresses (or at such other
address for a party as shall be specified by like notice, provided that notices
of a change of address shall be effective only upon receipt thereof):
(a) if to the Seller, to
FiberMark, Inc.
000 Xxxxxxxxxx Xxxx
Xxxxxxxxxxx, XX 00000
Attention: Xxxxx Xxxxx, Vice President
Telecopy: (000) 000-0000
with a copy to
White & Case LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Attention: X. Xxxx Xxxxxxxxx, Esq.
Telecopy: (000) 000-0000
(b) if to the Purchaser, to
Xxxxxxxx Engine Filtration, LLC
00000 Xxxxxxxx Xxxxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxxx, President
Telecopy: (000) 000-0000
with a copy to
Cleary, Gottlieb, Xxxxx & Xxxxxxxx
Xxx Xxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Telecopy: (000) 000-0000
SECTION 9.9 Interpretation. The article and section headings
contained in this Agreement are solely for the purpose of reference, are not
part of the agreement of the parties and shall not in any way affect the meaning
or interpretation of this Agreement. As used in this
19
Agreement: (i) the term "subsidiary" when used in reference to any person shall
mean any other corporation of which outstanding securities having ordinary
voting power to elect a majority of the Board of Directors of such other
corporation are owned directly or indirectly by such person; (ii) the term
"affiliate" shall mean a person that directly, or indirectly through one or more
intermediaries, controls or is controlled by, or is under common control with,
the person specified; and (iv) the term "business day" means a day on which
banking institutions in New York, New York are authorized or obligated by law or
executive order to close.
SECTION 9.10 Entire Agreement. This Agreement, including the
exhibits hereto and the documents, schedules, certificates and instruments
referred to herein embodies the entire agreement and understanding of the
parties hereto in respect of the transactions contemplated by this Agreement.
There are no restrictions, promises, representations, warranties, covenants or
undertakings, other than those expressly set forth or referred to herein or
therein. This Agreement supersedes all prior agreements and understandings
between the parties with respect to such transactions.
SECTION 9.11 Severability. If for any reason any term or provision
of this Agreement is held to be invalid or unenforceable, all other valid terms
and provisions hereof shall remain in full force and effect, and all of the
terms and provisions of this Agreement shall be deemed to be severable in
nature. If for any reason any term or provision containing a restriction set
forth herein is held to cover an area or to be for a length of time which is
unreasonable, or in any other way is construed to be too broad or to any extent
invalid, such term or provision shall not be determined to be null, void and of
no effect, but to the extent the same is or would be valid or enforceable under
applicable law, any court of competent jurisdiction shall construe and interpret
or reform this Agreement to provide for a restriction having the maximum
enforceable area, time period and other provisions (not greater than those
contained herein) as shall be valid and enforceable under applicable law.
SECTION 9.12 Amendment. This Agreement may not be amended or
modified except by an instrument in writing signed by, or on behalf of, both of
the parties hereto.
20
IN WITNESS WHEREOF, the Seller and the Purchaser have caused this
Agreement to be executed as of the date first written above by their respective
officers thereunto duly authorized.
XXXXXXXX ENGINE FILTRATION, LLC
By:
Name:
Title:
FIBERMARK, INC.
By:
Name:
Title:
ANNEX I
Determination of and Payment of the Contingent Purchase Price Amount
Transfer Purchase Price Amount shall be paid to the Seller as follows:
Within 5 business days following product qualification and receipt
by the Purchaser of payment for a commercial order for one of more of the
Specified Paper Grades by one or more of the customers aggregating, by itself or
together with other such orders in respect of which payments in respect of the
Transfer Purchase Price Amount have not been made, at least 100 MT, the Seller
shall be paid from the Escrow Account a portion of the Transfer Purchase Price
Amount equal to the product of the (x) the Transfer Purchase Price Amount
multiplied by (y) a fraction the numerator of which shall be the number of MT of
the Transferred Order Flow represented by the Specified Paper Grades with
respect to which such orders have been accepted for payment and the denominator
of which is the number of MT comprising the Transferred Order Flow for all
Specified Paper Grades.
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