EXECUTION COPY
ASSET PURCHASE AGREEMENT
dated as of
November 1, 1995
by and between
ST. XXX FOREST PRODUCTS COMPANY,
ST. XXX CONTAINER COMPANY,
and
ST. XXX PAPER COMPANY
on the one hand
and
FOUR M CORPORATION
and
PORT ST. XXX PAPER COMPANY
on the other hand
TABLE OF CONTENTS
SECTION PAGE
PARTIES . . . . . . . . . . . . . . . 1
PREAMBLE. . . . . . . . . . . . . . . 1
ARTICLE I
DEFINITIONS
1.01 Definitions . . . . . . . . . . . 2
ARTICLE II
PURCHASE AND SALE
2.01 Purchase and Sale . . . . . . . . 25
2.02 Excluded Assets . . . . . . . . . 27
2.03 Assumption of Liabilities . . . . 30
2.04 Retained Liabilities. . . . . . . 32
2.05 Benefits of Assets. . . . . . . . 34
ARTICLE III
PURCHASE PRICE AND CLOSING
3.01 Purchase Price. . . . . . . . . . 36
3.02 Closing . . . . . . . . . . . . . 37
3.03 Deliveries at the Closing . . . . 38
3.04 Allocation of the Purchase Price. 42
3.05 Purchase Price Adjustment . . . . 43
3.06 Count of Inventory. . . . . . . . 46
3.07 Resolution of Net Working
Capital and Closing Capital
Expenditures Disputes . . . . . . 46
ii
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF SELLER
Section Page
4.01 Corporate Existence and Power, Etc. 48
4.02 Corporate Authorization . . . . . 49
4.03 Consents and Approvals;
No Violation. . . . . . . . . . . . 50
4.04 Financial Statements. . . . . . . . 52
4.05 Absence of Certain Changes. . . . . 53
4.06 Tangible Assets . . . . . . . . . . 54
4.06 ADisclaimer of Warranties of
Merchantability and Fitness . . . . 55
4.07 Title to the Acquired Assets. . . . 55
4.08 Certain Agreements. . . . . . . . . 56
4.09 Legal Matters . . . . . . . . . . . 57
4.10 Environmental Permits; Other Permits 60
4.11 Intellectual Property . . . . . . . 62
4.12 Finders' Fees . . . . . . . . . . . 64
4.13 Real Property; Realty Rights. . . . 64
4.14 Labor Controversies, Etc. . . . . . 66
4.15 No Implied Representation . . . . . 67
ARTICLE V
REPRESENTATIONS AND WARRANTIES
OF BUYER
5.01 Organization and Existence. . . . 67
5.02 Authorization . . . . . . . . . . 68
5.03 Consents and Approvals;
No Violation. . . . . . . . . . . 69
5.04 Finders' Fees . . . . . . . . . . 70
5.05 Litigation. . . . . . . . . . . . 70
5.06 Investor Status . . . . . . . . . 71
5.07 Outstanding Debt. . . . . . . . . 72
5.08 Title to Properties . . . . . . . 72
5.09 Taxes . . . . . . . . . . . . . . 72
5.10 Financial Statements. . . . . . . 72
iii
ARTICLE VI
COVENANTS OF THE PARTIES
6.01 Conduct of the Business . . . . . 73
6.02 Access to Information . . . . . . 75
6.03 Seller Trademarks . . . . . . . . 76
6.04 Guaranties. . . . . . . . . . . . 78
6.05 Efforts; Further Assurances;
Permits . . . . . . . . . . . . . 80
6.06 Bulk Sales Laws . . . . . . . . . 81
6.07 Books and Records . . . . . . . . 82
6.08 Intellectual Property
Cooperation; Etc. . . . . . . . . 83
6.09 Governmental Regulatory Approval. 84
6.10 HSR Act Review. . . . . . . . . . 84
6.11 Effect of Due Diligence and
Related Matters . . . . . . . . . 85
6.12 Real Property Transfers . . . . . 86
6.13 Insurance . . . . . . . . . . . . 91
6.14 Secured Indebtedness. . . . . . . 91
6.15 Licensing Arrangements. . . . . . 91
6.16 No Solicitation of Transactions . 92
6.17 Stockholders' Meeting . . . . . . 95
6.18 Prompt Payment of Taxes
and Indebtedness. . . . . . . . . 95
6.19 Conduct of Business and
Corporate Existence . . . . . . . 96
6.20 Insurance . . . . . . . . . . . . 97
6.21 Limitation on Distributions,
Investments and Payments. . . . . 97
6.22 Lien, Debt and Other Restrictions 98
6.23 Non-Competition . . . . . . . . . 101
6.24 Financing . . . . . . . . . . . . 101
6.25 Audited Financial Statements. . . 102
iv
ARTICLE VII
TAX MATTERS
7.01 Pre-Closing Tax Periods;
Post-Closing Tax Periods;
Bridge Tax Periods. . . . . . . . . 103
7.02 Refunds or Credits. . . . . . . . . 106
7.03 Mutual Cooperation. . . . . . . . . 107
7.04 Tax Audits. . . . . . . . . . . . . 108
7.05 No Offset . . . . . . . . . . . . . 110
ARTICLE VIII
EMPLOYEE BENEFITS
8.01 Employee Benefit Plans. . . . . . 111
8.02 Employees and Offers of Employment 113
8.03 Seller's Benefit Plans. . . . . . 114
8.04 Buyer Benefit Plans . . . . . . . 115
8.05 Seller's 401(k) Plan. . . . . . . 116
8.06 Early Retirement Incentive. . . . 117
8.07 Severance . . . . . . . . . . . . 119
8.08 Labor Controversies . . . . . . . 122
8.09 No Third Party Beneficiaries. . . 122
ARTICLE IX
CONDITIONS TO CLOSING
9.01 Conditions to the Obligations
of Each Party . . . . . . . . . . 123
9.02 Conditions to Obligation of Buyer 123
9.03 Conditions to Obligation of Seller 125
ARTICLE X
TERMINATION AND ABANDONMENT
10.01 Termination. . . . . . . . . . . 126
10.02 Effect of Termination. . . . . . 129
v
ARTICLE XI
SURVIVAL; INDEMNIFICATION
11.01 Survival . . . . . . . . . . . . 130
11.02 Indemnification. . . . . . . . . 131
11.03 Procedures . . . . . . . . . . . 133
11.04 Tax, Insurance and Other Benefits 136
11.05 Environmental Indemnification. . 137
11.06 Environmental Audit. . . . . . . 147
11.07 Work To Be Completed by Seller . 148
11.08 Work To Be Completed by Buyer. . 151
11.09 Other Disposal Facilities. . . . 152
ARTICLE XII
MISCELLANEOUS
12.01 Notices. . . . . . . . . . . . . 153
12.02 Amendments; No Waivers . . . . . 155
12.03 Expenses . . . . . . . . . . . . 156
12.04 Assignment; Parties in Interest. 157
12.05 Governing Law; Jurisdiction; Forum157
12.06 Counterparts; Effectiveness. . . 158
12.07 Entire Agreement . . . . . . . . 158
12.08 Publicity. . . . . . . . . . . . 159
12.09 Captions . . . . . . . . . . . . 159
12.10 Severability . . . . . . . . . . 159
12.11 Knowledge. . . . . . . . . . . . 160
vi
ASSET PURCHASE AGREEMENT
AGREEMENT (this "Agreement") dated as of the 1st day of
November, 1995 by and among St. Xxx Forest Products Company, a
Florida corporation ("SJFP"), St. Xxx Container Company, a Florida
corporation ("SJCC") and St. Xxx Paper Company, a Florida
corporation ("SJPC"), on the one hand, and Four M Corporation, a
Maryland corporation ("FMC") and Port St. Xxx Paper Company,
organized by FMC and SCC as a joint venture ("JV"), on the other
hand.
W I T N E S S E T H :
WHEREAS, Seller is engaged in the production of mottled
white and unbleached kraft linerboard and corrugated containers;
and
WHEREAS, Seller desires to sell, convey, assign, transfer
and deliver to FMC and JV, and FMC and JV desire to purchase and
accept from Seller, certain of its paper mill, box plants and
related assets, upon the terms and conditions set forth in this
Agreement; and
WHEREAS, pursuant to the terms and conditions of this
Agreement JV intends to acquire the Mill Assets and the Mill
Business and assume the Assumed Liabilities relating to the Mill
Assets and the Mill Business; and
WHEREAS, pursuant to the terms and conditions set forth in
this Agreement, FMC intends to acquire the Container Assets and the
Container Business and to assume the Assumed Liabilities relating
to the Container Assets and the Container Business.
NOW, THEREFORE, the parties hereto, intending to be legally
bound, agree as follows:
ARTICLE I
DEFINITIONS
1.01 DEFINITIONS.
(a) The following terms, as used herein, have the
following meanings:
"Accounts Payable" shall mean all current liabilities of
Seller outstanding as of the Closing Date relating to the Business,
other than Intercompany Payables, to the extent such Accounts
Payable are included in the calculation of Closing Net Working
Capital.
"Acquired Agreements" shall mean all contracts, agreements,
leases, purchase orders, instruments and commitments related to the
Business to which Seller is a party, other than Collective
2
Bargaining Agreements, those with respect to Realty Rights, those
with respect to which Rights of First Refusal have been exercised,
and those with respect to Secured Indebtedness and the Security
Documents.
"Acquired Assets" has the meaning set forth in Section
2.01.
"Acquired Books and Records" means all of Seller's customer
lists and records, vendor and supplier lists and records, accounts
and billing records, property records, plans, blueprints,
specifications, designs, drawings, surveys, engineering reports,
personnel records (where applicable) and all other documents,
computer data and records (including records and files on computer
disks or stored electronically) relating to the Business, the
Acquired Assets, the Transferred Employees and/or the Assumed
Liabilities, except to the extent related to Excluded Assets or
Retained Liabilities.
"Acquired Claims" has the meaning set forth in Section 2.01(ix).
"Acquired Equipment" means all personal property (other
than the Excluded Assets, Fixtures and Improvements, Rolling Stock,
and Inventories) owned by Seller and used in connection with the
operation of the Business, including, but not limited to, all
3
furniture and other furnishings, tools, office equipment, machinery
and equipment and other such property used by Seller for the
Business or for the use of raw materials, utilities or supplies
therefor (except office furnishings and equipment used by directors
and salaried Eligible Employees located outside the Real Property
who do not become Transferred Employees).
"Acquired Insurance Claims" has the meaning set forth in Section 2.01(xv).
"Acquired Intellectual Property" shall mean the Intellectual Property
used or held for use exclusively in the Business and owned by Seller,
which shall be assigned to Buyer and the Buyer Affiliates under
Section 2.01 hereof.
"Acquired Software" shall mean the computer software used
or held for use in the businesses of Seller and its Affiliates
other than the Business and also used in the Business set forth in
Section 1.01 of the Disclosure Schedule and owned by Seller which
shall be licensed to Buyer and the Buyer Affiliates under Section
6.15 hereof.
"Affiliate" shall mean, with respect to any Person, any
Person directly or indirectly controlling, controlled by, or under
common control with such other Person; "Buyer Affiliates" shall
mean (i) with respect to FMC, only the Affiliates of FMC receiving
4
Container Assets hereunder; and (ii) with respect to JV, only
Affiliates of JV receiving the Mill Assets hereunder which
Affiliates of JV shall not be deemed to include SCC or Affiliates
of SCC or FMC or Affiliates of FMC and "Seller Affiliates" shall
mean the Affiliates of Seller.
"Ancillary Agreements" shall mean the Assignment and
Assumption Agreement, the Xxxx of Sale, the Intellectual Property
Instruments, the license for Acquired Software, the lease referred
to in Section 3.03(b)(ix) hereof, the Wood Fiber Supply Contract,
the SJLD Deed, the deeds conveying the Real Property and documents
conveying or assigning the Realty Rights.
"Assignment and Assumption Agreement" shall mean the
Assignment and Assumption Agreement in substantially the form
attached hereto as Exhibit A.
"Assumed Charges" shall mean all of the following charges
incurred with respect to Acquired Assets to the extent allocable to
periods after the Closing Date: (i) utility charges (which shall
include, without limitation, water, sewer, electricity, gas and
other utility charges) with respect to the Real Property, the SJLD
Property and the Realty Rights, (ii) rental charges (which shall
include, without limitation, rental charges and other payments
5
under the Realty Rights) and (iii) payments and assessments for
waste water treatment.
"Assumed Liabilities" has the meaning set forth in Section 2.03.
"Assumed Taxes" shall mean (a) all Taxes allocated or apportioned
to Buyer under Section 7.01(d) and (b) fifty (50%) of all Transfer Taxes.
"Audited Financial Statements" has the meaning set forth in Section 6.25.
"Benefit Plan" has the meaning set forth in Section 8.01(a).
"Xxxx of Sale" shall mean the Xxxx of Sale in substantially the form
attached hereto as Exhibit B.
"Bridge Tax Period" has the meaning set forth in Section 7.01(d).
"Business" shall mean the business as conducted by SJFP and
SJCC of producing mottled white and unbleached kraft linerboard and
corrugated containers and products associated therewith and of
conducting other related activities and services; "Mill Business"
shall mean the business as conducted by SJFP of producing mottled
white and unbleached kraft linerboard and products associated
therewith; and "Container Business" shall mean the business as
6
conducted by SJCC of producing corrugated containers and products
associated therewith.
"Business Day" shall mean any day except a Saturday, Sunday
or other day on which commercial banks in New York City are
generally authorized to close.
"Buyer" shall mean (i) FMC or one or more FMC Affiliates
solely with respect to all matters under this Agreement relating to
the Container Assets and the Container Business; and (ii) JV solely
with respect to all matters under this Agreement relating to the
Mill Assets and the Mill Business.
"Buyer's Plan" has the meaning set forth in Section 8.05.
"CERCLA" shall mean the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended.
"Change of Control" has the meaning set forth in Section 11.05(g).
"Closing" shall mean the closing of the sale and purchase
of the Acquired Assets pursuant to this Agreement.
"Closing Capital Expenditures" has the meaning set forth in Section 3.05.
"Closing Date" shall mean the date and time of the Closing.
"Closing Inventory Schedule" has the meaning set forth in Section 3.06.
7
"Closing Net Working Capital" has the meaning set forth in Section 3.05.
"Closing Sales Proceeds" has the meaning set forth in Section 3.05.
"Cluster Rules" has the meaning set forth in Section 4.10(c).
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Collective Bargaining Agreement" has the meaning set forth in
Section 8.01(c).
"Confidentiality Agreement" has the meaning set forth in Section 6.02.
"Consents" has the meaning set forth in Section 4.03.
"Container Assets" shall mean the Acquired Assets of SJCC.
"Disclosure Schedule" shall mean the Disclosure Schedule annexed hereto,
including the Introduction thereto.
"Dispute Notice" has the meaning set forth in Section 3.07.
"Eligible Employees" shall mean all employees of Seller or
any Seller Affiliate whose principal employment is for or in
connection with the Business, except for those employees listed on
Confidential Section 8.02 of the Disclosure Schedule which Seller
shall provide to Buyer one day after the Financing Date.
8
"Environmental Conditions" shall mean any and all acts,
omissions, events, circumstances, and conditions, including any
pollution, contamination, degradation, damage, or injury caused by,
related to, or arising from or in connection with the generation,
use, handling, treatment, storage, disposal, discharge, emission or
release of Hazardous Materials.
"Environmental Laws" shall mean all Federal, state, local
or municipal laws, rules, regulations, statutes, ordinances or
orders of any Governmental Entity relating to (a) the control of
any potential pollutant, or protection of the air, water or land,
(b) solid, gaseous or liquid waste generation, handling, treatment,
storage, disposal or transportation, and (c) exposure to hazardous,
toxic or other substances alleged to be harmful. "Environmental
Laws" shall include, but not be limited to, the Clean Air Act, the
Clean Water Act, the Resource Conservation Recovery Act, the
Superfund Amendments and Reauthorization Act, the Toxic Substances
Control Act, the Safe Drinking Water Act, and CERCLA and shall also
include all state, local and municipal laws, rules, regulations,
statutes, ordinances and orders dealing with the subject matter of
the above listed Federal statutes or promulgated by any
governmental or quasi-governmental agency thereunder in order to
9
carry out the purposes of any Federal, state, local or municipal
law.
"Environmental Liabilities" shall mean any and all
liabilities, responsibilities, claims, suits, losses, costs
(including remedial, removal, response, abatement, clean-up,
investigative and/or monitoring costs and any other related costs
and expenses), other causes of action recognized now or at any
later time, damages, settlements, expenses, charges, assessments,
liens, penalties, fines, pre-judgment and post-judgment interest,
attorneys' fees and other legal costs incurred or imposed (a)
pursuant to any agreement, order, notice of responsibility,
directive (including directives embodied in Environmental Laws),
injunction, judgment or similar documents (including settlements)
arising out of, in connection with, or under Environmental Laws, or
(b) pursuant to any claim by a Governmental Entity or other Person
for personal injury, property damage, damage to natural resources,
remediation, or payment or reimbursement of response costs incurred
or expended by such Governmental Entity or Person pursuant to
common law or statute, as a result of Environmental Conditions.
"Environmental Permit" or "Environmental Permits" means any
permit, license, approval, registration, identification number or
other authorization with respect to the Acquired Assets or the
10
Business under any applicable law, regulation or other requirement
of the United States or any other country or of any state,
municipality or other subdivision thereof relating to the control
of any pollutant or protection of health or the environment,
including laws, regulations or other requirements relating to
emissions, discharges, releases or threatened releases of
pollutants, contaminants or hazardous or toxic materials or wastes
into ambient air, surface water, groundwater or land, or otherwise
relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of chemical
substances, pollutants, contaminants or hazardous or toxic
materials or wastes.
"ERISA" shall mean the Employee Retirement Income Security
Act of 1974, as amended.
"ERISA Affiliate" shall mean any person, firm or entity
(whether or not incorporated) which, by reason of its relationship
with Seller or any Seller Affiliate, is required to be aggregated
with Seller or any Seller Affiliate under Sections 414(b), (c) or
(m) of the Code or which, together with Seller or any Seller
Affiliate, is a member of a controlled group within the meaning of
Section 4001(a) of ERISA.
11
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
"Excluded Assets" has the meaning set forth in Section 2.02.
"Execution Date" shall mean the date of execution of this Agreement.
"Federal" shall mean of or pertaining to the federal government of the
United States of America.
"Financial Statements" has the meaning set forth in Section 4.04.
"Financing Date" shall mean the sixty-fifth (65th) calendar
day after the Execution Date or January 5, 1996, provided that in
the event the Audited Financial Statements are not delivered on the
sixtieth (60th) calendar day after the Execution Date, such date
shall be extended by one day for each day beyond the sixtieth
(60th) day after the Execution Date to and including the date of
delivery of the Audited Financial Statements.
"Fixtures and Improvements" shall mean the buildings and
other improvements referred to in the definition of Real Property.
"FMC" shall mean Four M Corporation.
"FMC Financial Statements" has the meaning set forth in Section 5.10.
12
"401(k) Plan" shall mean the St. Xxx Paper Company Employee
Salary Deferral Plan.
"GAAP" shall mean generally accepted accounting principles consistently
applied.
"Governmental Entity" has the meaning set forth in Section 4.03.
"Group" shall mean a Person and such Person's Affiliates
and their respective directors, officers, employees,
representatives, consultants, stockholders, controlling persons and
agents and each of the heirs, executors, successors and assigns of
any of the foregoing.
"Guarantee" has the meaning set forth in Section 6.04.
"Hazardous Materials" shall mean any (a) petroleum or
petroleum products, (b) hazardous substances as defined by
101(14) of CERCLA and (c) any other chemical, substance or waste
that is regulated by any Governmental Entity under any
Environmental Law.
"HSR Act" shall mean the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended.
"Incentive Program" has the meaning set forth in Section 8.06.
13
"Indemnified Parties" has the meaning set forth in Section 11.02.
"Indemnifying Party" has the meaning set forth in Section 11.03.
"Intellectual Property" shall mean all patents, patent
applications, service marks, trademarks, trademark registrations,
trademark applications, copyrights, industrial design
registrations, utility models, trade names, whether or not
registered (or by whatever name or designation), used by Seller,
and all proprietary data, and technical or manufacturing know-how
or information (and materials embodying such information) used by
Seller, including inventions and trade secrets and documentation
thereof in whatever form.
"Intellectual Property Instruments" shall mean, collectively, a
Patent Assignment in the form attached hereto as Exhibit C, and
an Acquired Software license in the form attached hereto as Exhibit D.
"Intercompany" shall mean a transaction, obligation or
account between Seller, any Seller Affiliate, any other Affiliate
of Seller or their divisions, on the one hand, and any of Seller,
any Seller Affiliate, any other Affiliate of Seller or their
14
divisions, on the other hand, arising from the conduct of the
Business.
"Intercompany Payables" shall mean all Intercompany
payables and other Intercompany liabilities of the Business of
whatever nature and regardless of whether such liabilities would be
treated as short-term or long-term on a balance sheet prepared in
accordance with GAAP.
"Intercompany Receivables" shall mean all Intercompany
receivables of the Business of whatever nature.
"Inventories" shall mean all supplies, spare parts, raw
materials, work in process, and material held for resale, and other
inventories, including without limitation, all as are owned by
Seller for use in the Business and all as are located at, used in
connection with, acquired for, produced for, contained in or in
transit to, through or from the Real Property including, without
limitation, those in warehouses or other storage facilities outside
the Real Property; provided, however, that Inventories shall not
include any of the foregoing that have no valid continuing use in
Buyer's conduct of the Business after the Closing Date which are
required to be destroyed or returned to Seller pursuant to Section 6.03.
15
"JV" shall mean Port St. Xxx Paper Company organized by FMC
and SCC as a joint venture.
"Lenders" has the meaning set forth in Section 11.05(g).
"Lien" shall mean, with respect to any asset, any mortgage,
lien, pledge, charge, security interest or encumbrance of any kind
in respect of such asset.
"Listed Employee" has the meaning set forth in Confidential
Section 8.07 of the Disclosure Schedule which Seller shall provide
to Buyer one day after the Financing Date and which shall not
indicate aggregate annual salaries or average straight time rates
materially in excess of that shown on the comparable schedule dated
August 18, 1995 which Seller has previously provided to Buyer.
"Listed Intellectual Property" has the meaning set forth in Section 4.11(a).
"Losses and Damages" has the meaning set forth in Section 11.02.
"Material Adverse Effect" shall, as the case may be, mean
a material adverse effect on the condition (financial or
otherwise), business, assets or results of operations of the Mill
Business taken as a whole or the Container Business taken as a
whole.
16
"Mill Assets" shall mean the Acquired Assets of SJFP and SJLD.
"Multiemployer Plan" shall mean each Benefit Plan that is
a multiemployer plan, as defined in Section 3(37) of ERISA.
"Net Working Capital" has the meaning set forth in Section 3.05.
"Off-Site Environmental Liabilities" has the meaning set forth in
Section 11.05(e).
"On-Site Environmental Liabilities" has the meaning set forth in
Section 11.05(e).
"Other Employee" has the meaning set forth in Confidential
Section 8.07 of the Disclosure Schedule which Seller shall provide
to Buyer one day after the Financing Date and which shall not
indicate aggregate annual salaries or average straight time rates
materially in excess of that shown on the comparable schedule dated
August 18, 1995 which Seller has previously provided to Buyer.
"Parcel" has the meaning set forth in Section 6.12(b).
"Permits" shall mean all franchises, licenses,
authorizations, approvals, permits (including Environmental
Permits), consents or other rights granted by Federal, state or
local governmental authorities and all certificates of convenience
or necessity, immunities, privileges, licenses, consents, grants,
17
ordinances and other rights, of every character whatsoever, which
are used by Seller in the conduct of the Business.
"Permitted Lien" shall mean, with respect to any of the
Acquired Assets, (a) mechanics', carriers', workers', repairers',
purchase money security interests and other similar Liens arising
or incurred in the ordinary course of business related to
obligations as to which there is no default on the part of Seller;
(b) other Liens, imperfections in title, charges, easements,
restrictions and encumbrances; and (c) Liens for Taxes not yet due
and payable in the case of each of (a), (b) and (c) which,
individually or in the aggregate, do not detract from the value, or
interfere with the continuation of the present use, of the property
subject thereto or affected thereby, other than in any de minimis
respect and (d) applicable zoning laws and ordinances and municipal
regulations which are not violated in any material respect by the
continuation of the present use of the property subject thereto or
affected thereby and rights in the nature of condemnation reserved
to or vested in any municipality or governmental, statutory or
public authority to control or regulate real property and realty
rights.
"Person" shall mean an individual, a limited liability
company, a corporation, a partnership, an association, a trust or
18
other entity or organization, including a governmental or political
subdivision or an agency or instrumentality thereof.
"Post-Closing Tax Periods" has the meaning set forth in
Section 7.01(c).
"Pre-Closing Tax Periods" has the meaning set forth in
Section 7.01(b).
"Principals" has the meaning set forth in Section 11.05(g).
"Purchase Price" has the meaning set forth in Section
3.01(b).
"Purchase Price Adjustment" has the meaning set forth in
Section 3.05.
"Real Property" shall mean those tracts or parcels of land
described by metes and bounds or identified in Section 4.13(a)(i)
of the Disclosure Schedule and all buildings and other improvements
of every kind and nature thereon, including fixtures and personalty
of a permanent nature.
"Realty Rights" shall mean those easements, privileges,
right-of-way agreements, surface use rights, realty leasehold
interests, servitudes, and other real property interests located
outside the Real Property and the SJLD Property, other than those
Acquired Agreements set forth in Section 4.08(a)(i) and (ii) of the
Disclosure Schedule, necessary for access to or which are ancillary
19
or appurtenant to the use and enjoyment of the Real Property, the
SJLD Property and the operation of the Business, as described in
Section 4.13(b) of the Disclosure Schedule.
"Receivables" shall mean accounts receivable relating to
the Business existing as of the Closing Date other than
Intercompany Receivables.
"Regulatory Approvals" has the meaning set forth in Section 6.09.
"Releases and Terminations" has the meaning set forth in Section 6.14.
"Retained Books and Records" has the meaning set forth in
Section 2.02(ix).
"Retained Liabilities" has the meaning set forth in Section 2.04.
"Reviewing Accountant" has the meaning set forth in Section 3.07.
"Right of First Refusal" shall mean those certain rights to
elect to purchase certain assets of the Business as listed in
Section 1.03 of the Disclosure Schedule.
"Rolling Stock" shall mean all vehicles, certificated and
otherwise, (including, but not limited to automobiles, trucks, rail
engines and rail cars), owned or leased by Seller and used in
20
connection with the operation of the Business (other than vehicles
used by directors and salaried Eligible Employees located outside
the Real Property who do not become Transferred Employees).
"Section 6.16 Fee" has the meaning set forth in Section 12.03.
"Secured Indebtedness" shall mean all indebtedness to Secured Parties.
"Secured Parties" shall mean the Polk County Industrial
Development Authority, Groveton Paperboard, Inc. and the holder of
any purchase money security interest.
"Securities Act" has the meaning set forth in Section 5.06.
"Security Documents" shall mean all security agreements,
mortgages and financing statements reflecting a security interest
or Lien in the Acquired Assets and entered into with the Secured
Parties.
"Seller" shall mean (i) SJCC solely with respect to all
matters under this Agreement relating to the Container Assets and
the Container Business; and (ii) SJFP solely with respect to all
matters under this Agreement relating to the Mill Assets and the
Mill Business.
"Seller Trademarks" has the meaning set forth in Section 6.03(a).
21
"SCC" shall mean Stone Container Corporation.
"SJCC" shall mean St. Xxx Container Company, a wholly owned
subsidiary of SJFP.
"SJFP" shall mean St. Xxx Forest Products Company, a wholly
owned subsidiary of SJPC.
"SJLD" shall mean St. Xxxxxx Land and Development Company,
a wholly owned subsidiary of SJFP.
"SJLD Deed" has the meaning set forth in Section 3.03(b)(vi).
"SJLD Property" has the meaning set forth in Section 3.03(b)(vi).
"SJPC" shall mean St. Xxx Paper Company.
"Stock" shall mean 7,483 shares of capital stock of
Groveton Paperboard, Inc., a New Hampshire corporation, 310 of
which are held in escrow as of the Execution Date pending payment
therefor in equal installments of $24,799.05 for 62 shares in each
of the next five quarters.
"Subsidiary" shall mean a corporation or other entity a
majority of whose capital stock with voting power, under ordinary
circumstances, entitling holders of such capital stock to elect the
board of directors or other governing body, is at the time,
22
directly or indirectly, owned by such Person and/or Subsidiary or
subsidiaries of such Person.
"Taxes" shall mean all taxes, charges, fees, levies or
other assessments, including, without limitation, income, gross
receipts, alternative minimum, excise, property, real estate,
sales, purchase, use, payroll (including required withholdings),
and franchise taxes imposed by any Governmental Entity with respect
to the Business or the Acquired Assets, but excluding Transfer
Taxes. Such term shall include any interest, penalties or
additions payable in connection with such taxes, charges, fees,
levies or other assessments and "Tax" shall mean one of the
foregoing Taxes.
"Tax Returns" shall mean all returns, declarations,
reports, statements and other documents required to be filed with
any Governmental Entity in respect of any Tax and "Tax Return"
shall mean one of the foregoing Tax Returns.
"Title Exception" has the meaning set forth in Section 6.12(a).
"Trademark" shall mean any word, name, symbol or device or
any combination thereof, whether or not registered, used to
identify and distinguish a Person's goods, including unique
23
products, from those manufactured or sold by others and to indicate
the source of the goods, even if that source is unknown.
"Transaction Proposal" has the meaning set forth in Section 6.16.
"Transfer Taxes" shall mean all sales, transfer, use, gross
receipts, value added, recording, registration, stamp and similar
taxes or fees (including recording fees) imposed by any
Governmental Entity in connection with the transfers by Seller and
the Seller Affiliates to Buyer and the Buyer Affiliates of any of
the Acquired Assets pursuant to this Agreement.
"Transferred Employees" has the meaning set forth in Section 8.02.
"Unaudited Financial Statements" has the meaning set forth
in Section 6.25.
"WARN" has the meaning set forth in Section 8.07.
"Wood Fiber Supply Contract" shall mean a Wood Fiber Supply
Contract in the form attached hereto as Exhibit E.
24
ARTICLE II
PURCHASE AND SALE
2.01 PURCHASE AND SALE. Upon the terms and subject to the
conditions of this Agreement, Buyer agrees to purchase, or cause
one or more Buyer Affiliates to purchase, from Seller and Seller
Affiliates and Seller and Seller Affiliates agree to sell,
transfer, assign and deliver to Buyer and its designated Buyer
Affiliates at the Closing (except as provided in Section 2.05), all
of Seller's and Seller Affiliates' right, title and interest in and
to the following assets, wherever located, including all such
assets hereafter acquired by Seller (the "Acquired Assets"), it
being understood that the Mill Assets will be purchased by JV and
the Container Assets will be purchased by FMC or one or more FMC
Affiliates:
(i) the Real Property and the SJLD Property;
(ii) the Realty Rights;
(iii) the Acquired Equipment;
(iv) the Rolling Stock;
(v) the Inventories;
(vi) the Receivables;
25
(vii) all rights under all Acquired Agreements,
except to the extent related to Excluded Assets or Retained
Liabilities;
(viii) the Stock, if the Right of First Refusal has
not been exercised;
(ix) all rights, claims, credits, causes of action
or rights of set-off against third Persons relating to the Acquired
Assets, arising after the Closing Date, including, without
limitation, unliquidated rights under manufacturers' and vendors'
warranties, except to the extent related to Excluded Assets or
Retained Liabilities (collectively, the "Acquired Claims");
(x) the Permits (to the extent assignable);
(xi) the Acquired Intellectual Property;
(xii) the Acquired Books and Records;
(xiii) all other intangibles including, but not
limited to, goodwill associated with the Business or the Acquired
Assets;
(xiv) cash in an amount equal to all condemnation
proceeds and all property and casualty insurance proceeds
(excluding business interruption insurance) plus an amount equal to
any deductible from any Person (other than Seller or any of its
Affiliates) from the Execution Date through the Closing Date with
26
respect to the loss, damage, destruction or condemnation of any of
the tangible Acquired Assets identified in the preceding clauses
(i) through (xiii) other than Inventories, but only to the extent
not applied by Seller to the repair, restoration or replacement
thereof on or prior to the Closing Date;
(xv) all claims to property and casualty insurance
proceeds and condemnation proceeds (excluding business interruption
insurance) from any Person (other than Seller or any of its
Affiliates) with respect to the loss, damage, destruction or
condemnation of any of the tangible Acquired Assets identified in
the preceding clauses (i) through (xiii) other than Inventories
occurring from the Execution Date through the Closing Date to the
extent proceeds of such claims are not covered in clause (xiv)
above, but only to the extent Seller has not paid for the repair,
restoration or replacement with respect thereto as of the Closing
Date ("Acquired Insurance Claims"); and
(xvi) the Acquired Software.
2.02 EXCLUDED ASSETS. Buyer expressly understands and
agrees that the following assets and properties of Seller and the
Seller Affiliates (the "Excluded Assets") shall be excluded from
the Acquired Assets and shall be retained by Seller and the Seller
Affiliates:
27
(i) all cash, cash equivalents and cash investments
of Seller and any of the Seller Affiliates, except to the extent
included within the definition of Acquired Assets pursuant to
clause (xiv) of Section 2.01;
(ii) all Intercompany Receivables;
(iii) all rights and claims, whether now existing or
arising hereafter, for credits or refunds of any Taxes other than
Assumed Taxes or Taxes attributable to Post-Closing Tax Periods
upon the terms and subject to the conditions of Section 7.02;
(iv) all prepaid interest, security deposits and
other like assets related to any Excluded Asset or Retained
Liability;
(v) all of Seller Affiliates' (other than Seller's)
right, title and interest in and to all of their assets and
properties that are not dedicated exclusively to the Business and
otherwise are not Acquired Assets.
(vi) Seller's interest in the capital stock of SJLD,
all of the assets and businesses of SJLD and any applications or
licenses granted with respect thereto other than the SJLD Property
and all of Seller's and Seller Affiliates' real property other than
the Real Property;
28
(vii) all prepaid rentals, refunds and dividends on
insurance policies and other prepaid expenses relating to the
Business and the Acquired Assets allocable to periods after the
Closing Date, as reflected on Seller's or Seller Affiliates' books
and records as of the Closing Date;
(viii) except as otherwise specifically provided
herein, all rights and claims (whether now existing or arising
hereafter) and all other assets relating to any Benefit Plan;
(ix) all books and records relating to (a) Closing
Net Working Capital until the Purchase Price Adjustment becomes
final pursuant to Section 3.07 hereof; (b) Tax Returns and tax
records for periods on or prior to the Closing Date, (c) the other
assets and properties of Seller which are included in the Excluded
Assets, and (d) the Retained Liabilities (collectively, the
"Retained Books and Records");
(x) except as otherwise provided in Section 6.03
hereof, all Trademarks, trade names, trade dress, logos and any
other intangible assets that use or incorporate the words "St. Xxx"
and any other marks listed in Section 2.02 of the Disclosure
Schedule;
(xi) the Stock, if the Right of First Refusal with
respect thereto has been exercised; and
29
(xii) all claims to all types of insurance proceeds
and condemnation proceeds to the extent related to Excluded Assets
and Retained Liabilities.
2.03 ASSUMPTION OF LIABILITIES. Upon the terms and
subject to the conditions of this Agreement, Buyer and the Buyer
Affiliates agree to assume, and shall defend, indemnify and hold
harmless the Seller Group in accordance with Article XI hereof from
and against, all of the following liabilities and obligations (all
such liabilities and obligations being herein referred to as the
"Assumed Liabilities"), it being understood that only those of the
Assumed Liabilities which relate to the Mill Assets and the Mill
Business will be assumed by JV and only those of the Assumed
Liabilities which relate to the Container Assets and the Container
Business will be assumed by FMC or one or more FMC Affiliates and
that neither JV nor any JV Affiliates will have any liability or
obligation with respect to the Assumed Liabilities which relate to
the Container Assets or the Container Business and that neither FMC
nor any FMC Affiliates will have any liability or obligation with
respect to the Assumed Liabilities which relate to the Mill Assets
or the Mill Business:
(i) Environmental Liabilities specified to Buyer in
Section 11.05;
30
(ii) current liabilities or obligations reflected in
the calculation of Closing Net Working Capital;
(iii) upon the terms and subject to the conditions
of Article VII, all Assumed Taxes and all other Taxes relating to,
arising from or with respect to the Acquired Assets or the
operations of the Business which are attributable to the Post-
Closing Tax Periods;
(iv) all liabilities and obligations to Transferred
Employees and their beneficiaries which are Buyer's responsibility
under Article VIII;
(v) Assumed Charges;
(vi) (other than those described in clauses (i) and
(ii) above) all liabilities and obligations under the terms of any
of the Acquired Agreements or that relate to the Real Property, the
SJLD Property, the Realty Rights, the Acquired Equipment, the
Rolling Stock, the Inventories, the Receivables, the Stock (if the
Right of First Refusal has not been exercised), the Acquired
Claims, the Permits (to the extent assignable), the Acquired
Intellectual Property, the Acquired Books and Records, the Acquired
Insurance Claims and the Acquired Software relating to periods
after the Closing Date; and
31
(vii) (other than those described in clauses (i) and
(ii) above) liabilities and obligations attributable to the
Acquired Assets or the Business arising out of any action, suit or
proceeding based upon an event occurring, a condition existing or
a claim arising after the Closing Date, except as and to the extent
that Buyer is entitled to indemnification in respect thereof
pursuant to Article XI; provided, however, that nothing in this
Section 2.03 shall be construed to impose any Environmental
Liabilities, such liabilities being treated exclusively under
Sections 11.05, 11.07, 11.08 and 11.09.
Notwithstanding the foregoing, the Assumed Liabilities
shall not include any liabilities or obligations if and to the
extent they are (a) attributable to any business or activity of
Seller or any of its Affiliates other than the Business or the
Acquired Assets, (b) Retained Liabilities, or (c) related to
Excluded Assets.
2.04 RETAINED LIABILITIES. Upon the terms and subject to
the conditions of this Agreement, Seller agrees to retain, and SJPC
and Seller shall defend, indemnify and hold harmless the Buyer
Group in accordance with Article XI hereof from and against, all of
the following liabilities and obligations of Seller and the Seller
32
Affiliates (all such liabilities and obligations being herein
referred to as the "Retained Liabilities"):
(i) Environmental Liabilities specified to Seller in
Sections 11.05, 11.07, 11.08 and 11.09;
(ii) upon the terms and subject to the conditions of
Article VII, all liabilities or obligations for Taxes relating to,
arising from or with respect to the Acquired Assets or the Business
which are incurred in or attributable to the Pre-Closing Tax
Periods and the portion of Taxes allocated or apportioned to Seller
for Bridge Tax Periods;
(iii) all Intercompany Payables;
(iv) except as specifically assumed by Buyer under
Article VIII or imposed by operation of law, all liabilities and
obligations to employees of Seller whether or not arising under the
Benefit Plans;
(v) the Secured Indebtedness and the Security
Documents;
(vi) all liabilities or obligations directly
relating to any Excluded Assets;
(vii) fifty percent (50%) of all Transfer Taxes;
(viii) (other than those described in clause (i)
above) all liabilities or obligations attributable to the Acquired
33
Assets or the Business arising out of any action, suit or
proceeding based upon an event occurring, a condition existing or
a claim arising on or prior to the Closing Date; provided, however
that nothing in this Section 2.04 shall be construed to impose any
Environmental Liabilities, such liabilities being treated
exclusively under Sections 11.05, 11.07, 11.08 and 11.09; and
(ix) accounts payable related to capital expenditures with respect
to matters identified in Section 11.07.
2.05 BENEFITS OF ASSETS. To the extent that any Acquired
Agreement, Permit or other Acquired Asset is not capable of being
sold, conveyed, assigned, transferred, delivered, subleased or
sublicensed without the waiver or consent of any third Person,
including a Governmental Entity, Seller and Buyer agree to use and
cause their respective Affiliates to use their best efforts to
obtain such a waiver or consent (which best efforts shall not in
any case include the payment of money or, in the case of Seller and
its Affiliates, the providing of any guarantees). To the extent
such consent or waiver cannot be obtained, this Agreement shall not
constitute a sale, conveyance, assignment, transfer, delivery,
sublease or sublicense or an attempted sale, conveyance,
assignment, transfer, delivery, sublease or sublicense thereof
notwithstanding anything in this Agreement to the contrary. In
34
those cases where any necessary consents, assignments, releases
and/or waivers have not been obtained at or prior to the Closing
Date, this Agreement shall constitute an equitable assignment by
Seller and the Seller Affiliates to Buyer and the Buyer Affiliates
of all of Seller's and the Seller Affiliates' rights, benefits,
title and interest in and to such Acquired Assets, and where
necessary or appropriate, Buyer or a Buyer Affiliate shall be
deemed to be Seller's or the Seller Affiliate's agent for the
purpose of completing, fulfilling and discharging all of Seller's
or such Seller Affiliate's rights and liabilities arising after the
Closing Date with respect to such Acquired Assets. Seller shall
take or cause its Seller Affiliate to take all necessary steps and
actions to provide Buyer or a Buyer Affiliate with the benefit of
such Acquired Assets including, without limitation, (i) enforcing,
at the request of Buyer and for the account of Buyer or a Buyer
Affiliate, any rights of Seller or any Seller Affiliate arising
with respect to any such Acquired Assets (including, without
limitation, the right to terminate in accordance with the terms
thereof upon the advice of Buyer) or (ii) permitting Buyer or a
Buyer Affiliate to enforce any rights arising with respect to such
Acquired Assets as if they had been sold, conveyed, assigned,
transferred, delivered, subleased or sublicensed to Buyer or a
35
Buyer Affiliate, and Buyer or a Buyer Affiliate shall, to the
extent Buyer or a Buyer Affiliate is provided with the benefits of
such Acquired Assets, assume, perform and in due course pay and
discharge all debts, obligations and liabilities of Seller or any
Seller Affiliate with respect to such Acquired Assets, and shall
defend, indemnify and hold harmless the Seller Group with respect
thereto. Nothing contained in this Section 2.05 will be deemed to
limit Seller's or the Seller Affiliates' representation and
warranty in Section 4.03, or require Buyer to agree to any material
change in any contract, agreement or commitment. Notwithstanding
the foregoing, in the case of the Acquired Agreements and the
Realty Rights, if Seller shall have complied with its covenants set
forth in this Section 2.05, the failure of Seller to obtain the
necessary consents or the formal legal assignment of such Acquired
Agreements or Realty Rights shall not provide grounds for Buyer not
to close under Section 9.02(b). Seller and Buyer agree to schedule
items subject to this Section 2.05 at and as of the Closing Date.
ARTICLE III
PURCHASE PRICE AND CLOSING
3.01 PURCHASE PRICE. Upon the terms and subject to the
conditions of this Agreement and in consideration of the sale,
36
conveyance, assignment and transfer of the Acquired Assets to be
sold to Buyer or one or more Buyer Affiliates hereunder, Buyer will
pay or deliver and cause one or more Buyer Affiliates to pay or
deliver to Seller or one or more Seller Affiliates the following:
(a) on the Closing Date, one or more Assignment
and Assumption Agreements and the other agreements contemplated
hereby to effect the assumption by Buyer or the Buyer Affiliates of
all Assumed Liabilities, duly executed by Buyer or such Buyer
Affiliate; and
(b) on the Closing Date, the aggregate sum of
three hundred ninety million dollars ($390,000,000), subject to
reduction in the amount of five million two hundred fifty thousand
dollars ($5,250,000) in the event the Right of First Refusal is
exercised, by wire transfer of immediately available funds in U.S.
dollars to an account designated by notice from Seller at least two
(2) Business Days prior to the Closing Date (the "Purchase Price").
3.02 CLOSING. The Closing of the sale and purchase of the
Acquired Assets hereunder shall take place at the offices of
Seller's counsel in Washington, D.C. at 10:00 a.m. EDT (a) on or
before the seventh Business Day following the date on which all
conditions to the parties' respective obligations under Article IX
37
have been satisfied; or (b) at such other place, date and time as
the parties hereto may mutually agree.
3.03 DELIVERIES AT THE CLOSING.
(a) At the Closing, Buyer shall deliver, or shall
cause one or more of the Buyer Affiliates to deliver, the following
to Seller or to one or more of the Seller Affiliates:
(i) the Purchase Price as provided for in Section 3.01;
(ii) one or more Assignment and Assumption Agreements, duly
executed by Buyer and/or the Buyer Affiliates;
(iii) a license for the Acquired Software;
(iv) the Wood Fiber Supply Contract;
(v) a lease in the form of Exhibit F annexed
hereto covering approximately 12,000 square feet of office space in
Port St. Xxx, Florida;
(vi) the easements referenced in Section 6.12;
(vii) certified copies of resolutions duly
adopted by Buyer and the Buyer Affiliates constituting all
necessary authorization for the consummation by Buyer and the Buyer
Affiliates of the transactions contemplated by this Agreement;
38
(viii)the certificate required by Section 9.03(c);
(ix) certificates of incumbency for all
relevant officers of Buyer and the Buyer Affiliates executing this
Agreement and any other documents pursuant to this Agreement;
(x) an opinion of counsel substantially in the forms annexed
hereto as Exhibit G; and
(xi) such other documents, instruments,
certificates and writings as reasonably may be requested by Seller
at least three (3) Business Days prior to the Closing.
(b) At the Closing, Seller shall deliver, or shall
cause one or more of its Affiliates to deliver, the following to
Buyer or to one or more of the Buyer Affiliates:
(i) one or more Bills of Sale duly executed by Seller;
(ii) one or more Assignment and Assumption Agreements duly
executed by Seller;
(iii) the certificates representing the
Stock, duly assigned to FMC (if the Right of First Refusal has not
been exercised);
(iv) the Intellectual Property Instruments
and such other assignments or other appropriate documents of
39
transfer for the Acquired Intellectual Property and a license for
the Acquired Software;
(v) the Wood Fiber Supply Contract;
(vi) a deed (in form and substance mutually
satisfactory to Seller and JV in accordance with customary
practices for the conveyance of commercial real property rights in
the locality) conveying, subject to Section 6.12 hereof, all of
SJLD's right, title and interest in that certain tract of land (the
"SJLD Deed") outlined in Section 3.03(b) of the Disclosure Schedule
as it may be altered pursuant to Section 6.12(b)(1) (the "SJLD
Property");
(vii) deeds (in form and substance mutually
satisfactory to Seller and Buyer in accordance with customary
practices for the conveyance of commercial real property rights in
the locality of the particular Real Property) conveying the Real
Property;
(viii) documents (in form and substance
mutually satisfactory to Seller and Buyer in accordance with
customary practices for the sale of commercial real property in the
locality of the particular Real Property or the SJLD Property)
conveying or assigning the Realty Rights;
40
(ix) a lease in the form of Exhibit F annexed
hereto covering approximately 12,000 square feet of office space in
Port St. Xxx, Florida;
(x) certified copies of resolutions duly
adopted by the Board of Directors of Seller and any Seller
Affiliates constituting all necessary corporate authorization for
the consummation by Seller and such Seller Affiliates of the
transactions contemplated by this Agreement;
(xi) the certificate required by Section 9.02(c);
(xii) certificates of incumbency for all
relevant officers of Seller and its Affiliates executing this
Agreement and any other documents pursuant to this Agreement;
(xiii) subject to Section 6.14, evidence of
the release of Liens other than Permitted Liens on the Acquired
Assets, including the Releases and Terminations;
(xiv) an opinion of counsel substantially in
the form of Exhibit H annexed hereto, including without limitation
reliance letters to Buyer's financing institutions; and
(xv) such other documents, instruments,
certificates and writings, including without limitation landlord
41
estoppel certificates, as reasonably may be requested by Buyer at
least three (3) Business Days prior to the Closing.
3.04 ALLOCATION OF THE PURCHASE PRICE. The Purchase Price
shall be allocated among the Acquired Assets in a manner to be
agreed between Buyer and Seller prior to the filing of any Tax
Returns. The allocation may be changed by written agreement of the
parties after the Closing, and the agreement of the parties shall
be binding for all tax purposes. For Federal income tax purposes
(including, without limitation, Buyer's and Seller's compliance
with the reporting requirements under Section 1060 of the Code),
each of Seller and Buyer hereby agree to use such allocation and to
cooperate with each other in connection with the preparation and
filing of any information required to be furnished to the Internal
Revenue Service under Section 1060 of the Code and any applicable
regulations thereunder. Without limiting the generality of the
preceding sentence, Buyer and Seller agree to (i) report such
allocations to the Internal Revenue Service on Form 8594 and, if
required, supplemental Forms 8594, in accordance with the
instructions to Form 8594 and the provisions of Section 1060 of the
Code and the applicable regulations thereunder, and (ii) coordinate
their respective preparation and filing of each such Form 8594 and
any other forms or information statements or schedules required to
42
be filed under Section 1060 of the Code and the applicable
regulations thereunder so that the allocations and information
reflected on such forms, statements and schedules shall be
consistent. For the purposes of the reporting requirements of
Section 1060 of the Code, the parties acknowledge that the total
consideration payable by Buyer to Seller shall include the amount
referred to herein as the Purchase Price plus or minus the Purchase
Price Adjustment plus the amount of the Assumed Liabilities fixed
at the Closing Date which were an obligation of Seller prior to the
transaction contemplated by this Agreement.
3.05 PURCHASE PRICE ADJUSTMENT. After Closing, the
Purchase Price shall (a) be increased or decreased, as the case may
be, by the difference between Net Working Capital as of the Closing
Date, including adjustments made pursuant to Section 3.07 of this
Agreement and Net Working Capital as of June 30, 1995 ("Closing Net
Working Capital"), and (b) subject to Section 6.01(e), be increased
by the excess, if any, of capital expenditures of Seller following
June 30, 1995 (exclusive of capital expenditures with respect to
matters identified in Section 11.07) incurred and paid as of the
Closing Date over depreciation of the Business for the period June
30, 1995 through the Closing Date (exclusive of depreciation with
respect to matters identified in Section 11.07) determined in
43
accordance with GAAP ("Closing Capital Expenditures") and (c) be
decreased by the aggregate amount of cash proceeds, plus an amount
equal to the value of any other consideration if such consideration
is not included in the Acquired Assets, realized from the sale of
any machinery, equipment and fixtures of the Business after June
30, 1995 and prior to the Closing Date ("Closing Sales Proceeds";
and collectively with Closing Net Working Capital and Closing
Capital Expenditures, the "Purchase Price Adjustment"). "Net
Working Capital" means Receivables and Inventories, minus Accounts
Payable (not including Inventories or Accounts Payable related to
capital expenditures with respect to matters identified in Section
11.07). For this purpose, Receivables and Accounts Payable, as
defined in Section 1.01, shall be determined in accordance with
GAAP. Inventories as determined under Section 3.06 hereof shall be
valued in accordance with the procedures set forth in Section 3.05
of the Disclosure Schedule which procedures are, except as
otherwise set forth in such Section 3.05 of the Disclosure
Schedule, in accordance with GAAP.
Seller shall provide Buyer with a schedule of the Closing
Net Working Capital, Closing Capital Expenditures and Closing Sales
Proceeds within forty-five (45) days after Closing, together with
a letter of Seller's independent certified public accountants
44
stating that such schedule has been prepared, in all material
respects, in accordance with the provisions of this Agreement and
fairly presents the Closing Net Working Capital, Closing Capital
Expenditures and Closing Sales Proceeds for the relevant period in
accordance with the provisions of this Agreement. If the Purchase
Price Adjustment is a negative number, Seller shall make payment by
wire transfer to Buyer in immediately available funds for the
amount of the Purchase Price Adjustment on or before fifteen (15)
days after the Purchase Price Adjustment becomes final pursuant to
Section 3.07. If the Purchase Price Adjustment is a positive
number, Buyer shall, on or before fifteen (15) days after the
Purchase Price Adjustment becomes final pursuant to Section 3.07,
make payment by wire transfer to Seller in immediately available
funds for the amount of the Purchase Price Adjustment. The
Purchase Price Adjustment shall be paid by or to FMC and JV on the
basis of the elements of the Purchase Price Adjustment allocable to
the Mill Assets acquired by JV and the Container Assets acquired by
FMC, respectively. All payments of the Purchase Price Adjustment
shall also include interest on the amount of such Purchase Price
Adjustment at the prime rate announced from time to time by The
Chase Manhattan Bank N.A. from the forty-fifth (45th) day after
Closing until the day actually paid.
45
3.06 COUNT OF INVENTORY. Seller and Buyer and their
respective independent certified public accountants shall conduct
a joint physical count as of the Closing Date, in accordance with
the procedures set forth in Section 3.05 of the Disclosure
Schedule, of the Inventory, in order to determine the quantity of
all items of such Inventory that qualify as Inventory. Based upon
such joint physical count, Seller shall prepare and deliver to
Buyer as part of the schedule of Closing Net Working Capital a
schedule, by item and quantity, of Inventory (the "Closing
Inventory Schedule") accompanied by a letter of agreed upon
procedures of Seller's independent certified public accountant to
the effect that the Closing Inventory Schedule has been prepared,
in all material respects, in accordance with this Section 3.06.
3.07 RESOLUTION OF NET WORKING CAPITAL AND CLOSING CAPITAL
EXPENDITURES DISPUTES. Seller shall make available to Buyer and,
if Buyer elects, Buyer's independent certified public accountants,
at no expense, such of the facilities, books, records and personnel
of Seller related to the Business and such of the work papers of
Seller's independent certified public accountants as are reasonably
requested by Buyer to enable it to review and verify Seller's
Closing Net Working Capital calculation, including the Closing
Inventory Schedule, the Closing Capital Expenditures and Closing
46
Sales Proceeds calculations. In the event Buyer disputes Seller's
calculations, it shall, within thirty (30) days of delivery
thereof, deliver a notice to Seller (the "Dispute Notice") setting
forth in reasonable detail the basis of such dispute. If the
Dispute Notice is not delivered within such thirty (30) day period,
then the Purchase Price Adjustment, as determined by Seller, shall
be final. In the event that the Dispute Notice is so delivered,
the parties shall negotiate to attempt to resolve the portion which
is in dispute and the portion which is not in dispute, together
with interest accrued thereon, shall be promptly paid by the party
owing the same. If the parties fail to resolve any such dispute
within ninety (90) days after receipt by Seller of the Dispute
Notice, the parties shall select a firm of independent certified
public accountants of national standing (the "Reviewing
Accountant") to review the portions of Seller's calculation which
are subject to dispute or, if the parties fail to agree upon a
Reviewing Accountant within twenty (20) days after receipt by
Seller of the Dispute Notice, such firm shall be selected by lot
from among all so-called "Big Six" firms not having (and not having
announced a pending combination with another firm having) a
disqualifying interest with respect to either party. The
performance of any such firm as the Reviewing Accountant under this
47
or any other provision of this Agreement shall not constitute a
disqualifying interest. The parties shall make available to the
Reviewing Accountant all work papers and all other information and
material in their possession relating to the matters asserted in
the Dispute Notice. The Reviewing Accountant shall be instructed
by the parties to use its best efforts to deliver to the parties
its determination as promptly as practicable after such submission
of the dispute to the Reviewing Accountant. The determination of
the Reviewing Accountant shall be final and binding on the parties.
Each party shall bear its own expenses and the fees and expenses of
its own representatives and experts, including its independent
accountant, in connection with the preparation, review, dispute (if
any) and final determination of the Purchase Price Adjustment. The
parties shall share equally in the costs, expenses and fees of the
Reviewing Accountant.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to Buyer that:
4.01 CORPORATE EXISTENCE AND POWER, ETC.
(a) Each of SJPC, SJFP and SJCC is a corporation
duly incorporated, validly existing and in good standing under the
48
laws of the jurisdiction of its incorporation, and has all required
corporate power and authority to carry on the Business as now
conducted by it and, in the case of SJFP and SJCC, to own any of
the Acquired Assets owned by it. Section 4.01 of the Disclosure
Schedule sets forth the name and the jurisdiction of incorporation
of each of SJPC, SJFP and SJCC. Each of SJPC, SJFP and SJCC is
duly qualified or licensed to do business and is in good standing
in each jurisdiction where the character of the property owned or
leased by it or the nature of its activities make such
qualification necessary, except where failure to be so qualified
would not, individually or in the aggregate, materially adversely
affect compliance with this Agreement.
4.02 CORPORATE AUTHORIZATION. The execution and delivery
of this Agreement by SJPC, SJFP and SJCC and the execution and
delivery of the Ancillary Agreements by Seller and each of the
Seller Affiliates which is a party thereto, and the performance by
SJPC of this Agreement and by Seller of this Agreement and each of
the Ancillary Agreements to which it is a party and the
consummation by Seller and any Seller Affiliate of the transactions
contemplated hereby and by the Ancillary Agreements to which it is
a party are within SJPC's, Seller's and such Seller Affiliate's
corporate powers and have been duly authorized by all necessary
49
corporate action on the part of SJPC, Seller and such Seller
Affiliate, subject to the requirement that this Agreement and the
transactions contemplated thereby are subject to the approval of a
majority of the outstanding shares of capital stock of SJPC. This
Agreement constitutes, and when executed and delivered the
Ancillary Agreements will constitute, valid and binding agreements
of SJPC, Seller and each Seller Affiliate which is a party thereto,
enforceable against it in accordance with its terms except that (a)
such enforcement may be subject to bankruptcy, insolvency,
reorganization, moratorium (whether general or specific) or other
similar laws now or hereafter in effect relating to creditor's
rights generally and (b) the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to
equitable defenses and to the discretion of the court before which
any proceeding therefor may be brought.
4.03 CONSENTS AND APPROVALS; NO VIOLATION. Except for
consents under any applicable "bulk sales" laws, requirements of
the HSR Act, the Right of First Refusal, those permits and licenses
identified in Section 4.10(a) of the Disclosure Schedule, the
stockholder approval referenced in Section 4.02 and each of the
consents set forth in Section 4.03 of the Disclosure Schedule (each
a "Consent" and together the "Consents"), no notice to or filing
50
with, and no permit, authorization, consent or approval of, any
Person, or any public body or authority, including courts of
competent jurisdiction, domestic or foreign (a "Governmental
Entity"), is necessary for the execution, delivery and performance
of this Agreement and the consummation by Seller and any Seller
Affiliate of the transactions contemplated by this Agreement.
Neither the execution and delivery of this Agreement by Seller and
SJPC, nor the consummation by Seller and any Seller Affiliate of
the transactions contemplated hereby, nor compliance by Seller and
any Seller Affiliate with any of the provisions hereof, will (i)
conflict with or result in any breach of any provision of the
certificate of incorporation or by-laws of Seller or such Seller
Affiliate; (ii) assuming the obtaining of all Consents and the
Releases and Terminations, result in a default (with or without due
notice or lapse of time or both), or give rise to any right of
termination, cancellation or acceleration, under any note, bond,
mortgage, indenture, license, contract, agreement or other
instrument or obligation to which Seller or any such Seller
Affiliate is a party or by which Seller, any such Seller Affiliate
or any of the Acquired Assets may be bound; or (iii) assuming the
obtaining of all Consents, violate any order, writ, injunction,
decree, statute, rule or regulation applicable to Seller, any such
51
Seller Affiliate or any of the Acquired Assets, except in the case
of (ii) or (iii) for violations, breaches or defaults which will
not in the aggregate have a Material Adverse Effect.
4.04 FINANCIAL STATEMENTS. SJFP has delivered to Buyer a
copy of unaudited consolidated financial statements of SJFP and
SJCC (without SJLD) consisting of a balance sheet, statement of
operating profit and changes in cash and investments as of and for
the years ended December 31, 1994, 1993 and 1992 and the periods
ended March 31, 1995 and June 30, 1995 and unaudited consolidating
balance sheets and income statements as of and for the periods
ended March 31, 1995 and June 30, 1995 (the "Financial
Statements"). Subject to Section 4.04 of the Disclosure Schedule,
the Financial Statements were prepared or will be prepared based
upon the books and records of Seller, and fairly present or will
fairly present in all material respects the financial condition of
Seller as of the appropriate periods and the results of operations
for the period then ended, in each case in conformity with GAAP.
SJFP shall promptly deliver to Buyer comparable unaudited or
audited financial statements for periods subsequent to
June 30, 1995 and prior to the Closing Date, and they shall be
deemed to be included within the defined term "Financial
Statements." Except as set forth in Section 4.04 of the Disclosure
52
Schedule and except as reflected or reserved against on the most
recent Financial Statements delivered to Buyer pursuant to this
Section 4.04, as of the date of such most recent Financial
Statements the Business did not have any liabilities or obligations
of a nature that would be required to be reflected or reserved
against on a balance sheet prepared in accordance with GAAP.
4.05 ABSENCE OF CERTAIN CHANGES. Except as set forth in
Section 4.05 of the Disclosure Schedule, since January 1, 1995, (a)
Seller has conducted the Business in the ordinary course consistent
with past practices; (b) the Business and the Acquired Assets have
not suffered any occurrence which has resulted in or could
reasonably be expected to result in a Material Adverse Effect; (c)
other than transactions wholly within the Business, Seller has not
sold, transferred, or otherwise disposed of, or agreed to sell,
transfer, or otherwise dispose of, any property or asset, real,
personal or mixed, which is (or would be if held by Seller at the
Closing Date) an Acquired Asset and which has a sales price in any
single case in excess of $50,000 or in the aggregate for all such
cases in excess of $500,000, except in the ordinary course of
business or in connection with capital improvements or
replacements; (d) Seller and the Seller Affiliates have not
received any written notice, or had actual knowledge, that any
53
supplier or customer of the Business has taken any steps which
could reasonably be expected to result in a Material Adverse
Effect; and (e) other than transactions wholly within the Business,
Seller has not entered into, amended, modified or terminated any
other agreements, commitments or contracts of a nature required to
be listed in Section 4.08 of the Disclosure Schedule relating to
the Business, except agreements, commitments or contracts made in
the ordinary course of business consistent with past practice.
4.06 TANGIBLE ASSETS. Assets constituting Acquired
Equipment as of September 30, 1995 are listed in Section 4.06 of
the Disclosure Schedule. Acquired Equipment will at the Closing
Date constitute all (except as disclosed in such definition)
personal property (other than the Excluded Assets, Fixtures and
Improvements, Rolling Stock, and Inventories) owned by Seller and
used in connection with the operation of the Business. Rolling
Stock will at the Closing Date constitute all (except as disclosed
in such definition) vehicles, certificated and otherwise,
(including, but not limited to automobiles, trucks, rail engines
and rail cars), owned or leased by Seller and used in connection
with the operation of the Business. Fixtures and Improvements will
at the Closing Date constitute the buildings, fixtures and other
improvements referred to in the definition of Real Property.
54
Seller's tangible assets comprising Acquired Equipment, Fixtures
and Improvements and Rolling Stock are in good operating condition
and repair, normal wear and tear excepted. Except as set forth in
Sections 4.09, 4.10(a) and 11.08 of the Disclosure Schedule, Seller
has not received any written notice within the past twelve (12)
months of a violation of any ordinances, regulations or other laws
with respect to such assets that could reasonably be expected to
result in a Material Adverse Effect.
4.06 ADISCLAIMER OF WARRANTIES OF MERCHANTABILITY AND
FITNESS. EXCEPT AS EXPRESSLY PROVIDED IN SECTION 4.06, SELLER
MAKES NO REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, AS
TO THE CONDITION OR FITNESS OF THE TANGIBLE PERSONAL ACQUIRED
ASSETS AND HEREBY DISCLAIMS ANY WARRANTY OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE.
4.07 TITLE TO THE ACQUIRED ASSETS. Except as set forth in
Section 4.07 of the Disclosure Schedule with respect to Secured
Indebtedness, there are no Liens on the Acquired Assets other than
Permitted Liens. On the Closing Date, Seller shall convey to Buyer
or a Buyer Affiliate good and marketable title in and to the
Acquired Assets free and clear of all Liens other than Permitted
Liens (except with respect to the Acquired Agreements, Acquired
Software, Acquired Claims, and Acquired Insurance Claims, as to
55
which Seller shall convey to Buyer a valid and enforceable
leasehold or other contractual interest in and to each of such
Acquired Assets (subject to Section 2.05 and subject to Section
4.08 of the Disclosure Schedule) (except that no representation is
made as to enforceability to the extent it may be affected by the
nature of Buyer or Buyer Affiliates or Buyer's or Buyer Affiliates'
acts or omissions after the Closing Date and except that (a) such
enforcement may be subject to bankruptcy, insolvency,
reorganization, moratorium (whether general or specific) or other
similar laws now or hereafter in effect relating to creditor's
rights generally and (b) the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to
equitable defenses and to the discretion of the court before which
any proceeding therefor may be brought) and except with respect to
the Real Property, the SJLD Property and the Realty Rights which
are the subject of Section 6.12, and except with respect to
Acquired Intellectual Property which is the subject of Sections
4.11 and 6.08 to the extent related to perfecting title as to third
parties.
4.08 CERTAIN AGREEMENTS.
(a) Section 4.08(a) of the Disclosure Schedule
sets forth a list of all of the following agreements constituting
56
Acquired Agreements as of September 30, 1995 (other than purchase
orders and replacement parts supply arrangements outstanding in the
ordinary course of business regardless of amount):
(i) each agreement which involves the receipt
or payment of more than fifty thousand dollars ($50,000) per annum;
(ii) each railroad tracking agreement;
(iii) each pipeline agreement; and
(iv) any other agreement that is material to
the Business.
(b) Except as set forth in Section 4.08(b) of the
Disclosure Schedule, to Seller's knowledge, each agreement which
will constitute Acquired Agreements as of the Closing Date and each
right which will constitute a Realty Right as of the Closing Date
is or will be as of the Closing Date in full force and effect.
Neither Seller nor any Seller Affiliate nor, to Seller's knowledge,
any third party is or will be as of the Closing Date in default
under the terms of any Acquired Agreement or any Realty Right in
any manner which could reasonably be expected to have a Material
Adverse Effect.
4.09 LEGAL MATTERS. Except as set forth in Sections 4.09,
4.10(a), 4.14, 8.08 and 11.08 of the Disclosure Schedule and
excluding matters pertaining to Excluded Assets or Retained
57
Liabilities, (a) there is no written notice of any action, suit,
claim, arbitration, investigation or proceeding pending against, or
to the knowledge of Seller, threatened against, Seller or any of
the Seller Affiliates (i) with respect to the Business or any
Acquired Asset before any court, arbitrator or any Governmental
Entity which could reasonably be expected to have a Material
Adverse Effect or (ii) which in any manner challenges or seeks to
prevent or enjoin the transactions contemplated hereby; (b) none of
Seller or the Seller Affiliates is a party to or, to the knowledge
of Seller, is bound by any judgment, injunction, award or order of
any Governmental Entity, arbitrator or any other Person which would
bind the Buyer after the Closing Date and which could reasonably be
expected to have a Material Adverse Effect; (c) the Business is
being conducted in compliance with all applicable laws, statutes,
ordinances, regulations, decrees and orders, including
Environmental Laws, except for violations that have not had and
could not reasonably be expected to have a Material Adverse Effect;
(d) Seller has not received any written notice of any actual or
threatened proceeding, claim, lawsuit or loss that relates to
Acquired Assets or the Business and arises under any Environmental
Law, except for notices that have not had and could not reasonably
be expected to have a Material Adverse Effect; (e) to Seller's
58
knowledge, no written notice of the type described in the preceding
clause (d) was given to any Person or entity that occupied or owned
any of the Real Property or the SJLD Property prior to Seller's
acquisition or use thereof that could reasonably be expected to
have a Material Adverse Effect; (f) Seller is not currently
operating or required to be operating the Business or the Acquired
Assets under any compliance order, schedule, decree or agreement,
any consent decree, order or agreement, and/or any corrective
action decree, order or agreement issued or entered into under any
Environmental Law except for those that have not had and could not
reasonably be expected to have a Material Adverse Effect; and (g)
to Seller's knowledge, there are not on the Real Property or the
SJLD Property landfills or land farms where Seller has
intentionally accumulated and disposed of any solid waste or
Hazardous Materials in violation of law which could reasonably be
expected to have a Material Adverse Effect. Except as set forth in
Sections 4.09 and 4.10(a) of the Disclosure Schedule, as of the
Execution Date there have been no environmental reports or studies
made by or on behalf of Seller relating to the Acquired Assets or
the Business within the last five (5) years which were prepared as
part of a single plant or a division-wide environmental compliance
audit or a comprehensive review of all media (air, water, and solid
59
waste) for all facilities and operations and which were not related
to any reporting obligation under any Environmental Law.
4.10 ENVIRONMENTAL PERMITS; OTHER PERMITS.
(a) Listed in Section 4.10(a) of the Disclosure
Schedule are the Environmental Permits held by Seller and used in
the operation of the Business, which list shall be updated as of
the Closing Date. Except as set forth in Sections 4.09 and 4.10(a)
of the Disclosure Schedule, to Seller's knowledge, as of the
Execution Date, Seller possesses all Environmental Permits
necessary for the conduct of the Business and as of the Closing
Date will possess all Environmental Permits necessary for the
conduct of the Business except where the failure to possess the
same could not reasonably be expected to have a Material Adverse
Effect. Except as set forth in Sections 4.09 and 4.10(a) of the
Disclosure Schedule, Seller has not received written notice from
any Governmental Entity that it is required to have in effect as of
the Execution Date any additional Environmental Permits. Seller
has furnished Buyer a copy of each such Environmental Permit. To
Seller's knowledge, except as set forth in Section 4.10(a) of the
Disclosure Schedule, each such Environmental Permit is in full
force and effect. Except as set forth in Section 4.10(a) of the
Disclosure Schedule, no outstanding notice of cancellation or
60
termination has been delivered to Seller in connection with any
Environmental Permit nor to Seller's knowledge is any such
cancellation or termination threatened (i) as of the Execution Date
or (ii) as of the Closing Date which could reasonably be expected
to have a Material Adverse Effect. Except as set forth in Sections
4.09 and 4.10(a) of the Disclosure Schedule, no applications are
known by Seller to be required, as of the Execution Date, for
operating permits or alternatives thereto in connection with the
Business under Title V of the Federal Clean Air Act. Except as set
forth in Sections 4.09 and 4.10(a) of the Disclosure Schedule,
there are no complaints or petitions by others, of which written
notice has been given to Seller, with respect to revocation of any
such Environmental Permits (i) as of the Execution Date or (ii) as
of the Closing Date which could reasonably be expected to have a
Material Adverse Effect.
(b) Listed in Section 4.10(b) of the Disclosure
Schedule are all Permits other than Environmental Permits used in
the conduct of the Business which list shall be updated as of the
Closing Date. Seller possesses all Permits necessary for the
conduct of the Business, except where the failure to possess any
such Permit could not reasonably be expected to result in a
Material Adverse Effect. To Seller's knowledge, each such Permit
61
is in full force and effect. No outstanding notice of cancellation
or termination has been delivered to Seller in connection with any
such Permit nor to Seller's knowledge is any such cancellation or
termination threatened (i) as of the Execution Date or (ii) as of
the Closing Date which could reasonably be expected to have a
Material Adverse Effect.
(c) Notwithstanding anything to the contrary in
Sections 4.09 and 4.10(a), nothing herein shall be construed as a
representation of Seller's compliance with any provision of Title
V of the Clean Air Act or the U.S. Environmental Protection
Agency's Effluent Limitations Guidelines, Pretreatment Standards,
and New Source Performance Standards: Pulp, Paper, and Paperboard
Category; National Emission Standards for Hazardous Air Pollutants
for Source Category; Pulp and Paper Production ("Cluster Rules")
which becomes effective or which must initially be complied with
after the Execution Date.
4.11 INTELLECTUAL PROPERTY.
(a) Section 4.11 of the Disclosure Schedule sets
forth a list of (i) all Trademark registrations, patents, copyright
registrations and applications therefor and all material
unregistered Trademarks, service marks and trade names which are
owned by Seller or any of the Seller Affiliates and used
62
exclusively or held for use exclusively in the Business, (ii)
Acquired Software which is owned by Seller or any of the Seller
Affiliates, and (iii) any written license, sublicense or other
agreement which Seller or any of the Seller Affiliates has entered
granting Seller or any of the Seller Affiliates rights to use
Intellectual Property (the "Listed Intellectual Property").
(b) Buyer understands that Seller has not made or
given, and does not make or give, any warranty as to the value,
enforceability, or validity of any Intellectual Property or that
the use by Buyer or Buyer Affiliates of any Intellectual Property
pursuant to this Agreement will not infringe upon other
intellectual property rights.
(c) Nothing contained in this Agreement shall be
construed as an agreement by, or obligation of, Seller to bring or
prosecute actions or suits against third parties for infringement
or violation of any Intellectual Property transferred or licensed
hereunder.
(d) Seller shall have no obligation to defend,
indemnify or hold harmless Buyer Group from any damages, costs or
expenses resulting from any obligation, proceeding or suit based
upon any claim that any activity, subsequent to the Closing Date,
engaged in by Buyer Group, a customer of Buyer or Buyer Affiliates
63
or anyone claiming under Buyer constitutes direct or contributory
infringement or misuse of any intellectual property rights not
licensed under this Agreement.
(e) Buyer shall be liable for and shall hold
Seller Group harmless from and against any and all Losses and
Damages resulting from any obligation, proceeding or suit based
upon any claim that any activity conducted or engaged in,
subsequent to the Closing Date, by Buyer Group, a customer of Buyer
or Buyer Affiliates, or anyone claiming under Buyer constitutes
direct or contributory infringement, or misuse, or misappropriation
of any intellectual property right of any third party.
4.12FINDERS' FEES. Except for Xxxxxx, Read & Co. Inc.
whose fees related thereto, if any, will be paid by Seller, there
is no investment banker, broker, finder or other intermediary which
has been retained by or is authorized to act on behalf of Seller or
any of its Affiliates who would be entitled to any fee or
commission upon consummation of or in connection with the
transactions contemplated by this Agreement.
4.13 REAL PROPERTY; REALTY RIGHTS.
(a) Section 4.13(a)(i) of the Disclosure Schedule
sets forth a description of the Real Property. Subject to Section
6.12 and except as set forth in Section 4.13(a)(i) of the
64
Disclosure Schedule, the Real Property and the SJLD Property
include all the real property (expressly excluding parcels of
undeveloped real property) of SJFP currently used and necessary in
the operation of the Mill Business. Subject to Section 6.12 and
except as set forth in Section 4.13(a)(ii) of the Disclosure
Schedule, the Real Property includes all real property owned by
SJCC.
(b) Section 4.13(b) of the Disclosure Schedule
sets forth the Realty Rights used in the operation of the Business.
Except as set forth in Section 4.13(b) of the Disclosure Schedule,
to Seller's knowledge and subject to Section 6.12, the Realty
Rights set forth in Section 4.13(b) of the Disclosure Schedule are
all those that are currently used and necessary in the operation of
the Business.
(c) To Seller's knowledge, no zoning law or other
similar ordinance or municipal regulation is violated by
continuation of the present use and operation of the Acquired
Assets presently on the Real Property or the SJLD Property and
Seller has not received notice of any such violation.
(d) No outstanding notice of condemnation of any
of the Real Property or the SJLD Property has been delivered to
65
Seller nor, to Seller's knowledge, is any condemnation proceeding
of any of the Real Property or the SJLD Property threatened.
(e) To Seller's knowledge, no fact or condition
exists which would result in the termination or curtailment of the
current access from the Real Property or the SJLD Property to any
presently existing public roads adjoining the Real Property or the
SJLD Property. All of the Real Property and the SJLD Property has
direct access to existing public roads and to all utilities
utilized at such location, except that utilities at the Port St.
Xxx container facility are provided from the mill.
(f) Except as set forth in Section 4.13(f) of the
Disclosure Schedule, to Seller's knowledge, no underground storage
tanks are present on the Real Property or the SJLD Property.
(g) Except as set forth in Section 4.13(g) of the
Disclosure Schedule, to Seller's knowledge, no asbestos containing
materials remain in place on any of the Real Property or the SJLD
Property.
4.14 LABOR CONTROVERSIES, ETC. Except as set forth in
Section 8.08 of the Disclosure Schedule, as of the Execution Date,
and subject to Buyer's and Buyer Affiliates' compliance with
Article VIII hereto, as of the Closing Date:
66
(a)there are no controversies between Seller and any
Eligible Employees that could reasonably be expected to have a
Material Adverse Effect; and
(b)to Seller's knowledge, there are no organizational
efforts currently being made or threatened involving any Eligible
Employees that could reasonably be expected to have a Material
Adverse Effect.
4.15 NO IMPLIED REPRESENTATION. It is the explicit intent
of each party hereto that neither Seller nor SJPC is making any
representation or warranty whatsoever, express or implied, except
those representations and warranties of Seller and SJPC explicitly
set forth in this Agreement, the Disclosure Schedule or in any
certificate contemplated hereby and delivered by or on behalf of
Seller or any Seller Affiliate in connection herewith.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF BUYER
Each of FMC and JV, severally and not jointly, hereby
represents and warrants to Seller as to itself and where applicable
its Affiliates that:
5.01 ORGANIZATION AND EXISTENCE. Each of FMC and JV is
duly organized, validly existing and in good standing under the
67
laws of the jurisdiction of its organization and has all requisite
corporate or other organizational power and authority and all
governmental licenses, authorizations, consents and approvals
required to carry on its business as now conducted. Each of FMC
and JV is duly qualified or licensed to do business and is in good
standing in each jurisdiction where the character of the property
owned or leased by it or the nature of its activities make such
qualification necessary, except where failure to be so qualified
would not, individually or in the aggregate, materially adversely
affect FMC's or JV's compliance with this Agreement.
5.02AUTHORIZATION. The execution, delivery and
performance by FMC and JV of this Agreement and the Ancillary
Agreements to which FMC or JV is a party and the consummation by
FMC and JV of the transactions contemplated hereby and thereby are
within FMC's and JV's powers and have been duly authorized by all
necessary action on the part of FMC and JV. This Agreement
constitutes and, when executed and delivered, the Ancillary
Agreements will constitute, the valid and binding agreements where
applicable of FMC and JV, enforceable against each of them in
accordance with its terms except that (a) such enforcement may be
subject to bankruptcy, insolvency, reorganization, moratorium
(whether general or specific) or other similar laws now or
68
hereafter in effect relating to creditor's rights generally and (b)
the remedy of specific performance and injunctive and other forms
of equitable relief may be subject to equitable defenses and to the
discretion of the court before which any proceeding therefor may be
brought.
5.03 CONSENTS AND APPROVALS; NO VIOLATION. Except for the
applicable requirements of the HSR Act, or as set forth in
Section 5.03 of the Disclosure Schedule, no notice to or filing
with, and no permit, authorization, consent or approval of, any
Person or Governmental Entity is necessary for the execution,
delivery and performance of this Agreement and the consummation by
FMC or JV of the transactions contemplated by this Agreement.
Neither the execution and delivery of this Agreement by FMC or JV
nor the consummation by FMC or JV of the transactions contemplated
hereby nor compliance where applicable by FMC or JV with any of the
provisions hereof will (i) conflict with or result in any breach of
any provision of the certificate of incorporation or by-laws (or
other similar charter documents) of FMC or JV; (ii) result in a
violation or breach of, or constitute (with or without due notice
or lapse of time or both) a default (or give rise to any right of
termination, cancellation or acceleration) under, any of the terms,
conditions or provisions of any note, bond, mortgage, indenture,
69
license, contract, agreement or other instrument or obligation to
which FMC or JV is a party or by which FMC or JV or their
respective assets may be bound; or (iii) violate any order, writ,
injunction, decree, statute, rule or regulation applicable to FMC
or FMC's assets or JV or JV's assets, except in the case of (ii) or
(iii) for violations, breaches or defaults which will not, in the
aggregate, have a material adverse effect on FMC or JV,
respectively.
5.04 FINDERS' FEES. Except for Bear Xxxxxxx & Co. Inc.,
whose fees related thereto, if any, will be paid by Buyer, there is
no investment banker, broker, finder or other intermediary which
has been retained by or is authorized to act on behalf of Buyer or
any Buyer Affiliates or SCC who would be entitled to any fee or
commission upon consummation of the transactions contemplated by
this Agreement.
5.05 LITIGATION. There is no action, suit, investigation
or proceeding pending against, or to the knowledge of Buyer,
threatened before any court or arbitrator or any Governmental
Entity which (a) would be reasonably likely to have a material
adverse effect on Buyer or any Buyer Affiliate or (b) in any manner
challenges or seeks to prevent or enjoin the transactions
contemplated hereby.
70
5.06 INVESTOR STATUS. FMC is an accredited investor
within the meaning of Rule 501 of the Securities and Exchange
Commission under the Securities Act of 1933, as amended (the
"Securities Act"), has the financial ability to bear the economic
risk of the investment in the Stock, can afford to sustain a
complete loss of such investment, and has no need for liquidity in
the investment in the Stock. FMC is acquiring the Stock for
investment and not with a view to the sale or distribution thereof,
for its own account and not with a view to the subsequent
distribution thereof and not on behalf of or for the benefit of
others and has not granted any other person any right or option or
any participation or beneficial interest in the Stock. FMC
acknowledges that the shares of Stock constitute restricted
securities within the meaning of Rule 144 under the Securities Act,
and that none of such securities may be sold except pursuant to an
effective registration statement under the Securities Act or in a
transaction exempt from registration under the Securities Act, and
acknowledges that it understands the meaning and effect of such
registration. FMC is aware that no Federal or state regulatory
agency or authority has passed upon the sale of the Stock or the
terms of the sale or the accuracy or adequacy of any material being
provided to FMC and that the purchase price thereof was negotiated
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between the Seller and FMC and does not necessarily bear any
relationship to the underlying assets or value of Groveton
Paperboard, Inc.
5.07 OUTSTANDING DEBT. There exists no default under the
provisions of any instrument evidencing debt or of any agreement
related thereto to which Buyer or any Buyer Affiliate or any of
their subsidiaries is a party.
5.08 TITLE TO PROPERTIES. Buyer and each Buyer Affiliate
has good and marketable title to its respective real property
(other than property which it leases) and good title to all its
other respective property.
5.09 TAXES. Buyer and each Buyer Affiliate has filed all
returns for taxes which are required to be filed, and each has paid
all taxes as shown on said returns and on all assessments received
by it to the extent that such taxes have become due, other than any
assessments being contested in good faith by appropriate
proceedings.
5.10 FINANCIAL STATEMENTS.
FMC has delivered to Seller a copy of its audited
consolidated financial statements consisting of a balance sheet,
income statement and statement of cash flows as of and for the year
ended July 31, 1995 (the "FMC Financial Statements"). The FMC
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Financial Statements were prepared based upon the books and records
of FMC, and fairly present in all material respects the financial
condition of FMC as of the appropriate periods and the results of
operations for the period then ended, in each case in conformity
with GAAP. FMC shall promptly deliver to Seller unaudited or
comparable audited financial statements for interim quarterly and
annual periods subsequent to July 31, 1995 and prior to the Closing
Date, and they shall be deemed to be included within the defined
term "FMC Financial Statements." Except as reflected or reserved
against on the most recent FMC Financial Statements delivered to
Seller pursuant to this Section 5.10, as of the date of such most
recent FMC Financial Statements FMC had no liabilities or
obligations of a nature that would be required to be reflected or
reserved against on a balance sheet prepared in accordance with
GAAP.
ARTICLE VI
COVENANTS OF THE PARTIES
6.01 CONDUCT OF THE BUSINESS. From the date hereof until
the Closing Date, except as otherwise expressly set forth in this
Agreement or disclosed in the Disclosure Schedule, Seller shall,
and shall cause the Seller Affiliates to, conduct the Business in
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the ordinary course consistent with past practice. Without
limiting the generality of the foregoing, except as otherwise
expressly set forth in this Agreement or disclosed in the
Disclosure Schedule, from the date hereof until the Closing Date,
without the prior written consent of Buyer, Seller will not:
(a) with respect to the Business, acquire a
material amount of assets of any other Person other than in the
ordinary course consistent with past practice;
(b) sell, lease, license or otherwise dispose of
(i) any assets of the Business unless in the ordinary course
consistent with past practice or (ii) any item of equipment or
fixtures of the Business for an amount in excess of $10,000;
(c) cause any of the Acquired Assets to become
subject to any Lien other than Permitted Liens;
(d) except for changes in the ordinary course
consistent with past practice, grant any bonus or any increase in
wages or salaries or enter into, adopt or make any change in any
consulting agreement, employment agreement or other Benefit Plan or
Seller benefit arrangement or commit to do so, in each case as it
may relate to Eligible Employees;
(e) make capital expenditures other than those
itemized in Section 6.01 of the Disclosure Schedule without the
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prior written approval of Buyer except as required to remain in
compliance with applicable law; or
(f) agree or commit to do any of the foregoing.
6.02 ACCESS TO INFORMATION. Subject to applicable law and
restrictions contained in any confidentiality agreements to which
Seller is subject, Seller will give Buyer, its counsel,
consultants, financial advisors, auditors and other authorized
representatives reasonable access during business hours to the
offices, properties, books and records of Seller relating to the
Business and the Acquired Assets and will instruct the employees,
counsel, independent certified public accountants and financial
advisors of Seller to cooperate with Buyer in its investigation of
the Business; PROVIDED that any investigation pursuant to this
Section 6.02 shall be conducted on commercially reasonable prior
notice and in such manner as not to interfere unreasonably with the
conduct of the Business of Seller and in accordance with such
reasonable procedures as Seller may require to protect the
confidentiality of proprietary information. All such information
shall be kept confidential pursuant to the terms of the
confidentiality agreements dated as of April 13, 1995 between FMC
and Xxxxxx, Read & Co. Inc. for itself and as a representative of
SJPC and SJFP and dated as of April 12, 1995 between SCC and
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Xxxxxx, Read & Co. Inc. for itself and as a representative of SJPC
and SJFP (collectively, the "Confidentiality Agreement").
6.03 SELLER TRADEMARKS.
(a) Except as set forth in Section 6.03 of the
Disclosure Schedule, after the Closing Date, Buyer and its
Affiliates shall not use any Trademark or trade name owned or used
by Seller or any of the Seller Affiliates other than those
constituting Acquired Intellectual Property (the "Seller
Trademarks"). Buyer understands and agrees that the Seller
Trademarks, or any right or license to the Seller Trademarks, are
not being transferred pursuant to this Agreement. Buyer
acknowledges Seller's exclusive and proprietary rights in the use
of the Seller Trademarks, and Buyer agrees that it shall not use
and shall not permit its Affiliates to use the Seller Trademarks
(or any names or Trademarks confusingly similar to the Seller
Trademarks) except as expressly set forth in Section 6.03 of the
Disclosure Schedule. After the Closing Date, all Seller Trademarks
shall be replaced by Buyer as soon as possible, but in no event
later than one hundred and twenty (120) days after the Closing Date
for items with Seller Trademarks affixed to them with a valid
continuing use in Buyer's conduct of the Business, including,
without limitation, buildings, vehicles, heavy equipment, hard
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hats, tools, tool boxes, kits (safety and others), signs, manual
covers and notebooks. After the Closing Date, Buyer will not use,
and will destroy or deliver to Seller, all such items with Seller
Trademarks affixed to them that have no valid continuing use in
Buyer's conduct of the Business, including items affecting customer
or employee relations or items that do not reflect Buyer's true
identity. Specific items to be destroyed or returned include items
with Seller Trademarks affixed to them including, without
limitation, giveaways; order, purchase or materials forms;
requisitions; invoices; statements; time sheets/labor reports; xxxx
inserts; stationery; personalized note pads; maps; organization
charts; bulletins/releases; sales/price literature; manuals or
catalogs; report covers/folders; program materials; and materials
such as media contact lists/cards. Notwithstanding the foregoing,
Seller consents to the use of the locality name "Port St. Xxx" in
the name of JV, but Buyer agrees to change the name of JV to
exclude use of "St. Xxx" therein upon the request of Seller made
prior to December 31, 1995.
(b) Buyer recognizes the value associated with the
Seller Trademarks, and acknowledges that the Seller Trademarks and
all rights therein and the goodwill pertaining thereto belong
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exclusively to Seller, and that the Seller Trademarks have a
secondary meaning in the minds of the public.
(c) Buyer agrees that the conduct of the Business
after the Closing Date by Buyer and Buyer Affiliates using the
Seller Trademarks shall be provided in accordance with all
applicable Federal, state and local laws, and that the same shall
not reflect adversely upon the good name of Seller, and that the
conduct of the Business will be of a standard and skill equivalent
to that employed by Seller prior to the Closing Date.
(d) Buyer acknowledges that its or its Affiliates'
failure to cease use of the Seller Trademarks as provided in this
Agreement, or its or its Affiliates' improper use of the Seller
Trademarks, will result in immediate and irreparable damage to
Seller. Buyer acknowledges and admits that there is no adequate
remedy at law for such failure to terminate use of the Seller
Trademarks, or for such improper use of the Seller Trademarks, and
Buyer agrees that in the event of such failure or improper use,
Seller shall be entitled to equitable relief by way of temporary
restraining order or any other relief available under this
Agreement.
6.04 GUARANTIES. Buyer shall use its best efforts (other
than the payment of money or agreement to substantive changes in
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the applicable document) to cause itself or a Buyer Affiliate to be
substituted in all respects for each member of the Seller Group,
effective as of the Closing Date, in respect of all obligations of
any such member allocated to any period, or to be performed after
the Closing Date, under any Acquired Agreement or Realty Rights
under which Seller or a Seller Affiliate is liable and is not
released by the other party thereto to the extent the obligations
thereunder constitute an Assumed Liability (the items described
shall be referred to individually as a "Guarantee" and collectively
as the "Guaranties") but such obligation shall be limited to those
Guaranties which are listed in Section 6.04 of the Disclosure
Schedule. Section 6.04 of the Disclosure Schedule lists all
Guaranties as of the date hereof which individually or in the
aggregate are material. Following the Closing Date, with respect
to any Guarantee which is not listed in Section 6.04 of the
Disclosure Schedule or for which no such substitution is effected
for the benefit of the Business and which relate to an Assumed
Liability, Buyer and Buyer Affiliates shall defend, indemnify and
hold harmless each member of the Seller Group against any
obligation and liability under any such Guarantee.
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6.05 EFFORTS; FURTHER ASSURANCES; PERMITS.
(a) Subject to the terms and conditions of this
Agreement, each party will use its commercially reasonable efforts
to take, or cause to be taken, all actions and to do, or cause to
be done, all things necessary or desirable under applicable laws
and regulations to consummate the transactions contemplated by this
Agreement, including, without limitation, preparing and making any
filings required to be made under applicable law. Each party shall
furnish to the other party such necessary information and
reasonable assistance as such other party may request in connection
with the foregoing.
(b) In case at any time after the Closing Date any
further action is necessary or desirable to carry out the purposes
of this Agreement, including action to fully vest in Buyer and
Buyer Affiliates their rights in the Acquired Assets, to perfect
the assumption by Buyer and Buyer Affiliates of the Assumed
Liabilities or to perfect the retention by Seller of the Excluded
Assets and the Retained Liabilities, the proper officers and/or
directors of Seller or the Seller Affiliates and Buyer or Buyer
Affiliates shall on the written request of any of them take all
such necessary or desirable action.
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(c) Seller shall, at its own expense (but without
providing any guarantees), promptly apply for or otherwise seek and
use commercially reasonable efforts to obtain all authorizations,
consents, waivers and approvals as may be required in connection
with the assignment of the Acquired Agreements to Buyer and Buyer
Affiliates at the Closing. Upon Buyer's request Seller will also
use, and will cause its Affiliates to use, commercially reasonable
efforts (not including the payment of money, incurring any out-of-
pocket costs or providing any guarantees) to assist Buyer and the
Buyer Affiliates in obtaining any other permits, licenses or other
authorizations after the Closing Date necessary for Buyer's and the
Buyer Affiliates' operation of the Business after the Closing Date
in a manner consistent with past practice.
(d) In the event that at any time, any order,
decree or injunction shall be entered which prevents or delays the
consummation of any of the transactions contemplated by this
Agreement, each party shall promptly use its best efforts to cause
such order, decree or injunction to be reversed, vacated or
modified in order to permit such transactions to proceed as
expeditiously as possible.
6.06BULK SALES LAWS. Buyer hereby waives to the fullest
extent possible under applicable laws compliance by Seller and the
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Seller Affiliates with the provisions of any applicable "bulk
sales", "bulk transfer" or similar laws. Seller shall comply with
any such laws which cannot be waived. Seller agrees to defend,
indemnify and hold the Buyer Group harmless against any and all
Losses and Damages incurred by Buyer or Buyer Affiliates arising
under any such "bulk sales", "bulk transfer" or similar laws as a
result of the sale of the Acquired Assets pursuant to this
Agreement.
6.07 BOOKS AND RECORDS. Buyer and Seller agree to retain,
for a period of ten (10) years after the Closing Date, any and all
books and records (hard copy, electronic or otherwise) related to
the Acquired Assets, the Assumed Liabilities, the Retained
Liabilities or the Business for all periods through the Closing
Date or related to the transactions contemplated hereby, provided
that upon expiration of such period, the party with custody of such
books and records shall give written notice to the other party and
an opportunity to such other party to ship such books and records
at such other party's cost, expense and risk to a location chosen
by it. In the event either party needs access to such books and
records for purposes of verifying any representations and
warranties contained in this Agreement, responding to inquiries
regarding the Business from Governmental Entities, indemnifying,
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defending and holding harmless the Seller Group or the Buyer Group,
as the case may be, in accordance with applicable provisions of
this Agreement or any other legitimate business purposes, including
without limitation books and records related to businesses
conducted by SJLD, each party will allow representatives of the
other party access to such books and records upon reasonable notice
during regular business hours for the sole purpose of obtaining
information for use as aforesaid and will permit such other party
to make such extracts and copies thereof as may be necessary or
convenient and, if required for such purpose, to have access to and
possession of original documents.
6.08 INTELLECTUAL PROPERTY COOPERATION; ETC. Seller and
the Seller Affiliates covenant and agree that at any time from and
after the Closing Date upon reasonable and specific written request
of Buyer, they will use commercially reasonable efforts to
communicate to Buyer all information known to them relating to the
Acquired Intellectual Property, and they will execute and deliver
any papers, make all rightful oaths, testify in any legal
proceedings and perform all other lawful acts reasonably deemed
necessary or desirable by Buyer to convey or perfect title to the
Acquired Intellectual Property and to enforce or defend Buyer's
rights in and to the Acquired Intellectual Property or assist Buyer
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in obtaining or enforcing Buyer's rights in and to the Acquired
Intellectual Property. Buyer shall reimburse Seller for all
reasonable and documented out-of-pocket expenses incurred in
providing cooperation pursuant to this Section 6.08 other than
expenses for conveying or perfecting title to such Acquired
Intellectual Property, which shall be handled in accordance with
Section 12.03 (except for recordation fees and expenses, which
shall be for Buyer's account).
6.09 GOVERNMENTAL REGULATORY APPROVAL. As promptly as
practicable after the Financing Date, Buyer and Seller shall
cooperate in filing the required applications and notices with the
appropriate Governmental Entities seeking authorization to transfer
or assign the Permits to Buyer (the "Regulatory Approvals"). To
the extent assignable, Seller will assign the Permits to Buyer.
Each party agrees to use its best efforts to obtain the Regulatory
Approvals and the parties agree to cooperate fully with each other
and with all Governmental Entities to obtain the Regulatory
Approvals at the earliest practicable date.
6.10 HSR ACT REVIEW. As promptly as practicable after the
Execution Date, the parties will make such filings as may be
required by the HSR Act with respect to the sale contemplated by
this Agreement. Thereafter, the parties will file as promptly as
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practicable any supplemental information that may be requested by
the U.S. Federal Trade Commission or the U.S. Department of Justice
pursuant to the HSR Act. If necessary, the parties will use their
best efforts in seeking early termination of the waiting periods
under the HSR Act.
6.11 EFFECT OF DUE DILIGENCE AND RELATED MATTERS. Buyer
represents that it is a sophisticated entity that was advised by
knowledgeable counsel, environmental consultants and financial
advisors and, to the extent it deemed necessary, other advisors in
connection with this Agreement and by the Closing Date will have
conducted its own independent review, evaluation and inspection of
the Acquired Assets and Assumed Liabilities. Accordingly, Buyer
covenants and agrees that (i) except for the representations and
warranties set forth in this Agreement and the Disclosure Schedule
and any other written communication signed and delivered by an
executive officer of Seller, Buyer and Buyer Affiliates have not
relied and will not rely upon any document or written or oral
information furnished to it by or on behalf of Seller or its
Affiliates or discovered by it or its representatives in a review
of Seller's or Seller Affiliates' records, including, without
limitation, any financial statements or data, provided that nothing
stated aforesaid shall prevent Buyer and Buyer Affiliates from
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using any document or written record of Seller or Seller Affiliates
in connection with verification of a representation or warranty in
this Agreement, (ii) there are no representations or warranties by
or on behalf of Seller or its Affiliates or representatives except
for those expressly set forth in this Agreement and the Disclosure
Schedule and any other written agreement entered into with Seller
or any of its Affiliates with Buyer in connection with this
Agreement, and (iii) to the fullest extent permitted by law,
Buyer's and Buyer Affiliates' rights and obligations with respect
to all of the foregoing matters will be solely as set forth in this
Agreement or in such other written agreements.
6.12 REAL PROPERTY TRANSFERS.
(a) Within five (5) Business Days after the
Financing Date, Buyer may (at its option and expense) order a
preliminary title binder (on a standard form reasonably acceptable
to Buyer), to be issued by a title insurance company or companies
reasonably acceptable to Buyer, with respect to the Real Property
and the SJLD Property. Within thirty (30) days after the Financing
Date, Seller shall provide Buyer with boundary surveys of the Real
Property and the SJLD Property and within seventy-five (75) days
after the Financing Date, Seller shall provide Buyer with ALTA
surveys of the Real Property and the SJLD Property. Buyer shall
86
provide Seller with a copy of each preliminary title binder (with
copies of all instruments listed as exceptions to title) and any
continuation thereof not later than five (5) Business Days
following Buyer's receipt thereof. If a preliminary title binder
or any continuation thereof indicates an exception (other than a
Permitted Lien) that would impair marketability in any material
respect in Buyer's reasonable judgment (the "Title Exception"),
Seller shall, upon written notice thereof from Buyer given at the
time of Buyer's submitting the preliminary title binder or
continuation thereof, as the case may be, not later than thirty
(30) days before the Closing Date, cause such Title Exception to be
removed on or before the Closing Date, or, with Buyer's approval
(such approval not to be unreasonably withheld), to put up a bond
with the title insurer in an amount sufficient to cause the title
insurer to insure over such Title Exception or to remove such Title
Exception from the title commitment for the benefit of Buyer or the
Buyer Affiliate. Notwithstanding the foregoing, if any Title
Exception cannot be removed prior to the Closing Date, Seller shall
have such additional time as Seller may reasonably require to
remove such Title Exception and an interest-bearing escrow account
shall be established at Closing out of a portion of the moneys
payable by Buyer at the Closing equal to the estimated reasonable
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cost of curing such Title Exception. To the extent the escrow
contains funds following the cure of all such Title Exceptions,
said surplus shall be delivered to Seller. To the extent the
escrow contains inadequate funds to cure all such Title Exceptions,
Seller shall pay the cost of such cure directly. Notwithstanding
the foregoing, Seller shall not be required to incur any expense to
cure Title Exceptions in excess of an aggregate amount of $500,000;
provided, however, that Seller shall be required as of the Closing
Date to cure any mortgage, mechanic's lien, tax lien, or judgment
lien capable of being removed by payment of a fixed sum of money,
regardless of the amount thereof, subject to Seller's right to
contest any of the foregoing in good faith and by appropriate
proceedings diligently conducted, and an interest-bearing escrow
account shall be established at Closing out of a portion of the
moneys payable by Buyer at Closing equal to the amount of such
contested item. To the extent the escrow contains funds following
the cure of such contested item, said surplus shall be delivered to
Seller. To the extent the escrow contains inadequate funds to cure
such contested item, Seller shall pay the cost of such cure
directly. If the estimated cost to cure Title Exceptions other
than mortgages, mechanic's liens, tax liens or judgment liens,
exceeds $500,000 in the aggregate, and Seller shall elect not to
88
cure such Title Exceptions, Buyer shall have the right upon five
(5) days' prior written notice to Seller to either (a) accept title
subject to such Title Exceptions and receive a credit against the
Purchase Price in the amount of $500,000 or (b) terminate this
Agreement.
(b) Notwithstanding the foregoing subsection (a), JV
agrees to provide SJLD with a recordable easement with respect to
the SJLD Property to extract water from the canal included therein
in an amount up to one million gallons per day in the event of a
forest fire in the environs and to have reasonable access to the
roads currently along and over such real property and to provide
the Apalachicola Northern Railroad with a recordable easement with
respect to the SJLD Property as to its existing rail lines across
such property. Notwithstanding anything to the contrary in this
Agreement, JV may at its election: (1) no less than sixty (60)
days prior to the Closing Date, notify Seller to substitute a
single parcel of 100 contiguous undeveloped acres of real property
which, to the reasonable satisfaction of JV, shall be free of any
Environmental Conditions giving rise to Environmental Liabilities
(the "Parcel") to be designated by Seller in place of similar
acreage for dredge material along the water canal supplying water
to the mill; or (2) within three (3) years of the Closing Date
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purchase from Seller the Parcel at the then fair market value
thereof for use as dredge spoil disposal; provided, however, that
in either case JV shall bear all responsibilities for obtaining all
necessary permits from Governmental Entities in connection
therewith and JV shall bear all costs associated with the
development and use of the Parcel for such intended use. The
Parcel shall have direct access to an existing public road or
recordable easements from Seller or its Affiliates to provide
access over its real property thereto.
(c) In addition, within five (5) Business Days after
the Financing Date, Buyer may (at its option and expense) commence
an investigation of Seller's right, title and interest in the
Realty Rights. If any such investigation indicates an exception
other than a Permitted Lien, Seller shall, upon written notice
thereof from Buyer not later than thirty (30) days before the
Closing Date, cause such exception to be removed on or before the
Closing Date or to be addressed in a fashion similar to that for
Real Property in this Section 6.12, except where the failure to
obtain any such exception could not reasonably be expected to have
a Material Adverse Effect.
(d) SJFP shall provide JV with a recordable easement
to a twenty foot wide strip of that certain real property not
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constituting Real Property hereunder under which the water canal
pipeline to the mill facility of SJFP runs for ingress and egress
for the purpose of repairing and maintaining such pipeline.
6.13INSURANCE. Seller shall, prior to the Closing Date,
continue to keep in effect at existing levels and coverage all its
insurance for its properties which are of an insurable nature and
of the character usually insured by companies operating similar
properties against loss or damage by fire, which insurance Seller
currently maintains in such amounts as are usually insured against
by such companies. On the Closing Date, the coverage under the
insurance policies and programs applicable to the Acquired Assets
will be terminated, and Buyer and Buyer Affiliates will be
responsible for providing all insurance coverage for the Acquired
Assets and the Business.
6.14 SECURED INDEBTEDNESS. Seller shall take, at Seller's
sole cost and expense, all actions necessary with respect to the
Secured Parties to obtain the termination or release, as of the
Closing Date, of all Security Documents (the "Releases and
Terminations"). Buyer shall cooperate in good faith with Seller in
obtaining the Releases and Terminations.
6.15 LICENSING ARRANGEMENTS. From and after the Closing
Date, Seller shall license to Buyer the Acquired Software. Such
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license shall be a royalty free license in the form attached hereto
as Exhibit D.
6.16 NO SOLICITATION OF TRANSACTIONS.
(a) SJPC and Seller shall not, and shall cause
their Affiliates, officers, directors, employees, investment
bankers, financial advisors and other representatives not to,
initiate, solicit or knowingly encourage any inquiries or the
making of any proposal to acquire all or substantially all of the
Business or enter into or maintain or continue discussions or
negotiate with any person or entity in furtherance of such
inquiries or such proposal; provided, however, that nothing in this
Section 6.16 shall prohibit the Board of Directors of SJPC from
(i) furnishing information pursuant to an appropriate
confidentiality letter concerning Seller and its businesses,
properties or assets to a third party who has made an unsolicited
Transaction Proposal, or (ii) engaging in discussions or
negotiations with such a third party who has made an unsolicited
Transaction Proposal, but in each case referred to in the foregoing
clauses (i) and (ii) only (x) after the Board of Directors of SJPC
concludes in good faith based on the advice of outside counsel that
such action is necessary for the Board of Directors of SJPC to
comply with its fiduciary obligations to stockholders under
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applicable law or (y) if Xxxxxx, Xxxx & Co. Inc. is unable to
render, or withdraws, its opinion as to the fairness of the
transactions contemplated by this Agreement to the stockholders of
SJPC. Notwithstanding anything in this Agreement to the contrary,
Seller shall immediately inform Buyer orally and in writing of the
receipt by it after the Execution Date of any Transaction Proposal.
"Transaction Proposal" means any proposal with respect to any
acquisition or purchase of a substantial amount of assets of, or
any equity interest in, Seller or any of its Subsidiaries or any
merger, consolidation, or business combination, involving Seller or
any of its Subsidiaries.
(b) The Board of Directors of SJPC shall not
(i) withdraw or modify, or propose to withdraw or modify, in a
manner adverse to Buyer, the approval or recommendation by such
Board of Directors of this Agreement, (ii) approve or recommend, or
propose to approve or recommend, any Transaction Proposal or
(iii) approve Seller entering into any agreement with respect to
any Transaction Proposal, unless an unsolicited Transaction
Proposal is received from a third party and the Board of Directors
of SJPC concludes in good faith based on the advice of outside
counsel that in order to comply with its fiduciary obligations to
stockholders under applicable law, it is necessary for the Board of
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Directors to withdraw or modify its approval or recommendation of
this Agreement, approve or recommend such Transaction Proposal,
enter into an agreement with respect to such Transaction Proposal
or terminate this Agreement, provided that no such action shall be
taken prior to ten (10) days after notice of such Transaction
Proposal has been provided to Buyer and provided further that
either the Board of Directors shall reject such Transaction
Proposal or such action shall be taken and notice thereof given to
Buyer no later than forty-five (45) days after notice of such
Transaction Proposal has been provided to Buyer. A failure to
reject such Transaction Proposal or to give such notice to Buyer
within such 45-day period shall be deemed an election by Seller to
terminate this Agreement and shall entitle Buyer to immediate
payment of the Section 6.16 Fee. In the event the Board of
Directors of SJPC takes any of the foregoing actions, Seller shall,
concurrently with the taking of any such action, pay Buyer the
Section 6.16 Fee. Notwithstanding anything contained in this
Agreement to the contrary, any action by the Board of Directors
permitted by this Section 6.16 shall not constitute a breach of
this Agreement by Seller or SJPC if, concurrently with such action,
Seller pays the Section 6.16 Fee.
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6.17 STOCKHOLDERS' MEETING. SJPC shall call and hold a
meeting of its stockholders as promptly as practicable after the
Financing Date for the purpose of approving this Agreement and the
consummation of the transactions contemplated hereby. SJPC shall
solicit from its stockholders proxies in favor of this Agreement
and the transactions contemplated hereby; provided, however, that
SJPC shall not be obligated to solicit such proxies if (a) its
Board of Directors takes an action authorized under Section 6.16 in
accordance with the terms and conditions thereof; or (b) if Xxxxxx,
Read & Co. Inc. is unable to render, or withdraws, its opinion as
to the fairness of the transactions contemplated by this Agreement
to the stockholders of SJPC; provided, however, that SJPC shall
give Buyer prompt notice of the occurrence of any such event.
6.18 PROMPT PAYMENT OF TAXES AND INDEBTEDNESS. On and
prior to the Closing Date, Buyer covenants that it will, and it
will cause each Buyer Affiliate to promptly pay and discharge, or
cause to be paid and discharged, prior to the earliest date on
which any penalty or interest is incurred or begins to accrue, all
lawful taxes, assessments and governmental charges or levies
imposed upon any of its income, profits, property or business and
promptly pay when due all its debt (including all claims or demands
of materialmen, mechanics, carriers, workmen, repairmen,
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warehousemen and landlords which, if unpaid, might result in the
creation of a Lien upon its property); PROVIDED that any such tax,
assessment, charge, levy or debt need not be paid if (i) the same
shall currently be contested in good faith, (ii) accruals shall
have been provided which are adequate to pay and discharge any such
tax, assessment, charge, levy or debt that could reasonably be
anticipated, and (iii) no proceedings shall have been commenced to
accelerate the payment of any such tax, assessment, charge, levy or
debt or to foreclose any Lien which may have attached as security
therefor.
6.19 CONDUCT OF BUSINESS AND CORPORATE EXISTENCE. On and
prior to the Closing Date, Buyer will, and will cause each Buyer
Affiliate to, do or cause to be done all things necessary to
preserve, renew and keep in full force and effect its corporate
existence and its rights, franchises, licenses and permits
necessary to continue its business. On and prior to the Closing
Date, Buyer will, and will cause each Buyer Affiliate to, use its
best efforts to comply with all laws, and with all rules,
regulations and orders made by governmental authority, applicable
to it or its properties or business (or any part thereof), non-
compliance with which could materially adversely affect the
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properties, business, profits or condition (financial or otherwise)
of Buyer or any Buyer Affiliates.
6.20 INSURANCE. Buyer will, and will cause each Buyer
Affiliate to, prior to the Closing Date, continue to keep in effect
at existing levels and coverage all its insurance for its
properties which are of an insurable nature against loss or damage
by fire and from other causes customarily insured against by
similar companies and against liability for loss or damage from
such hazards and risks to the person and property of others as are
usually insured against by companies operating similar property.
All such insurance is and shall continue to be carried with
independent insurers of good standing.
6.21 LIMITATION ON DISTRIBUTIONS, INVESTMENTS AND
PAYMENTS. Buyer covenants that, on or prior to the Closing Date,
it will not, and will not allow any Buyer Affiliate to directly or
indirectly, (a) declare or make, or incur a liability to make, a
distribution in respect of its capital stock (other than a
distribution to Buyer), (b) make any investments in any Person,
whether by acquisition of stock, indebtedness or other obligation
or security or by loan, guaranty, advance, capital contribution or
otherwise or in any property except property to be used in the
ordinary course of business or current assets arising from the sale
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of goods and services in the ordinary course of business and except
for investments in JV and investments in Buyer or Buyer's
Subsidiaries or (c) subject to Section 6.22(f), make any payment in
cash or property to any Buyer Affiliate or Affiliates of Buyer
(other than payments consistent with past practice to Persons
solely as director or officer).
6.22 LIEN, DEBT AND OTHER RESTRICTIONS. Buyer covenants
that, prior to the Closing Date, neither it nor any Buyer Affiliate
will:
(a) LIENS. Create, assume or suffer to exist any
Lien upon any of its property whether now owned or hereafter
acquired, except
(i) Liens for taxes not yet delinquent or
which are being actively contested in good faith by appropriate
proceedings,
(ii) Other Liens incidental to the conduct of
its business or the ownership of its property which were not
incurred in connection with the borrowing of money or the obtaining
of advances or credit, and which do not in the aggregate materially
detract from the value of its property or materially impair the use
thereof in the operation of its business,
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(iii) Liens securing obligations for term
loans currently in place and for working capital line(s) of credit
at existing advance rates relative to accounts receivable and
inventories, and
(iv) Liens in the nature of purchase money
security interests;
(b) DEBT. Create, incur, assume or suffer to
exist any debt for borrowed money, except (i) debt secured by Liens
permitted by the provisions of clause (iii) of Section 6.22(a), or
(ii) the renewal or refunding of existing debt that is presently
outstanding, PROVIDED that the principal amount of such existing
debt is not increased; provided, however, that nothing in this
Section 6.22 shall inhibit the incurrence of debt to finance the
transactions contemplated by this Agreement or the creation of
Liens in connection therewith;
(c) MERGER AND SALE OF ASSETS. (i) Merge or
consolidate with any other corporation other than one or more
Subsidiaries of Buyer or (ii) sell, lease or transfer or otherwise
dispose of all or any part of its assets, rights, or property other
than in the ordinary course of business;
(d) SALE AND LEASEBACK. Enter into any
arrangement with any lender or investor or to which such lender or
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investor is a party providing for the leasing by Buyer or any Buyer
Affiliate of real or personal property which has been or is to be
sold or transferred by Buyer or any Buyer Affiliate to such lender
or investor or to any such person to whom funds have been or are to
be advanced by such lender or investor on the security of such
property or rental obligations of Buyer or any Buyer Affiliate;
(e) SALE OR DISCOUNT OF RECEIVABLES. Sell with
recourse, or discount or otherwise sell for less than the face
value thereof, any of its notes or accounts receivable, except
Buyer and any Buyer Affiliate may discount or otherwise sell for
less than the face value thereof, without recourse, notes or
accounts receivable the collection of which is doubtful in
accordance with GAAP; or
(f) TRANSACTIONS WITH AFFILIATES. Directly or
indirectly, purchase, acquire, or lease any property from, or sell,
transfer or lease any property to, or otherwise deal with, in the
ordinary course of business or otherwise, any Buyer Affiliate or
Affiliate of Buyer unless such transaction or series of
transactions is on terms that are no less favorable than would be
available in a comparable transaction with an unrelated third
party. Notwithstanding the foregoing, this provision will not
apply to any transaction with an officer or director of Buyer or
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any Buyer Affiliate entered into in the ordinary course of business
(including compensation or employee benefit arrangements with any
officer or director) and transactions in existence on the date
hereof, PROVIDED that such transactions were entered into in
accordance with the original agreements (as amended) in effect at
that time.
6.23 NON-COMPETITION.If the Closing occurs, Seller and
SJPC hereby agree that, for a period of three (3) years following
the Closing Date, Seller and SJPC will not, and Seller and SJPC
will cause their respective Affiliates (other than individuals) not
to, directly or indirectly, engage in any business which is
competitive with the Mill Business within the United States or
Canada or which is competitive with the Container Business within
300 miles of any of the box plants included in the Real Property.
Seller and SJPC acknowledge that FMC and JV would be irreparably
harmed by any breach of this Section 6.23 and that there would be
no adequate remedy in damages to compensate FMC or JV for any such
breach.
6.24 FINANCING. Buyer shall use its best efforts to (a)
cause to be provided the letters and documents listed in Section
10.01(e) hereof; (b) to obtain the financing contemplated in such
letters; and (c) cause to be satisfied the closing condition set
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forth in Section 9.02(d) hereof. For this purpose, the term "best
efforts" shall not include causing (a) any of the forgoing to be in
a form not deemed commercially reasonable by FMC and JV in the
context of transactions similar to those contemplated by this
Agreement or (b) any of the terms and conditions relating to the
issuance of common stock, preferred stock, warrants or other equity
interests in FMC and/or JV to be determined, subject to the terms
and conditions of the letters and documents listed in Section
10.01(e) hereof and the commitment letters dated as of the
Execution Date from FMC and JV, other than in their sole judgment.
6.25 ADDITIONAL FINANCIAL STATEMENTS. Seller, at its sole
cost and expense, will deliver to Buyer (i) no later than thirty-
five (35) days after the Execution Date, a copy of unaudited
unconsolidated financial statements for each of SJFP and SJCC
consisting of a balance sheet, income statement and statement of
cash flows as of and for the years ended December 31, 1994, 1993
and 1992 and the periods ended March 31, 1995, June 30, 1995 and
September 30, 1995 and their respective comparable fiscal 1994
periods and as soon as available, if available prior to the Closing
Date, comparable unaudited financial statements for periods
subsequent to September 30, 1995 (other than the period ended
December 31, 1995) and prior to the Closing Date (the "Unaudited
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Financial Statements"), and (ii) no later than sixty (60) days
after the Execution Date, a copy of audited unconsolidated
financial statements for each of SJFP and SJCC consisting of a
balance sheet, income statement and statement of cash flows as of
and for the years ended December 31, 1994, 1993 and 1992 and as
soon as available comparable audited financial statements as of and
for the year ended December 31, 1995 (the "Audited Financial
Statements"). The Audited Financial Statements but not the
Unaudited Statements shall be deemed to be included in the term
"Financial Statements" for purposes of Section 4.04(a) hereof. Any
delay in providing the Unaudited Financial Statements or the
Audited Financial Statements shall be addressed in Section 10.01(e)
hereof and shall not be deemed to be a breach of the covenants in
this Section 6.25.
ARTICLE VII
TAX MATTERS
7.01 PRE-CLOSING TAX PERIODS; POST-CLOSING TAX PERIODS;
BRIDGE TAX PERIODS.
(a) Seller represents to Buyer that there are no
Liens for any Tax (other than for any current Tax not yet due and
payable) on the Acquired Assets.
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(b) Seller shall be liable for, and shall
indemnify and hold the Buyer Group harmless from and against, all
Taxes with respect to the Business and the Acquired Assets for all
Tax periods ending on or before the Closing Date ("Pre-Closing Tax
Periods") plus 50% of all Transfer Taxes. Except with respect to
Transfer Taxes, Seller shall be responsible for preparing and
filing all Tax Returns with respect to Taxes relating to the
Business and the Acquired Assets for Pre-Closing Tax Periods.
(c) Buyer shall be liable for, and shall indemnify
and hold the Seller Group harmless from and against, all
(i) Assumed Taxes and (ii) Taxes with respect to the Business and
the Acquired Assets for all Tax periods commencing after the
Closing Date ("Post-Closing Tax Periods"). Buyer shall be
responsible for preparing and filing all Tax Returns with respect
to Transfer Taxes and with respect to Taxes relating to the
Business and the Acquired Assets for Post-Closing Tax Periods.
(d) For any taxable period or taxable reporting
period which includes (but does not end on) the Closing Date (a
"Bridge Tax Period"), there shall be allocated or apportioned
between Seller and Buyer all Taxes other than Transfer Taxes and
Taxes based on income as follows: (i) for any payroll Taxes in
respect of Transferred Employees (including all Taxes under the
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Federal Insurance Contributions Act and the Federal Unemployment
Tax Act and other Taxes or contributions related to compensation
paid to such Transferred Employees), allocation shall be made to
the Seller and Buyer respectively based on actual payroll accrued
before and including the Closing Date and based on actual payroll
accrued after the Closing Date; (ii) for sales and use taxes other
than Transfer Taxes, allocation shall be made to Seller and Buyer
respectively based on actual sales before and including the Closing
Date and based on actual sales after the Closing Date using the
method used for reporting sales to Tax authorities; (iii) for
purchase or value added Taxes, allocation shall be made to Seller
and Buyer respectively based on actual purchases before and
including the Closing Date and based on actual purchases after the
Closing Date; (iv) for other Taxes on which a measure of activity
is used to measure or assess the Tax, allocation shall be made to
Seller and Buyer respectively based on the actual measure of
activity before and including the Closing Date and based on the
actual measure of activity after the Closing Date; (v) for Taxes
which are assessed on the basis of some measurement of value,
including real and personal property Taxes and capital or other
intangibles Taxes, apportionment shall be made to Seller and Buyer
respectively based on actual valuations used by the Tax authorities
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before and after the Closing Date and based on the number of days
of the Bridge Tax Period before and including the Closing Date and
after the Closing Date to Seller and Buyer respectively. Seller
shall be liable for, and shall defend and indemnify the Buyer Group
from and against, the proportionate amount of all such Taxes that
are allocated or apportioned to it for the Bridge Tax Period and
Buyer shall be liable for, and shall defend and indemnify the
Seller Group from and against, the proportionate amount of all such
Taxes that are allocated or apportioned to it for the Bridge Tax
Period. Buyer shall be responsible for preparing and filing all
Tax Returns for any Bridge Tax Period in a manner consistent with
the past practices (including accounting principles, methods and
elections) followed by Seller and shall submit all Tax Returns to
Seller for review and approval at least twenty (20) days prior to
the filing thereof. Seller shall review all such Tax Returns
within ten (10) Business Days of their receipt and inform Buyer in
writing of any item(s) with which Seller does not agree. Seller
and Buyer shall negotiate in good faith to resolve all disputed
items.
7.02 REFUNDS OR CREDITS. Any refunds or credits of Taxes,
to the extent that such refunds or credits are attributable to
Taxes (other than Assumed Taxes) for Pre-Closing Tax Periods, shall
106
be for the account of Seller and, to the extent that such refunds
or credits are attributable to Taxes for Post-Closing Tax Periods
or to Assumed Taxes they shall be for the account of Buyer. To the
extent that such refunds or credits are attributable to Taxes for
a Bridge Tax Period, such refunds or credits shall be for the
account of the party who bears responsibility for such Taxes
pursuant to Section 7.01(d). In the event Buyer has any discretion
to designate whether any credit or refund is attributable to a Pre-
Closing Tax Period, a Bridge Tax Period or a Post-Closing Tax
Period, the credit or refund shall be treated for purposes of this
Agreement as attributable to the earliest taxable period to which
it may be attributed. Each party shall promptly notify the other
of any refund or credit which it receives or expects to receive
which is for the account of the other party. Buyer shall promptly
forward to Seller or reimburse Seller for any refunds or credits
due Seller hereunder after receipt thereof by or on behalf of Buyer
with interest from the date of receipt by Buyer, and Seller shall
promptly forward to Buyer or reimburse Buyer for any refunds or
credits due Buyer hereunder after receipt thereof by or on behalf
of Seller with interest from the date of receipt by Seller.
7.03 MUTUAL COOPERATION. As soon as practicable, but in
any event within fifteen (15) days after a party's request, the
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other party shall deliver to it such information and other data
relating to Tax Returns and Taxes with respect to the Business and
the Acquired Assets and shall make available such of its
knowledgeable employees as the other party may reasonably request,
including providing the information and other data customarily
required, to cause the completion and filing of all Tax Returns for
which it has responsibility or liability under this Agreement or to
respond to audits by any taxing authorities with respect to any Tax
Returns or taxable periods for which it (or any of its Affiliates)
has any responsibility or liability under this Agreement or to
otherwise enable it (or any of its Affiliates) to satisfy its
reasonable accounting or Tax requirements.
7.04 TAX AUDITS. Within thirty (30) days after Buyer or
Seller has received oral or written notice (but in any event not
less than thirty (30) days before any response to any Governmental
Entity is due) that any Governmental Entity is auditing or
investigating, or intends to audit or investigate, any taxable
period for which the other party may be liable, in whole or in
part, to it under this Agreement, Buyer or Seller, as the case may
be, shall give to the other party written notice of such audit or
investigation, and shall tender to the other party the defense of
such audit or investigation with respect to Taxes for which the
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other party may be liable in whole under this Article VII. If both
Buyer and Seller may be liable in part as to the same Tax, Buyer
and Seller shall have the right jointly to defend such audit or
investigation. If the other party accepts the tendered defense of
any such audit or investigation, (a) the tendering party shall
execute and deliver to the other party all documents necessary or
appropriate (including powers of attorney) (i) to enable the other
party to act, at its sole cost and expense, on behalf of the
tendering party in defending against such audit or investigation,
in the case of periods for which the other party may be liable in
whole, or (ii) to enable the other party to defend against those
issues raised in such audit or investigation for which the other
party may be liable, in the case of any taxable period or Taxes for
which the other party may be liable in part, and (b) the other
party shall determine, at its sole discretion, the manner in which
such audit or investigation (in the case of periods for which the
other party may be liable in whole) will be defended or settled and
the other party shall defend or settle such audit or investigation
in good faith with respect to future taxes of the tendering party,
PROVIDED, HOWEVER, that the tendering party may reject any
settlement (or portion thereof) proposed by the other party, in
which case the other party will have no obligation to indemnify the
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tendering party with respect to the taxable period or Taxes under
audit or investigation for any amount in excess of the settlement
proposed by the other party, reduced by the actual settlement
amount, if any, of the items the proposed settlement of which was
not rejected by the tendering party. Notwithstanding anything in
this Agreement to the contrary, the other party shall not be liable
to the tendering party with respect to any Taxes for which the
other party's defense or settlement of the audit or investigation
has been adversely affected by the tendering party's failure to
give the timely written notice required by this Section 7.04. Each
party shall keep the other party fully informed of the status of
all audits and investigations for which the other party may be
liable in whole or in part.
7.05 NO OFFSET. To the extent that any party hereto is
responsible for any Tax pursuant to this Article VII or to receive
or remit any refund or credit in respect of any Tax, such party
shall not offset its obligation to pay any such Tax or to remit any
such refund or credit by any claim it may have against the other
party under this Agreement or otherwise.
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ARTICLE VIII
EMPLOYEE BENEFITS
8.01EMPLOYEE BENEFIT PLANS.
(a) Section 8.01(a) of the Disclosure Schedule
lists each of the following plans, contracts, policies and
arrangements which is sponsored, maintained, administered or
contributed to by, or otherwise binding upon Seller or any Seller
Affiliates or, in the case of an "employee pension plan" (as
defined in Section 3(2) of ERISA), an ERISA Affiliate for the
benefit of any Eligible Employee or a beneficiary thereof: (1) any
"employee benefit plan," as such term is defined in Section 3(3) of
ERISA, which is subject to ERISA, and (2) any other employment,
consulting, stock option, stock bonus, stock purchase, phantom
stock, incentive, severance, deferred compensation, bonus,
vacation, dependent care, employee assistance, fringe benefit,
medical, dental, sick leave, death benefit, insurance or other
material compensatory plan, contract, policy or arrangement which
is not an employee benefit plan as such term is defined in Section
3(3) of ERISA. Each plan, contract or arrangement described in the
preceding sentence is herein referred to as a "Benefit Plan". With
respect to each Benefit Plan, Seller has provided or made available
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to Buyer a true and complete copy of the governing documents and of
the most recently distributed summary material(s).
(b) No Benefit Plan is a Multiemployer Plan.
Neither Seller nor any ERISA Affiliate has incurred or expects to
incur any unpaid liability (contingent or otherwise) under Title IV
of ERISA in connection with a termination or withdrawal from any
funded pension plan (within the meaning of Section 3(2) of ERISA)
that is or could become an obligation of Buyer or any Buyer
Affiliate. With respect to any benefit plan which is a funded
pension plan (within the meaning of Section 3(2) of ERISA), there
has been no accumulated funding deficiency within the meaning of
Section 302 of ERISA or Section 412 of the Code, which has resulted
or could result in the imposition of a Lien upon the Acquired
Assets or with respect to which Buyer or any Buyer Affiliate could
have any liability. Groveton Paperboard, Inc. is not, and never
has been, an ERISA Affiliate of Seller.
(c) Section 8.01(c) of the Disclosure Schedule
lists each collective bargaining agreement to which Seller or any
Seller Affiliate is a party and which covers any Eligible Employees
("Collective Bargaining Agreement"). Seller has provided or made
available to Buyer true and complete copies of each Collective
Bargaining Agreement, including any side letters thereto.
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8.02 EMPLOYEES AND OFFERS OF EMPLOYMENT. On or prior to
the Closing Date, Buyer or a Buyer Affiliate shall offer
employment, subject to consummation of the Closing, to the Eligible
Employees, to commence as of the Closing Date. Seller will provide
to Buyer one day after the Financing Date a complete list of all
Eligible Employees, together with their annualized base salary or
hourly wage rate and a description of the amount and basis of their
other compensation. Seller will update the list for Buyer to
reflect additions and deletions prior to the Closing. Prior to the
Closing, Seller and the Seller Affiliates will not terminate the
employment of or transfer any Eligible Employee to another business
of Seller other than in the ordinary course of business. All
offers of employment by Buyer or Buyer Affiliates to Eligible
Employees shall be at the same or higher salaries or hourly wage
rates and with benefits commencing on the Closing Date which, in
the aggregate, are not less favorable than those in effect under
the Benefit Plans prior to the Closing Date, except that Buyer or
Buyer Affiliate does not maintain any stock option, stock bonus,
stock purchase, or phantom stock plans for its employees and except
that Buyer or Buyer Affiliates may make available participation in
a defined contribution profit sharing plan and not a defined
benefit plan aggregate contributions to which shall be no less than
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3% of the aggregate covered pay of participants therein. As to
each collective bargaining unit covered under a Collective
Bargaining Agreement, if a majority of Eligible Employees in the
unit accept an offer of employment from Buyer or a Buyer Affiliate,
the union representing such unit of employees of Seller shall be
recognized by Buyer or Buyer Affiliate as the collective bargaining
agent for such unit of employees of Buyer or Buyer Affiliate.
Buyer and Buyer Affiliates will waive any waiting periods under its
welfare plans and any preexisting conditions restrictions with
respect to the disability, life and health coverage which shall be
provided for all Eligible Employees who accept employment with
Buyer or Buyer Affiliates (herein collectively referred to as the
"Transferred Employees").
8.03 SELLER'S BENEFIT PLANS.
(a) Buyer will not assume the sponsorship of, the
responsibility for contributions to, or any liability in connection
with, any Benefit Plan. Except as provided in Section 8.05, with
respect to any Transferred Employee, no assets of any Benefit Plan
shall be transferred to Buyer or any Buyer Affiliates or to any
plan of Buyer or any Buyer Affiliates. Accrued benefits or account
balances of Transferred Employees under the Benefit Plans which are
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funded employee pension plans under Section 3(2) of ERISA shall be
fully vested as of the Closing Date.
(b) With respect to any Transferred Employee
(including any beneficiary or dependent thereof), Seller shall
retain (i) all liabilities and obligations arising under any group
life, accident, medical, dental or disability plan (whether or not
insured) to the extent that such liability or obligation relates to
claims or expenses incurred (whether or not then reported) on or
prior to the Closing Date, (ii) all liabilities and obligations
arising under any worker's compensation arrangement to the extent
such liability or obligation arises out of an illness or injury
that originated on or prior to the Closing Date, (iii) all
liabilities or other obligations incurred under or imposed by
Section 4980B of the Code due to qualifying events which occur on
or prior to the Closing Date, and (iv) all other liabilities or
obligations incurred or arising under any Collective Bargaining
Agreement or individual employment agreement or by any statute
pertaining to employment relationships or common law pertaining to
employment relationships on or prior to the Closing Date.
8.04 BUYER BENEFIT PLANS. Buyer and Buyer Affiliates will
recognize all service of the Transferred Employees with Seller or
any of its Affiliates for purposes of eligibility to participate
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and vesting in any employee benefit plans (within the meaning of
Section 3(3) of ERISA) of Buyer or any Buyer Affiliates, and for
determining the period of employment under any vacation, sick leave
or other paid time off plan of Buyer or any Buyer Affiliates, as
well as for determining other entitlements and terms of employment
affected by seniority under Buyer's or Buyer Affiliates' employment
policies, except to the extent such service with Seller is
disregarded for such purposes under a corresponding plan or policy
of Seller. Buyer or Buyer Affiliates shall be liable for sick
leave, vacation or paid time off benefits accrued and untaken by
each Transferred Employee as of the Closing Date to the extent
reflected in the calculation of Closing Net Working Capital and
shall provide such benefits to the Transferred Employees in
accordance with Buyer's and Buyer Affiliates' standard policies
concerning the use of or payment for same, to the extent that the
same shall be included in the calculation of the Closing Net
Working Capital.
8.05 SELLER'S 401(K) PLAN. As soon as practicable after
the Closing, Seller will give or will cause to be given to each
Transferred Employee the following choices with respect to the
disposition of his or her account balance under the 401(k) Plan:
(a) an immediate payout from the 401(k) Plan, (b) a deferred payout
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from the 401(k) Plan, or (c) if Buyer or Buyer Affiliate maintains
a qualified plan (under Section 4.01(a) of the Code) (the "Buyer's
Plan") direct roll over to the Buyer's or Buyer Affiliate's Plan.
8.06 EARLY RETIREMENT INCENTIVE. Seller, at JV's request
(if made within six (6) months after the Closing Date), will use
its best efforts to establish an early retirement incentive program
(the "Incentive Program") offering supplemental retirement pension
benefits to designated eligible Transferred Employees of SJFP as
reasonably proposed by JV within the limitations of this Section
8.06. In connection therewith, Seller will use its best efforts to
amend its funded pension plans to provide such supplemental
benefits to those Transferred Employees of SJFP who elect early
retirement under the Incentive Program, provided, however, that (a)
Seller's obligation shall be limited to fifteen salaried and
thirty-five hourly Transferred Employees, (b) the present value of
the supplemental benefits provided by Seller's plans, determined by
the plans' actuarial consultants in accordance with the interest
and mortality assumptions used by the plans in determining benefit
values, will be limited to $500,000 in the case of salaried
employees and $600,000 in the case of hourly employees, (c)
Seller's obligation will be contingent upon its receipt of an
opinion of Buyer's counsel reasonably satisfactory to Seller's
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counsel to the effect that the amendment of Seller's plans to
provide the supplemental retirement pension benefits will not
adversely affect the qualified status of Seller's plans under
Section 401(a) of the Code and will not be in violation of
applicable law, (d) JV will indemnify the Seller Group and Seller's
and Seller Affiliates' plans under which such supplemental benefits
are provided from and against any liability, cost or expense which
may be incurred by the Seller Group or Seller's or Seller
Affiliate's plans in connection with claims or demands arising from
the amendment of such plans to provide such benefits and/or the
payment of supplemental retirement pension benefits pursuant to
this Section 8.06 in reliance upon the aforesaid opinion of
counsel, except claims for the payment of supplemental benefits
payable pursuant to the amendments, (e) group health coverage for
any Transferred Employee who accepts the early retirement offer
(and his/her eligible dependents) shall be provided by either
Seller or JV as mutually agreed at the expense of Seller and JV
until the Transferred Employee reaches age 65, provided that
Seller's share shall be no greater than 50% of the total cost and
no greater than a total of $400,000; and (f) Seller's obligation
under this Section 8.06 will apply only with respect to early
retirement incentive offers which are made within six months after
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the Closing Date and which are accepted within twelve months after
the Closing Date. Seller will furnish JV with copies of the
Incentive Program documents and advance copies of any written
materials which Seller proposes to furnish to Transferred Employees
in connection with the Incentive Program. Notwithstanding anything
to the contrary herein, Seller's obligation in this Section 8.06
will extend to one Incentive Program, irrespective of whether any
Transferred Employees of SJFP accept such early retirement offers.
8.07SEVERANCE. Buyer shall have the sole responsibility
for making or causing to be made any applicable severance payments
and any other applicable similar payment (including any payment
under the Worker Adjustment and Retraining Act ("WARN"), or any
similar law) to Transferred Employees in the event their services
are terminated after the Closing Date. Buyer shall be liable for
any continuation coverage (including any penalties, excise taxes or
interest resulting from the failure to provide continuation
coverage) required by Section 4980B of the Code due to qualifying
events which occur with respect to Transferred Employees (or their
dependents) after the Closing Date. Notwithstanding anything to
the contrary contained herein, if Buyer or a Buyer Affiliate
terminates or causes the termination of the employment of (i) any
Listed Employee at any time within one year of the Closing Date,
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then, unless such Listed Employee's employment is terminated for
cause (defined below), Buyer shall pay or cause to be paid to such
terminated Listed Employee a lump sum severance payment in an
amount equal to the annual salary of any such Listed Employee at
the time of termination (or, if greater, immediately prior to the
Closing Date), and the prior year's bonus, if any, granted in the
ordinary course of business, which severance and bonus payments
shall be subject to applicable income tax withholding; or (ii) any
Other Employee within six months of the Closing Date, then, unless
such Other Employee's employment is terminated for cause, Buyer
shall pay or cause to be paid to such Other Employee a lump sum
severance payment in an amount equal to the gross weekly regular
straight-time rate of pay of such Other Employee at the time of
termination (or, if greater, immediately prior to the Closing Date)
multiplied by the aggregate number of years (including a fraction
of a year) of such Other Employee's employment with Seller, any
Seller Affiliate, Buyer and any Buyer Affiliate, with a minimum
severance payment of four weeks of the foregoing weekly rate of
pay, and a pro rata share of the prior year's bonus, if any,
granted in the ordinary course of business, determined by
multiplying the prior year's bonus by a fraction, the numerator of
which is the number of weeks for which severance is to be paid and
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the denominator of which is 52, which severance payments shall be
subject to applicable income tax withholding. In addition, any
terminated Listed Employee or Other Employee entitled to a lump sum
severance payment under this Section 8.07 shall also be entitled to
receive from Buyer or a Buyer Affiliate the first six months of
COBRA continuation coverage at no premium cost to him or her. For
the purpose of this Section 8.07, the term "cause" shall mean
(i) the failure or refusal of an employee to substantially perform
the material duties of his or her employment with Buyer, or any
Buyer Affiliate, subject to a written notice and cure period of at
least thirty (30) days; (ii) commission by the employee of a crime
involving moral turpitude, or (iii) the employee's wilful
engagement in conduct which is materially injurious to the business
of the Buyer. An employee shall be deemed to have been terminated
by Buyer or a Buyer Affiliate without cause if he or she terminates
employment because of a refusal to accept an offer of employment by
Buyer or a Buyer Affiliate at a business location which is more
than one hundred miles from his or her present location of
employment or if his or her duties or employment status are
materially altered by Buyer or Buyer Affiliate without his or her
consent.
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8.08 LABOR CONTROVERSIES. Except as set forth in Section
8.08 of the Disclosure Schedule, Seller represents and warrants
with respect to Eligible Employees that as of the Execution Date
and, subject to Buyer's and Buyer Affiliates' compliance with this
Article VIII, as of the Closing Date neither Seller nor any of the
Seller Affiliates has received written notice of its being a party
to any grievance, arbitration, demand, labor dispute or unfair
practice proceeding with respect to claims of, or obligations to,
Eligible Employees that could reasonably be expected to have a
Material Adverse Effect.
8.09 NO THIRD PARTY BENEFICIARIES. No provision of this
Article VIII or this Agreement shall create any third party
beneficiary or other rights in any employee or former employee
(including any beneficiary or dependent thereof) or collective
bargaining agent of such present or former employee of Seller or
Seller Affiliates in respect of continued employment (or resumed
employment) with either Buyer, Seller, the Business or any of Buyer
or Seller Affiliates and no provision of this Article VIII or this
Agreement shall create any such rights in any such employee or
former employee or collective bargaining agent in respect of any
benefits that may be provided, directly or indirectly, under any
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Benefit Plan or any plan or arrangement which may be established by
Buyer or Buyer Affiliates.
ARTICLE IX
CONDITIONS TO CLOSING
9.01 CONDITIONS TO THE OBLIGATIONS OF EACH PARTY. The
obligations of Buyer and Seller to consummate the Closing are
subject to the satisfaction of the following conditions:
(a) all required waiting periods under the HSR Act
shall have expired or been terminated;
(b) all authorizations, consents, orders or
approvals of, or declarations or filings with, or expirations or
terminations of waiting periods imposed by, any Governmental Entity
necessary to effect the transactions contemplated by this Agreement
shall have occurred, been filed or been obtained, subject to
Section 10.01(f)(ii); and
(c) no judgment, injunction, order or decree of
any court, arbitrator or Governmental Entity shall restrain or
prohibit the consummation of the Closing.
9.02 CONDITIONS TO OBLIGATION OF BUYER. The obligation of
Buyer to consummate the Closing is subject to the satisfaction, or
waiver by FMC if it pertains to the Container Assets or JV if it
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pertains to the Mill Assets, of the following further conditions
and Seller shall use its best efforts to cause each such condition
to be timely satisfied:
(a) Each of the representations and warranties of
Seller in this Agreement shall be true and correct in all material
respects as of the date hereof and (except the representation in
Section 4.09(a)(ii), which shall be superseded by Section 9.01(b))
at and as of the Closing Date with the same effect as though such
representations and warranties had been made at and as of the
Closing Date, other than representations and warranties that speak
as of a specific date or time (which need only be true and correct
as of such date or time);
(b) Seller shall have performed in all material
respects all obligations and complied in all material respects with
all covenants required to be performed or complied with by it under
this Agreement at or prior to the Closing Date;
(c) Buyer shall have received at the Closing a
certificate to the effect of (a) and (b) above, dated the Closing
Date and duly executed on behalf of Seller; and
(d) Buyer shall have obtained the debt financing
required in order to consummate the transactions contemplated by
this Agreement.
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9.03CONDITIONS TO OBLIGATION OF SELLER. The obligation
of Seller to consummate the Closing is subject to the satisfaction,
or waiver by Seller, of the following further conditions:
(a) The representations and warranties of Buyer in
this Agreement shall be true and correct in all material respects
as of the date hereof and (except for the representation in Section
5.05(b), which shall be superseded by Section 9.01(b)) at and as of
the Closing Date with the same effect as though such
representations and warranties had been made at and as of such
time, other than representations and warranties that speak as of a
specific date or time (which need only be true and correct as of
such date or time);
(b) Buyer shall have performed in all material
respects all obligations and complied in all material respects with
all covenants required to be performed or complied with by it under
this Agreement at or prior to the Closing Date;
(c) Seller shall have received at the Closing a
certificate to the effect of (a) and (b) above, dated the Closing
Date and duly executed on behalf of Buyer;
(d) A majority of the outstanding shares of
capital stock of SJPC shall have approved this Agreement and
consummation of the transactions contemplated thereby;
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(e) Xxxxxx, Read & Co. Inc. shall not have
withdrawn its opinion as to the fairness of the transactions
contemplated by this Agreement to the stockholders of SJPC; and
(f) Notwithstanding anything to the contrary
herein, Seller shall not be required to close any portion of the
transactions contemplated by this Agreement unless both FMC and JV
have satisfied the aforementioned Closing conditions.
ARTICLE X
TERMINATION AND ABANDONMENT
10.01 TERMINATION. This Agreement may be terminated at any
time prior to the Closing:
(a) by mutual consent of Seller and Buyer; or
(b) by either Seller or Buyer if the Closing shall
not have occurred on or before May 31, 1996 (unless the failure to
consummate the Closing by such date shall be due to the action or
failure to act of the party seeking to terminate this Agreement in
violation of its covenants pursuant to this Agreement, in which
case the foregoing date shall be extended by the period of delay
due to such action or failure to act); or
(c) by either Seller or Buyer if the other party
shall (i) fail to perform in any material respect its agreements
126
contained herein required to be performed by it at or prior to the
date of termination or (ii) materially breach any of its
representations or warranties contained herein as of the date when
made, and in either such case such party fails to cure such failure
or breach promptly upon notice from the party asserting a right to
terminate pursuant to this subparagraph (c); or
(d) by either Seller or Buyer in the event that
any arbitrator or Governmental Entity shall have issued a judgment,
injunction, order or decree restraining or prohibiting the
consummation of the Closing, and such judgment, injunction, order
or decree shall have become final and nonappealable; or
(e) by Seller or Buyer, if Buyer fails or is
unable to provide Seller (i) an equity commitment letter or letters
no later than forty-five (45) days after the Execution Date, (ii)
an updated equity commitment letter or letters, including from FMC
and SCC no later than the Financing Date which contain no
conditions other than debt financing and satisfaction by the
parties of the conditions to Closing set forth in Article IX of
this Agreement; (iii) a highly confident letter from Bear Xxxxxxx
as to the high yield debt no later than fifty (50) days after the
Execution Date, (iv) an updated highly confident letter as to the
same no later than the Financing Date which contains no
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environmental conditions and, upon the request of Seller, a
reaffirmation after the Financing Date of the highly confident
letter issued on the Financing Date; (v) an initialed term sheet
from its bank as to a term loan and revolving credit facility no
later than the Financing Date, in each case satisfactory to Seller
in its sole discretion; and (vi) evidence satisfactory to Seller
that FMC and SCC shall have duly organized JV, subject only to
capitalization thereof and shall have approved by all necessary
corporate action and executed and delivered their shareholders' and
any other related agreements with respect thereto no later than the
Financing Date; provided that if the Unaudited Financial Statements
are not delivered to Buyer by the thirty-fifth (35th) day after the
Execution Date, each date in (i) and (iii) above by which Buyer is
required to provide certain documentation shall be increased one
day for each day beyond such thirty-fifth (35th) day after the
Execution Date to and including the date of delivery of the
Unaudited Financial Statements; and provided further that from and
after any such failure on the part of Buyer to provide such letters
to Seller when due, the applicability of Section 6.16 of this
Agreement shall be terminated and be of no further force and
effect; or
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(f) by Buyer no later than the Financing Date if
an environmental audit report from an environmental consultant of
national standing indicates either (i) that the mill facility of
SJFP or any of the other Real Property is (x) subject to any
Environmental Liabilities not identified in Sections 11.07 and
11.08 of the Disclosure Schedule and (y) subject to On-Site
Environmental Liabilities which could reasonably be expected to
involve aggregate remediation costs in excess of $2,000,000, not
including costs incurred pursuant to Sections 11.07 and 11.08, or
(ii) that Environmental Permits identified in Disclosure Schedule
4.10(a) cannot be transferred or assigned to Buyer and that the
absence of any such Environmental Permits would have a material
adverse effect on the properties, business or condition of Buyer
and Buyer Affiliates taken as a whole.
10.02 EFFECT OF TERMINATION. In the event of the
termination and abandonment of this Agreement pursuant to Section
10.01 hereof:
(a) Each party will redeliver all documents, work
papers and other materials of the other party relating to the
transactions contemplated hereby, whether so obtained before or
after the execution hereof, to the party furnishing the same; and
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(b) Neither party hereto shall have any liability
or further obligation of any nature to the other party to this
Agreement except as provided in the last sentence of Section 6.02,
and in Section 12.03 and except for any breach of this Agreement
prior to such date of which Seller or Buyer, as the case may be,
shall have received notice in accordance with Section 10.01(c).
ARTICLE XI
SURVIVAL; INDEMNIFICATION
11.01 SURVIVAL. All representations and warranties of the
parties contained in this Agreement or in the Disclosure Schedule
shall survive for eighteen months following the earlier of the
Closing Date and March 31, 1996, provided that the survival period
shall not be less than one year from the Closing Date. No action
or proceeding may be brought with respect to any of the
representations and warranties unless written notice thereof,
setting forth in reasonable detail the nature of the claimed
misrepresentation or breach of warranty, shall have been delivered
to the party alleged to be in breach on or prior to the expiration
of the period provided above. The covenants and agreements of the
parties hereto shall not be subject to the foregoing limitation,
including Seller's obligations with respect to Retained Liabilities
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and Buyer's obligations with respect to Assumed Liabilities upon
all of the terms and conditions hereof, notwithstanding any
reference in the applicable provisions hereof to representations
and warranties which may have expired. If the Closing occurs the
exclusive remedy under this Agreement for Environmental Liabilities
incurred by Buyer and Buyer Affiliates for breach of the
representations in Sections 4.09, 4.10 and 4.13(f) and (g) shall be
found in Section 11.05.
11.02INDEMNIFICATION. Subject to the other provisions of
this Article XI, from and after the Closing (a) SJPC and SJCC,
jointly and severally, shall indemnify and hold harmless the FMC
Group from and against any costs or expenses (including reasonable
attorneys' fees), judgments, fines, amounts paid in settlement,
losses, claims and damages (collectively, "Losses and Damages") to
the extent they arise from (i) a breach of any representation or
warranty of Seller contained in or made pursuant to this Agreement
with respect to the Container Assets or the Container Business,
(ii) failure to perform any covenant made by or on behalf of Seller
under this Agreement with respect to the Container Assets or the
Container Business, (iii) any Liens other than Permitted Liens with
respect to the Container Assets or the Container Business (other
than the Real Property and Realty Rights which are the subject of
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Section 6.12) and (iv) Retained Liabilities with respect to the
Container Assets or the Container Business, (b) SJPC and SJFP,
jointly and severally, shall indemnify and hold harmless the JV
Group from and against Losses and Damages to the extent they arise
from (i) a breach of any representation or warranty of Seller
contained in or made pursuant to this Agreement with respect to the
Mill Assets or the Mill Business, (ii) failure to perform any
covenant made by or on behalf of Seller under this Agreement with
respect to the Mill Assets or the Mill Business, (iii) any Liens
other than Permitted Liens with respect to the Mill Assets or the
Mill Business (other than the Real Property, the SJLD Property and
Realty Rights which are the subject of Section 6.12) and (iv)
Retained Liabilities with respect to the Mill Assets or the Mill
Business, (c) FMC shall indemnify and hold harmless the Seller
Group from and against all Losses and Damages to the extent that
they arise from (i) a breach of any representation or warranty of
FMC or any FMC Affiliates (other than JV) contained in or made
pursuant to this Agreement, (ii) failure to perform any covenant
made by or on behalf of FMC or any FMC Affiliate (other than JV)
under this Agreement, or (iii) any Assumed Liabilities assumed by
FMC or any FMC Affiliate (other than JV), and (d) JV and JV
Affiliates shall indemnify and hold harmless the Seller Group from
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and against all Losses and Damages to the extent they arise from
(i) a breach of any representation or warranty of JV contained in
or made pursuant to this Agreement, (ii) failure to perform any
covenant made by or on behalf of JV under this Agreement, or (iii)
any Assumed Liabilities assumed by JV. The Seller Group, the FMC
Group or the JV Group, as the case may be, are referred to herein
as the "Indemnified Parties." Notwithstanding anything to the
contrary in this Article XI, all indemnification obligations with
respect to Environmental Liabilities shall be exclusively those
provided in Sections 11.05 and 11.09.
11.03PROCEDURES. If an Indemnified Party intends to seek
indemnity under this Article XI, such Indemnified Party shall
promptly notify Seller, FMC or JV, as the case may be (the
"Indemnifying Party"), in writing of such claims setting forth the
basis for and the amount of such claims in reasonable detail,
provided that the failure to provide such notice shall not affect
the obligations of the Indemnifying Party unless it is actually
prejudiced thereby, subject, however, to the time periods in
Sections 11.01 and 11.05 hereof. In the event such claim involves
a claim by a third party against the Indemnified Party, the
Indemnifying Party shall have thirty (30) days after receipt of
such notice to decide whether it will undertake, conduct and
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control, through counsel of its own choosing and at its own
expense, the settlement or defense thereof, and if it so decides,
the Indemnified Party shall cooperate with it in connection
therewith; provided that the Indemnifying Party may so undertake,
conduct and control the settlement or defense thereof only if it
acknowledges its indemnification obligations hereunder and the
Indemnified Party may participate (subject to the Indemnifying
Party's control) in such settlement or defense through counsel
chosen by it; and provided further that the fees and expenses of
such Indemnified Party's counsel shall be borne by the Indemnified
Party. If the defendants in any action include the Indemnified
Party and the Indemnifying Party, and the Indemnified Party shall
have been advised by its counsel in writing that there are legal
defenses available to the Indemnified Party which are materially
different from or in addition to those available to the
Indemnifying Party, the Indemnified Party shall have the right to
employ its own counsel in such action, and, in such event, the
reasonable fees and expenses of such counsel shall be borne by the
Indemnifying Party. The Indemnifying Party may, without the
consent of the Indemnified Party, settle or compromise or consent
to the entry of any judgment in any action involving only the
payment of money which includes as an unconditional term thereof
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the delivery by the claimant or plaintiff to the Indemnified Party
of a duly executed written release of the Indemnified Party from
all liability in respect of such action which written release shall
be reasonably satisfactory in form and substance to the Indemnified
Party. The Indemnifying Party shall not, without the written
consent of the Indemnified Party, settle or compromise any action
involving relief other than the payment of money in any manner
that, in the reasonable judgment of the Indemnified Party, would
materially and adversely affect the Indemnified Party; provided,
however, that if the Indemnified Party shall fail or refuse to
consent to a settlement, compromise or judgment proposed by the
Indemnifying Party and approved by the third party in any such
action and a judgment thereafter shall be entered or a settlement
or compromise thereafter shall be effected on terms less favorable
in the aggregate to the Indemnified Party than the settlement,
compromise or judgment proposed by the Indemnifying Party and
approved by the third Person on such action, the Indemnifying Party
shall have no liability hereunder with respect to any Losses and
Damages in excess of those that were provided for in such
settlement, compromise or judgment so proposed by the Indemnifying
Party or any costs or expenses related to such claim arising after
the date such settlement, compromise or judgment was so proposed.
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So long as the Indemnifying Party is contesting any such claim in
good faith, the Indemnified Party shall not pay or settle any such
claim, unless such settlement includes as an unconditional term
thereof the delivery by the claimant or plaintiff and by the
Indemnified Party to the Indemnifying Party of duly executed
written releases of the Indemnifying Party from all liability in
respect of such claim which written releases shall be reasonably
satisfactory in form and substance to the Indemnifying Party. The
Indemnified Party shall cooperate fully in all aspects of any
investigation, defense, pre-trial activities, trial, compromise,
settlement or discharge of any claim in respect of which
indemnification is sought pursuant to this Article XI. If the
Indemnifying Party does not notify the Indemnified Party within
thirty (30) days after the receipt of the Indemnified Party's
notice of a claim of indemnity hereunder that it elects to
undertake the defense thereof or does not acknowledge its
indemnification obligations with respect thereto, the Indemnified
Party shall have the right to contest, settle or compromise the
claim but shall not thereby waive any right to indemnity therefor
pursuant to this Agreement.
11.04 TAX, INSURANCE AND OTHER BENEFITS. The amount of any
claim by an Indemnified Party shall be reduced by any Tax,
136
insurance or other benefits which such party or its Group receives
in respect of or as a result of such claim or the facts or
circumstances relating thereto. If any Losses and Damages for
which indemnification is provided hereunder are subsequently
reduced by any Tax benefit, insurance payment or other recovery
from a third party, the amount of such reduction shall be remitted
to the Indemnifying Party. To the extent the receipt of any
indemnification payment will result in an increase of the amount of
tax payable by the recipient, the Indemnifying Party will increase
the amount of its indemnification payment so that the amount
received after the payment of all taxes payable as a result of such
receipt shall equal the amount of Losses and Damages for which
indemnification is provided.
11.05 ENVIRONMENTAL INDEMNIFICATION.
(a) Except as otherwise provided in Sections 11.07
and 11.08 if the Closing occurs, On-Site Environmental Liabilities
(as defined in Section 11.05(e)) arising from conditions existing
on the Closing Date shall be paid by Buyer and Seller according to
the following schedule:
100% of the first $2,500,000 of On-
Site Environmental Liabilities shall
be paid by Buyer;
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100% of the next $2,500,000 of On-Site
Environmental Liabilities shall be
paid by Seller;
100% of the next $2,500,000 of On-Site
Environmental Liabilities shall be
paid by Buyer,
100% of the next $2,500,000 of On-Site
Environmental Liabilities shall be
paid by Seller;
100% of the next $2,500,000 of On-Site
Environmental Liabilities shall be
paid by Buyer; and
100% of the next $5,000,000 of On-Site
Environmental Liabilities shall be
paid by Seller;
provided that (i) Environmental Conditions that give rise to On-
Site Environmental Liabilities are discovered and Seller is
notified thereof with reasonable specificity by Buyer not later
than three (3) years after the Closing Date (which notice shall be
sufficient even if the source and extent of the problem to be
remedied cannot be fully or completely identified) consistent with
Exhibit I attached hereto, and (ii) Seller has received invoices or
statements for On-Site Environmental Liabilities within five (5)
years after the Closing Date; provided, however that the running of
such five (5) year period shall be extended (A) until the
completion of remedial projects which are substantially underway or
are under continuing contest with a Governmental Entity within five
138
(5) years after the Closing Date and (B) for the period of time, if
any, beginning on the date of the applicable Trigger Notice
relating to a dispute described in paragraph 3 of Exhibit I and
ending on the date the arbitrator gives Seller and Buyer notice of
its decision pursuant to the terms of Exhibit I (and any payment of
Seller which would be due but for a dispute with respect thereto as
referred to in paragraph 3 of Exhibit I shall be required of Seller
to the extent such dispute is resolved in favor of Buyer promptly
after such resolution). Buyer and Buyer Affiliates shall have no
rights against Seller for On-Site Environmental Liabilities which
result from the acts or omissions of Buyer or Buyer Affiliates
after the Closing Date. The payment of On-Site Environmental
Liabilities by JV and FMC and their Affiliates shall be aggregated
for the purposes of determining payments by Buyer in this Section
11.05 and the payment of On-Site Environmental Liabilities by SJFP,
SJCC and SJPC for the benefit of either JV or FMC shall be
aggregated for the purposes of determining payments by Seller in
this Section 11.05. In no event shall Seller or Seller Affiliates
in the aggregate have any obligation to JV, FMC or Affiliates
thereof or to such other Persons or Group to which Seller or Seller
Affiliates may have obligations under Section 11.05(g) for On-Site
Environmental Liabilities under this Agreement or under statute or
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common law (excluding the specific obligations Seller has assumed
under Sections 11.07 and 11.08) in excess of $10,000,000.
(b) For purposes of defining Seller's obligations
under this Section 11.05, On-Site Environmental Liabilities shall
not include conditions, claims, losses, or causes of action which
arise because of a change in any law or regulation becoming
effective after the Execution Date and imposing new requirements,
conditions, or obligations on Buyer or Buyer Affiliates or the
Acquired Assets, including but not limited to the adoption or
modification of regulations under Title V of the Clean Air Act or
related to the Cluster Rules; provided, however, that On-Site
Environmental Liabilities shall be defined to include for the three
(3) years after the Closing Date conditions, claims, losses or
causes of action which both (i) arise for the first time from a
statute or regulation enacted, adopted or amended after the
Execution Date and (ii) arise from an activity or operation not
continued or contributed to by Buyer during that three (3) year
period. It is specifically understood that in no event shall Buyer
seek or Buyer Affiliates seek nor recover any payment from Seller
for any Environmental Liabilities Buyer or Buyer Affiliates may
incur in order to comply with any regulatory or permitting
requirements which are not, on the Execution Date, then specially
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and currently enforceable under Federal or state law against the
Acquired Assets or the Business and in no event shall Buyer or
Buyer Affiliates seek nor recover any payments under this Section
11.05 or otherwise for costs Buyer or Buyer Affiliates may incur to
comply with the requirements of Title V of the Clean Air Act or to
comply with the Cluster Rules, it being agreed that all costs
required for compliance with such programs shall be borne entirely
by Buyer and Buyer Affiliates regardless of when those requirements
might be deemed specifically applicable to any of the Acquired
Assets or the Business.
(c) If the Closing occurs, Buyer and Buyer Affiliates
shall take full responsibility for all On-Site Environmental
Liabilities not specifically agreed to be assumed by Seller
pursuant to Section 11.05(a). In the event that On-Site
Environmental Liabilities arise from Environmental Conditions which
were caused by or arise from acts or omissions which occurred both
before and after the Closing Date, such liabilities shall be
allocated between the periods before and after the Closing Date
based upon the relative contribution of the acts or omissions
occurring in each period to such On-Site Environmental Liabilities
and then only that share of the On-Site Environmental Liabilities
allocated to the periods before the Closing Date will be deemed to
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be included within the On-Site Environmental Liabilities covered by
Buyer and Seller in Section 11.05(a).
(d) FMC and JV and their Affiliates shall have no
rights to recovery or indemnification for On-Site Environmental
Liabilities under this Agreement, common law, or any statute or
regulation other than the rights and remedies specifically provided
in Sections 11.05(a), 11.07 and 11.08, and all rights or remedies
FMC and JV and their Affiliates may have at common law or under any
statute or regulation with respect to On-Site Environmental
Liabilities are expressly waived. FMC AND JV AND THEIR AFFILIATES
DO HEREBY AGREE, WARRANT, AND COVENANT TO RELEASE, ACQUIT, AND
FOREVER DISCHARGE SELLER GROUP FROM ANY AND ALL CLAIMS,
DEMANDS, CAUSES OF ACTION OF WHATSOEVER NATURE, INCLUDING
WITHOUT
LIMITATION ALL CLAIMS, DEMANDS, AND CAUSES OF ACTION FOR
CONTRIBUTION
AND INDEMNITY UNDER STATUTE OR COMMON LAW, WHICH COULD BE
ASSERTED NOW
OR IN THE FUTURE AND THAT RELATE TO OR IN ANY WAY ARISE OUT OF
ON-SITE
ENVIRONMENTAL LIABILITIES. FMC AND JV AND THEIR AFFILIATES
WARRANT, AGREE, AND COVENANT NOT TO XXX THE SELLER GROUP UPON
ANY CLAIM, DEMAND, OR CAUSE OF ACTION, INCLUDING WITHOUT
LIMITATION
ANY CLAIM, DEMAND, OR CAUSE OF ACTION FOR INDEMNITY AND
CONTRIBUTION
THAT HAVE BEEN ASSERTED OR COULD BE ASSERTED FOR
ENVIRONMENTAL
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LIABILITIES, EXCEPT FOR THE PURPOSE OF ENFORCING SECTIONS 11.05,
11.07, 11.08, AND 11.09.
(e) With respect to Environmental Conditions
existing on the Closing Date it is intended that the Environmental
Liabilities under Section 11.05(a) and 11.05(b) be allocated
between the parties based on the property lines of the Real
Property and the SJLD Property conveyed, with Buyer and Buyer
Affiliates taking full responsibility (subject to Section 11.05(a))
for On-Site Environmental Liabilities and Seller or Buyer taking
full responsibility, as the case may be, or Buyer and Seller
sharing responsibility for Off-Site Environmental Liabilities, as
described below. For purposes of this Section 11.05, therefore,
"On-Site Environmental Liabilities" shall mean Environmental
Liabilities which are incurred for Environmental Conditions within
the boundaries of the Real Property and the SJLD Property conveyed
to Buyer under this Agreement and which arise out of Environmental
Conditions or events existing or occurring prior to the Closing
Date and "Off-Site Environmental Liabilities" shall mean
Environmental Liabilities other than On-Site Environmental
Liabilities; provided that in no event shall Seller be responsible
for acts or omissions of Buyer after the Closing Date. With
respect to Off-Site Environmental Liabilities only, Buyer and
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Seller agree that where the Environmental Liabilities were caused
by acts or omissions which occurred both before and after the
Closing Date, responsibility between Buyer and Seller shall be
allocated between the two parties based upon the relative
contribution of acts or omissions during each period to the injury
or harm; provided that if Buyer has not contributed to such acts or
omissions its relative contribution shall be zero and provided
further that if Seller has not contributed to such acts or
omissions its relative contribution shall be zero. Buyer and
Seller agree that for purposes of Section 11.05 when an
Environmental Condition exists which requires remediation costs to
be incurred both within and without the boundaries of the Real
Property and the SJLD Property such remediation costs incurred for
work within the boundaries of the Real Property and the SJLD
Property will be deemed On-Site Environmental Liabilities and those
remediation costs for work outside such boundaries shall be deemed
Off-Site Environmental Liabilities, provided that where Buyer (or
Buyer Affiliates) and Seller (or Seller Affiliates) both
contributed to the harm beyond the boundaries of the Real Property
and the SJLD Property the Environmental Liabilities will be
allocated as provided in the preceding sentence.
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(f) All claims by Buyer and Buyer Affiliates for
payment of On-Site Environmental Liabilities under Section 11.05(a)
which must be resolved by initiation of construction, remediation,
monitoring, disposal or related activities shall be presented and
resolved in accordance with Exhibit I. All other claims for On-
Site Environmental Liabilities shall be asserted and resolved in
accordance with the procedures specified in Section 11.03.
(g) In the event of a Change of Control, all of
Seller's obligations in this Section 11.05 shall terminate, except
for Off-Site Environmental Liabilities for which Seller was solely
responsible; however, Buyer's and Buyer Affiliates' obligations
under Section 11.05(d) shall continue. "Change of Control" means
(a) any transaction (including a merger or consolidation) the
result of which is that any Person or Group (as defined in Rule
13d-5 of the Exchange Act), other than the Principals or the
Lenders acquires, directly or indirectly, more than 50% of the
total voting power of all classes of voting stock of FMC or JV, as
the case may be; (b) any transaction (including a merger or
consolidation) the result of which is that any Person or Group (as
defined in Rule 13d-5 of the Exchange Act), other than the
Principals or the Lenders has a sufficient number of its or their
nominees elected to the board of directors of FMC or JV, as the
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case may be such that such nominees so elected (whether new or
continuing as directors) shall constitute a majority of the board
of directors of FMC or JV, as the case may be; or (c) the sale of
all or substantially all of the capital stock of FMC or JV, as the
case may be to any Person or Group (as defined in Rule 13d-5 of the
Exchange Act), other than the Principals or the Lenders as an
entirety or substantially as an entirety in one transaction or a
series of related transactions; or (d) the sale or transfer of all
or substantially all of the assets of FMC or JV, as the case may
be, as an entirety or substantially as an entirety in one
transaction or series of related transactions to any Person other
than the Principals or the Lenders; provided that in the event any
of the Principals or Lenders is involved in any change of control
in which they are exempted as described in (a)-(d) above and either
JV or FMC is no longer the entity directly holding the Mill Assets
or the Container Assets, respectively, then such Principals or
Lenders agree to cause the Person which will directly hold such
assets upon the Change of Control to agree in writing in a form
acceptable to Seller to be bound by Section 11.05(d); otherwise all
of Seller's obligations in Section 11.05 as described in the first
sentence of this Section 11.05(g) will terminate upon such Change
of Control. For the foregoing purposes, the term "Principals"
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shall mean (x) Xxxxxx Xxxxxx in the case of FMC, (y) FMC and SCC in
the case of JV, and (z) any Subsidiary of Xxxxxx Xxxxxx, FMC or
SCC; and the term "Lenders" shall mean one or more institutional
lenders which provided any of the debt financing that was issued to
FMC or JV as of the Closing Date in connection with the
transactions contemplated by this Agreement.
(h) SJPC shall be jointly and severally liable
with SJFP or SJCC, as the case may be, for Seller's obligations
under this Section 11.05.
11.06 ENVIRONMENTAL AUDIT. Buyer may desire to
engage a third party environmental consulting firm for the purposes
of conducting prior to the Financing Date an environmental audit or
survey of the Real Property and the SJLD Property satisfactory to
the Buyer which may include a phase 1 and phase 2 environmental
audit or survey. If Buyer so elects, Seller shall permit such
firm, its agents and employees, and Buyer, its employees, agents
and other representatives, to enter upon such properties and
conduct such surveys, tests and evaluations as may be reasonably
requested by Buyer or such firm, all at Buyer's sole expense, risk
and cost under the terms of a Property Access Agreement in the form
attached hereto as Exhibit J. In connection with any such audit
and survey, Seller shall cooperate with Buyer and said firm in
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connection with scheduling and conducting said surveys, tests and
evaluations to the extent the same do not unreasonably interfere
with the normal operations of Seller and Seller Affiliates
conducted at such properties. If Buyer elects to cause such
environmental audit or survey to be conducted and a report is
prepared by said firm in connection therewith, Buyer agrees
promptly to provide a copy at no cost to Seller thereof to Seller
if reqested by Seller at Closing.
11.07 WORK TO BE COMPLETED BY SELLER.
(a) Seller shall use its best efforts to complete
the removal of asbestos from the steam pipe (140 lbs.) which runs
from the Turbine Room to the Digester in the Turbine and old Boiler
Room areas and the removal and replacement of electric transformers
(GE5848920, XX0000000, and GE5711609) with a single transformer, at
the mill facility at Port St. Xxx at Seller's sole cost and expense
before Closing. If, however, that work is not completed prior to
Closing, Seller shall cause such work to be completed promptly
thereafter. Seller shall have no other obligations under this
Agreement for asbestos or transformers except to the extent such
conditions constitute an Environmental Liability for which Seller
is responsible hereunder.
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(b) Seller shall complete, at Seller's sole cost
and expense, remedial actions required for the former land
application area adjacent to and north of the Laurens, South
Carolina manufacturing plant. Those remedial activities will be
deemed to be satisfactorily completed by Seller upon receipt from
the South Carolina Department of Environmental Control and any
other Governmental Entity with jurisdiction over the matter of an
approval of the completion of those remedial activities, if a
procedure for approval exists, and, if no such procedure for
approval exists, upon delivery to Buyer of a report from a
registered professional engineer that such work has been completed
consistent with good engineering practice and in compliance with
all applicable Environmental Laws. Seller shall have no other
obligations under this Agreement for the conditions described in
this paragraph except to the extent such conditions constitute an
Environmental Liability for which Seller is responsible hereunder.
(c) Seller shall complete, at Seller's sole cost
and expense, remedial actions associated with two underground tanks
at the Chicago Container Division identified in Leaking Underground
Storage Tank Incident Number 902200. Those remedial activities
will be deemed to be satisfactorily completed upon receipt from the
Illinois Environmental Protection Agency and any other Governmental
149
Entity with jurisdiction over the matter of an approval of the
completion of those remedial activities, if a procedure for
approval exists, and, if no such procedure for approval exists,
upon delivery to Buyer of a report from a registered professional
engineer that such work has been completed consistent with good
engineering practice and in compliance with all applicable
Environmental Laws. Seller shall have no other obligations under
this Agreement for the conditions described in this paragraph
except to the extent such conditions constitute an Environmental
Liability for which Seller is responsible hereunder.
(d) With respect to any remedial activities which
must be undertaken by Seller after the Closing Date under
paragraphs (a), (b), or (c) of this Section 11.07, Buyer agrees to
provide its full cooperation to complete the work required. Such
cooperation shall be given at no cost to Seller and shall include,
but shall not be limited to, reasonable access for construction
and/or removal activities, locations for monitor xxxxx, execution
of all necessary reports, plans, certifications, and deed record
notices specified under Environmental Laws, and attendance at
meetings with regulatory authorities. Except for the personnel
time of Buyer needed to implement and complete the remediation
activities specified in this Section 11.07, Buyer shall not be
150
obligated to incur any out-of-pocket costs in connection with the
completion of such work. Seller shall be responsible for the
implementation of remedial plans and the work specified in this
Section 11.07 and Seller's implementation of those plans shall be
consistent with good engineering practice and all Environmental
Laws.
11.08 WORK TO BE COMPLETED BY BUYER.
(a) SJCC shall reimburse FMC or FMC Affiliates for
projects listed in Section 11.08 of the Disclosure Schedule in an
amount not to exceed $1,400,000, provided (i) FMC or FMC Affiliates
shall present a reasonable description of the work performed and
all invoices for which reimbursement is sought within sixty (60)
days of incurring that expense and within three (3) years of the
Closing Date and (ii) FMC or FMC Affiliates shall provide all other
reasonable information requested by SJCC to (x) permit a
determination that the work performed was directly related to and
required for completion of the projects listed in Section 11.08 of
the Disclosure Schedule, (y) permit a determination that the costs
incurred were reasonable and (iii) a determination that the work
was performed in accordance with all Environmental Laws. If SJCC
and FMC or FMC Affiliates are unable to agree on whether the
project for which reimbursement was sought was specified in Section
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11.08 of the Disclosure Schedule, whether the costs incurred were
reasonable, or whether the work was done in compliance with all
Environmental Laws, either party may on ten (10) days' written
notice refer the matter to arbitration as specified on Exhibit I.
If upon completion of all of the projects in Section 11.08 of the
Disclosure Schedule FMC or FMC Affiliates have not sought
reimbursement of the entire $1,400,000, the difference between the
amount sought and $1,400,000 shall be remitted to FMC or FMC
Affiliates.
11.09 OTHER DISPOSAL FACILITIES. All Environmental
Liabilities alleged, imposed or required by any state or Federal
agency arising from off-site landfills or other land disposal
facilities owned and operated by Persons other than Seller to which
municipal and industrial solid waste has been carted or trucked by
Seller, its agents, or contractors prior to the Closing Date and to
which neither Buyer, its agents, or its contractors have carted or
trucked any solid wastes after the Closing Date, shall be the sole
responsibility of Seller, and Buyer shall have no obligations to
Seller or Seller Affiliates for Environmental Liabilities related
to such landfills or facilities. However, with respect to
landfills or other land disposal facilities to which both Seller
and Buyer or their agents or contractors have carted or trucked any
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solid waste, responsibility for Environmental Liabilities of Buyer
and Seller will be allocated according to the relative contribution
of each party to the harm. This Section 11.09 does not apply to,
alter, modify or change obligations of Buyer and Buyer Affiliates
under Section 11.05 for On-Site Environmental Liabilities.
ARTICLE XII
MISCELLANEOUS
12.01 NOTICES. All notices, requests, demands, consents
and other communications required or permitted hereunder shall be
in writing and shall be delivered personally or by telecopier or
mailed by certified or registered mail (return receipt requested),
postage prepaid, provided that any notice delivered by certified or
registered mail shall also be delivered by telecopy or by hand at
the time that it is mailed. If such telecopy is sent, notices shall
be deemed given on the Business Day of confirmation at the sender's
telecopy machine of receipt at the recipient's telecopy machine (or
if such confirmation is received on a day which is not a Business
Day, on the Business Day occurring immediately thereafter). If the
notice is delivered by hand, it shall be deemed given when so
delivered to a responsible representative of the addressee. All
communications hereunder shall be delivered to the respective
153
parties at the following addresses (or to such other person 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 Buyer, in care of:
Xxxxxx Xxxxxx
Chairman
Four M Corporation
000 Xxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
and by telecopy to: (000) 000-0000
Xxxxx X. Xxxxx
Chairman, President and
Chief Executive Officer
Stone Container Corporation
000 X. Xxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
and by telecopy to: (000) 000-0000
with a copy to:
Xxxxxx X. Xxxxxxxx
Four M Corporation
000 Xxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
and by telecopy to: (000) 000-0000
154
with a copy to:
Xxxxxx X. Xxxxxxx
Vice President, Corporate Secretary and
General Counsel
Stone Container Corporation
000 X. Xxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
and by telecopy to: (000) 000-0000
(b) If to SJPC or Seller, to:
Xxxxxxx X. Xxxxxxxx
Chairman
St. Xxx Paper Company
duPont Center Xxxxx 000
0000 Xxxxxxxxxx Xxxxx
Xxxxxxxxxxxx, XX 00000
and by telecopy to: (000) 000-0000
with a copy to:
Fulbright & Xxxxxxxx L.L.P.
Market Square
000 Xxxxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, XX 00000-0000
Attn: Xxxxxxx Xxxxxx, Esq.
and by telecopy to: (000) 000-0000
12.02AMENDMENTS; NO WAIVERS.
(a) Any provision of this Agreement may be amended
or waived if, and only if, such amendment or waiver is in writing
and signed, in the case of an amendment, by Buyer and Seller, or in
155
the case of a waiver, by the party against whom the waiver is to be
effective.
(b) No failure or delay by either party in
exercising any right, power or privilege hereunder shall operate as
a waiver thereof nor shall any single or partial exercise thereof
preclude any other or further exercise thereof or the exercise of
any other right, power or privilege. The rights and remedies
herein provided shall be cumulative and not exclusive of any rights
or remedies provided by law.
12.03 EXPENSES. Except as otherwise provided herein, all
costs, fees and expenses incurred in connection with this Agreement
shall be paid by the party incurring such cost, fee or expense. If
the Closing does not occur as a result of Seller's failure to meet
the closing conditions in Sections 9.02(a)-(c) or as a result of
the failure of a majority of the outstanding shares of capital
stock of SJPC to have approved this Agreement and consummation of
the transactions contemplated thereby, Seller shall promptly pay to
Buyer and SCC collectively their actual documented out-of-pocket
fees and expenses in connection with this Agreement and the
transactions contemplated hereby up to a maximum amount of two
million dollars ($2,000,000); provided, however, Seller shall, in
lieu of the reimbursement of fees and expenses described above,
156
promptly pay to Buyer in immediately available funds a fee of
$8,000,000 plus 15% of the excess consideration represented by the
Transaction Proposal up to an aggregate maximum of $12,000,000
("Section 6.16 Fee") if the Section 6.16 Fee is payable pursuant to
Section 6.16. If the Closing does not occur as a result of Buyer's
failure to meet the closing conditions in Section 9.03(a)-(c), then
FMC and JV shall jointly and severally promptly pay to Seller and
Seller Affiliates their actual documented out-of-pocket fees and
expenses in connection with this Agreement and the transactions
contemplated hereby up to a maximum amount of two million dollars
($2,000,000).
12.04 ASSIGNMENT; PARTIES IN INTEREST. This Agreement
shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns. No party may
assign, delegate or otherwise transfer any of its rights or
obligations under this Agreement without the written consent of the
other party hereto.
12.05 GOVERNING LAW; JURISDICTION; FORUM. The parties
hereto agree that all of the provisions of this Agreement and any
questions concerning its interpretation and enforcement shall be
governed by the laws of the State of Florida without regard to any
applicable principles of conflicts of law. Each of the parties
157
irrevocably and unconditionally consents that any suit, action or
proceeding relating to this Agreement may be brought in the United
States District Court for the Middle District of Florida, or, if
jurisdiction is lacking in such court, in a court of record of the
State of Florida in Xxxxx County, and each party hereby irrevocably
waives, to the fullest extent permitted by law, any objection that
it may have, whether now or in the future, to the laying of the
venue in, or to the jurisdiction of, any and each of such courts
for the purpose of any such suit, action, proceeding or judgment
and further waives any claim that any such suit, action, proceeding
or judgment has been brought in an inconvenient forum, and each
party hereby submits to such jurisdiction.
12.06 COUNTERPARTS; EFFECTIVENESS. This Agreement may be
signed in any number of counterparts, each of which shall be an
original, with the same effect as if the signatures thereto and
hereto were upon the same instrument. This Agreement shall become
effective when each party hereto shall have received a counterpart
hereof signed by the other party hereto.
12.07 ENTIRE AGREEMENT. This Agreement and the Disclosure
Schedule hereto constitute the entire agreement between the parties
with respect to the subject matter hereof and supersede all other
prior agreements, understandings and negotiations, both written and
158
oral, between the parties with respect to the subject matter of
this Agreement, except for the Confidentiality Agreement and any
amendments or letter agreements relating to the subject matter
referred to herein that may be entered into in writing by Seller
and Buyer. No representation, inducement, promise, understanding,
condition or warranty not set forth herein has been made or relied
upon by either party hereto.
12.08 PUBLICITY. Except as otherwise required by law or
the rules of any national securities exchange, neither the Buyer
Group nor the Seller Group shall issue or cause the publication of
any press release or other public announcement with respect to this
Agreement or the transactions contemplated by this Agreement
without the express written prior approval of the parties hereto.
12.09 CAPTIONS. The captions herein are included for
convenience of reference only and shall be ignored in the
construction or interpretation hereof.
12.10 SEVERABILITY. This Agreement shall be deemed
severable; the invalidity or unenforceability of any term or
provision of this Agreement shall not affect the validity or
enforceability of this Agreement or of any other term hereof.
159
12.11 KNOWLEDGE. Whenever information provided herein is
based on "knowledge", such term means the actual knowledge of any
person presently holding the position of Vice President or higher.
[ intentionally left blank ]
160
IN WITNESS WHEREOF, the parties hereto here caused this
Agreement to be duly executed by their respective authorized
officers as of the day and year first above written.
ST. XXX FOREST PRODUCTS COMPANYST. XXX CONTAINER COMPANY
By: /s/ R. E. Xxxxxx By: /s/ R. E. Xxxxxx
Name: R. E. Xxxxxx Name: R. E. Xxxxxx
Title: President Title: Vice-President
ST. XXX PAPER COMPANYFOUR M CORPORATION
By: /s/ R. E. Xxxxxx By: /s/ X. Xxxxxx
Name: R. E. Xxxxxx Name: X. Xxxxxx
Title: President Title: Chairman
PORT ST. XXX PAPER COMPANY
By:Box USA Paper Corporation, a general partner
By: /s/ X. Xxxxxx
Name: X. Xxxxxx
Title: Chairman
PORT ST. XXX PAPER COMPANY
By:SSJ Corporation, a general partner
By: /s/ Xxxxxx X. Xxxxxxx
Name: Xxxxxx X. Xxxxxxx
Title: Vice President
Exhibit A
ASSIGNMENT AND ASSUMPTION AGREEMENT
ASSIGNMENT AND ASSUMPTION AGREEMENT dated as of
_____________, 199__ by and between _____________, a ____________
corporation having its principal place of business at ____________
___________________ (the "Assignor") and _________________, a
____________ corporation having its principal place of business
at ________________________ (the "Assignee").
R E C I T A L S :
Assignor and certain of its Affiliates (the "Sellers") and Assignee
__________________________ are parties to an Asset Purchase
Agreement dated as of __________________ 1995 (the "Purchase
Agreement"), pursuant to which Sellers have sold, assigned and
transferred to Assignee [and certain of Assignee's Affiliates] the
Acquired Assets (capitalized terms used and not otherwise defined
herein shall have the meanings ascribed to them in the Purchase
Agreement). In consideration of the representations, warranties,
covenants and agreements in the Purchase Agreement and for other
good and valuable consideration, the receipt and adequacy of which
are hereby acknowledged, the parties agree as follows: 1.ASSIGNMENT
OF CERTAIN OF THE ACQUIRED ASSETS. The Assignor hereby
assigns to Assignee all of its right, title and interest in, to
and under the following assets as the same shall exist on the date
hereof, (the "Assigned Acquired Assets"):
(a) the Acquired Agreements;
(b) the Realty Rights;
(c) the Receivables;
(d) the Acquired Claims;
(e) the Acquired Intellectual Property;
(f) the Acquired Insurance Claims; and
(g) all other intangibles including, but not limited to, goodwill
associated with the Business or the Acquired Assets.
2. ASSUMPTION OF THE ASSIGNED ACQUIRED ASSETS.
Assignee hereby accepts the assignment of all of the Assignor's right,
title and interest in, to and under the Assigned Acquired Assets and,
subject to the terms of the Purchase Agreement, assumes and
covenants to pay, perform and discharge and will indemnify and hold
harmless Assignor from and against all of the liabilities and obligations
of Assignor thereunder relating to periods after the Closing Date.
3. PARTIES' RIGHTS AND REMEDIES. The rights and
remedies of each party under the Purchase Agreement shall not be
deemed to be enlarged, modified or altered in any way by this
Assignment and Assumption Agreement.
4. GOVERNING LAW; JURISDICTION; FORUM. The parties
hereto agree that all of the provisions of this Agreement and any
questions concerning its interpretation and enforcement shall be
governed by the laws of the State of Florida without regard to any
applicable principles of conflicts of law. Each of the parties
irrevocably and unconditionally consents that any suit, action or
proceeding relating to this Agreement may be brought in the United
States District Court for the Middle District of Florida,
A-2
or, if jurisdiction is lacking in such court, in a court of record
of the State of Florida in Xxxxx County, and each party hereby
irrevocably waives, to the fullest extent permitted by law, any
objection that it may have, whether now or in the future, to the
laying of the venue in, or to the jurisdiction of, any and each of
such courts for the purpose of any such suit, action, proceeding or
judgment and further waives any claim that any such suit, action,
proceeding or judgment has been brought in an inconvenient forum,
and each party hereby submits to such jurisdiction.
IN WITNESS WHEREOF, the parties have caused this
Assignment and Assumption Agreement to be executed by their duly
authorized representatives as of the date first written above.
________________ (Assignor) _________________ (Assignee)
By: By:
Name: Name:
Title: Title:
A-3
Exhibit B
XXXX OF SALE
THAT ___________________________________, a Florida corporation
with its principal place of business at __________________________
_________________ ("Seller"), for and in consideration of the
representations, warranties and agreements in that certain Asset
Purchase Agreement dated as of ____________, 1995 (the "Purchase
Agreement") among Seller and certain of its Affiliates and
_______________________________ ("Buyer"), a ___________________
corporation, having its principal place of business at
_________________________________________________
(capitalized terms used herein shall have the meanings ascribed to
them in the Purchase Agreement) and the sum of one dollar ($1.00)
lawful money of the United States and other good and valuable
consideration paid to Seller, the receipt and sufficiency of which
consideration are hereby acknowledged, has bargained and sold and
by these presents does grant and convey, pursuant to the Purchase
Agreement, unto Buyer, free and clear of all Liens other than
Permitted Liens, all of Seller's right, title and interest in and to:
(i) the Acquired Equipment;
(ii) the Rolling Stock owned by Seller;
(iii) the Inventories; and
(iv) the Acquired Books and Records.
The rights and remedies of each party under the Purchase
Agreement shall not be deemed to be enlarged, modified or altered
in any way by this Xxxx of Sale.
All of the provisions of this Xxxx of Sale and any questions
concerning its interpretation and enforcement shall be governed by the
laws of the State of Florida without regard to any applicable
principles of conflicts of law. Each of Seller and Buyer irrevocably
and unconditionally consents that any suit, action or proceeding
relating to this Xxxx of Sale may be brought in the United States
District Court for the Middle District of Florida, or, if
jurisdiction is lacking in such court, in a court of record of the
State of Florida in Xxxxx County, and each of Seller and Buyer
hereby irrevocably waives, to the fullest extent permitted by law,
any objection that it may have, whether now or in the future, to the
laying of the venue in, or to the jurisdiction of, any and each of
such courts for the purpose of any such suit, action, proceeding or
judgment and further waives any claim that any such suit, action,
proceeding or judgment has been brought in an inconvenient forum,
and each of Seller and Buyer hereby submits to such jurisdiction.
TO HAVE AND TO HOLD, the same unto Buyer and the
heirs, executors, administrators, successors and assigns thereof
forever.
IN WITNESS WHEREOF, Seller has duly executed this Xxxx
of Sale as of this ______ day of ____________, 1995.
_________________________________
By:
Name:
Title:
B-2
Exhibit C
PATENT ASSIGNMENT
For good and valuable consideration, the receipt of and
sufficiency of which are hereby acknowledged, the undersigned has
sold and assigned, and by these presents hereby sells and assigns,
unto _________________________ (hereinafter "ASSIGNEE") all right,
title and interest in and to the inventions of the patent listed in
the attached Schedule A including any and all divisions or
continuations thereof and in and to the Letter Patent listed in the
attached Schedule A, including any and all reissues or extensions
thereof to be held and enjoyed by said ASSIGNEE, its successors,
legal representatives and assigns to the full end of the term for
which such Letter Patent may be granted as fully and entirely as
would have been held and enjoyed by the undersigned had this
Assignment not be made;
The undersigned hereby authorizes and requests the Commissioner
of Patents and Trademarks to issue such Letter Patent to said
ASSIGNEE, its successors or assigns in accordance herewith.
Dated: ________________________ St. Xxx Forest Products
Company
By: _____________________
Name:
Title:
[ ACKNOWLEDGMENT ]
Exhibit D
COMPUTER SOFTWARE LICENSE AGREEMENT
AGREEMENT (this "Agreement") dated as of the _____ day
of _______, 1995 by and among ___________________________
_____, a Florida corporation ("SJFP") and ______________________
___________, a Florida corporation ("SJCC"; SJFP and SJCC shall
be referred to individually and collectively as "Licensor"),
and __________________________, a Florida corporation, on the one
hand, and ______________________________________, a
________________ corporation ("M") and _______________________
________________, a
___________________________ corporation ("JV"), on the other hand
(M and JV shall be referred to individually and collectively
as "Licensee").
W I T N E S S E T H :
Pursuant to an Asset Purchase Agreement dated as of
_________________ (the "Purchase Agreement"), among Licensor and
Licensee, entered into contemporaneously with the execution and
delivery of this Agreement, Licensee has acquired from Licensor
certain assets and assumed certain obligations and liabilities as
set forth in the Purchase Agreement relating to the business of
production of mottled white and unbleached kraft linerboard and
corrugated containers and products associated therewith and of
conducting other related activities and services with respect thereto
(collectively, the "Business"); and
In connection with the foregoing, Licensee desires to procure
from Licensor, and Licensor is willing to provide to Licensee, a
nonexclusive license
to use certain software and related documentation solely
on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and
mutual promises set forth herein, Licensor and Licensee agree as
follows:
1. License. Subject to the terms and conditions of this
Agreement, Licensor grants Licensee a nonexclusive license to use
the computer programs and related materials, including documentation,
identified in Exhibit A, which together constitute the "Licensed
Programs."
2. Scope of Rights. Licensee may:
(i) Install the Licensed Programs in Licensee's own
facility at the location specified in Exhibit B;
(ii) Use and execute the Licensed Programs on the
computer specified by type/model and serial (or plant number) in
Exhibit C for purposes of serving the internal needs of Licensee's
Business;
(iii) In support of Licensee's authorized use of the Licensed
Programs, store the Licensed Programs' machine-readable instructions
in machines associated with the specified computer; and
D-2
(iv) Make one copy of the Licensed Programs in machine-
readable, object code form, for nonproductive backup purposes only,
provided that all of Licensor's proprietary and restricted rights
legends and notices are included.
3. Second User Fees. In connection with providing the
License hereunder, Licensor shall not be required to perform any
actions which in Licensor's reasonable judgment could result in
or cause any conflict with, or breach or violation of, any license,
lease or other agreement to which Licensor or any of its Affiliates
is a party. In the event that, at any time during the Term,
Licensor is required to pay any additional charges to any of its
software vendors in order to enable Licensor to provide this license
to Licensee, Licensee shall, upon demand, pay such charges to
Licensor.
4. Licensee's Responsibilities and Additional Licensor
Services.
4.1 Licensee Qualified Personnel. Licensee is
responsible for selecting personnel who are qualified to operate
the Licensed Programs on Licensee's own equipment and are familiar with the
standard information, calculations, and reports that serve as input and
output of the Licensed Programs.
4.2 Licensee's Hardware and Software Environment.
The Licensed Programs are designed for use with the peripheral
equipment, accessories, and
D-3
software specified in Exhibit D. Licensor assumes no responsibility
under this Agreement for obtaining or providing such equipment and
software. Licensee is also responsible for ensuring a proper
environment and proper utilities for the computer system on which the
Licensed Program will operate, including an uninterrupted power
supply.
Except as agreed otherwise in writing, Licensor assumes no
responsibility under this Agreement for converting Licensee's data files
for use with the Licensed Program.
5. Proprietary Protection and Restrictions.
5.1 Intellectual Property Rights. As between Licensor and
Licensee, Licensor shall have sole and exclusive ownership of all right,
title, and interest in and to the Licensed Programs and all
modifications and enhancements thereof (including ownership of all
trade secrets, copyrights and other intellectual property rights
pertaining thereto), subject only to the rights and privileges
expressly granted to Licensee herein by Licensor, and the rights
of licensor of any computer programs and data included in the Licensed
Programs. This Agreement does not provide Licensee with title or
ownership of the Licensed Programs, but only a right of limited use.
Licensee must keep the Licensed Program free and clear of all claims,
liens, and encumbrances.
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5.2 Licensee's Use of Licensed Program. Except as otherwise
provided in this Section, Licensee may not use, copy, modify, or
distribute the Licensed Program (electronically or otherwise), or any
copy, adaptation, transcription, or merged portion thereof, except as
expressly authorized by Licensor. Licensee may not reverse assemble,
reverse compile, or otherwise translate the Licensed Programs.
Licensee's rights may not be transferred, leased, assigned, or
sublicensed. No service bureau work, multiple-user license,
or time-sharing arrangement is permitted, except as expressly
authorized by this Agreement. Licensee may not install the Licensed
Programs in any other computer system or use it at any other location
without Licensor's express authorization obtained in advance;
provided that Licensee may transfer the Licensed Programs to another
computer temporarily if the computer specified in Exhibit C is
inoperable.
5.3 Inspection. Licensee hereby authorizes Licensor to enter
Licensee's premises in order to inspect the Licensed Programs in any
reasonable manner during regular business hours to verify Licensee's
compliance with the terms hereof.
5.4 Licensee's Breach. Licensee acknowledges that, in the
event of Licensee's breach of any of the foregoing provisions, Licensor
will not have an adequate remedy in money or damages. Licensor shall
therefore be entitled to obtain an injunction against such breach from
any court of competent
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jurisdiction immediately upon request. Licensor's right to obtain
injunctive relief shall not limit its right to seek further remedies.
5.5 Cooperation. If a third party claims that the Licensed
Programs infringes its patent, copyright, or trade secret, or any similar
intellectual property right, Licensor will cooperate with Licensee, at
Licensee's expense, in the defense or any related settlement
negotiations. Licensor has no obligation under this Agreement for any
claim of infringement except for such cooperation. THIS
PARAGRAPH STATES LICENSOR'S ENTIRE OBLIGATION TO
LICENSEE WITH RESPECT TO ANY CLAIM OF INFRINGEMENT.
6. Disclaimer of Warranty and Limitation of Liability.
LICENSOR MAKES NO REPRESENTATIONS OR WARRANTIES,
EXPRESS OR IMPLIED, OF ANY KIND OR NATURE, INCLUDING,
WITHOUT LIMITATION, WARRANTIES OF MERCHANTABILITY
OR FITNESS FOR A PARTICULAR PURPOSE. LICENSOR DOES
NOT WARRANT THAT THE LICENSED PROGRAMS ARE IS FREE
FROM DEFECTS, THAT THE LICENSED PROGRAMS WILL
SATISFY LICENSEE'S SPECIFIC REQUIREMENTS, OR THAT
COPIES OF THE LICENSED PROGRAMS OTHER THAN THOSE
PROVIDED OR AUTHORIZED BY LICENSOR WILL POSSESS
FUNCTIONAL INTEGRITY. LICENSOR MAKES NO WARRANTIES
WITH RESPECT TO NONINFRINGEMENT BY THE LICENSED
PROGRAMS OF ANY THIRD PARTY'S RIGHTS OR AS TO THE
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FITNESS AND OPERABILITY OF THE LICENSED PROGRAMS.
IN NO EVENT SHALL LICENSOR BE LIABLE FOR ANY LOSS OF
OR DAMAGE TO LICENSEE, INCLUDING, WITHOUT
LIMITATION, ANY DIRECT LOSS OR DAMAGE OR ANY LOSS OF
REVENUES, PROFITS OR GOOD WILL OR OTHER SPECIAL,
INCIDENTAL, INDIRECT AND CONSEQUENTIAL DAMAGES OF
ANY KIND RESULTING FROM THE FURNISHING,
PERFORMANCE, OR USE OR LOSS OF USE OF ANY LICENSED
PROGRAM OR OTHER MATERIALS DELIVERED TO LICENSEE
HEREUNDER, INCLUDING, WITHOUT LIMITATION, ANY
INTERRUPTION OF BUSINESS, WHETHER RESULTING FROM
BREACH OF CONTRACT OR BREACH OF WARRANTY, EVEN IF
LICENSOR HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH
DAMAGES.
7. Term and Termination of Agreement. This Agreement
shall become effective on the date hereof and shall continue in effect
until terminated as provided herein. Upon termination of this
Agreement, the license granted by Licensor to Licensee hereunder
shall terminate. Upon termination of this License Agreement, Licensee
shall (a) cease using the Licensed Programs immediately and
(b) promptly deliver the Licensed Programs and all copies of same,
including, without limitation, partial copies, to Licensor.
Either party may terminate this Agreement in whole but not in
part at any time upon written notice if (i) the other party (the
"Defaulting Party") commences any case or other proceeding under any
bankruptcy or similar law, (ii) any involuntary petition for proceedings
in bankruptcy or liquidation or for
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the reorganization of the Defaulting Party shall be commenced under
applicable bankruptcy laws against the Defaulting Party, and such
petition, case or proceeding shall remain undischarged for more than
sixty (60) days, or (iii) the Defaulting Party is in default in the
performance or observance of a material obligation or covenant
hereunder and fails to remedy such default within thirty (30) days
following receipt of written notice from the other party or shall not be
undertaking bona fide efforts to cure such default as promptly as
possible if such cure requires more than thirty (30) days.
8. Miscellaneous.
8.1 Governing Law; Jurisdiction; Forum. The parties hereto
agree that all of the provisions of this Agreement and any questions
concerning its interpretation and enforcement shall be governed by the
laws of the State of Florida without regard to any applicable principles
of conflicts of law. Each of the parties irrevocably and unconditionally
consents that any suit, action or proceeding relating to this Agreement
may be brought in a court of the United States sitting in the State of
Florida or, if jurisdiction is lacking in such a court, in a court of
record in the State of Florida, and each party hereby irrevocably
waives, to the fullest extent permitted by law, any objection that it may
have, whether now or in the future, to the laying of the venue in, or
to the jurisdiction of, any and each of such courts for the purpose of
any such suit, action, proceeding or judgment and further waives any
claim that any such suit, action,
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proceeding or judgment has been brought in an inconvenient forum,
and each party hereby submits to such jurisdiction.
8.2 Amendments; No Waivers.
(a) Any provision of this Agreement may be amended
or waived if, and only if, such amendment or waiver is in writing and
signed, in the case of an amendment, by Licensee and Licensor, or in
the case of a waiver, by the party against whom the waiver is to be
effective.
(b) No failure or delay by either party in exercising
any right, power or privilege hereunder shall operate as a waiver
thereof nor shall any single or partial exercise thereof preclude any
other or further exercise thereof or the exercise of any other right,
power or privilege. The rights and remedies herein provided shall be
cumulative and not exclusive of any rights or remedies provided by law.
8.3 Assignment. This Agreement shall be binding upon any
successor in interest and/or assigns of Licensor in ownership and/or
control of the Licensed Programs. This Agreement and the license
granted herein shall not be assigned, pledged, transferred or otherwise
encumbered or disposed of by Licensee, whether in whole or in part,
and whether voluntarily or by operation of law, or otherwise, and
Licensee shall not grant sublicenses hereunder without the consent of
Licensor, which, in Licensor's sole discretion, may or may not be
granted.
D-9
8.4 Notices. All notices, requests, demands, consents and
other communications required or permitted hereunder shall be in
writing and shall be delivered personally or by telecopier or mailed
by certified or registered mail (return receipt requested), postage
prepaid, provided that any notice delivered by certified or registered
mail shall also be delivered by telecopy or by hand at the time that it
is mailed. If such telecopy is sent, notices shall be deemed given on the
Business Day of confirmation at the sender's telecopy machine of
receipt at the recipient's telecopy machine (or if such confirmation is
received on a day which is not a Business Day, on the Business Day
occurring immediately thereafter). "Business Day" shall mean any day
except a Saturday, Sunday or other day on which commercial banks in
New York City are generally authorized to close. If the notice is
delivered by hand, it shall be deemed given when so delivered to a
responsible representative of the addressee. All communications
hereunder shall be delivered to the respective parties at the following
addresses (or to such other person 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 Licensee, to in care of:
and by telecopy to:
with copy to:
and by telecopy to:
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(b) If to Licensor, to:
Xxxxxxx X. Xxxxxxxx
St. Xxx Paper Company
duPont Center Xxxxx 000
0000 Xxxxxxxxxx Xxxxx
Xxxxxxxxxxxx, XX 00000
and by telecopy to: (000) 000-0000
with a copy to:
Fulbright & Xxxxxxxx L.L.P.
Market Square
000 Xxxxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, XX 00000-0000
Attn: Xxxxxxx Xxxxxx, Esq.
and by telecopy to: (000) 000-0000
8.5 Severability. This Agreement shall be deemed severable;
the invalidity or unenforceability of any term or provision of this
Agreement shall not affect the validity or enforceability of this
Agreement or of any other term hereof.
8.6 Complete Agreement. This Agreement constitutes the entire
agreement between the parties with respect to the subject matter hereof
and supersede all other prior agreements, understandings and
negotiations, both written and oral, between the parties with respect
to the subject matter of this Agreement, except for the Confidentiality
Agreement and any amendments or letter agreements relating to the
subject matter referred to herein that may be entered into in writing
by Licensor and Licensee. "Confidentiality Agreement" shall have the
same meaning as set forth in the Purchase Agreement. No
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representation, inducement, promise, understanding, condition or
warranty not set forth herein has been made or relied upon by either
party hereto.
8.7 Captions. The captions herein are included for convenience of
reference only and shall be ignored in the construction or interpretation
hereof.
IN WITNESS WHEREOF, the parties hereto here caused this
Agreement to be duly executed by their respective authorized officers
as of the day and year first above written.
By: By:
Name: Name:
Title: Title:
By: By:
Name: Name:
Title: Title:
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Exhibit E
WOOD FIBER SUPPLY AGREEMENT
THIS AGREEMENT, made and entered into this day of ,
199___, between ST. XXXXXX LAND AND DEVELOPMENT COMPANY, a
Florida corporation, hereinafter "Seller", and ,
a corporation, hereinafter "Buyer."
W I T N E S S E T H
Whereas, Buyer is desirous of procuring wood fiber in the form of
pulpwood, wood chips, and fuel wood from Seller for its paper mill at
Port St. Xxx, Florida (the "Mill");
Whereas, Seller is desirous of selling pulpwood, wood chips, and fuel
wood to Buyer for its mill at Port St. Xxx, Florida;
NOW, THEREFORE, in consideration of the mutual covenants
hereinafter set forth and for other good and valuable consideration,
Seller and Buyer agree that Seller shall sell to and Buyer shall
purchase from Seller pulpwood, wood chips, and fuel wood upon
the following terms and conditions:
1. AMOUNT:
Seller shall deliver to Buyer and Buyer shall accept from Seller,
upon and subject to the terms and conditions of this Agreement, pulpwood
and wood chips in the aggregate as follows:
first twelve months -- 1,600,000 tons
second twelve months -- 1,400,000 tons
third twelve months -- 1,200,000 tons
fourth twelve months -- 900,000 tons
thereafter -- 900,000 tons
Starting in the twenty-fifth month, and annually thereafter during
the term of this Agreement, 900,000 tons of the tonnage delivered
to Buyer must originate
from Seller's land with the understanding that wood chips generated
from higher margin wood fiber products shall not be required to
originate from Seller's land but shall be deemed for this purpose
to so originate. During the term of this Agreement, Seller shall
notify contemporaneously with notice to other third parties Buyer
of any upcoming sales of pulpwood or pine wood chips in the open
market and Buyer shall have the right to bid on the same basis as other
third parties. From time to time during the term of this Agreement
Buyer may elect in its sole option upon 120 days notice to Seller to
reduce in increments the minimum tonnage (the "Minimum Tonnage")
required of Seller hereunder to an amount not less than 600,000 tons
per year, but each and every reduction shall be permanent.
2. SPECIFICATIONS:
All wood fiber delivered pursuant to this Agreement shall meet the
specifications set forth in Exhibit A hereto. Of the aggregate annual
amount of wood fiber in the form of pulpwood and wood chips to be
delivered, at least 25% shall be comprised of wood chips.
3. DELIVERY SCHEDULE:
Seller shall deliver to Buyer and Buyer shall accept from Seller
wood fiber on a generally uniform weekly schedule which may be
adjusted by the parties to conform so far as practical to (a) Buyer's
paper mill operating schedule; (b) cessation of paper mill operations
that are scheduled in advance of stoppage, for maintenance of the mill
and inventory adjustments; (c) loss of rail transportation; or
(d) excessive unfavorable weather conditions; (e) labor disputes or
(f) insufficient customer orders. Each party will give to the other
E-2
party notice in writing in advance of 3(a), (b), (c), (d), (e) and (f) of this
Agreement.
In the event Buyer does not accept wood fiber from Seller for reasons
other than those in this Section 3 or by Force Majeure (Section 11) for
a period of two (2) weeks, Buyer shall pay to Seller weekly an amount
equal to the pine pulpwood Zone 2 price as determined from time to
time in accordance with the terms of this Agreement (1/52 x the
Minimum Tonnage). In the event the circumstances in the preceding
sentence arise, Buyer may instruct Seller to deliver wood fiber to
third parties at destinations other than the Port St. Xxx mill.
Additional cost incurred for delivery to third parties shall be for the
account of Buyer.
4. FUEL WOOD:
Biomass used for fuel required by Buyer consistent with past
practice at its Port St. Xxx Mill shall be delivered to Buyer by Seller
for its Port St. Xxx mill for the first twelve (12) months hereof. No
later than 120 days before the first anniversary of the date of this
Agreement and each succeeding anniversary, if extended, Buyer shall
notify Seller in writing whether it desires fuel wood produced at
Seller's wholly owned or leased wood chipping facilities to be delivered
to Buyer in the second twelve (12) months and thereafter in which case
Buyer shall be solely responsible for obtaining the balance, if any, of its
fuelwood requirements otherwise. In such event, Seller shall so deliver
such fuel wood to Buyer.
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5. SCALES:
A ton used in this Agreement shall be defined as 2,000 pounds by
weight for trucks and 78 cubic feet by scale for rail wood chip cars.
Buyer shall provide and maintain at its expense, adequate printing
scales at its paper mill at Port St. Xxx, Florida for the purpose of
determining the weight of pulpwood, wood chips, and fuel wood sold
and delivered by truck to the mill.
Upon request of Seller, Buyer shall promptly provide Seller copies of
the certifications of the scales by the Florida Department of Agriculture
and Consumer Services.
Buyer shall be responsible for all scaling and measuring of
pulpwood, wood chips, and fuel wood pursuant to this Agreement.
Buyer shall, at its expense, furnish qualified scalers acceptable to Seller.
Such scalers shall be employees of Buyer.
Notwithstanding the foregoing, Buyer may, at its option, utilize the
weight equivalency methodology of (stick) scaling for the purpose of
determining the weight of wood chips delivered by rail to the Port
St. Xxx mill based on 78 cubic feet per ton.
Scaling shall be done upon delivery of pulpwood, wood chips, and fuel
wood to Buyer's scales, and Buyer shall expeditiously unload and release
all trucks and rail cars.
Seller may, upon reasonable notice to Buyer, at its sole option and
cost, utilize scalers other than those supplied by Buyer to verify the
scaling and culling. Buyer shall adjust its scaling and culling to reflect
the results of such
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verification, provided, however, that such verification shall have
determined that Buyer's scaling methods were in error.
6. PRICE OF WOOD FIBER:
The prices of all wood fiber produced by Seller and purchased by
Buyer hereunder is shown in Exhibit B attached to this Agreement and
is made a part hereof, as adjusted in accordance with the provisions of
this Section 6.
The prices shown in Exhibit B shall be adjusted at the beginning of
each month following the most recent quarterly publication of Timber
Mart South (or a successor publication). The prices, including the
prices currently set forth in Exhibit B and the quarterly adjusted prices
as defined below, shall be adjusted by that percentage change rounded to
the fourth decimal place between (a) the average of the prices reflected
in the four most recent quarterly publications of Timber Mart South (or
a successor publication), for Stumpage Price Mart, Standing Timber,
Pine Pulpwood, Dollars Per Ton, Xxxx 0, Xxxxxxx Price for Florida, and
(b) the average of the prices reflected in the four quarterly publications
prior to the most recent quarterly publication of Timber Mart South (or
a successor publication), for Stumpage Price Mart, Standing Timber,
Pine Pulpwood, Dollars Per Ton, Xxxx 0, Xxxxxxx Price for Florida;
provided that each quarterly adjustment shall not be greater than a 5%
increase or decrease. However, the prices reflected in Exhibit B
(September 30, 1995) attached hereto shall be adjusted without
limitation by the percentage change determined by the most recent
publication of Timber Mart South (or a successor publication)
immediately preceding the closing date hereof.
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In the event that Timber Mart South (or a successor publication) is
no longer published or such publication (or a successor publication) is
prepared on a basis different than that in effect on the date of this
Agreement, the parties hereto shall use reasonable efforts to agree on
an appropriate substitute publication. Failing such agreement, the
parties shall select an arbitrator to select the substitute publication
in accordance with the procedures set forth in Section 12 hereof.
Notwithstanding the foregoing, no later than thirty days prior to
each 24 month period beginning on the second anniversary date of this
Agreement, Buyer and Seller shall use their best efforts to agree on
prices reflecting fair market value for each category of wood fiber as
reflected on Exhibit B hereto, to become effective on the anniversary
date. Such annually negotiated prices shall be adjusted quarterly as
described above for the next 24 month period. In the event that Buyer
and Seller are unable to agree on prices by the end of each 24 month
anniversary date then the parties shall select an arbitrator to determine
the prices in compliance with Section 12 hereof. The prices so
determined will be applied retroactively to the applicable anniversary
date.
7. PRICE OF BIOMASS (FUEL WOOD):
The price of biomass used for fuel wood produced by Seller and
delivered to Buyer hereunder is shown in Exhibit B hereto.
The price of fuel wood may be adjusted every 24 months as mutually
agreed between the parties.
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8. PAYMENT:
Buyer shall pay Seller on Thursday each week for all deliveries
made to the Port St. Xxx mill during the preceding week.
9. RECORDS:
Buyer shall furnish Seller daily numbered weight tickets and
numbered scaling tickets evidencing the weights of pulpwood, wood
chips and fuel wood delivered to it; listing the name of the timber
dealer, the name of the timber producer, the time, the date, the truck
number, the rail car number, the zone and the tract from which the
pulpwood, wood chips and fuel wood originated; provided, however,
that Seller shall have provided such information to Buyer at the time
of the applicable delivery. Buyer shall furnish all documents detailing
the amount and nature of any culling to Seller daily as performed and
shall make available to Seller, upon Seller's request, the samples taken
on which the culling was done. Buyer shall assist Seller in effecting
timber security activities. Unless the quantity received by Buyer
under the foregoing records is contested within sixty (60) days from
date of such numbered tickets and documents, such records shall be
deemed final by the parties hereto.
10. TITLE:
The title of all pulpwood, wood chips and fuel wood under this
Agreement shall remain in Seller until delivered to Buyer. Delivery
of pulpwood, wood chips, and fuel wood by truck shall be deemed to
have been made when the truck has been placed in position for scaling
at Buyer's xxxxxxxx. Delivery of chips by rail shall be deemed to have
been made when the rail cars have been placed for scaling at Buyer's
xxxxxxxx.
X-0
00. FORCE MAJEURE:
The parties hereto agree that Seller shall not be liable to Buyer
for any actual or consequential damages for Seller's failure to perform
if:
A. The contract dealers and producers of pulpwood, wood chips
or fuel wood are prevented by strike, walkout, labor strife, riot, civil
war, acts of the public enemy, and/or acts of God from delivering to
Buyer;
B. Restrictions or prohibitions imposed by Local, State, or
Federal Government or any of their agencies that prevent Seller from
performing under this Agreement.
C. The condemnation or taking of Seller's lands or any material
part thereof or of the timber thereon; or
D. Seller's timber is damaged by fire, storm, pestilence, wind,
lightning, rain, ice, floods, rising waters or other casualty to the extent
that the timber remaining and undamaged is insufficient to supply
pulpwood, wood chips, and fuel wood without deviating from sound
forest management principles.
In the event that Seller is unable to ship the pulpwood and wood
chip tonnage required hereunder on account of any such force majeure
event, Seller will allocate its available pulpwood and wood chip
tonnage thereof among its then existing customers, divisions and
affiliated companies on such basis as Seller may deem fair and
practical, without liability for any such failure to perform its
obligations under this Agreement; provided, however, that in making
such allocation Seller shall, as near as practicable, limit its reduction
of shipments hereunder in such manner as to have the same
percentage of reduction apply to such customers, divisions and
affiliated companies.
X-0
00. DISAGREEMENT OF SPECIFICATIONS, QUALITY OR PRICE:
In the unlikely event that a disagreement should arise over the
specifications, quality, or price of any product produced by Seller and
delivered to Buyer, Seller and Buyer mutually agree to submit the
matter in dispute to a qualified testing laboratory, engineering firm,
forestry consultant, or other third party qualified to arbitrate the
disagreement. Seller and Buyer agree to accept the decision of the
third party.
In the event that Seller and Buyer cannot agree on the third party
qualified to arbitrate the disagreement, a joint request shall be made to
the American Arbitration Association to appoint an arbitrator. The
arbitrator appointed shall be deemed to be the arbitrator selected by
mutual agreement.
If any of the prices of pulpwood, wood chips, or fuel wood is an
issue and the matter is submitted for arbitration, the arbitrator shall
have not less than ten (10) years experience in the supply of the wood
fiber products to be supplied hereunder to the geographic region in
which Buyer's mill is located and shall not be a current or prior
employee of Buyer, Seller or SCC. Each party shall submit to the
arbitrator, within five days after the arbitrator is chosen, the price it
feels reflects the fair market value for such category of wood fiber as
reflected in Exhibit B hereto, together with all data in support of its
position. The arbitrator will then rule within thirty days thereafter
on the price of either Seller or Buyer that most fairly represents fair
market value. The decision of the arbitrator shall be binding on both
parties.
The expenses of the arbitrator shall be borne equally by Seller and
Buyer.
X-0
00. CHIPPING SERVICES AT XXXXX
Seller will provide chip service at Xxxxx for Buyer's private wood
up to a maximum of 100,000 tons per year. The charge for chipping
Buyer's private wood will be as shown on Exhibit B hereto. For each
gross ton of Buyer's private wood delivered to Xxxxx, Seller will
deliver to the mill at Port St. Xxx eighty-three percent (83%) chips
and seventeen percent (17%) fuel wood. If the ratio of chips to fuel
wood proves to be different, the parties will negotiate an appropriate
ratio based upon actual outturn.
14. TERMS OF AGREEMENT:
This Agreement shall commence on ___________________, and will
terminate on December 31 of the fifteenth calendar year thereafter.
Notwithstanding the foregoing, this Agreement may be extended by
Buyer for two successive five year terms, in each case upon one
hundred twenty (120) days advance notice in writing to Seller.
15. ASSIGNMENT:
This Agreement shall be binding on the successors and assigns of
the parties hereto; provided that without the prior written consent of
Seller, Buyer may only assign or transfer any of its rights or
obligations under this Agreement to a subsequent purchaser of the
Mill which will only be permitted to take delivery as prescribed in
this Agreement at the Mill except as otherwise provided in Section 3.
Nothing herein shall prohibit the Seller from employing any
subcontractors or agents; provided that such employment shall not
relieve the Seller of any of its obligations hereunder.
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16. NOTICES:
All notices provided for in this Agreement shall be in writing
signed by the party giving such notice, and delivered personally or
sent by overnight courier or messenger against receipt thereof or sent
by registered or certified mail (air mail if overseas), return receipt
requested, or by Telex, facsimile transmission, telegram or similar
means of communication if confirmed by mail. Notices shall be
deemed to have been received on the date of personal delivery or
telecopy or, if sent by certified registered mail, return receipt requested,
shall be deemed to be delivered on the third business day after the
date of mailing. Notices shall be sent to the following addresses:
To Seller: St. Xxxxxx Land and Development Company
X.X. Xxx 000
Xxxx Xx. Xxx, Xxxxxxx 00000
Attention: Xxxx Xxxxxxxxx, Manager
To Buyer:
17. GOVERNING LAW; JURISDICTION; FORUM:
The parties hereto agree that all of the provisions of this
Agreement and any questions concerning its interpretation and
enforcement shall be governed by the laws of the State of Florida
without regard to any applicable principles of conflict of laws. Each
of the parties irrevocably and unconditionally consents that any suit,
action or proceeding relating to this Agreement may be brought in a
court of the United States sitting in the State of Florida or, if
jurisdiction is lacking in such a court, in a court of record in the
State of Florida, and each party hereby irrevocably waives, to the
fullest extent permitted by law, any objection
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that it may have, whether now or in the future, to the laying of the
venue in, or to the jurisdiction of, any and each of such courts for the
purpose of any such suit, action, proceeding or judgment and further
waives any claim that any such suit, action, proceeding or judgment
has been brought in an inconvenient forum, and each party hereby
submits to such jurisdiction.
18. COUNTERPARTS:
This Agreement may be executed in any number of counterparts,
each of which when so executed shall be deemed an original but all of
which together shall constitute one and the same instrument.
19. ENTIRE AGREEMENT:
This Agreement constitutes the entire agreement of the parties
with respect to the subject matter hereof.
20. HEADINGS:
The section headings of this Agreement are only for the purpose of
reference and shall not affect the meaning hereof.
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IN WITNESS WHEREOF, the companies hereunto have caused
this Agreement to be executed by their duly authorized officer, on
the ___ day of ______________, 199__.
ST. XXXXXX LAND AND DEVELOPMENT
COMPANY
WITNESSES:
____________________ ______________________________________
Witness R.E. Xxxxxx, Vice President
____________________
Witness
BUYER
WITNESSES:
___________________ ____________________________________
Witness Buyer, Vice President
___________________
Witness
Exhibit F
_______________ __, 1996
[SJFP and SJPC or
SJCC and SJPC]
[Address]
Gentlemen:
We have acted as counsel to [JV or FMC, respectively], which is
a ___________ corporation (the "Company"), in connection with the
Asset Purchase Agreement dated as of November 1, 1995 (the
"Agreement") between St. Xxx Forest Products Company, St. Xxx
Container Company and St. Xxx Paper Company ("SJPC") on the one
hand and Four M Corporation and ______________ on the other
hand. All capitalized terms used herein without definition have the
respective meanings specified therefor in the Agreement. This
opinion is delivered to you pursuant to Section 3.03(b)(x) of the
Agreement.
We call your attention to the fact that the scope of our opinions
set forth herein is limited only to the laws of the state of Florida,
and the federal laws of the United States to the extent and only to
the extent that such laws apply to the opinions contained herein
(such laws, the "Applicable Law"). Other than Applicable Law, we
do not express any
opinions on any other laws, and no such opinions are intended to be
implied hereby and none shall be inferred herefrom.
In connection with rendering this opinion letter, we have
examined and relied upon the originals or copies certified or
otherwise identified to
F-1
our satisfaction, of those documents and certificates as we deemed
relevant to the opinions expressed below. In such examination we
have assumed, without any verification or investigation, the
genuineness of all signatures (other than the signatures of the
Company on the Agreement and the Ancillary Agreements), the
authenticity of all documents submitted to us as originals, and the
conformity to original documents of all documents submitted to us
as certified or photostatic copies. We have also assumed, without
any verification or investigation, that the documents on which we
have relied, that were given or dated earlier than the date of this
letter, continue to remain accurate and complete insofar as relevant
to our opinions from such earlier date through and including the
date of this letter.
As to all questions of fact relevant to the opinions set forth
herein, we have relied without any verification or investigation, upon
the representations and warranties set forth in the Agreement, upon
the information set forth in the records and documents referred to
herein, and upon statements and certificates of officers and other
representatives of the Company.
In furtherance of the foregoing paragraph, but without limiting
the generality thereof, we have, in particular, examined and relied
as to factual matters upon the following documents: the certificate
of the Company as to the licenses, contracts, agreements and other
instruments or obligations (such licenses, contracts, agreements and
other instruments or obligations as received by us for review and
without regard to any amendments or modifications thereto not
received by us, being herein
F-2
referred to as the "Contracts") to which the Company is a party and
that are binding on the Company or any of the Company's assets
and copies of the Contracts; and the certificate of the Company as
to orders, writs, injunctions and decrees (such orders, writs,
injunctions or decrees as received by us for review and without
regard to any amendments or modifications thereto not received by
us, being herein referred to as the "Decrees") of any court or
governmental authority binding upon the Company and copies of the
Decrees. Copies of all such certificates referred to in this paragraph
have been delivered to you for your examination and review.
Based upon and in reliance on the foregoing, and having regard
to the legal considerations of Applicable Law which we deem
relevant, and subject to the assumptions, exceptions, qualification,
limitations and understandings contained herein, we are of the
opinion that:
1. The Company is a corporation validly existing and in good
standing under the laws of its jurisdiction of incorporation. The
Company has all required corporate power and authority to carry on
its business as now conducted by it and to own any of the assets
owned by it. The Company is duly qualified or licensed to do
business and is in good standing in each jurisdiction where the
character of the property owned or leased by it or the nature of its
activities make such qualification necessary, except where failure to
be so qualified would not, individually or in the aggregate, have a
Material Adverse Effect from and after the Closing Date.
F-3
2. The execution and delivery of the Agreement by the
Company, the execution and delivery of the Ancillary Agreements by
the Company, and the performance by the Company of its
obligations under the Agreement and each of the Ancillary
Agreements to which it is a party and the consummation of the
transactions contemplated thereby (i) are within the Company's
corporate powers and (ii) have been duly authorized by all necessary
corporate action on the part of the Company. The Agreement and
each of the Ancillary Agreements have been duly and validly
executed by the Company.
3. Each of the Agreement and the Ancillary Agreements to
which it is a party constitutes a valid and binding agreement of the
Company enforceable against it in accordance with its terms except
that (i) such enforcement may be subject to bankruptcy, insolvency,
reorganization, moratorium (whether general or specific) or other
similar laws now or hereafter in effect relating to creditor's rights
generally, (ii) such enforcement may be subject to general equitable
principles, and (iii) the remedy of specific performance and injunctive
and other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any
proceeding therefor may be brought.
4. Neither the execution and delivery of the Agreement by the
Company nor consummation by the Company of the transactions
contemplated thereby nor compliance the Company with the
provisions thereof (i) conflicts with or results in a breach of any
provision of the certificate of incorporation or by-laws of the
Company, (ii) assuming the obtaining of all Consents, results in a
breach of or constitutes a default
F-4
under any of the Contracts, or (iii) violates any of the Decrees or any
provision of Applicable Law or regulation as currently in effect.
5. Except for (i) filings under the HSR Act, (ii) those permits
and licenses identified in Section 4.10(a) of the Disclosure Schedule
and (iii) the Consents, no notice to or filing with, and no permit,
authorization, consent or approval of, any Person is necessary for
the execution, delivery and performance of the Agreement by the
Company or for the consummation by the Company of the
transactions contemplated thereby.
The foregoing opinions are subject to the following assumptions,
exceptions, qualifications and limitations, as applicable.
A. With respect to the assumptions contained herein, our
reliance and the extent of our reliance on the certificates and other
documents referred to herein, and the limitations herein set forth
with respect to the scope of our opinions, each has been made with
your permission and consent.
B. Pursuant to your agreement as expressed by your
acceptance of this opinion letter and the closing of the transactions
contemplated hereby, we have no obligation to supplement this
opinion after the date hereof if any law changes after the date hereof
or if we become aware of any facts that affect the opinions expressed
herein.
This opinion may be relied upon by [SJFP and SJPC or SJCC
and SJFP] and by their respective counsel with respect to the
Agreement and is not to be relied upon by any governmental agency
or any other person or entity without our prior written consent.
Subject to any obligations to
F-5
the contrary imposed on you by law, this opinion is not to be used,
circulated, quoted or referred to without our prior written consent.
Very truly yours,
F-6
Exhibit G
LEASE
THIS LEASE AGREEMENT (this "Lease") is made as of this ___
day of , 1995, by and between Apalachicola Northern
Railroad Company, a corporation ("Landlord"), and
, a ("Tenant").
WITNESSETH:
WHEREAS, Landlord is the owner of the property commonly
known as ___________________, together with all alterations,
additions, improvements, restorations or replacements now or
hereafter made thereto (the "Building"), located on, and being a part
of, that certain real property (the "Property") located at 000 Xxxxx
Xxxxxx, Xxxx Xx. Xxx, Xxxxxxx;
and
WHEREAS, Landlord desires to lease certain office space located
in the Building to Tenant and Tenant desires to lease same from
Landlord.
NOW THEREFORE, in consideration of the mutual covenants
contained herein, the parties hereto agree as follows:
1. PREMISES. Landlord does hereby lease to Tenant and
Tenant
does hereby lease from Landlord upon the covenants and agreements
herein contained the following described premises containing
approximately Twelve Thousand (12,000) rentable square feet on the
second and third (2nd and 3rd) floors of the Building, which shall
include the conference room located on the second floor (the
"Premises"). The Premises are outlined and/or more fully described
in EXHIBIT A attached hereto and made a part hereof.
2. TERM. Subject to the terms and conditions set forth herein,
the term of this Lease (the "Term") shall be twenty-four (24) months
beginning on , 19 (the "Commencement Date") and
ending twenty-four (24) months thereafter, unless terminated earlier
as hereinafter provided. Provided that Tenant is not in default
hereunder, Tenant shall have, by providing Landlord with ninety
(90) days prior written notice, the option to terminate this Lease.
3. RENT.
(a)Tenant shall pay to Landlord without setoff, deduction,
demand, notice or counterclaim an annual rent for the
Premises (the "Basic Rent") of Ten and 50/100 Dollars
($10.50) per square foot. Said Basic Rent shall be paid in
equal monthly installments of Ten Thousand Five Hundred
and 00/100 Dollars ($10,500.00) and shall be paid in advance
on the first (1st) day of each and
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every calendar month during the Term, beginning on the
Commencement Date; provided, however, that if the
Commencement Date occurs on a date other than on the first
day of a calendar month, Basic Rent shall be prorated from
such date until the first day of the following month, at which
time it shall be due and payable. Tenant shall pay the Basic
Rent and all Additional Rent, if any (as defined under this
Article 3), by good check or in lawful currency of the United
States of America, to Landlord at, or to such other address
or in such other manner as Landlord from time to time
specifies by advance written notice to Tenant at, or such other
address as Tenant from time to time specifies by advance
written notice to Landlord. No installment of Basic Rent or
Additional Rent shall be deemed paid until received by
Landlord. Any payment made by Tenant to Landlord on
account of Basic Rent may be credited by Landlord to the
payment of any Basic Rent or Additional Rent then past due
before being credited to Basic Rent currently due. All sums
payable by Tenant under this Lease at any time during the
Term, other than Basic Rent, if any, shall be deemed
"Additional Rent," and, unless otherwise set forth herein, shall
be payable in the same manner as set forth herein for Basic
Rent. All Basic Rent or Additional Rent not paid to Landlord
when due and payable hereunder shall accrue interest thereon
until paid in full at the rate of ___________ interest per
annum.
G-3
(b) The Basic Rent includes Tenant's proportionate share
of real estate taxes assessed against the Building and
the Property.
(c) Tenant shall in all events be responsible for all taxes
and assessments which may be assessed against any
real or personal property of Tenant located within the
Premises.
4. SECURITY DEPOSIT. Upon execution of this Lease,
Tenant shall deposit with Landlord the sum of Thirty-one Thousand
Five Hundred and 00/100 Dollars ($31,500.00) as security for the full
and faithful performance by Tenant of all the terms, covenants and
conditions of this Lease upon Tenant's part to be performed, which
said sum shall be returned to Tenant at the end of the Term of this
Lease; provided, however, that Tenant has fully and faithfully
carried out all of said terms, covenants and conditions on Tenant's
part to be performed and Tenant has vacated the Building and the
Premises have been returned to Landlord in the condition required
hereunder. In the event of a bona fide sale, subject to this Lease,
Landlord shall have the right to transfer the security to the vendee
for the benefit of Tenant and Landlord shall be considered released
by Tenant from all liability for the return of such security; and
Tenant agrees to look to the new landlord solely for the return of
the said security, and it is agreed that this shall apply to
every transfer or assignment made of the security to a new landlord.
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5. ALTERATIONS. Tenant shall not make or permit any
alterations to the Premises without the prior written consent
of Landlord.
6. TENANT IMPROVEMENT WORK. Tenant shall be
responsible for the cost of all Tenant Improvement Work to the
Premises, including, without limitation, any security equipment
desired by Tenant, which Tenant Improvement Work shall be
constructed only after Landlord has given its prior written approval
to such work, and, only after Tenant has obtained any necessary
permits from governmental authorities having jurisdiction, and
furnished copies of the permits to Landlord. Landlord shall approve
all contractors or subcontractors for the Tenant Improvement Work.
EXHIBIT B contains a description of the Tenant Improvement Work
which has been agreed to by Landlord. Upon Landlord's demand,
Tenant shall deposit with Landlord 100% of the estimated costs of
the Tenant Improvement Work prior to the commencement of any
work. Tenant guarantees to complete said work free of any liens of
contractors or suppliers. Notwithstanding the foregoing, if any
mechanic's lien is filed against the Premises, the Building or the
Property for work or materials done for or furnished to Tenant, or
claimed to have been done for or furnished to Tenant, the lien shall
be discharged by Tenant within ten (10) days of written notice
thereof, solely at Tenant's expense, by paying off or bonding the lien.
Tenant shall indemnify and hold Landlord harmless from and
against any and all liabilities, costs, expenses, liens, suits, claims,
demands or damage to persons or property which may arise from the
making of the Tenant Improvement Work. If any Tenant
G-5
Improvement Work or subsequent alteration is made without the
prior written consent of Landlord, Landlord may correct or remove
the alteration at Tenant's expense.
7. USE. Tenant shall use and occupy the Premises solely for
general office purposes, and for no other purposes except those
authorized, in writing, by Landlord. The Building's hours of
operation are _____ am to_____ pm, Monday through Friday, and
_____ am to _____ pm on Saturdays. Tenant will comply with all
rules and regulations respecting such use as Landlord may specify
from time to time. Tenant shall have access to the conference room
located on the second (2nd) floor of the Building, which conference
room is outlined on EXHIBIT A. Landlord shall have the first
priority of use of such conference room.
8. INDEMNITY AND INSURANCE.
(a) Landlord shall maintain and keep in force and effect all
such insurance against the Building as Landlord currently
maintains.
(b) Tenant agrees to indemnify and save Landlord,
harmless from and against all claims, costs, liabilities or damages
(including, without limitation, reasonable attorneys' fees) arising
from or out of the occupancy of the Premises or the Building by or
under Tenant, or any failure on Tenant's part to comply with any of
the covenants, terms, and conditions herein contained.
G-6
(c) At all times during the Term, Tenant will keep in full
force
(i) property insurance covering property damage to the
improvements and property located in the Premises caused by fire
and such other risks as may be included in extended coverage
insurance in an amount equal to the full replacement cost thereof,
and (ii) general liability insurance for personal injury and property
damage in connection with Tenant's or its Agent's (as hereinafter
defined) occupation of the Premises or the Building, in an amount
not less than _______ Dollars ($________________).
Tenant may effect such coverage under its blanket insurance
policies, provided that (i) any such policy of blanket insurance either
shall specify therein, or Tenant shall furnish to Landlord a written
statement from the insurer under such policy so specifying, (x) the
maximum amount of the total insurance afforded by the blanket
policy allocated to the Property and the Premises and (y) any
sublimits in such blanket policy applicable to the Property and the
Premises, which amounts shall not be less than the amounts
required pursuant to this SECTION 8; (ii) any policy of blanket
insurance hereunder shall comply in all respects with the other
provisions of this SECTION 8; and (iii) the protection afforded
under any policy of blanket insurance hereunder shall be no less
than that which would have been afforded under a separate policy
or policies relating only to the Property and the Premises. Tenant
hereby agrees on behalf of itself and others claiming under it,
including any insurer, to waive all claims against Landlord, including
all rights of subrogation for loss or damage to its property arising
from fire and such other risks as may be included in extended
coverage insurance, to the extent such loss is
G-7
reimbursed by insurance. If Landlord so requests, Tenant shall
obtain from its insurer a written waiver of all rights of subrogation
that it may have against Landlord.
(d) All such insurance shall be written by insurance
companies which are reasonably satisfactory to Landlord and such
policies shall be in form and substance reasonably satisfactory to
Landlord. Insurance policies shall name Landlord as an additional
insured thereunder.
(e) If Tenant is paid any proceeds under any policy of
insurance naming Tenant as an insured, on account of any loss or
damage, then Tenant releases Landlord to the extent of the amount
of such proceeds, from any and all liability for such loss or damage,
notwithstanding that such loss, damage or liability may arise out of
the negligent or intentionally tortious act or omission of Landlord;
Tenant shall have a clause to such effect included in the aforesaid
policies.
(f) Tenant shall furnish to Landlord, within ten (10) days
after the Commencement Date, copies of policies (and certificates) of
insurance evidencing coverages required by this Lease, and Tenant
shall also furnish copies of all renewal policies (and certificates) of
insurance at least thirty (30) days prior to the expiration of the then
existing policy.
(g) Tenant shall not conduct or permit any activity, or
place any equipment or material, in or about the Premises or any
other part of the
G-8
Property which will increase the rate of fire or other insurance on
the Property or insurance benefiting any other tenant of the
Property.
9. MAINTENANCE AND REPAIR.
(a) Landlord shall keep and maintain in good repair and
working order the mechanical, electrical, plumbing and HVAC
systems within and serving the Premises and the Building (excluding
Tenant's leasehold improvements in the Premises) that are required
under this Lease for the normal maintenance and operation of the
Premises and the Building.
(b) Tenant shall maintain all of Tenant's leasehold
improvements in the Premises and other real and personal property
within the Premises and shall repair, at its expense, any and all
damage caused by Tenant or Tenant's employees, agents, invitees,
guests, visitors, contractors, subcontractors or anyone else acting for
or on behalf of Tenant (collectively, "Agents") to the Premises or
other parts of the Property, including without limitation equipment
within and serving the Building, ordinary wear and tear excepted.
Notwithstanding the foregoing, Tenant shall bear the cost of, but
shall not itself perform without Landlord's prior written consent,
any such repairs which would affect the Building's structure or
mechanical, electrical, plumbing or HVAC systems or which would
be visible from the exterior of the Building or from any interior
common area of the Building.
G-9
(c) Tenant shall be responsible for furnishing and bearing
the costs of all cleaning and janitorial services to the Premises and
in connection therewith shall maintain the high quality of the
Premises.
(d) If, within five (5) days following notice to Tenant,
Tenant fails to commence to repair or replace any damage to the
Premises or other parts of the Property caused by Tenant or its
Agents and diligently pursue and achieve timely completion of such
repair and replacement, Landlord may, at its option, cause all
required maintenance, repairs or replacements to be made. Tenant
shall promptly pay Landlord upon demand all costs incurred in
connection therewith plus interest thereon at the rate of twelve
percent (12%) per annum from the demand date until paid.
10. UTILITIES. Landlord shall pay the sewage, electric and
water charges imposed upon the Building. Landlord shall not be
liable for, nor shall there be any abatement of Basic Rent or
Additional Rent or constructive eviction for, the failure to furnish,
or the delay or suspension in furnishing, utility services.
11. TRANSFERS. Tenant shall not assign, transfer, mortgage
or otherwise encumber this Lease or sublet or rent (or permit a third
party to occupy or use) the Premises, or any part thereof, nor shall
any assignment or transfer of this Lease or the right of occupancy
hereunder be affected by operation of law or otherwise.
G-10
12. CASUALTY AND CONDEMNATION.
In case of damage, by fire or other action of the elements, to
the Building, without the fault of Tenant or its Agents, if in
Landlord's sole discretion the damage is so extensive as to amount
practically to the total destruction of the Premises or of the
Building, or if Landlord shall within a reasonable time decide not to
rebuild in its sole discretion, this Lease shall cease and come to an
end, and the rent shall be apportioned to the time of damage. In all
other cases where the Premises are damaged by fire without the
fault of Tenant or its Agents, Landlord shall repair the damage with
reasonable dispatch after notice of damage, and if the damage has
rendered the Premises untenantable, in whole or in part, there shall
be an apportionment of the rent until the damage has been repaired.
In determining what constitutes reasonable dispatch consideration
shall be given to delays caused by strikes, adjustment of insurance
and other causes beyond Landlord's control.
13. Landlord reserves to itself any and all rights to receive
awards made for or in connection with damages to the Premises
accruing by reason of exercise of eminent domain or similar
proceedings (or sale in lieu thereof).
G-11
14. TENANT'S DEFAULT; LANDLORD'S REMEDIES.
(a) In the event of the non-payment of the Basic Rent or
Additional Rent, or any installment thereof, at the times and in the
manner above provided, and if the same shall remain in default for
five (5) days after becoming due, or if Tenant shall be dispossessed
for non-payment of such rent, or if the Premises shall be deserted or
vacated, Landlord or its agents shall have the right to and may enter
the Premises as the agent of Tenant, either by force or otherwise,
without being liable for any prosecution or damages therefor, and
may relet the Premises as the agent of the Tenant, and receive the
rent therefor, upon such terms as shall be satisfactory to Landlord,
and all rights of the Tenant to repossess the Premises under this
Lease shall be forfeited. Such re-entry by Landlord shall not operate
to release Tenant from any rent to be paid or covenants to be
performed hereunder during the full term of this Lease. For the
purpose of reletting, Landlord shall be authorized to make such
repairs or alterations in or to the Premises as may be necessary to
place the same in good order and condition. Tenant shall be liable
to Landlord for the cost of such repairs or alterations, and all
expenses of such reletting. If the sum realized or to be realized from
the reletting is insufficient to satisfy the monthly or term rent
provided in this Lease, Landlord, at its option, may require tenant
to pay such deficiency month by month, or may hold liable the
Tenant in advance for the entire deficiency to be realized during the
term of the reletting. Tenant shall not be entitled to any surplus
accruing as a result of the reletting.
G-12
Landlord is hereby granted a lien, in addition to any statutory lien
or right to distrain that may exist, on all personal property of
Tenant in or upon the Premises, to secure payment of the rent and
performance of the covenants and conditions of this Lease. Landlord
shall have the right, as agent of Tenant, to take possession of any
furniture, fixtures or other personal property of Tenant found in or
about the Premises, and sell the same at public or private sale and
to apply the proceeds thereof to the payment of any monies
becoming due under this Lease, Tenant hereby waiving the benefit
of all laws exempting property from execution, levy and sale on
distress or judgment. Tenant agrees to pay, as additional rent, all
reasonable attorneys' fees and other expenses incurred by Landlord
in enforcing any of the Tenant's obligations under this Lease.
(b) In case of violation by Tenant of any of the covenants,
agreements and conditions of this Lease, or of the rules and
regulations now or hereafter to be reasonably established by
Landlord, and upon failure to discontinue such violation with ten
(10) days after notice thereof given to Tenant, this Lease shall
thenceforth, at the option of Landlord, become null and void, and
Landlord may re-enter without further notice or demand. The rent
in such case shall become due, be apportioned and paid on and up to
the day of such re-entry, and the Tenant shall be liable for all loss
or damage resulting from such violation as aforesaid. No waiver by
Landlord of any violation or breach of condition by Tenant shall
constitute or be construed as a waiver of any other violation or
breach of condition, nor shall lapse of time after breach of condition
by Tenant
G-13
before Landlord shall exercise its option under this paragraph
operate to defeat the right of Landlord to declare this Lease null and
void and to re-enter upon the Premises after the said breach or
violation.
(c) It is further agreed that if at any time during the Term
of this Lease Tenant shall make any assignment for the benefit of
creditors, or be decreed insolvent or bankrupt according to law, or
if a receiver shall be appointed for Tenant, then Landlord may, at its
option, terminate this Lease, exercise of such option to be evidenced
by notice to that effect served upon the assignee, receiver, trustee or
other person in charge of the liquidation of the property of Tenant
or Tenant's estate, but such termination shall not release or
discharge any payment of rent payable hereunder and then accrued,
or any liability then accrued by reason of any agreement or covenant
herein contained on the part of Tenant, or Tenant's legal
representatives.
(d) In addition to the foregoing, Landlord shall be entitled
to all rights and remedies against Tenant which Landlord would be
entitled to at law or in equity.
(e) To the extent permitted by law, Tenant waives any and
all rights of redemption granted by or under any present or future
laws if Tenant is evicted or dispossessed for any cause, or if
Landlord obtains possession of the Premises due to Tenant's default
hereunder or otherwise.
G-14
15. SUBORDINATION. This Lease is subject and subordinate
to all ground or underlying leases and to any mortgage(s) (which
term "mortgages" shall include mortgages, deeds of trust and similar
security instruments) which may now or hereafter affect such leases
or the Property (or any portion of the Property) and to all renewals,
modifications, consolidations, replacements and extensions thereof.
This subordination shall be self-operative; however, in confirmation
thereof, Tenant shall execute promptly any instrument that
Landlord or any mortgagee (which term shall include any lender
who is the mortgagee or beneficiary under any of the aforesaid
mortgages) may request confirming such subordination. Tenant
hereby constitutes and appoints Landlord as Tenant's
attorney-in-fact to execute any such instrument on behalf of Tenant
if Tenant does not execute the same within five (5) days after
written request. Notwithstanding the foregoing, before any
foreclosure sale under a mortgage, the mortgagee shall have the
right to subordinate the mortgage to this Lease. In the event of a
foreclosure, this Lease may continue in full force and effect and
Tenant shall, upon request of the purchaser of Landlord's interest
under this Lease, attorn to and recognize as its landlord said
purchaser. Tenant shall, upon the request of a mortgagee or
purchaser at foreclosure, execute, acknowledge and deliver any
instrument that has for its purpose and effect the subordination of
the lien of any mortgage to this Lease and/or Tenant's attornment
to such purchaser.
G-15
16. BROKERS. Landlord and Tenant each represents and
warrants to the other that it has not employed any broker, agent or
finder relating to this Lease. Landlord shall indemnify and hold
Tenant harmless, and Tenant shall indemnify and hold Landlord
harmless, from and against any claim for brokerage or other
commission arising from or out of any breach of the indemnitor's
representation and warranty contained in this Paragraph 16.
17. NOTICES. Whenever notice is to be given under the terms
of this Lease, such notice shall be deemed to have been given when
delivered (if hand delivered) or enclosed in an envelope having the
proper postage, addressed to Landlord or Tenant at the address
specified in Paragraph 3, as the case may be, and sent by certified
mail, return receipt requested, to the addressee (if mailed) to the
address specified in Paragraph 3. The date at which notice shall be
deemed to have been given shall be the date it is delivered (if hand
delivered) or three (3) days after being deposited in the mails (if
mailed).
18. QUIET ENJOYMENT. Landlord covenants that if Tenant
shall pay Basic Rent and Additional Rent and perform all of the
terms and conditions of this Lease to be performed by Tenant,
Tenant shall during the Term peaceably and quietly occupy and
enjoy possession of the Premises without molestation or hindrance
by Landlord or any party claiming through or under Landlord,
subject to the provisions of this Lease.
G-16
19. INSPECTION OF PREMISES. Tenant shall permit
Landlord or its agents, at reasonable times (or any time in an
emergency) and with one (1) day (except in emergencies) prior
notice, to enter the Premises, (i) to examine, inspect and protect the
Premises, (ii) to make such repairs to the Premises which in
Landlord's reasonable judgment, exercised in good faith, may be
necessary or desirable, (iii) to exhibit the same to prospective
purchasers of the Premises (or all or any portion of the Property) or
to present or future mortgagees, or (iv) to exhibit the same to
prospective tenants.
20. TRANSFER OF FEE. The term "Landlord" as used in this
Lease, as far as covenants and agreements on the part of Landlord
are concerned, shall be limited to mean and include only the owner
or owners at the time in question of the fee of the Premises, and in
the event of any transfer or transfers of the title to such fee,
Landlord herein named (and in case of any subsequent transfers or
conveyances, the then grantor) shall automatically be freed and
relieved from and after the date of such transfer and conveyance of
all liability with respect to the performance of any covenants and
agreements on the part of Landlord contained in this Lease,
thereafter to be performed, provided that any funds in the hands of
Landlord or the then grantor at the time of such transfer, in which
Tenant has an interest, shall be turned over to the grantee and any
amount then due and payable to Tenant by Landlord or the then
grantor under any provisions of this Lease shall be paid to Tenant,
and provided further, that such grantee or transferee shall, except
as may otherwise be
G-17
provided herein, be bound by all of the covenants and agreements in
this Lease contained, to be performed on the part of Landlord, it
being intended hereby that the covenants and agreements contained
in this Lease on the part of Landlord to be performed shall be
binding on Landlord, its successors and assigns, only during and in
respect of their successive periods of ownership.
21. ESTOPPEL CERTIFICATES. Tenant shall, without charge,
at any time and from time to time, within five (5) days after request
therefor by Landlord, any mortgagee, any purchaser of the Premises
(or any portion of the Property containing the Premises) or any
other similarly interested person, execute, acknowledge and deliver
to such requesting party a written estoppel certificate in such form
and substance as such requesting party shall reasonably request.
22. NO REPRESENTATIONS BY LANDLORD. Tenant
acknowledges that neither Landlord nor its agents nor any broker
has made any representation or promise with respect to the
Premises or any other part of the Property, except as herein
expressly set forth, and no rights, privileges, easements or licenses
are acquired by Tenant except as herein expressly set forth. Tenant,
by taking possession of the Premises shall accept the Premises, the
Building and other portions of the Property "as is," and such taking
of possession shall be conclusive evidence that the Premises, the
Building and other portions of the Property are in good and
satisfactory condition at the time of such taking of possession.
G-18
23. NO PARTNERSHIP. Nothing contained in this Lease shall
be deemed or construed to create a partnership or joint venture of
or between Landlord and Tenant, or to create any other relationship
between Landlord and Tenant other than that of landlord and
tenant.
24. COMPLIANCE WITH LAW. Tenant agrees to observe and
comply with all laws, ordinances, rules and regulations of the
Federal, State, County and Municipal authorities, including, without
limitation, any environmental law or regulation which shall include,
without limitation, the Comprehensive Environmental Response,
Compensation and Liability Act, as amended, and the regulations
thereunder, the Resource Conservation and Recovery Act, as
amended, and the regulations thereunder, and the Federal Clean
Water Act, as amended, and the regulations thereunder. Tenant
agrees not to do or permit anything to be done in the Premises, or
keep anything therein, which will increase the rate of fire insurance
premiums on the improvements or any part thereof, or on property
kept therein, or which will obstruct or interfere with the rights of
other tenants, or conflict with the regulations of the Fire
Department or with any insurance policy upon said improvements
or any part thereof. In the event of any increase in insurance
premiums resulting from Tenant's occupancy of the Premises, or
from any act or omission on the part of Tenant, Tenant agrees to
pay said increase in insurance premiums on the improvements or
contents thereof as Additional Rent.
G-19
25. SIGNS. Tenant shall place no signs on or about the
Premises except with Landlord's prior written approval, which shall
not be unreasonably withheld. Any such signs shall be in compliance
with all applicable laws and regulations.
26. PARKING. Lessor shall make available to Tenant
throughout the Term ( ) reserved parking spaces in the
Building's outdoor parking lot, which spaces shall be designated by
Landlord.
27. CONFIDENTIALITY. Tenant acknowledges that Landlord
has confidential matters relating to Landlord's business being
handled in the Building, and Tenant agrees to take all necessary
steps to ensure that no breach of such confidentiality occurs by
Tenant or its Agents. Landlord acknowledges that Tenant has
confidential matters relating to Tenant's business being handled in
the Building, and Landlord agrees to take all necessary steps to
ensure that no breach of such confidentiality occurs by Landlord or
Landlord's employees, agents, invitees, guests, visitors or anyone else
acting for or on behalf of Landlord.
28. SURRENDER. Tenant shall peaceably surrender the
Premises to Landlord on the expiration of the Term or earlier
termination of this Lease, in broom-clean condition and in as good
condition as when Tenant took possession (including without
limitation the repair of any damage to the Premises caused by the
removal of any of Tenant's personal property or trade fixtures from
the Premises), except for reasonable wear and tear.
G-20
Any of Tenant's personal property or trade fixtures left on or in the
Premises, or elsewhere on the Property, after the aforesaid
expiration or
earlier termination of this Lease shall be deemed to be abandoned,
and, at Landlord's option, title shall pass to Landlord under this
Lease.
29. HOLD-OVER. It is further covenanted and agreed that if
Tenant shall continue without written consent of Landlord to occupy
the Premises after the expiration of the Term or earlier termination
of this Lease, then Tenant shall pay Landlord, for each day Tenant
retains possession of the Premises, 175% of the Basic Rent prorated
on a daily basis. Notwithstanding the foregoing, if Tenant shall
hold-over after said expiration or termination of this Lease, and
Landlord shall desire to regain possession of the Premises, then
Landlord may forthwith re-enter and take possession of the
Premises without process, or by any legal process in force in the
State of Florida. Tenant shall indemnify and hold harmless
Landlord against all liabilities and damages sustained by Landlord
by reason of Tenant's retention of possession and/or Landlord's
retaking thereof.
30. FORCE MAJEURE. Notwithstanding anything to the
contrary contained in this Lease, Landlord shall not be required to
perform any of its obligations under this Lease, nor shall Landlord
be liable for loss or damage for failure to do so, nor shall Tenant
thereby be released from any of its obligations under this Lease,
where such failure arises from or through acts of God, strikes,
lockouts, labor difficulties, explosions,
G-21
sabotage, accidents, riots, civil commotions, acts of war, results of
any warfare or warlike conditions in this or any foreign country, fire
or casualty, governmental actions, legal requirements, energy
shortage or other causes beyond the reasonable control of Landlord,
unless such loss or damage results from the willful misconduct or
gross negligence of Landlord.
31. MODIFICATION; WAIVER. The failure of Landlord or
Tenant to insist upon strict performance of any of the covenants or
conditions of this Lease in any one or more instance shall not be
construed as a waiver or relinquishment for the future of any such
covenants or conditions but the same shall be and remain in full
force and effect. This Lease shall not be modified in any manner
except by an instrument in writing signed by the parties.
32. PARAGRAPH HEADINGS. The paragraph headings used
herein are for reference and convenience only and shall not enter
into the interpretation hereof.
33. GOVERNING LAW. It is the intention of the parties hereto
that all questions with respect to the construction of this Lease and
the rights and liabilities of the parties hereunder shall be
determined in accordance with the laws of the State of Florida.
G-22
34. ENTIRE AGREEMENT OF PARTIES. This Lease contains
the final and entire agreement between the parties. There are no
promises, agreements, conditions, undertakings, warranties or
representations, oral or written, express or implied, between them,
other than as herein set forth. This Lease is intended by the parties
hereto to be an integration of all prior or contemporaneous promises,
agreements, conditions, negotiations and undertakings between the
parties hereto.
35. SEVERABILITY. If any term, covenant or condition of this
Lease or the application thereof to any person or circumstances shall
be invalid or unenforceable, the remainder of this Lease, or the
application of such term, covenant or provision to persons or
circumstances other than those to which it is held invalid or
unenforceable shall not be affected thereby, and each term, covenant
or provision to persons or circumstances other than those to which
it is held invalid or unenforceable shall be valid and enforceable to
the fullest extent permitted by law.
36. TIME OF THE ESSENCE. Time is of the essence in the
performance of all obligations under this Lease.
37. COUNTERPARTS. This Lease may be executed in
counterparts, all of which taken together shall constitute one
agreement binding on all the parties notwithstanding that all the
parties are not signatories to the same counterpart.
G-23
IN WITNESS WHEREOF, the parties hereto have duly executed
this Lease Agreement as of the day and year first above written.
LANDLORD:
WITNESS/ATTEST:
By:
Its:
TENANT:
WITNESS/ATTEST:
By:
Its:
G-24
Exhibit H
_______________ __, 1996
[FMC or JV]
[Address]
Gentlemen:
We have acted as counsel to [St. Xxx Container Company or St.
Xxx
Forest Products Company, respectively], which is a Florida
corporation (the "Company"), in connection with the Asset Purchase
Agreement dated as of October 31, 1995 (the "Agreement") between
St. Xxx Forest Products Company, St. Xxx Container Company and
St. Xxx Paper Company ("SJPC") on the one hand and Four M
Corporation and ______________ on the other hand. All capitalized
terms used herein without definition have the respective meanings
specified therefor in the Agreement. This opinion is delivered to you
pursuant to Section 3.03(b)(xiv) of the Agreement.
We call your attention to the fact that the scope of our opinions
set forth herein is limited only to the laws of the state of Florida and
the federal laws of the United States to the extent and only to the
extent that
__________ __, 1995
Page 2
such laws apply to the opinions contained herein (such laws, the
"Applicable Law"). Other than Applicable Law, we do not express
any opinions on any other laws, and no such opinions are intended
to be implied hereby and none shall be inferred herefrom.
In connection with rendering this opinion letter, we have
examined and relied upon the originals or copies certified or
otherwise identified to our satisfaction, of those documents and
certificates as we deemed relevant to the opinions expressed below.
In such examination we have assumed, without any verification or
investigation, the genuineness of all signatures (other than the
signatures of the Company and SJPC on the Agreement and the
Ancillary Agreements), the authenticity of all documents submitted
to us as originals, and the conformity to original documents of all
documents submitted to us as certified or photostatic copies. We
have also assumed, without any verification or investigation, that the
documents on which we have relied, that were given or dated earlier
than the date of this letter, continue to remain accurate and
complete insofar as relevant to our opinions from such earlier date
through and including the date of this letter.
As to all questions of fact relevant to the opinions set forth
herein, we have relied without any verification or investigation, upon
the representations and warranties set forth in the Agreement, upon
the information set forth in the records and documents referred to
herein, and
H-2
___________ __, 1995
Page 3
upon statements and certificates of officers and other representatives
of the Company and SJPC.
In furtherance of the foregoing paragraph, but without limiting
the generality thereof, we have, in particular, examined and relied
as to factual matters upon the following documents: the certificate
of the Company as to the licenses, contracts, agreements and other
instruments or obligations (such licenses, contracts, agreements and
other instruments or obligations as received by us for review and
without regard to any amendments or modifications thereto not
received by us, being herein referred to as the "Contracts") to which
the Company is a party and that are binding on the Company or any
of the [Container or Mill] Assets and copies of the Contracts; and
the certificate of the Company as to orders, writs, injunctions and
decrees (such orders, writs, injunctions or decrees as received by us
for review and without regard to any amendments or modifications
thereto not received by us, being herein referred to as the "Decrees")
of any court or governmental authority binding upon the Company
and copies of the Decrees. Copies of all such certificates referred to
in this paragraph have been delivered to you for your examination
and review.
Based upon and in reliance on the foregoing, and having regard
to the legal considerations of Applicable Law which we deem
relevant, and subject to the assumptions, exceptions, qualification,
limitations and understandings contained herein, we are of the
opinion that:
H-3
__________ __, 1995
Page 4
1. Each of the Company and SJPC is a corporation validly
existing and in good standing under the laws of its jurisdiction of
incorporation. The Company has all required corporate power and
authority to carry on the [Container or Mill] Business as now
conducted by it and to own any of the [Container or Mill] Assets
owned by it. The Company is duly qualified or licensed to do
business and is in good standing in each jurisdiction where the
character of the property owned or leased by it or the nature of its
activities make such qualification necessary, except where failure to
be so qualified would not, individually or in the aggregate, have a
Material Adverse Effect from and after the Closing Date.
2. The execution and delivery of the Agreement by the
Company and SJPC, the execution and delivery of the Ancillary
Agreements by the Company, and the performance by each of the
Company and SJPC of its obligations under the Agreement and each
of the Ancillary Agreements to which it is a party and the
consummation of the transactions contemplated thereby (i) are
within such corporation's corporate powers and (ii) have been duly
authorized by all necessary corporate action on the part of each such
corporation. The Agreement and each of the Ancillary Agreements
have been duly and validly executed by each of the Company and
SJPC which is a party thereto.
3. Each of the Agreement and the Ancillary Agreements to
which it is a party constitutes a valid and binding agreement of each
of the Company and SJPC, enforceable against it in accordance with
its terms
H-4
__________ __, 1995
Page 5
except that (i) such enforcement may be subject to bankruptcy,
insolvency, reorganization, moratorium (whether general or specific)
or other similar laws now or hereafter in effect relating to creditor's
rights generally, (ii) such enforcement may be subject to general
equitable principles, and (iii) the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to
equitable defenses and to the discretion of the court before which
any proceeding therefor may be brought.
4. Neither the execution and delivery of the Agreement by the Company nor
consummation by the Company of the transactions
contemplated thereby nor compliance the Company with the
provisions thereof (i) conflicts with or results in a breach of any provision
of
the certificate of incorporation or by-laws of the Company, (ii) assuming
the obtaining of all Consents, results in a breach of or constitutes a
default under any of the Contracts, or (iii) violates any of the Decrees or any
provision of Applicable Law or regulation as currently in effect.
5. Except for (i) filings under the HSR Act, (ii) those permits
and licenses identified in Section 4.10(a) of the Disclosure Schedule and
(iii) the Consents, no notice to or filing with, and no permit,
authorization, consent or approval of, any Person is necessary for the
execution,
delivery and performance of the Agreement by the Company and SJPC or for the
consummation by the Company of the transactions contemplated thereby.
6. The instruments of assignment, transfer and conveyance
delivered by the Company to Buyer pursuant to the Agreement have been duly
H-5
___________ __, 1995
Page 6
authorized by all necessary corporate action of the Company,
executed and delivered by the Company, and effectively vest in Buyer all right,
title and interest of the Company in and to the assets assigned, transferred
and conveyed thereby.
The foregoing opinions are subject to the following assumptions,
exceptions, qualifications and limitations, as applicable.
A. With respect to the assumptions contained herein, our
reliance and the extent of our reliance on the certificates and other
documents referred to herein, and the limitations herein set forth with respect
to the scope of our opinions, each has been made with your permission and
consent.
B. Pursuant to your agreement as expressed by your
acceptance of this opinion letter and the closing of the transactions
contemplated
hereby, we have no obligation to supplement this opinion after the
date hereof if any law changes after the date hereof or if we become
aware of any facts that affect the opinions expressed herein.
This opinion may be relied upon by [FMC or JV] and its lenders
and outside equity investors and by their respective counsel with respect
to the Agreement and is not to be relied upon by any governmental
agency or any other person or entity without our prior written consent.
Subject to any obligations to the contrary imposed on you by law, this
opinion is
H-6
__________ __,1995
Page 7
not to be used, circulated, quoted or referred to without our prior
written consent.
Very truly yours,
H-7
Exhibit I
1. IMPLEMENTATION SCHEDULE AND BUDGETS
FORTHE REMEDIATION PROJECT. If as a result of a Environmental
Liabilities, Buyer is required to implement any construction,
remediation, closure, or disposal projects Buyer shall propose to Seller a
Plan for
such work. Prior to the implementation of each Plan developed, Buyer
shall provide Seller with a comprehensive schedule showing in reasonable
detail the remedial and other actions to be taken by Buyer to comply with
such Plans and a budget showing the estimated timing and estimated
amount of expenditures required to implement the Plans (including any
applicable Governmental Fines). Seller and Buyer from time to time shall meet
and consult with one another fully with respect to each such schedule
and budget and, not less than once each calendar quarter commencing
with the first full calendar quarter after Closing and continuing as long
as Seller is obligated to make payments under Section 11.05 (the
"Contribution Period"), Buyer shall provide Seller with an updated
comprehensive schedule showing in reasonable detail the current
status of all remedial and other actions undertaken by Buyer since the
Closing Date (including expenditures to date) and an updated version of said
budget. Buyer shall only be required to obtain Seller's approval
(which shall not be unreasonably withheld or delayed) of a budget and
schedule prior to proceeding with the work involved if it is then projected or
estimated to have a cost in excess of $50,000.00. Seller shall be
deemed to have approved such budget and schedule unless Seller shall have
objected thereto by notice to Buyer within twenty (20) days following
Seller's receipt thereof setting forth in reasonable detail the basis for
Seller's objections.
2. PAYMENT PROCEDURES. On or before the 15th day
of each month during the Contribution Period, Buyer shall provide
Seller with a schedule setting forth amounts paid during the preceding
month for goods or services actually provided or performed or damages or
expenses paid that constitute Environmental Liabilities. Buyer shall
also provide Seller with copies of invoices and such other supporting data
as Seller may reasonably request regarding the amounts set forth in
such schedule. Subject to paragraph 3, payment for such amounts shall
be due from Seller on or before the last day of the month immediately
following the month during which the schedule is received by Seller.
3. ARBITRATION. If a dispute shall arise between the
parties concerning (a) whether Seller's approval of a budget and schedule or
any portion thereof (where such approval is required pursuant to
paragraph 1), has reasonably been withheld, or (b) whether an amount
submitted to Seller for payment pursuant to paragraph 2 as remediation,
disposal,
closure or construction costs for work performed by Buyer is an
Environmental Liability and a reasonable and necessary cost for
curing or remediating that Environmental Liability, then either Seller or
Buyer shall have the right to notify (the "Trigger Notice") the other (the
"Notified Party") that the notifying party (the "Notifying Party") is
electing to submit the dispute to arbitration. Three arbitrators will
be
I-2
selected from arbitrators approved by the American Arbitration
Association with each party selecting an arbitrator and the two
arbitrators selecting a third arbitrator. The arbitrators shall give the
parties
reasonable advance notice of, and shall convene, a hearing after their
selection, at which each party may submit evidence in such form and
in accordance with such procedures as the arbitrators shall designate.
The arbitrators shall render their decision in writing within ten days
after the conclusion of such hearing, and such decision shall be final and
binding on the parties. Such hearing shall be held in Jacksonville, Florida
and the fees and expenses of such arbitrators shall, unless the arbitrators
otherwise decide, be borne equally by the parties.
I-3
Exhibit J
PROPERTY ACCESS AGREEMENT
___________________________________________________
("Buyer")
agrees with ____________________________________ ("Owner") to the
following terms for Owner's allowing Buyer to conduct surveying,
sampling, testing, and other work on the Real Property (as defined
in Section 1.01 of the Asset Purchase Agreement) at [Insert Addresses]
(the "Property") for purposes of complying with Section 11.05 of the Asset
Purchase Agreement.
1. CONDITIONS OF BUYER'S WORK
a. Prior to the commencement of sampling and testing
procedures by any person under Buyer's direct or indirect
employ or supervision on the Property, Buyer will provide
Owner with a written plan detailing the sampling and testing
procedures Buyer will use,including a site map showing the
location of every sampling event anticipated. After providing
Owner with such plans and schedules, Buyer will notify
Owner or Owner's representative of any changes to the
sampling and testing schedule, as such changes become
necessary. Notice of changes to the and schedules shall be
made as promptly after made as possible, and every
reasonable effort shall be made to provide notice of such
changes at least 48 hours in advance of the date
of the proposed new sampling event or the date of the
superseded sampling event, whichever is earlier, by providing
telephone notice to Owner at [phonenumber] or written notice
via telecopy to [fax].
b. Buyer shall limit its sampling procedures to
environmental media and waste-related residues to the
extent necessary to determine the (i) presence and location of
hazardous wastes of the type it may be alleged to be on the
Property (ii) character of air emissions, (iii) character of
wastewater. Owner shall not be required to alter ongoing
operations to permit sampling desired by Buyer.
c. Buyer shall assume that no person entering upon the
Property under authority of this Agreement will: (1) disturb
any soils, vegetation, or structures, except as necessary to
conduct the work authorized; (2) release, dispose, discard, or
fail to remove from the Property any soil samples, equipment,
tools, materials, or other objects, except as necessary to
conduct the work authorized; or (3) violate any rule or
regulation of the United States Environmental Protection
Agency, the Regulatory Authority, or other
governmental agencies.
J-2
d. Buyer agrees to hold harmless, release, defend and
fully
indemnify Owner against all Losses arising out
of (1) any violation by Buyer or its agents of
paragraph 1(c) above and (2) any cause of action
resulting in whole or in part from the acts or
omissions of Buyer or Buyer's agents during their
investigation of the Property, regardless of any
concurrent negligence on the part of Seller and
regardless of the form of claim be it at commonlaw,
strict liability, negligence or under any statute or
regulation. For purposes of this paragraph "Losses"
shall mean any and all fines or penalties, liabilities,
damages, claims, causes of action, and losses,
including, but not limited to remedial, removal,
response, cleanup, disposal investigative and
monitoring costs, personal injury damages, property
damages, natural resource damages, punitive and
exemplary damages, all attorneys fees and costs
incurred, and expert and engineering fees and costs.
e. Any soil or water samples taken by Buyer from the
Property become the sole property and possession of
Buyer and will be managed consistent with the
applicable rules and regulations of the State
Authority or the EPA. For purposes of this
J-3
Agreement, a soil sample occurs when any amount of
soil or liquid has been extracted from its in situ
subsurface or surface placement for testing purposes
by any mechanical means or by hand. Upon 24 hour
advance notice to Buyer and at the sole expense of
Owner, Buyer shall permit Owner to collect "split
samples" of any samples taken by Buyer; provided,
however, that Owner in taking "split samples" shall
not alter or delay any work or work schedule
established by or for implementation of the Plan, so
long as Owner has been notified by Buyer of any
changes to the schedules in accordance with
paragraph 1(a) above.
f. Buyer will return all areas where sampling was done
to the conditions existing when testing was
commenced. Buyer will grout all boring holes for
monitoring xxxxx, if such xxxxx be necessary, in
accordance with good engineering practice. Failure
by Buyer to comply with this subsection within a
reasonable time period will entitle Owner to proceed
with such work at Buyer's expense. Except for
possible monitoring xxxxx and similar equipment
required to remain on site for continued remedial
investigation or remedial work Buyer will remove all
J-4
of its other equipment, tools, materials, soil samples,
or other objects at the completion of the investigation,
unless otherwise agreed by Owner.
g. Buyer agrees that Buyer, and Buyer's employees,
agents or contractors shall exercise due care with
respect to the property and its condition, taking into
consideration the characteristics of any wastes or
substances found thereon, and in light of all relevant
fact and circumstances. Specifically, but without
limitation, when handling any solid waste or
hazardous substances discovered on the Property
during implementation of the Plan, Buyer and
Buyer's employees, agents or contractors shall handle
such waste or substances in accordance with all
applicable laws and regulations.
h. Buyer acknowledges that all of the terms of this
Agreement apply to Buyer's employees, agents,
contractors, contractor's subcontractors, and invitees
on the Property.
i. Buyer shall insure that its consultants are properly
qualified for the task assigned. Buyer shall deliver to
Owner, for all consultants who shall enter the
Property, policies of insurance in a form and an
amount reasonably satisfactory to Owner.
J-5
2. TERM OF WORK
This Agreement shall commence on the date of execution of
the Asset Purchase Agreement, and shall expire no later
than sixty-five (65) days thereafter, unless extended by
agreement of the parties in the form of a written letter
agreement executed by same.
3. CONFIDENTIALITY
Buyer shall maintain as confidential and shall not disclose
(without the prior written agreement of Seller) the results
of Seller's inspection, testing, analysis, study, or conclusion
about or for Environmental Liabilities ("Confidential
Information") to any person or Regulatory Authority
(without the prior written agreement of Seller.) If any court
or administrative agency subpoenas or orders production of
any confidential Information it shall immediately notify
Seller of the pendency of such subpoena or demand and
shall, to the extent appropriate and requested by Seller,
assist Seller in preserving the information confidential.
4. DEFINITIONS
"Regulatory Authorities" shall mean any federal, state, or local or
municipal government with authority to regulate environmental
matters, including waste handling and disposal, air emissions, and
wastewater disposal.
J-6
"Environmental Liabilities" and "Real Property" shall have the same
meanings provided in the Asset Purchase Agreement.
SIGNED this ____ day of ___________________, 1995.
FOR:
_________________________________________
By:_________________________________
SIGNED this ____ day of ___________________, 1994.
FOR:
By:_________________________________
STATE OF ___________
COUNTY OF ___________
J-7
This instrument was acknowledged before me on the ____ day
of
____________, 1994, by
____________________________________________,
______________________ for ____________________________________.
_____________________________________
Notary Public in and for
the
State of
____________________
STATE OF ___________
COUNTY OF ___________
This instrument was acknowledged before me on the ____ day
of
____________, 1994, by __________________________________,
______________________ for ____________________________.
____________________________________
Notary Public in and for
the
State of
_____________________
J-8
