Exhibit 2.2
45 pages
GERMAN PURCHASE AGREEMENT
BETWEEN
BUCKEYE TECHNOLOGIES INC.
BUCKEYE STEINFURT GmbH
BUCKEYE HOLDINGS GmbH
AND
WALKISOFT GMBH
UPM-KYMMENE OYJ
PREAMBLE
1. Whereas, the Seller, an indirect wholly-owned subsidiary of UPM, is
engaged in the production and worldwide distribution of non-wovens
(Vliesstoffe) and related products. Seller conducts its business from
its partly owned and partly leased facilities in Steinfurt.
2. Whereas, the Buyer is a wholly-owned subsidiary of Buckeye Holdings,
the registered share capital of which amounts to 25,000, consists
of two shares in the par value of 12,500 each and is fully paid
in.
3. Whereas, Buckeye Holdings is a wholly-owned subsidiary of Buckeye Inc.,
the registered share capital of which amounts to 25,000, consists
of two shares in the par value of 12,500 each and is fully paid
in.
4. Whereas, the Seller is interested in selling and transferring and the
Buyer, based upon the representations and warranties and other
indemnities made by the Seller in this Agreement, is interested in
buying the business of the Seller with all assets, contracts and
personnel, except as specifically excluded from the purchase hereafter
as well as certain liabilities as specified hereinafter (such business
hereinafter referred to as the "Sold Business") on the terms and
conditions set forth in this Agreement.
5. Whereas, the German Federal Cartel Office has cleared the transactions
agreed herein by clearance letter dated August 26, 1999, a copy of
which is attached hereto as Annex I.
NOW THEREFORE, the parties hereby agree as follows:
2.2-2
1. Definitions.
"Accounts Receivable" has the meaning set forth in Section 2 (a) (iv)
below.
"Acquired Assets" has the meaning set forth in Section 2 below.
"Adverse Consequences" means all actions, suits, proceedings, hearings,
investigations, charges, complaints, claims, demands, injunctions, judgments,
orders, decrees, rulings, damages, dues, penalties, fines, costs, amounts paid
in settlement, diminution in value, Liabilities, obligations, Taxes, liens,
losses, expenses, and fees, including court costs and attorneys' fees and
expenses, net of any actual insurance or other third party recoveries.
"Affiliated Companies" has the meaning set forth in Section 3(b)(i)
below.
"Ancillary Agreements" shall mean the following agreements:
(1) The Notarial Deed attached hereto as Exhibit A;
(2) Share Pledge Agreement attached hereto as Exhibit B;
"Assigned Contracts" has the meaning set forth in Section 4(a) below.
"Assumed Liabilities" has the meaning set forth in Section 3(a) below.
"Basis" means any past or present fact, situation, circumstance,
status, condition, activity, practice, plan, occurrence, event, incident,
action, failure to act, or transaction that forms or could form the basis for
any specified consequence.
"Buyer" has the meaning set forth in the preface above.
"Closing" has the meaning set forth in Section 10(c) below.
"Closing Date" has the meaning set forth in Section 10(c) below.
"Code" means the German Tax Code (Abgabenordnung - AO), as amended.
"Designated Accruals" shall mean those accrued liabilities incurred in
the Ordinary Course of Business and specifically assumed by Buyer as described
in Exhibit C attached hereto.
2.2-3
"Disclosure Schedule" has the meaning set forth in Section 6 below.
"Effective Date" has the meaning set forth in Section 2(a) below.
"Environmental, Health and Safety Liabilities" means any Liability or
other responsibility arising from or under Environmental, Health and Safety
Requirements and consisting of or relating to: (a) any environmental, health, or
safety matters or conditions (including on-site or off-site contamination,
occupational safety and health, and regulation of chemical substances or
products); (b) fines, penalties, judgments, awards, settlements, legal or
administrative proceedings, damages, losses, claims and demands arising under
Environmental, Health and Safety Requirements; (c) financial responsibility
under Environmental, Health and Safety Requirements for cleanup costs or
corrective action, including any investigation, cleanup, removal, containment,
or other remediation or response actions (collectively, a "Cleanup") required by
applicable Environmental, Health and Safety Requirements and for any natural
resource damages; or (d) any other compliance, corrective, investigative, or
remedial measures required under Environmental, Health and Safety Requirements.
"Environmental, Health, and Safety Requirements" shall mean all
federal, state, local and foreign statutes, regulations, ordinances and other
provisions having the force or effect of law or administrative decree
(Rechtsverordnung), all judicial and administrative orders and determinations,
all contractual obligations and all legal provisions concerning public health
and safety, worker health and safety, and pollution or protection of the
environment, including without limitation all those relating to the presence,
use, production, generation, handling, transportation, treatment, storage,
disposal, distribution, labeling, testing, processing, discharge, release,
threatened release, control, or Cleanup of any hazardous materials, substances
or wastes, chemical substances or mixtures, pesticides, pollutants,
contaminants, toxic chemicals, petroleum products or byproducts, asbestos,
polychlorinated biphenyls, noise or radiation, each as amended and as now or
hereafter in effect.
"Facilities" means any real property, leaseholds, or other interests
currently owned or operated by the Seller in Steinfurt and any buildings,
plants, structures, or equipment (including motor vehicles, tank cars, and
rolling stock) currently owned or operated by the Seller in Steinfurt.
"Financial Statements" has the meaning set forth in Section 6(g) below.
"GAAP" means accounting, valuation and depreciation principles
generally accepted in the Federal Republic of Germany as in effect from time to
time and consistently applied.
"Hazardous Activities" means the distribution, generation, disposal,
handling, importing, management, manufacturing, processing, production,
refinement, release, storage, transfer, transportation, treatment, or use
(including any withdrawal or other use of groundwater) of
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Hazardous Materials in, on, under, about, or from the Facilities or any part
thereof into the environment.
"Hazardous Materials" means any toxic materials, pollutants,
contaminants or radioactive, water endangering or other hazardous substances or
wastes of any kind whatsoever.
"Initial Payment" has the meaning set forth in Section 5(d) below.
"Intellectual Property" means (a) all inventions (whether patentable or
unpatentable and whether or not reduced to practice), all improvements thereto,
and all patents, patent applications, and patent disclosures, together with all
reissuances, continuations, continuations-in-part, revisions, extensions, and
reexaminations thereof, (b) subject to the provisions of Section 12 (a), all
trademarks, service marks, trade dress, logos, trade names, and corporate names
and fictitious or assumed name registrations, together with all translations,
adaptations, derivations, and combinations thereof and including all goodwill
associated therewith, and all applications, registrations, and renewals in
connection therewith, (c) all copyrightable works, all copyrights, and all
applications, registrations, and renewals in connection therewith, to the extent
these are transferable, (d) all mask works and all applications, registrations,
and renewals in connection therewith, (e) all trade secrets and confidential
business information (including ideas, research and development, know-how,
formulas, compositions, manufacturing and production processes and techniques,
technical data, designs, drawings, specifications, customer and supplier lists,
pricing and cost information, and business and marketing plans and proposals),
(f) all computer software (including data and related documentation), but
excluding any UPM proprietary software used outside of the Sold Business, (g)
all other proprietary rights, (h) all copies and tangible embodiments thereof
(in whatever form or medium) and (i) employee invention and discovery files and
logs.
"Inventory" has the meaning set forth in Section 2(a)(iii) below.
"Knowledge" means actual knowledge after reasonable investigation of
the officers, directors and managers of the Seller (including, without
limitation, Xxxx Xxxxxx) and the following other designated persons: Xxxxxx
Xxxxxx, Jaakko Rislakki, Xxxxx Xxxxxxxx, Jaakko Palsanen, Xxxxxx Xxxxxx, Xxxxxx
Xxxxxxx, Xxxxxx Xxxxxxxxxx, Xxxxxx Xxxxxx and Sirpa-Xxxxxx Xxxxxxxx.
"Liability" means any obligation or liability (whether known or
unknown, whether asserted or unasserted, whether absolute or contingent, whether
accrued or unaccrued, whether liquidated or unliquidated, and whether due or to
become due including any liability for Taxes.
"Minimum Net Working Capital" has the meaning set forth in Section
5(c) below.
"Most Recent Balance Sheet" means the balance sheet contained within
the Most Recent Financial Statements.
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"Most Recent Financial Statements" has the meaning set forth in
Section 6(g) below.
"Most Recent Fiscal Month End" has the meaning set forth in Section
6(g) below.
"Most Recent Fiscal Year End" has the meaning set forth in Section
6(g) below.
"Net Working Capital" means the aggregate value as of the Effective
Date in U.S. Dollars of (i) the Inventory and accounts receivable (net of any
customer pre-payments) assigned to the Buyer hereunder, minus (ii) Trade
Payables and Designated Accruals. For purposes of this definition, Inventory
shall be valued as of the Effective Date in U.S. Dollars at the lower of (a)
fair market value or (b) the actual cost of the Inventory reflected on the books
and records of Seller (which shall be prepared in accordance with GAAP), except
that for the purpose hereof, all spare parts, wires, xxxxx, fabrics and other
items carried as inventory on Seller's financial records (other than Inventory)
and used in the Sold Business shall not be taken into account. Accounts
receivable shall be valued as of the Closing Date in U.S. Dollars from the books
and records of the Seller. In the event the Parties fail to agree on the
Inventory valuation, the Buyer and Seller will request their respective
independent accounting firms to resolve the issues, and if the accounting firms
fail to do so within sixty (60) days of the date the Parties submitted the
issues to them, the Buyer and Seller will submit the unresolved issues to an
expert arbitrator to be appointed upon application of either party by the
President of the Institut der Wirtschaftsprufer in Deutschland e.V. (Institute
of Chartered Accountants), Dusseldorf. To the extent any currency conversions
are required, the exchange rates in effect on the Frankfurt Stock Exchange as of
the close of business on the date immediately preceding the Effective Date shall
be used.
"Ordinary Course of Business" means the ordinary course of business
consistent with past custom and practice (including with respect to quantity and
frequency).
"Person" means an individual, a civil law partnership (GbR), a general
or limited partnership (Personenhandelsgesellschaft), a corporation
(Kapitalgesellschaft), an association (Verein), a trust, a joint venture, an
unincorporated organization, or a governmental entity (or any department,
agency, or political subdivision thereof).
"Share Pledge Agreement" is the agreement attached as Exhibit B.
"Purchase Price" has the meaning set forth in Section 5(a) below.
"Security Interest" means any mortgage, pledge, lien, encumbrance,
charge, or other security interest, other than (a) mechanic's/materialmen's
(Werkunternehmerpfandrecht), landlord's liens (Vermieterpfandrecht), and similar
liens acceptable to Buyer, (b) liens for Taxes not yet due and payable, (c)
purchase money liens and liens securing rental payments under capital lease
arrangements, and (d) other liens arising in the Ordinary Course of Business and
not incurred in connection with the borrowing of money.
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"Seller" has the meaning set forth in the preface above.
"Sold Business" has the meaning set forth in Section 4 of the Preamble
hereof.
"Sold Real Estate" has the meaning set forth in Section 2(a)(i) below.
"Tax" means any federal, state, local, or foreign income, gross
receipts, license, payroll, employment, excise, severance, stamp, occupation,
premium, windfall profits, environmental, customs duties, capital stock,
franchise, profits, withholding, social security (or similar), unemployment,
disability, real property, personal property, sales, use, transfer,
registration, value added, alternative or add-on minimum, estimated, or other
tax, charge and/or other public due of any kind whatsoever, including any
interest, penalty, or addition thereto, whether disputed or not.
"Tax Return" means any return, declaration, report, claim for refund,
or information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.
"Trade Payables" means all accounts payable incurred by Seller in the
Ordinary Course of Business.
2. Sale and Transfer of the Acquired Assets
(a) With effect of October 1, 1999, 0.00 hrs (the "Effective Date"), the
Seller hereby sells to the Buyer, who accepts such sale, the entire
tangible and intangible assets owned by the Seller on the Effective
Date, except as specifically excluded from the sale and purchase
pursuant to other provisions of this Agreement (such sold assets
hereinafter referred to as the "Acquired Assets").
The Acquired Assets shall include:
(i) the real estate registered at the Magistrates Court of
Steinfurt in the Land Register for Burgsteinfurt, Sheet Nos.
4518 and 4321 together with all buildings, fixtures and
improvements located on, and forming part of, such real estate
and all rights pertaining thereto (hereinafter referred to as
the "Sold Real Estate") as follows:
2.2-7
(ai) Sheet No. 4518
Entry Size (sqm)
No. Boundary Field (Flur)/ Description
(Gemarkung) Lot (Flurstuck)
1 Burgsteinfurt 43/214 fields 9,001
Meteler Stiege
The following encumbrance is registered on the Sold Real
Estate in Part II of the Land Register:
Encumbered
Entry No. Real Estate
Entry No. Encumbrance Holder
1 1 limited personal Stadtwerke
servitude (duty Steinfurt
to tolerate a gas GmbH,
pipeline) Steinfurt
No encumbrances are registered in Part III of the Land Register.
(aii) Sheet No. 4321
Entry Size
No. Boundary Field/ Description (sqm)
Xxx
00 Xxxxxxxxxxxxx 00/000 xxxxxxxx and vacant 2,538
area agriculture and
forestry,
Meteler Stiege,
Dieselstra(beta)e 16
11 Burgsteinfurt 43/396 building and vacant 11,294
area, commercial and
industrial businesses,
Meteler Stiege,
Dieselstra(beta)e 16
2.2-8
Entry Size
No. Boundary Field/ Description (sqm)
Xxx
00 Xxxxxxxxxxxxx 00/000 xxxxxxxx and vacant 49,762
area, commercial and
industrial businesses,
Meteler Stiege,
Dieselstra(beta)e 16
The following encumbrance is registered on the Sold Real
Estate in Part II of the Land Register:
Encumbered
Entry Real Estate
No. Entry No. Encumbrance Holder
1 12 priority notice in City of
order to secure the Steinfurt
claim regarding the
retransfer of title
No encumbrances are registered in Part III of the Land
Register.
(ii) all other tangible fixed assets owned by the Seller on the
Effective Date, including all machinery and equipment, tools,
fixtures, fittings, vehicles, EDP hardware, plant and office
equipment, spare parts, supplies, small value items and all
other tangible fixed assets, whether located on the Sold Real
Estate, in warehouses or sales and service offices of the
Seller in other locations, with German or foreign distributors
or agents of the Seller, with suppliers and/or customers of
the Seller or with third parties; Exhibit D hereto contains a
list of such tangible fixed assets as of September 27, 1999;
(iii) all inventories of raw materials and packaging materials (in
particular including, without limitation, wood pulp, other
fibers, binders and superabsorbent polymers) and finished
products and services and merchandise owned by the Seller on
the Effective Date, wherever located, including but not
limited to consignment stocks kept with customers and the
2.2-9
warehouses located at Rheine, Bremen, Bremerhaven, Brake,
Pforzheim, Borghorst and Liverpool UK, as set forth in Exhibit
E hereto (hereinafter referred to as "Inventory");
(iv) all accounts receivable, net of customer pre-payments
pursuant to Section 2(b) below (hereinafter referred to as
"Accounts Receivable"), all other rights and claims of any
type, including but not limited to those from all other
pre-payments, deposits, those for the transfer of title to
assets of the type sold hereunder and those for the exclusive
or non-exclusive use or joint use of tangible and intangible
assets of any type whatsoever, all rights and claims resulting
from contracts taken over by the Buyer pursuant to Section 4
below, all insurance claims, all claims for the payment of
subsidies, grants and comparable benefits and all other
current assets, all to the extent that they are owned by the
Seller on the Effective Date, except as specifically excluded
from the sale and purchase in other provisions of this
Agreement; all ancillary and preferential rights within the
meaning ofss. 401 German Civil Code and all supporting rights
and ancillary security rights existing in respect of the
accounts receivable, rights and claims sold pursuant to this
paragraph (iv);
(v) all Intellectual Property, transferable public and private
concessions, permissions, authorizations and licenses,
transferable EDP software, goodwill, supplier and customer
relations and other intangible assets, all to the extent that
they are owned by the Seller on the Effective Date, except as
specifically excluded from the sale and purchase in other
provisions of this Agreement;
(vi) all books and business records (other than corporate records),
drawings, supplier and customer lists, sales aids and
literature and other documentation owned by the Seller on the
Effective Date, except as specifically excluded from the sale
and purchase in other provisions of this Agreement;
(b) The following assets of the Seller shall be specifically excluded from the
sale and purchase:
(i) all shares, if any, in other companies, other securities and
other financial investments;
(ii) all claims for the reimbursement of taxes for the period
prior to the Effective Date;
(iii) any notes receivables of Seller, unless specifically assumed
by Buyer, any cash, cash equivalents (including customer
pre-payments) or marketable securities of Seller.
2.2-10
(c) The following is hereby agreed in respect of the Sold Real Estate:
(i) The Buyer assumes the encumbrance listed in Part II of the
Land Register/Sheet No. 4518 referred to in Section 2
(a) (i) (ai) above.
The Buyer does not assume the encumbrance listed in Part II of
the Land Register/Sheet No. 4321 referred to in Section 2 (a)
(i) (aii), which shall be deleted. Seller undertakes to
procure that the City of Steinfurt provide all declarations
required for such deletion in proper legal form as soon as
possible after the date hereof.
The Buyer assumes building restrictions, servitudes predating
the present Land Register system which are not registered in
the Land Register, neighboring restrictions and other
encumbrances and obligations not apt to be registered in the
Land Register, if any. Other encumbrances of any type
whatsoever, including but not limited to those in Parts II and
III of the Land Register, shall not be assumed by the Buyer
(except for the one referred to in Section 2 (a) (i) (ai)
above).
(ii) Benefits, costs and risks shall pass to the Buyer as of the
Effective Date.
(iii) Development costs, assessments and charges according to the
Community Charges Code (Kommunalabgabengesetz) for measures
which have been carried out prior to the Effective Date shall
be borne by the Seller. All other such costs, assessments and
charges shall be borne by the Buyer.
(d) (i) The Seller and the Buyer undertake to transfer the Sold Real
Estate to the Buyer, and the Seller undertakes to grant a
priority notice (Auflassungs-vormerkung) pursuant to ss. 883
Civil Code in respect of the Sold Real Estate by establishing
as soon as possible after the date hereof the Notarial Deed
before the German Notary Xxxx Xxxxxx or Xxxxxx Xxxxxxxx or
their official deputies in Cologne, substantially in
accordance with the draft set forth in Exhibit A hereto.
(ii) The Seller and the Buyer hereby agree that title to, and
possession of, the Acquired Assets (except the Sold Real
Estate, the transfer of which is covered in paragraph (i)
above), shall pass to the Buyer as of the Effective Date. The
transfer of possession shall be effected by a joint inspection
and delivery of such assets. To the extent that any such
assets are in the possession of third parties, the Seller
hereby assigns to the Buyer, who accepts such assignment, its
entire rights and claims against such third parties for the
delivery of such assets.
2.2-11
(iii) To the extent that separate or particular documents or
instruments or any other steps are required or useful to
effect or document the transfer of the assets sold to the
Buyer pursuant to this Agreement, the parties agree to execute
all such documents and instruments and take all such steps
without further compensation promptly upon request by any
party.
(e) The Seller shall co-operate with the Buyer in notifying after the
Effective Date the debtors of rights and claims sold to the Buyer
pursuant to this Agreement and/or any other third parties who hold
title to, or rights in, or are in possession of, the assets sold to the
Buyer pursuant to this Agreement.
3. Assumption of Obligations and Liabilities and Indemnification of the
Seller and the Buyer
(a) With effect of the Effective Date the Buyer hereby assumes the
following obligations and Liabilities of the Seller pertaining
exclusively to the Sold Business which exist on the Effective Date:
(i) all Trade Payables and Designated Accruals of the Seller which
exist on the Effective Date, except as specifically excluded
from the assumption pursuant to other provisions of this
Agreement, but only to the extent included in the computation
of the Net Working Capital pursuant to Section 5 (c) below;
(ii) all obligations and Liabilities resulting from the contracts
and other arrangements taken over by the Buyer pursuant to
Section 4 below, but only to the extent they (x) have been
incurred in the Ordinary Course of Business and (y) are listed
in Exhibit G hereto
(the obligations and Liabilities pursuant to paras (i) and
(ii) above hereinafter collectively referred to as "Assumed
Liabilities").
(b) All other obligations and Liabilities of the Seller, whether accrued,
absolute, contingent or otherwise which exist on the Effective Date or
arise thereafter from acts, omissions or circumstances prior to the
Effective Date, shall be specifically excluded from the assumption,
including, without limitation thereto:
(i) all obligations and Liabilities (other than Trade Payables) to
UPM and its associated companies within the meaning of xx.xx.
15 et seq. of the German Stock Corporation Act other than the
Seller (UPM and such associated companies hereinafter referred
to as "Affiliated Companies");
2.2-12
(ii) all obligations and Liabilities regarding Taxes payable in
respect of the period prior to the Effective Date,
irrespective of when the underlying claims may arise or may be
raised with the Seller or the Buyer, as well as all
obligations, if any, for the repayment of subsidies, grants
and comparable benefits;
(iii) all obligations and Liabilities under product liability and/or
contractual warranty regulations or arrangements arising from
products produced in the period prior to the Effective Date;
(iv) all obligations and Liabilities arising from or under
Environmental, Health and Safety Requirements.
(c) The provisions in Sections 2(e) above and Section 4(c)(i) and (ii) and 4(d)
below shall apply mutatis mutandis.
(d) (i) The Buyer undertakes to indemnify the Seller and UPM after the
Effective Date from and against all obligations and
Liabilities of the Seller and from all interest, penalties
and costs in respect thereof which (x) the Buyer has
assumed pursuant to the express provisions of this
Agreement or (y) result from the conduct of the Sold Business
by the Buyer after the Effective Date.
(ii) The Seller undertakes to indemnify the Buyer after the
Effective Date from and against all obligations and
Liabilities of the Seller and from all interest, penalties and
costs in respect thereof which the Buyer has not assumed
pursuant to this Agreement.
4. Assignment of Contracts.
(a) Effective as of the Effective Date, the Seller hereby assigns and the
Buyer hereby takes over those contracts (including written and verbal
contracts, agreements, orders arrangements as well as pending offers
made by or to the Seller) of the Seller pertaining exclusively or
primarily to the Sold Business as described hereinbelow, with all
rights and claims as well as all obligations and Liabilities resulting
therefrom, except as specifically excluded from the assignment pursuant
to other provisions of this Agreement (the "Assigned Contracts").
The Assigned Contracts shall only include the following contracts
existing on the Effective Date:
(i) all employment and other contracts with all employees and
workers employed by the Seller on the Effective Date,
including the employment with Seller's sole managing director
Xx. Xxx Xxxxxxx, except as provided otherwise in Section 4 (b)
2.2-13
(i) below, all as listed in Exhibit F hereto. Exhibit F
contains complete and correct lists of all such employees,
and, to the extent applicable, their pension benefits, their
signature authorizations, the material contract terms of all
employees and workers.
The Seller and the Buyer acknowledge that the employment
relationships with these employees and workers, with all
rights and obligations, will pass to the Buyer pursuant to ss.
613a Civil Code as a result of the purchase of the Sold
Business as of the Effective Date as a matter of law;
(ii) all contracts of the Seller with suppliers and customers
listed in Exhibit G hereto as well as all pending offers made
by or to the Seller made in the Ordinary Course of Business;
(iii) the contracts of the Seller with distributors, agents and
advisers listed in Exhibit G hereto;
(iv) the license and co-operation contracts of the Seller listed
in Exhibit G hereto;
(v) those lease, leasing and rental contracts of the Seller and
its contracts with public utilities listed in Exhibit G
hereto;
(b) All other contracts of the Seller shall be specifically excluded from the
assignment, including, without limitation:
(i) all employment or other contracts with any present or former
employee or worker of the Seller who is not listed in Exhibit
F. If the employment of any employee or worker ends on the
Effective Date, he shall also not belong to the personnel
whose employment and other contracts are hereby assigned to
the Buyer;
(ii) all contracts between the Seller and Affiliated Companies
except for contracts of the type set forth in Section (a) (ii)
to (v) above listed in Exhibit G.;
(iii) all contracts covering or relating to assets and/or
obligations and liabilities which have been excluded from the
sale and purchase pursuant to Sections 2 and 3 above.
(c) (i) The parties shall use their best efforts to obtain the
consents of the other contractual parties to the assignments
of the Assigned Contracts.
(ii) If the other party to an Assigned Contract refuses its
consent to the assignment of such contract to the Buyer,
the respective contract shall be assigned in the
2.2-14
internal relationship between the Seller and the Buyer, with
the consequence that the Buyer, to the extent that this is
legally permissible and in practice possible, shall
perform the Assigned Contract and accept performance of such
contract by the other contractual party on behalf
of the Seller but for the account of the Buyer. If as a
result of the sale and transfer of the Sold Business
and/or the Seller's inability to perform his obligations
under Assigned Contracts the other contractual party
terminates the contract with the Seller for cogent reason
and/or asserts a claim for breach of contract, the
Seller shall indemnify the Buyer from and against all
claims of such contractual party, including but not
limited to claims pursuant toss. 89b Commercial Code, and
from all interest, penalties and costs in connection
therewith. This paragraph (ii) shall not apply in the cases
covered by paragraph (iii) below.
(iii) If an employee or worker passing to the Buyer pursuant to ss.
613a Civil Code should refuse to be transferred, such employee
or worker (and all contractual arrangements of any type
whatsoever existing between the Seller and such employee or
worker) shall remain with the Seller and his continued
employment and termination shall be the Seller's
responsibility at the Seller's discretion.
In the event that employees or workers other than those listed
in Exhibit F hereto claim employment by the Buyer from the
Buyer, the Seller shall indemnify the Buyer from and against
all liabilities relating to or arising from the employment of
such employees as well as their termination.
(iv) To the extent that insurance contracts cover the Seller's
business and the business of Affiliated Companies, the parties
shall make appropriate arrangements to ensure that the
Seller's business continues to be properly insured and the
Buyer is not burdened with any premium covering insurance of
the business of Affiliated Companies.
(d) Rights and obligations under the Assigned Contracts, irrespective of
whether the assignment takes effect in the relation to the other
contractual party or only in the internal relation between the Seller
and the Buyer, shall concern the Seller for the period until the
Effective Date and the Buyer for the period thereafter.
5. Purchase Price.
(a) Subject to Section 5(c) below, the consideration (hereinafter referred
to as "Purchase Price") for the sale and transfer of the Sold Business
pursuant to this Agreement as well as all other obligations assumed by
the Seller and UPM in this Agreement shall amount to US$ 75,400,000 (in
words: US-dollars seventy-five-million four hundred thousand) .
2.2-15
(b) Allocation. The parties agree to allocate the Purchase Price among the
assets described herein for all purposes (including financial
accounting and tax purposes) in accordance with the schedule attached
hereto as Exhibit H.
(c) Purchase Price Adjustment. If the Net Working Capital of Seller
as of the Effective Date does not equal US$ 12,000,000
("Minimum Net Working Capital"), the Purchase Price shall be adjusted
in accordance with this paragraph (c). Prior to the Closing Date,
Buyer and Seller shall agree to an estimate of the Net Working
Capital as of the Effective Date (the "Estimated Working Capital"),
and at Closing, the Estimated Working Capital shall be used to
determine any adjustment to the Initial Payment required under
Section 5 (d) (i) below. If the Estimated Working Capital is less
than the Minimum Net Working Capital required under this Section 5 (c),
the Purchase Price shall be reduced in an amount equal to such
difference. If the Estimated Working Capital is greater than the
Minimum Net Working Capital, the Purchase Price shall be
increased in an amount equal to the difference.
As soon as practicable following the Effective Date, but not later than
thirty (30) days thereafter, Buyer and Seller shall jointly determine
the actual amount of the Net Working Capital as of the Effective Date
and shall execute a certificate of their agreement as to the Net
Working Capital as of the Effective Date. In order to finally settle
any Purchase Price adjustments as required by comparing the actual Net
Working Capital as of the Effective Date to the Estimated Working
Capital, Buyer shall promptly deliver to Seller any Purchase Price
increase in U.S. Dollars in immediately available funds by wire
transfer or Seller shall promptly deliver to Buyer any Purchase Price
decrease in U.S. Dollars in immediately available funds by wire
transfer.
(d) The Purchase Price shall be due and payable as follows:
(i) An amount of US$ 9,400,000 (in words: US-dollars nine million
four hundred thousand) shall be paid on the Closing Date (the
"Initial Payment").
(ii) an amount of US$ 22,000,000 (in words: US-dollars twenty
two million) on the second anniversary of the Effective
Date;
(iii) an amount of US$ 22,000,000(in words: US-dollars twenty two
million) on the third anniversary of the Effective Date;
(iv) an amount of US$ 22,000,000(in words: US-dollars twenty two
million) on the fourth anniversary of the Effective Date.
As security for the Seller's rights under this Section 5, Buckeye
Holdings shall execute and deliver to Seller the Share Pledge Agreement
in the form attached hereto as Exhibit B. Buckeye Inc. hereby
2.2-16
guarantees Buyer's performance of its obligations pursuant to this
Section 5 and Section 3 (d)(i) above.
(e) The Initial Payment shall not bear interest, except that to the extent
the Closing Date occurs after October 31, 1999, Buyer shall pay Seller
interest at 5% p.a. on the Initial Payment from the Effective Date
through the Closing Date. The Purchase Price payments pursuant to
Section (d)(ii) through (d)(iv) shall bear interest for the time
between the Effective Date and the date of payment at the rate of 5 %
p.a. and the interest shall be paid on the outstanding balance of the
Purchase Price on each anniversary of the Effective Date until the
Purchase Price is paid in full.
(f) Payments to the Seller shall be made by wire transfer to the account
no. 233362-264 of UPM with Xxxxxx Bank, Helsinki, Finland (SWIFT Code:
MRIT FIHH), with releasing effect vis-a-vis the Seller.
(g) The Parties operate on the assumption that the transactions as agreed
herein are exempt from German value added tax pursuant to ss. 1 Section
1 a Turnover Tax Act (UStG). To the extent that the transactions as
agreed herein, despite the parties' expectations, are subject to value
added tax, the Buyer shall pay the value added tax in addition to the
Purchase Price. The value added tax shall be due and payable as soon as
the Buyer has received from the Seller an invoice which conforms to the
provision of Section 14 Turnover Tax Act. The parties shall use their
best efforts to settle any value added tax obligation in agreement with
the tax authorities without payment by way of set-off. The Seller
undertakes not to opt in favor of the value added tax in respect of any
part of the transactions agreed herein.
(h) Seller, Buyer, and Buckeye Holdings hereby agree that Buckeye Holdings
assumes all of Buyer's obligations vis-a-vis the Seller under this
Section 5 by virtue of an assumption of debt with debt releasing effect
(Schuldubernahme mit befreiender Wirkung) and Buckeye Holdings and
Buyer are in agreement that such assumption of debt shall be treated as
a contribution into the capital reserves of Buyer within the meaning of
ss. 272 Sec. II No. 4 German Commercial Code.
6. Representations and Warranties of the Seller.
The Seller represents and warrants to the Buyer as an independent
promise of guarantee that the statements contained in this Section 6
are correct and complete as of the date of this Agreement and will be
correct and complete as of the Closing Date (as though made then and as
though the Closing Date were substituted for the date of this Agreement
throughout this Section 6), except as set forth in the disclosure
schedule accompanying this Agreement and initialed by the Parties (the
"Disclosure Schedule"). The Disclosure Schedule will be arranged in
paragraphs corresponding to the lettered and numbered paragraphs
contained in this Section 6.
2.2-17
(a) Organization of the Seller. The Seller is a GmbH (limited liability
company) duly organized, validly existing, and in good standing under
the laws of the Federal Republic of Germany.
(b) Authorization of Transaction. The Seller and UPM have the full power
and authority (including full corporate power and authority) to execute
and deliver this Agreement and the other Agreements to be signed by
Seller and UPM and to perform all obligations hereunder or thereunder.
Without limiting the generality of the foregoing, the shareholders of
the Seller have duly authorized the execution, delivery, and
performance of this Agreement by the Seller. This Agreement constitutes
the valid and legally binding obligation of the Seller and UPM, as the
case may be, enforceable in accordance with its respective terms and
conditions.
(c) Noncontravention. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated
hereby (including the assignments and assumptions referred to in
Sections 3 and 4 above), will (i) violate any constitution, statute,
regulation, rule, injunction, judgment, order, decree, ruling, charge,
or other restriction of any government, governmental agency, or court
to which the Seller is subject or any provision of the charter or
bylaws of the Seller or (ii) conflict with, result in a breach of,
constitute a default under, result in the acceleration of, create in
any party the right to accelerate, terminate, modify, or cancel, or
require any notice under any agreement, contract, lease, license,
instrument, or other arrangement to which the Seller is a party or by
which it is bound or to which any of its assets is subject (or result
in the imposition of any Security Interest upon any of its assets).
The Seller does not need to give any notice to, make any filing with,
or obtain any authorization, consent, or approval of any government
or governmental agency in order for the Parties to consummate the
transactions contemplated by this Agreement (including the
assignments and assumptions referred to in Sections 3 and 4 above).
(d) Brokers' Fees. The Seller has no Liability or obligation to pay any
fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement for which the Buyer could
become liable or obligated.
(e) Title to Assets. The Seller has good and marketable title to, or a
valid leasehold interest in, the properties and assets used by it,
located on its premises, or shown on the Most Recent Balance Sheet or
acquired after the date thereof, free and clear of all Security
Interests, except for properties and assets disposed of in the Ordinary
Course of Business since the date of the Most Recent Balance Sheet.
Without limiting the generality of the foregoing, the Seller has good
and marketable title to all of the Acquired Assets, free and clear of
any Security Interest or restriction on transfer.
2.2-18
(f) Subsidiaries. The Seller does not own, directly or indirectly, any
capital stock or other equity ownership or other interest in any other
Person.
(g) Financial Statements. Seller has delivered to the Buyer the following
financial statements (collectively, the "Financial Statements"):
(i) audited balance sheets and statements of income (the "Audited
Statements") as of and for the fiscal years ended December 31, 1996,
December 31, 1997, and December 31, 1998 (the "Most Recent Fiscal
Year End") for the Seller; and (ii) unaudited balance sheets and
statements of income (the "Most Recent Financial Statements") as of
and for the six (6) months ended June 30, 1999 (the "Most Recent
Fiscal Month End") for the Seller. Except for normal year end
adjustments in the case of the Most Recent Financial Statements, the
Financial Statements (including the notes thereto) have been prepared
in accordance with GAAP applied on a consistent basis throughout the
periods covered thereby, present fairly the financial condition of
the Seller as of such dates and the results of operations of the
Seller for such periods, and are consistent with the books and
records of the Seller (which books and records are correct and
complete). Additionally, the Audited Statements are correct and
complete.
(h) Events Subsequent to Most Recent Fiscal Year End. Since the Most Recent
Fiscal Year End, there has not been any material adverse change in the
business, financial condition, operations or results of operations of
the Seller. Without limiting the generality of the foregoing, since
that date:
(i) The Seller has not sold, leased, transferred, or assigned any
of its assets, tangible or intangible, other than for a fair
consideration in the Ordinary Course of Business;
(ii) The Seller has not entered into any agreement, contract,
lease, or license (or series of related agreements, contracts,
leases, and licenses) outside the Ordinary Course of Business;
(iii) No person has accelerated, terminated, modified, or canceled
any agreement, contract, lease, or license (or series of
related agreements, contracts, leases, and licenses) to which
the Seller is a party or by which it is bound;
(iv) The Seller has not imposed any Security Interest upon any
of its assets, tangible or intangible;
(v) The Seller has not committed to make any capital expenditure
(or series of related capital expenditures) either involving
more than U.S. $100,000 or outside the Ordinary Course of
Business;
(vi) The Seller has not made any capital investment in, any loan
to, or any acquisition of the securities or assets of, any
other Person (or series of related capital investments, loans,
and acquisitions);
2.2-19
(vii) The Seller has not delayed or postponed the payment of
accounts payable and other Liabilities outside the Ordinary
Course of Business;
(viii) The Seller has not canceled, compromised, waived, or released
any right or claim (or series of related rights and claims);
(ix) The Seller has not granted any license or sublicense of any
rights under or with respect to any Intellectual Property;
(x) The Seller has not experienced any damage, destruction, or
loss (whether or not covered by insurance) to its property;
(xi) The Seller has not made any loan to, or entered into any other
transaction with, any of its directors, officers, and
employees outside the Ordinary Course of Business;
(xii) The Seller has not changed its accounting methods;
(xiii) The Seller has not granted any increase in the base
compensation of any of its stockholders, directors, officers,
and employees outside the Ordinary Course of Business;
(xiv) The Seller has not adopted, amended, modified, or terminated
any bonus, profit-sharing, incentive, severance, or other
plan, contract, or commitment for the benefit of any of its
stockholders, directors, officers, and employees (or taken any
such action with respect to any other Employee Benefit Plan);
(xv) The Seller has not made any other change in employment terms
for any of its directors, officers, and employees outside the
Ordinary Course of Business;
(xvi) There has not been any other occurrence, event, incident,
action, failure to act, or transaction outside the Ordinary
Course of Business involving the Seller;
(xvii) To the Knowledge of Seller, no significant customer of Seller
has stated or otherwise indicated its intention to cease doing
business with Seller prior to Closing or with Buyer after
Closing; and
(xviii) The Seller has not committed to any of the foregoing.
(i) Undisclosed Liabilities. The Sold Business does not include any
Liability (and there is no Basis for any present or future action,
suit, proceeding, hearing, investigation, charge, complaint, claim, or
demand against any of them giving rise to any Liability), except for
2.2-20
(i) Liabilities set forth on the face of the Most Recent Balance Sheet
(rather than in any notes thereto) and (ii) Liabilities which have
arisen after the Most Recent Fiscal Month End in the Ordinary Course of
Business (none of which results from, arises out of, relates to, is in
the nature of, or was caused by any breach of contract, breach of
warranty, tort, infringement, or violation of law).
(j) Legal Compliance. The Seller and its respective predecessors and
Affiliated Companies have complied with all applicable laws (including
rules, regulations, codes, plans, injunctions, judgments, orders,
decrees, rulings, and charges thereunder) of federal, state, local, and
foreign governments (and all agencies thereof), and no action, suit,
proceeding, hearing, charge, complaint, claim, demand, or notice has
been filed or commenced against any of them alleging any failure so
to comply and neither Seller nor the Affiliated Companies have any
Knowledge of any investigation regarding same.
(k) Tax Matters.
(i) The Seller has filed all Tax Returns that it was required to
file. All Taxes due and payable by the Seller (whether or not
shown on any Tax Return) have been paid. No claim has ever
been made by an authority in a jurisdiction where the Seller
does not file Tax Returns that it is or may be subject to
taxation by that jurisdiction. There are no Security Interests
on any of the assets of the Seller that arose in connection
with any failure (or alleged failure) to pay any Tax.
(ii) The Seller has withheld and paid all Taxes required to have
been withheld and paid in connection with amounts paid or
owing to any employee, independent contractor, creditor,
stockholder, or other third party.
(l) Real Property.
(i) Section 2(a)(i) above contains a complete and correct list of
all built-up and vacant real estate owned by the Seller, all
rights of the Seller in or to real estate and all buildings,
improvements and construction owned by the Seller on real
estate owned by third parties which were reflected in the
Audited Statements as per the Most Recent Fiscal Year End or
have been acquired by the Seller in the meantime.
(A) The Seller has not disposed of, or taken any steps to
dispose of, the Sold Real Estate or any part thereof
and is not under any commitment to dispose of it in
whole or in part.
(B) Except for those listed in Section 2(a)(i) above, the
Sold Real Estate is not subject to any encumbrances,
restrictions or rights of third parties, whether or
not registered in the Land Register, and no
2.2-21
application for the registration of any encumbrance,
restriction or right of third parties in the Land
Register has been filed, nor has the Seller granted,
or is committed to grant, any such rights to third
parties or has subjected, or is committed to subject,
the Sold Real Estate to any encumbrance or
restriction.
(C) The Sold Real Estate constitutes the entire plant
area of the Seller. All buildings, improvements and
constructions on the Sold Real Estate (hereinafter
"Plant Buildings") are in good and serviceable
condition, normal wear and tear excepted. The Plant
Buildings neither encroach on property owned by
third parties, nor are they in violation of any
rights of third parties or municipal zoning plans or
other legal provisions. All permits required for
the Plant Buildings have been properly granted. The
condition and the present use of the Sold Real Estate
including the Plant Buildings do not violate any
building regulations or restrictions and are
unobjectionable within the meaning of the applicable
administrative and other legal provisions.
(D) All Plant Buildings have received all approvals of
governmental authorities (including licenses and
permits) required in connection with the ownership or
operation thereof and have been operated and
maintained in accordance with applicable laws, rules,
and regulations;
(E) There are no leases, subleases, licenses,
concessions, or other agreements, written or oral,
granting to any party or parties the right of use or
occupancy of any portion of the parcel of real
property and no parties (other than Seller) are in
possession of any portion of such real property;
(F) There are no outstanding options or rights of first
refusal to purchase the parcel of real property, or
any portion thereof or interest therein;
(G) All Plant Buildings located on the parcel of real
property are supplied with utilities and other
services necessary for the operation of such Plant
Buildings, including gas, electricity, water,
telephone, sanitary sewer, and storm sewer, all of
which services are adequate in accordance with all
applicable laws, ordinances, rules, and regulations
and are provided via public roads or via permanent,
irrevocable, appurtenant easements benefiting the
parcel of real property; and
(H) Each parcel of real property abuts on and has direct
vehicular access to a public road, or has access to a
public road via a permanent, irrevocable, appurtenant
easement benefiting the parcel of real property, and
access to the property is provided by paved public
right-of-way with adequate curb cuts available.
2.2-22
(ii) Section 6 (l) (ii) of the Disclosure Schedule lists and
describes briefly all real property leased or subleased to the
Seller. The Seller has delivered to the Buyer correct and
complete copies of the leases and subleases listed in Section
(l) (ii) of the Disclosure Schedule (as amended to date). With
respect to each lease and sublease listed in Section 6 (l)
(ii) of the Disclosure Schedule:
(A) the lease or sublease is legal, valid, binding,
enforceable, and in full force and effect;
(B) the lease or sublease will continue to be legal,
valid, binding, enforceable, and in full force and
effect on identical terms following the consummation
of the transactions contemplated hereby (including
the assignments and assumptions referred to in
Sections 3 and 4 above);
(C) no party to the lease or sublease is in breach or
default, and no event has occurred which, with notice
or lapse of time, would constitute a breach or
default or permit termination, modification, or
acceleration thereunder;
(D) no party to the lease or sublease has repudiated any
provision thereof;
(E) there are no disputes, oral agreements, or
forbearance programs in effect as to the lease or
sublease;
(F) with respect to each sublease, the representations
and warranties set forth in subsections (A) through
(E) above are true and correct with respect to the
underlying lease;
(G) the Seller has not assigned, transferred, conveyed,
mortgaged, deeded in trust, or encumbered any
interest in the leasehold or subleasehold;
(H) all Plant Buildings leased or subleased thereunder
have received all approvals of governmental
authorities (including licenses and permits) required
in connection with the operation thereof and have
been operated and maintained in accordance with
applicable laws, rules, and regulations; and
(I) all Plant Buildings leased or subleased thereunder
are supplied with utilities and other services
necessary for the operation of said Facilities.
(m) Intellectual Property.
2.2-23
(i) The Seller owns or has the right to use pursuant to license,
sublicense, agreement, or permission all Intellectual Property
necessary for or currently used in for the operation of the
business of the Seller as presently conducted and as committed
to be conducted by Seller. Each item of Intellectual Property
owned or used by the Seller immediately prior to the Closing
hereunder will be owned or available for use by the Buyer on
identical terms and conditions immediately subsequent to the
Closing hereunder. The Seller has taken all necessary action
to maintain and protect each item of Intellectual Property
that it owns or uses.
(ii) The Seller has not interfered with, infringed upon,
misappropriated, or otherwise come into conflict with any
Intellectual Property rights of third parties, and to the
Knowledge of Seller, Seller has not received any charge,
complaint, claim, demand, or notice alleging any such
interference, infringement, misappropriation, or violation
(including any claim that the Seller must license or refrain
from using any Intellectual Property rights of any third
party). To the Knowledge of Seller, no third party has
interfered with, infringed upon, misappropriated, or otherwise
come into conflict with any Intellectual Property rights of
any of the Seller.
(iii) Section 6 (m) (iii)of the Disclosure Schedule identifies each
patent or copyright or trademark registration which
has been issued to the Seller with respect to any of its
Intellectual Property, identifies each pending patent
application or application for copyright or trademark
registration which the Seller has made with respect to any of
its Intellectual Property, and identifies each license,
agreement, or other permission which the Seller has granted
to any third party with respect to any of its Intellectual
Property (together with any exceptions). The Seller has
delivered to the Buyer correct and complete copies of all
such patents, registrations, applications, licenses,
agreements, and permissions (as amended to date) and has
made available to the Buyer correct and complete copies of
all other written documentation evidencing ownership and
prosecution (if applicable) of each such item. Section 6
(m) (iii) of the Disclosure Schedule also identifies each
trade name, fictitious or assumed name registration or
unregistered trademark used by the Seller in connection with
any of its businesses. With respect to each item of
Intellectual Property required to be identified in Section 6
(m) (iii) of the Disclosure Schedule:
(A) the Seller possesses all right, title, and interest
in and to the item, free and clear of any Security
Interest, license, or other restriction;
(B) the item is not subject to any outstanding
injunction, judgment, order, decree, ruling,
or charge;
(C) no action, suit, proceeding, hearing, investigation,
charge, complaint, claim, or demand is pending or, to
2.2-24
the Knowledge of Seller, is threatened which
challenges the legality, validity, enforceability,
use, or ownership of the item; and
(D) except for Xxx Webforming International A/S
("Xxx-Web") and Scanweb I/S ("Scanweb"), the Seller
has never agreed to indemnify any Person for or
against any interference, infringement,
misappropriation, or other conflict with respect to
the item.
(iv) Section 6 (m) (iv) of the Disclosure Schedule identifies each
item of Intellectual Property that any third party owns and
that the Seller uses pursuant to license, sublicense,
agreement, or permission. The Seller has delivered to the
Buyer correct and complete copies of all such licenses,
sublicenses, agreements, and permissions (as amended to date).
With respect to each item of Intellectual Property required to
be identified in Section 6 (m) (iv) of the Disclosure Schedule
(except for all such licenses of Seller and/or UPM with
Xxx-Web and Scanweb with respect to which no such
representation is being made for purposes hereof):
(A) the license, sublicense, agreement, or permission
covering the item is legal, valid, binding,
enforceable, and in full force and effect;
(B) the license, sublicense, agreement, or permission
will continue to be legal, valid, binding,
enforceable, and in full force and effect on
identical terms following the consummation of the
transactions contemplated hereby;
(C) no party to the license, sublicense, agreement, or
permission is in breach or default, and no event has
occurred which with notice or lapse of time would
constitute a breach or default or permit termination,
modification, or acceleration thereunder;
(D) no party to the license, sublicense, agreement, or
permission has repudiated any provision thereof;
(E) with respect to each sublicense, the representations
and warranties set forth in subsections (A) through
(D) above are true and correct with respect to the
underlying license;
(F) the underlying item of Intellectual Property is not
subject to any outstanding injunction, judgment,
order, decree, ruling, or charge;
(G) no action, suit, proceeding, hearing, investigation,
charge, complaint, claim, or demand is pending or, to
the Knowledge of Seller, is threatened which
challenges the legality, validity, or enforceability
of the underlying item of Intellectual Property; and
2.2-25
(H) the Seller has not granted any sublicense or similar
right with respect to the license, sublicense,
agreement, or permission except as disclosed in
Section 6 (m) (iv) of the Disclosure Schedule.
(v) To the Knowledge of Seller, Buyer will not interfere with,
infringe upon, misappropriate, or otherwise come into conflict
with, any Intellectual Property rights of third parties as a
result of the continued operation of Seller's businesses as
presently conducted and as committed to be conducted.
(n) Tangible Assets.
The Seller owns or leases all buildings, machinery, equipment, and
other tangible assets necessary for the conduct of its business as
presently conducted. Each such tangible asset is free from defects to
the Knowledge of Seller, has been maintained in accordance with normal
industry practice, is in normal operating condition and repair (subject
to normal wear and tear), and is suitable for the purposes for which it
presently is being used.
(o) Inventory.
The Inventory of the Seller consists of (a) raw materials and packaging
materials used in the Sold Business of Seller, including wood pulp,
other fibers, binders and superabsorbent polymers and (b) finished
product, all of which is merchantable and fit for the purpose for which
it was procured or manufactured, and none of which is obsolete,
damaged, or defective, subject only to the reserve for Inventory
writedown set forth on the face of the Most Recent Balance Sheet
(rather than in any notes thereto) as adjusted for the passage of time
through the Closing Date in accordance with the past custom and
practice of the Seller.
(p) Contracts.
Section 6 (p) of the Disclosure Schedule lists the following contracts
and other agreements to which the Seller is a party:
(i) any agreement (or group of related agreements) for the lease
of personal property to or from any Person providing
for lease payments;
(ii) any agreement (or group of related agreements) for the
purchase or sale of raw materials, commodities, supplies,
finished products, or other personal property, or for the
furnishing or receipt of services, the performance of which
will extend over a period beyond December 31, 1999;
2.2-26
(iii) any agreement concerning a partnership or joint venture;
(iv) any agreement (or group of related agreements) to be assumed
by Buyer as an Assumed Liability pertaining to any
indebtedness for borrowed money or any capitalized lease
obligation;
(v) any agreement concerning confidentiality or containing
covenants that in any way purport to restrict the business
activity of the Seller or limit the freedom of the Seller or
its stockholders, directors or officers to engage in any line
of business or to compete with any Person;
(vi) any intercompany agreement between any Seller and their
Affiliated Companies;
(vii) any profit sharing, stock option, stock purchase, stock
appreciation, deferred compensation, severance, or other
material plan or arrangement for the benefit of those current
directors, officers, and employees of Seller that will become
employees of Buyer;
(viii) any collective bargaining agreement;
(ix) any agreement for Seller's employment of any salaried
individual on a full-time, part-time, consulting, or other
basis that will become employees of Buyer;
(x) any other agreement (or group of related agreements) the
performance of which involves consideration in excess of
U.S.$25,000; or
(xi) any written warranty, guaranty or other similar undertaking
with respect to contractual performance by the Seller;
The Seller has delivered to the Buyer a correct and complete copy of
each written agreement listed in Section 6 (p) of the Disclosure
Schedule (as amended to date) and a written summary setting forth the
terms and conditions of each oral agreement referred to in Section 6
(p) of the Disclosure Schedule. With respect to each such agreement:
(A) the agreement is legal, valid, binding, enforceable, and in full
force and effect; (B) no party is in breach or default, and no event
has occurred which with notice or lapse of time would constitute a
breach or default, or permit termination, modification, or
acceleration, under the agreement; and (C) no party has repudiated any
provision of the agreement.
(q) Accounts Receivable. All accounts receivable of the Seller are
reflected properly on its books and records, are valid receivables
subject to no setoffs or counterclaims, are current and collectible,
and will be collected in accordance with their terms at their recorded
amounts.
2.2-27
(r) Insurance. Section 6 (r) of the Disclosure Schedule sets forth the
following information with respect to each insurance policy (including
policies providing property, casualty, liability, and workers'
compensation coverage and bond and surety arrangements) to which the
Seller has been a party, a named insured, or otherwise the beneficiary
of coverage at any time within the past three (3) years:
(i) the name, address, and telephone number of the agent;
(ii) the name of the insurer, the name of the policyholder, and
the name of each covered insured;
(iii) the policy number and the period of coverage;
(iv) the scope (including an indication of whether the coverage was
on a claims made, occurrence, or other basis) and amount
(including a description of how deductibles and ceilings are
calculated and operate) of coverage; and
(v) a description of any retroactive premium adjustments or other
loss-sharing arrangements.
With respect to each such insurance policy and assuming due
enforceability with respect to the insurer: (A) the policy is legal,
valid, binding, enforceable, and in full force and effect; (B) the
policy will continue to be legal, valid, binding, enforceable, and in
full force and effect on identical terms until the Closing Date; (C)
neither the Seller nor any other party to the policy is in breach or
default (including with respect to the payment of premiums or the
giving of notices), and no event has occurred which, with notice or the
lapse of time, would constitute such a breach or default, or permit
termination, modification, or acceleration, under the policy; and (D)
no party to the policy has repudiated any provision thereof. Section 6
(r) of the Disclosure Schedule describes any self-insurance
arrangements affecting the Seller.
(s) Litigation. Section 6 (s)of the Disclosure Schedule sets forth each
instance in which the Seller (i) is subject to any outstanding
injunction, judgment, order, decree, ruling, or charge or (ii)
is a party or, to the Knowledge of Seller, is threatened to be made a
party to any action, suit, proceeding, hearing, or investigation
of, in, or before any court or quasi-judicial or administrative agency
of any federal, state, local, or foreign jurisdiction or before any
arbitrator. None of the actions, suits, proceedings, hearings, and
investigations set forth in Section 6 (s) of the Disclosure Schedule
could result in any adverse change in the business, financial
condition, operations, results of operations, or future prospects of
2.2-28
the Seller. To the Knowledge of Seller, Seller has no reason to
believe that any such action, suit, proceeding, hearing, or
investigation may be brought or threatened against the Seller.
(t) Product Warranty. Except as set forth on the Disclosure Schedule
hereto, each product manufactured, sold, leased, or delivered
by the Seller has been in conformity with all applicable
contractual commitments and all express and implied warranties,
and the Seller has no Liability (and, to the Knowledge of Seller,
there is no Basis for any present or future action, suit, proceeding,
hearing, investigation, charge, complaint, claim, or demand against
any of them giving rise to any Liability) for replacement or repair
thereof or other damages in connection therewith. No product
manufactured, sold, leased, or delivered by the Seller is subject to
any guaranty, warranty, or other indemnity beyond the applicable
standard terms and conditions of sale or lease. Section 6 (t) of the
Disclosure Schedule includes copies of the standard terms and
conditions of sale or lease for the Seller (containing applicable
guaranty, warranty, and indemnity provisions).
(u) Product Liability. Except as set forth on the Disclosure Schedule
hereto, the Seller has no Liability (and, to the Knowledge of Seller,
there is no Basis for any present or future action, suit, proceeding,
hearing, investigation, charge, complaint, claim, or demand against any
of them giving rise to any Liability) arising out of any injury to
individuals or property as a result of the ownership, possession, or
use of any product manufactured, sold, leased, or delivered by the
Seller.
(v) Employees. Except as set forth on the Disclosure Schedule hereto, to
the Knowledge of Seller (without reasonable investigation), no
executive, key employee, or group of employees has any plans to
terminate employment with the Seller. The Seller is not a party to or
bound by any collective bargaining agreement, nor are there any pending
strikes, grievances, claims of unfair labor practices, or other
collective bargaining disputes. The Seller has not committed any unfair
labor practice. To the Knowledge of Seller (without reasonable
investigation), no organizational effort is presently being made or
threatened by or on behalf of any labor union with respect to employees
of the Seller.
(w) Employee Benefits.
(i) Section 6 (w) of the Disclosure Schedule lists each individual
or collective agreement providing for benefits for the
employees of the Seller of any kind whatsoever to which the
Seller is a party or which applies to the Seller or to which
the Seller contributes or may be obligated to contribute (the
"Employee Benefit Plan").
2.2-29
(A) Each such Employee Benefit Plan complies in form and
in operation in all respects with the applicable
laws.
(B) All required reports and descriptions have been filed
or distributed appropriately with respect to each
such Employee Benefit Plan.
(C) All contributions (including all employer
contributions and employee salary reduction
contributions) which are due have been paid to each
such Employee Benefit Plan and all contributions for
any period ending on or before the Effective Date
which are not yet due have been paid to each such
Employee Benefit Plan or accrued in accordance with
the statutory requirements.
(D) The Seller has delivered to the Buyer correct and
complete copies of the plan documents and summary
plan descriptions and all related agreements,
insurance contracts, and other funding agreements
which implement each such Employee Benefit Plan.
(ii) With respect to each Employee Benefit Plan that the Seller and
the Controlled Group of Corporations which includes the Seller
maintains or ever has maintained or to which any of them
contributes:
(A) No such Employee Benefit Plan has been completely or
partially terminated. No proceeding to terminate any
such Employee Benefit Plan has been instituted or, to
the Knowledge of Seller, threatened.
(B) No action, suit, proceeding, hearing, or
investigation with respect to the administration or
the investment of the assets of any such Employee
Benefit Plan (other than routine claims for benefits)
is pending or, to the Knowledge of Seller,
threatened. Seller has no Knowledge of any Basis for
any such action, suit, proceeding, hearing, or
investigation.
(x) Guarantees. The Seller is not a guarantor or otherwise liable for any
Liability or obligation (including indebtedness) of any other Person
that would survive the Closing.
(y) Environmental, Health, and Safety Matters. With respect to the
Acquired Assets;
(i) The Seller, and its respective Affiliated Companies have
complied and are in compliance with all Environmental, Health,
and Safety Requirements.
2.2-30
(ii) Without limiting the generality of the foregoing, the Seller
and its respective Affiliated Companies have obtained and
complied with, and are in compliance with, all permits,
licenses and other authorizations that are required pursuant
to Environmental, Health, and Safety Requirements for the
occupation of its Facilities and the operation of its
business; a list of all such permits, licenses and other
authorizations is set forth on the Disclosure Schedule 6 (y).
(iii) Neither the Seller, nor its Affiliated Companies has received
any written notice, report or other information (including
employee or third-party complaints or threats) regarding any
violation of Environmental, Health, and Safety Requirements,
or any liabilities or potential liabilities (whether accrued,
absolute, contingent, unliquidated or otherwise), including
any investigatory, remedial or corrective obligations,
relating to any of them or its Facilities arising under
Environmental, Health, and Safety Requirements.
(iv) To the Knowledge of Seller, none of the following exists at
any property or facility owned or operated by the Seller: (1)
underground storage tanks, (2) asbestos-containing material in
any form or condition, (3) materials or equipment containing
polychlorinated biphenyls, or (4) landfills, surface
impoundments, or disposal areas.
(v) Neither the Seller, nor its Affiliated Companies has treated,
stored, disposed of, arranged for or permitted the disposal
of, transported, handled, or released any Hazardous Materials,
or owned or operated any property or facility in a manner that
has given or would give rise to liabilities, including any
liability for response costs, corrective action costs,
personal injury, property damage, natural resources damages or
attorney fees, pursuant to any Environmental, Health, and
Safety Requirements as they exist as of the Effective Date.
(vi) Neither this Agreement nor the consummation of the transaction
that is the subject of this Agreement will result in any
obligations for site investigation or cleanup, or notification
to or consent of government agencies or third parties,
pursuant to any of the Environmental, Health, and Safety
Requirements.
(vii) Neither the Seller nor any of its Affiliated Companies has,
either expressly or by operation of law, assumed or undertaken
any liability, including without limitation any obligation for
corrective or remedial action, of any other Person relating to
Environmental, Health, and Safety Requirements.
(viii) To the Knowledge of the Seller, no facts, events or conditions
relating to the past or present Facilities, properties or
operations of the Seller or any of its respective predecessors
will prevent, hinder or limit continued compliance with
Environmental, Health, and Safety Requirements, give rise to
any investigatory, remedial or corrective obligations pursuant
2.2-31
to Environmental, Health, and Safety Requirements, or give
rise to any other liabilities (whether accrued, absolute,
contingent, unliquidated or otherwise) pursuant to
Environmental, Health, and Safety Requirements, including
without limitation any relating to onsite or offsite releases
or threatened releases of hazardous materials, substances or
wastes, personal injury, property damage or natural resources
damage.
(z) Year 2000 Problem. With regard to the possibility that computer
programs and systems may not properly process dates subsequent to
December 31, 1999 (the "Y2K Problem"), Seller represents and warrants
that it has audited all of its computer systems (including, but not
limited to, systems which operate the machinery and equipment at the
Steinfurt plant operated by Seller) and that, to its Knowledge, such
systems are free from the Y2K Problem insofar as it may affect the
operations of the Sold Business.
(aa) Certain Business Relationships With the Seller. None of the
stockholders of the Seller or their Affiliated Companies owns
any asset, tangible or intangible, which is used in the business of
the Seller.
7. Representations and Warranties of the Buyer. The Buyer represents and
warrants to the Seller that the statements contained in this Section 7
are correct and complete as of the date of this Agreement and will be
correct and complete as of the Closing Date (as though made then and as
though the Closing Date were substituted for the date of this Agreement
throughout this Section 7), except as set forth in the Disclosure
Schedule. The Disclosure Schedule will be arranged in paragraphs
corresponding to the lettered and numbered paragraphs contained in this
Section 7.
(a) Organization of the Buyer. The Buyer is a GmbH (limited liability
company) duly organized, validly existing, and in good standing under
the laws of the Federal Republic of Germany.
(b) Authorization of Transaction. The Buyer has full power and authority
(including full corporate power and authority) to execute and deliver
this Agreement and to perform its obligations thereunder. This
Agreement constitutes the valid and legally binding obligation of the
Buyer, enforceable in accordance with its terms and conditions.
(c) Noncontravention. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated
hereby (including the assignments and assumptions referred to in
Sections 3 and 4 above), will (i) violate any constitution, statute,
regulation, rule, injunction, judgment, order, decree, ruling,
charge, or other restriction of any government, governmental agency,
or court to which the Buyer is subject or any provision of its
charter or bylaws or (ii) conflict with, result in a breach of,
2.2-32
constitute a default under, result in the acceleration of, create
in any party the right to accelerate, terminate, modify, or cancel,
or require any notice under any agreement, contract, lease, license,
instrument, or other arrangement to which the Buyer is a party or
by which it is bound or to which any of its assets is subject.
Except for approval from the German Cartel Office attached hereto as
Annex 1, the Buyer does not need to give any notice to, make any
filing with, or obtain any authorization, consent, or approval of
any government or governmental agency in order for the Parties to
consummate the transactions contemplated by this Agreement
(including the assignments and assumptions referred to in Sections 3
and 4 above).
(d) Brokers' Fees. The Buyer has no Liability or obligation to pay any fees
or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement for which the Seller could
become liable or obligated.
8. Performance and Liability.
(a) UPM hereby joins the Seller as co-debtor with the consent of the other
parties. The Seller and UPM shall be jointly and severally liable for
the performance of this Agreement and for all claims of the Buyer
against the Seller and/or UPM of any type whatsoever pursuant to this
Agreement, including indemnifying Buyer pursuant to Section 3 (d) (ii)
above.
(b) Survival. Any claims by the Buyer against the Seller for breach of the
representations and warranties pursuant to Section 6 above shall become
time-barred as follows:
(i) Claims relating to environmental matters covered under
Section 6 (y) and Section 13 shall become time-barred five
years after the Closing Date;
(ii) Claims relating to defects in the legal title to Acquired
Assets shall become time-barred according to the statutory
provisions;
(iii) Claims relating to taxes shall become time-barred six months
after the applicable statute of limitations for such tax
matter has expired;
(iv) Any other claims shall become time-barred two years after
Closing Date.
(c) All other claims of the Buyer pursuant to this Agreement, including
without limitation claims relating to the indemnities pursuant to
Section 3 (d)(ii) shall, to the extent not explicitly otherwise
provided herein, become time-barred according to the statutory
provisions.
(d) Limitation on Amount-- Seller. The Seller shall have no Liability
for claims under the representations and warranties pursuant to
Section 6 above for indirect or consequential losses and damages
2.2-33
unless such claims involve a breach of Section 6 (e) or involve gross
negligence or willful misconduct by Seller, UPM or Affiliated
Companies and the term Adverse Consequences shall be interpreted
accordingly. Further, the Seller shall have no liability for any
individual claim under the representation and warranties pursuant to
Section 6 above, if the Adverse Consequences for such individual claim
is less than US$ 25,000. Seller shall have no liability for claims
under the representation and warranties pursuant to Section 6
above, which exceed the forgoing US$ 25,000 de minimis until the
total of all Adverse Consequences with respect to such claims under
the representation and warranties pursuant to Section 6 above exceeds
U.S. $300,000 in the aggregate, at which time, the Seller shall be
liable to the Buyer for the entire amount of such Adverse Consequences
(subject, however, to the US$ 25,000 de minimis limitation) in excess
of US$ 300,000. However, the foregoing US$ 300,000 limitation will not
apply to any breach of the Seller's representations and warranties
of which the Seller or UPM had Knowledge at any time prior to the
Effective Date. The maximum aggregate total amount of
indemnification for which Seller shall be liable under the
representation and warranties pursuant to Section 6 and with
respect to the environmental indemnification provided in Section 13
shall in all events be limited to U.S. $20,000,000 except with
respect to fraud or any intentional breach by the Seller or UPM of any
representation, warranty, covenant or obligation, and the Seller
will be liable for all Adverse Consequences suffered by the Buyer
with respect to such fraud or intentional breach. The maximum
aggregate total amount of indemnification under the representation
and warranties pursuant to Xxxxxxx 0 xxxxx xxx Xxxxxxx 0 (x) (xx)
above shall in all events be limited to US$105,000,000.
(d) The provisions in para. (c) above shall apply mutatis mutandis to all
claims of the Seller pursuant to this Agreement.
(e) Every right of rescission (Wandlung and Rucktritt) shall be excluded.
xx.xx. 123, 476 and 826 BGB (German Civil Code) shall not be affected.
(f) (i) Any review, inspection and investigation of or on behalf
of the Buyer shall neither affect the Seller's and UPM's
obligations, representations and warranties hereunder nor the
right of the Buyer to raise claims on the basis of such
obligations, representations and warranties.
(ii) Claims of the Buyer against the Seller and UPM on the basis of
the representations and warranties of the Seller and UPM in
this Agreement which concern events or due dates prior to the
Effective Date can only be raised to the extent that the
damages giving rise to such claims have not already been
reflected in the Net Working Capital Statement.
(g) Set off. Upon notice to Seller specifying in reasonable detail the
basis for such set-off, the Seller shall have thirty (30) days to agree
or disagree with Buyer's claim for set-off. The Buyer may set-off any
amount to which Seller agrees that Buyer is entitled under this
2.2-34
Agreement against amounts otherwise owing to Seller on account of this
Agreement. As to any amount that Seller disputes as being entitled to
set-off by providing notice to Buyer of such disputed amount within
said thirty (30) day period, Buyer shall pay such disputed amount to a
mutually agreed upon escrow agent to hold until the dispute is resolved
by mutual agreement of the Parties or pursuant to the arbitration
provisions of Section 14(a). Any interest earned in escrow shall be
paid to the Party receiving the principal from escrow, or such part
attributable thereto.
(h) The parties are in agreement that Buyer may interrupt any of the
statutes of limitation pursuant to Section 8 (b) above by virtue of a
reasonably substantiated notice to the Seller. Any stricter
requirements under German law are hereby waived.
9. Pre-Closing Covenants.
The Parties agree as follows with respect to the period between the
execution of this Agreement and the Closing.
(a) General. Each of the Parties will use its best efforts to take all
action and to do all things necessary, proper, or advisable in order to
consummate and make effective the transactions contemplated by this
Agreement (including satisfaction, but not waiver, of the Closing
conditions set forth in Section 10 below).
(b) Operation of Business. The Seller will not engage in any practice, take
any action, or enter into any transaction outside the Ordinary Course
of Business. Without limiting the generality of the foregoing, the
Seller will not (i) execute any agreement that will survive Closing
with another Seller or Affiliate unless Buyer consents, (ii) negotiate
any agreements creating obligations after Closing in excess of
U.S.$10,000 other than sales agreements and agreements for the purchase
of raw materials executed in the Ordinary Course of Business for a
period not to exceed December 31, 1999, unless Buyer consents, or (iii)
otherwise engage in any practice, take any action, or enter into any
transaction of the sort described in Section 6 (h) above.
(c) Preservation of Business. The Seller will use commercially reasonable
efforts to keep its business and properties substantially intact,
including its present operations, physical Plant Buildings, working
conditions, and relationships with lessors, licensors, suppliers,
customers, and employees.
(d) Full Access. Subject to anticompetitive laws, the Seller will permit
representatives of the Buyer to have full access at all reasonable
times, and in a manner so as not to interfere with the normal business
operations of the Seller, to all premises, properties, personnel,
books, records (including Tax records), contracts, and documents of or
pertaining to each Seller.
2.2-35
(e) Notice of Developments. Each Party will give prompt written notice to
the other Party of any material adverse development causing a breach of
any of its own representations and warranties in Section 6 and Section
7 above. No disclosure by any Party pursuant to this Section 9(e),
however, shall be deemed to amend or supplement the Disclosure Schedule
or to prevent or cure any misrepresentation, breach of warranty, or
breach of covenant.
(f) Exclusivity. The Seller will not (i) solicit, initiate, or encourage
the submission of any proposal or offer from any Person relating to the
acquisition of any capital stock or other voting securities, or any
portion of the assets, of the Seller (including any acquisition
structured as a merger, consolidation, or share exchange) or (ii)
participate in any discussions or negotiations regarding, furnish any
information with respect to, assist or participate in, or facilitate in
any other manner any effort or attempt by any Person to do or seek any
of the foregoing. The Seller will notify the Buyer immediately if any
Person makes any proposal, offer, inquiry, or contact with respect to
any of the foregoing.
10. Closing, Conditions to Close.
(a) Conditions to Obligation of the Buyer. The obligation of the Buyer to
consummate the transactions to be performed by it in connection with
the Closing is subject to satisfaction of the following conditions:
(i) the representations and warranties set forth in Section 6
above shall be true and correct in all material respects
at and as of the Closing Date;
(ii) the Seller shall have performed and complied with all of its
covenants hereunder in all material respects through the
Closing Date;
(iii) the Seller shall have procured the permits necessary for Buyer
to own and operate the Acquired Assets in the manner operated
prior to the Closing Date, and all licenses and approvals
necessary for Buyer to own and operate the Acquired Assets
shall have been obtained;
(iv) no action, suit, or proceeding shall be pending or threatened
before any court or quasi-judicial or administrative agency of
any federal, state, local, or foreign jurisdiction or before
any arbitrator wherein an unfavorable injunction, judgment,
order, decree, ruling, or charge would (A) prevent
consummation of any of the transactions contemplated by this
Agreement, (B) cause any of the transactions contemplated by
this Agreement to be rescinded following consummation, or (c)
affect adversely the right of the Buyer to own the Acquired
Assets or to operate the former businesses of the Seller;
(v) the Notarial Deed attached hereto as Exhibit A shall have been
notarized and the priority notice pursuant to Section 2 (d)(i)
2.2-36
above shall have been registered with the Land Registry of the
Magistrates Court of the City of Steinfurt with no
registrations having prior ranking not assumed by the Buyer;
(vi) the consent of the City of Steinfurt to the sale and transfer
of the Sold Real Estate to the Buyer in accordance with this
Agreement has been obtained;
(vii) the waiver by the city of Steinfurt of the encumbrance
referred to in Section 2(a)(i)(aii) above has been obtained.
(viii) the waiver of preemptive rights necessary for the transfer
of the Sold Real Estate have been obtained; and
(ix) all actions to be taken by the Seller in connection with
consummation of the transactions contemplated hereby and all
certificates, opinions, instruments, and other documents
required to effect the transactions contemplated hereby will
be satisfactory in form and substance to the Buyer.
The Buyer may waive any condition specified in this Section 10(a)
if it executes a writing so stating at or prior to the Closing.
(b) Conditions to Obligation of the Seller. The obligation of the Seller to
consummate the transactions to be performed by it in connection with
the Closing is subject to satisfaction of the following conditions:
(i) the representations and warranties set forth in Section 7
above shall be true and correct in all material respects
at and as of the Closing Date;
(ii) the Buyer shall have performed and complied with all of its
covenants hereunder in all material respects through the
Closing;
(iii) no action, suit, or proceeding shall be pending or threatened
before any court or quasi-judicial or administrative agency of
any federal, state, local, or foreign jurisdiction or before
any arbitrator wherein an unfavorable injunction, judgment,
order, decree, ruling, or charge would (A) prevent
consummation of any of the transactions contemplated by this
Agreement or (B) cause any of the transactions contemplated by
this Agreement to be rescinded following consummation (and no
such injunction, judgment, order, decree, ruling, or charge
shall be in effect);
(iv) Buckeye Holdings shall have duly executed the Share Pledge
Agreement;
(v) all actions to be taken by the Buyer in connection with
consummation of the transactions contemplated hereby and all
certificates, opinions, instruments, and other documents
required to effect the transactions contemplated hereby will
be satisfactory in form and substance to the Seller.
2.2-37
The Seller may waive any condition specified in this Section 10(b)
if it executes a writing so stating at or prior to the Closing.
(c) Closing. The consummation of the transactions contemplated in this
Agreement (the "Closing") shall take place at the offices of Oppenhoff
& Xxxxxx in Cologne or any other place(s) the parties may agree
commencing at 11.00 a.m. local time within three business days after
the conditions precedent referred to in Section 10(a)(iii), (v), (vi)
and (vii) have been fulfilled (the "Closing Date").
At the Closing,
(i) the Buyer and the Seller shall agree on the Estimated Net
Working Capital
(ii) the Buyer shall deliver to the Seller the Initial Payment
adjusted in accordance with the provisions of this Agreement;
(iii) Buyer and Seller shall instruct the Notary Public, who
notarized the Notarial Deed attached hereto as Exhibit A to
file all outstanding applications required in order to perfect
the title transfer with the competent Land Registry.
11. Termination.
(a) Termination of Agreement. Certain of the Parties may terminate this
Agreement as provided below:
(i) the Buyer and the Seller may terminate this Agreement by
mutual written consent at any time prior to the Closing;
(ii) the Buyer may terminate this Agreement by giving written
notice to the Seller at any time prior to the Closing (A) in
the event the Seller has breached any material representation,
warranty, or covenant contained in this Agreement in any
material respect, the Buyer has notified the Seller of the
breach, and the breach has continued without cure for a period
of 30 days after the notice of breach or (B) if the Closing
shall not have occurred on or before December 31, 1999.
(iii) the Seller may terminate this Agreement by giving written
notice to the Buyer at any time prior to the Closing (A) in
the event the Buyer has breached any material representation,
warranty, or covenant contained in this Agreement in any
material respect, the Seller has notified the Buyer of the
breach, and the breach has continued without cure for a period
of 30 days after the notice of breach or (B) if the Closing
shall not have occurred on or before December 31, 1999.
2.2-38
(b) Effect of Termination. If any Party terminates this Agreement pursuant
to Section 11 (a) above, all rights and obligations of the Parties
hereunder shall terminate without any Liability of any Party to any
other Party (except for any Liability of any Party then in breach).
12. Post-Closing Covenants.
(a) License of Walkisoft Name. Seller hereby grants to Buyer the exclusive
royalty-free right to use the trade name "Walkisoft" and trademark
for a period of five (5) years from the Effective Date in all areas
in which the Seller has used the trade name or otherwise has rights in
the trade name. Seller hereby expressly releases Buyer, its agents,
employees, licensees and assigns from and against any and all
claims which Seller has or may have with respect to use of the
trade name "Walkisoft." From Effective Date and thereafter for a
period of five (5) years, Seller shall not use or license to use or
transfer to Persons other than Buyer the "Walkisoft" trade name and
thereafter it will not use, license to use or transfer
the "Walkisoft" trade name in or to any similar business to that of
Buyer. Seller warrants that it has the full right and authority to
grant to Buyer the license to use the trade name "Walkisoft."
(b) Noncompetition by Seller. Except for a six months period following
the Effective Date to transition the Kotka, Finland plant out of
the Walkisoft business, for a period of five (5) years from and
after the Effective Date, neither the Seller nor any Affiliated
Company of Seller shall engage in, directly or indirectly, the
airlaid nonwoven business or any other business conducted by Seller
as of the Effective Date (the "Restricted Business") anywhere in
the world (each of Parties hereto acknowledging that the business as
conducted by Seller is an expanding global business with current
worldwide sales); provided, however, that no owner of less than 1% of
the outstanding stock of any publicly-traded corporation shall be
deemed to engage solely by reason thereof in the Restricted Business.
Notwithstanding the foregoing, Seller or an Affiliated Company
shall be permitted to acquire another business which has an airlaid
nonwoven division or subsidiary comprising not more than 3 % of the
gross sales for such acquired business for its last full fiscal
year. In such event, Seller or its applicable Affiliated Company
shall use its best efforts to dispose of the airlaid nonwoven
division or subsidiary of the acquired business as soon as commercially
practicable to do so and as part of such process, shall give Buckeye
Inc. or its affiliated companies within the meaning ofss.ss.15 et
seq. German Stock Corporation Act a right of first negotiation to
acquire the airlaid nonwoven division or subsidiary to be sold.
To the extent Buyer is unwilling to acquire such airlaid non-woven
division or subsidiary at such price and on such terms as offered by
Seller in writing to Buyer, then Seller may not sell such business at
a lower price or on more favorable terms than offered to Buyer for at
least one year following the date of written offer from Seller to
2.2-39
Buyer. If Seller or its Affiliate is unable to sell such airlaid
nonwoven division or subsidiary after using commercially reasonable
efforts or determines that it is commercially impracticable to sell
such airlaid nonwoven division or subsidiary based on its integration
with the remaining acquired business, then in such event,
Seller covenants that neither Seller nor its Affiliated Companies
shall seek to expand or otherwise invest in expansion of the airlaid
nonwoven division or subsidiary within the five-year period following
the Effective Date. If the final judgment of a court of competent
jurisdiction declares that any term or provision of this Section 12(b)
is invalid or unenforceable, the Parties agree that the court making
the determination of invalidity or unenforceability shall have the
power to reduce the scope, duration, or area of the term or provision,
to delete specific words or phrases, or to replace any invalid or
unenforceable term or provision with a term or provision that is valid
and enforceable and that comes closest to expressing the intention of
the invalid or unenforceable term or provision, and this Agreement
shall be enforceable as so modified after the expiration of the time
within which the judgment may be appealed.
(c) Accounts Receivable. If Buyer is unable after reasonable efforts to
collect the accounts receivable transferred hereunder within sixty (60)
days after the stated date for payment, Seller shall purchase such
accounts receivable at the U.S.$ value assigned to such accounts as of
the Effective Date.
(d) Sales Rebates or Discounts. Seller shall remain liable for or receive
benefit from, as the case may be, its pro rata share of any sales or
purchase discounts or rebates which are payable after Closing for the
period up to the Effective Date.
(e) Product Warranty. As a service to Seller, Buyer agrees to use its
reasonable efforts to rectify and/or remedy on Seller's behalf and at
Seller's expense any items manufactured by Seller prior to the
Effective Date which are claimed to be covered by a warranty of
Seller. Upon receipt of reasonable documentation from Buyer, Seller
shall promptly reimburse Buyer for all costs reasonably expended in
rectifying or remedying the claim. To the extent such costs are
anticipated to be in excess of U.S. $10,000 for a particular warranty
claim, Buyer shall notify Seller in advance of remedying the warranty
claim to advise Seller of the claim and the anticipated expenses
associated therewith. Buyer shall remedy or replace the item with
the consent of Seller, which shall not be unreasonably withheld,
provided that upon Seller's failure to object within five (5)
business days following receipt of Buyer's notice to Seller of the
claim, Buyer may proceed to rectify or remedy the claim at Seller's
expense. The Parties acknowledge that Designated Accruals contains
a reserve for warranty claims which shall be charged against prior to
reimbursement by Seller. The Parties further acknowledge that Buyer
is providing this warranty service as an accommodation to Seller and
such agreement shall not constitute an assumption by Buyer of any
Liability that does not constitute an Assumed Liability under this
Agreement.
2.2-40
(f) Access to Records. Each of the Parties after the Closing Date shall
permit the other full access at reasonable times, and in a manner so as
not to interfere with normal business operations, to all books, records
(including tax records), contracts and documents pertaining to the
operation of Seller's business prior to the Effective Date.
(g) Tax Matters. Tax matters of the Seller (including appeals) concerning
the period through the Effective Date shall be handled by the Seller.
However, the Buyer shall be notified in time of, and be given an
opportunity to comment on, tax and other administrative audits. Binding
declarations to the tax authorities which may have consequences for the
Buyer shall be made by the Seller only in agreement with the Buyer.
13. Environmental Indemnity.
The Seller will indemnify and hold harmless the Buyer and Buckeye
Technologies (the indemnified persons are sometimes hereinafter
referred to collectively as the ,,Indemnified Persons") for, and will
pay to the Indemnified Persons the amount of, any Adverse Consequence
arising, directly or indirectly, from or in connection with:
(i) any Environmental, Health, and Safety Liabilities arising out
of or relating to: (A) the ownership, operation, or
condition at any time on or prior to the Effective Date of
the Facilities or any other properties and assets
(whether real, personal, or mixed and whether tangible or
intangible) in which the Seller has or had an interest,
(B) any Hazardous Materials or other contaminants that were
present on the Facilities or such other properties and
assets at any time on or prior to the Effective Date; (C) any
Hazardous Materials or other contaminants, wherever
located, that were generated, transported, stored, treated,
released, or otherwise handled by the Seller or by any
other Person for whose conduct they are or may be held
responsible at any time on or prior to the Effective Date, or
(D) any Hazardous Activities that were conducted by the
Seller or by any other Person for whose conduct they are or
may be held responsible; or
(ii) any bodily injury (including illness, disability, and death,
and regardless of when any such bodily injury occurred,
was incurred, or manifested itself), personal injury,
property damage (including trespass, nuisance, wrongful
eviction, and deprivation of the use of real property), or
other damage of or to any Person, including any employee
or former employee of the Seller or any other Person for
whose conduct they are or may be held responsible, in any
way arising from or allegedly arising from any Hazardous
Activity conducted with respect to the Facilities or the
operation of the business by Seller prior to the Effective
Date, or from Hazardous Material that was (A) present on
or before the Effective Date on or at the Facilities (or
present on any other property, if such Hazardous Material
emanated from any of the Facilities and was present on any of
the Facilities on or prior to the Effective Date) or
(B) released by the Seller or any other Person for whose
2.2-41
conduct they are or may be held responsible, at any time on
or prior to the Effective Date. The Buyer will be entitled to
control any cleanup, and any related proceeding.
(iii) If any investigation, removal or remedial action is required
by Environmental, Health and Safety Requirements
("Required Action") and the Seller is Liable to the Buyer
for the Environmental, Health and Safety Liabilities
giving rise to the Required Action under the terms of this
Section 13, Seller shall be entitled to undertake said
Required Action so long as (a) Seller provides reasonable
notice to Buyer before commencing such Required Action;
(b) Seller performs such Required Action in accordance with
the Environmental, Health and Safety Requirements; (c)
Seller performs the Required Action, in accordance with
any requirements of any governmental agency having
jurisdiction over the administration and enforcement of the
Environmental, Health and Safety Requirements; (d)
Seller performs the Required Action in a manner so as not to
interfere, to the extent reasonably practicable, with
the Buyer's operation of business, and (e) Seller undertakes
the Required Action and uses commercially reasonable
efforts to complete the Required Action in a timely and
expeditious manner. If the Seller fails to meet the
foregoing conditions, the Buyer shall be entitled to perform
the Required Action at Seller's expense. If the Buyer
and Seller dispute either the extent to which there is a
Required Action or Seller's Liability with respect to the
Required Action or whether the Seller has failed to meet any
of the conditions set forth above which would entitle
Buyer to perform the Required Action, the Parties agree to
submit such issue to arbitration pursuant to Section 14
(a) hereof. In the event that Seller performs the Required
Action, Seller shall keep Buyer reasonably informed of
the progress of such Required Action and shall provide copies
to Buyer of the results of any Required Action, all
correspondence from or to any governmental entity
pertaining to the Required Action, and all reports and other
documentation pertaining to such Required Action. Buyer
shall provide access to the property at reasonable times to
allow Seller to perform any Required Action.
14. Miscellaneous.
(a) Arbitration. Any controversy or claim arising out of or relating to
this Agreement, not satisfied through negotiation, shall be settled
by binding arbitration in accordance with the Rules of Conciliation
and Arbitration of the International Chamber of Commerce by an
arbitration tribunal consisting of one arbitrator. The place of
arbitration shall be in Cologne, Germany. Judgment upon the award
rendered by the arbitrator may be entered in any court having
jurisdiction. As soon as reasonably practical after submission of
a demand for binding arbitration, Buyer and Seller shall select one
arbitrator, agreeable to all parties. This arbitrator will be
selected from lists prepared by the International Chamber of Commerce.
2.2-42
From the list the Parties will rank the arbitrators which are
acceptable. The highest ranking acceptable candidate will be
selected. If no arbitrators from the list composed by the
International Chamber of Commerce are acceptable to either of the
Parties, the International Chamber of Commerce will compile a second
list. If the Parties are unable to agree from a second list, the
arbitrator will be selected by the International Chamber of Commerce.
The results of the arbitrator's finding will be binding on the
Parties. As part of any award, the arbitrator may include an
award of attorneys fees to the prevailing party. English shall be
the language used for any arbitration.
(b) The Notary's fees and transfer taxes connected with the execution and
consummation of this Agreement shall be borne by the Buyer. The costs
of the transfer of any Intellectual Property shall be borne by the
Seller, with the transfer process being managed by the Buyer. Apart
therefrom, each contractual party shall bear its own costs and taxes
and the costs of its advisers and auditors. The costs connected with
the performance of the merger control proceedings with the Federal
Cartel Office shall be borne by the Buyer.
(c) Changes and amendments to this Agreement as well as declarations to be
made hereunder shall be valid only if made in writing unless a notarial
deed is legally required. This shall also apply to any change of this
provision.
(d)
(i) The Seller and UPM shall advise the Buyer and Buckeye Inc. of
a person or legal entity which is authorized to make and
accept with legally binding effect for the Seller and UPM all
declarations under this Agreement or in consummation hereof.
The Seller and UPM appoint as such joint agent:
Xxxx Xxxxx-Xxxxxx, Company Secretary
UPM-Kymmene, Group Head Office
Business Development
Xxxxxxxxxxxxxx 0
XXX-00000Xxxxxxxx, Xxxxxxx
Tel x000 000 00 000
Fax x000 000 00 000
A change of the person or address of an agent appointed by the
Seller and UPM shall be effective for the Buyer only one month
after the date on which it has been notified of such change.
Until the lapse of such period the authority of the previous
agent as well as his address shall be deemed to continue. The
obligation to nominate a joint agent pursuant to paragraph (a)
above shall apply until October 1, 2004.
2.2-43
(ii) The Buyer and Buckeye Inc. shall advise the Seller and UPM of
a person or legal entity which is authorized to make and
accept with legally binding effect for the Buyer and Buckeye
Inc. all declarations under this Agreement or in consummation
hereof.
The Buyer and Buckeye Inc. appoint as such joint agent:
Xxxxx X. Xxxxxxxx, Xx. Vice President
Buckeye Technologies Inc.
0000 Xxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Telephone No. 000-000-0000
Fax No. 000-000-0000
Copy to: Xxx X. Xxxxx, Xx.
Baker, Donelson, Bearman & Xxxxxxxx, P.C.
000 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Telephone No. 000-000-0000
Fax No. 000-000-0000
and Copy to: Xx. Xxxxx Xxxxxxx Xxxxxx
Oppenhoff & Xxxxxx
Hohenstaufenring 00
X- 00000 Xxxxxxx
Xxxxxxx
Telephone No.: x00-000-0000-0
Fax No.: x00-000-0000 -435
The provisions pursuant to para. (i), second paragraph, above shall
apply mutatis mutandis.
(e) No announcement of any kind to the media or any other indefinite group
of persons shall be made prior to the Effective Date in respect of the
subject matter of this Agreement except as specifically agreed between
UPM and Buckeye Inc. or if such announcement is required by law or
administrative or judicial order.
(f) If a provision of this Agreement should be or become invalid or not
contain a necessary regulation, the validity of the other provisions of
this Agreement shall not be affected thereby. The invalid provisions
2.2-44
shall be replaced and the gap be filled by a legally valid arrangement
which corresponds as closely as possible to the intentions of the
parties or what would have been the intentions of the parties according
to the aim and purpose of this Agreement if they had recognized the
gap.
(g) The Exhibits to this Agreement shall form an integral part of this
Agreement. The headings in this Agreement shall only serve the purpose
of easier orientation and are of no consequence for the contents and
interpretation of this Agreement. Statements in one provision of, or
Exhibit to, this Agreement shall be deemed to have been made also for
the purposes of all other provisions of, and Exhibits to, this
Agreement.
(h) This Agreement shall be governed by German law.
IN WITNESS THEREOF this Notarial Deed including its Annex, all its Exhibits and
the Disclosure Schedule hereto - with the exception of the lists of items
(Verzeichnisse) contained in the Exhibits D, E, F, G and in the Disclosure
Schedule and in the list attached thereto, for which the persons appeared have
renounced to have them read aloud and which were submitted to the notice of the
persons appeared and which were signed by them on each page - has been read
aloud to the persons appeared and this Notarial Deed, its Annex, all its
Exhibits and the Disclosure Schedule was confirmed and approved by the persons
appeared. The persons appeared then signed this Deed. All this was done at the
day herebelow written in the presence of me, the Notary Public, who also signed
this Deed and affixed my offical Seal.
Basel, this 1st (first) day of October, 1999 (nineteen hundred and ninety-nine)
2.2-45