EXHIBIT 2(c)
ASSET PURCHASE AGREEMENT
dated as of
May 10, 1998
between
JEFFERSON SMURFIT CORPORATION (U.S.), as Buyer,
and
SMURFIT PAPERBOARD, INC., as Seller
Relating to the Purchase and Sale of the No. 2 Linerboard Machine
at the Fernandina Beach, Florida Paper Mill and Other Assets
TABLE OF CONTENTS
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PAGE
ARTICLE 1
DEFINITIONS
SECTION 1.01. Definitions.....................................................1
ARTICLE 2
PURCHASE AND SALE
SECTION 2.01. Purchased Assets................................................4
SECTION 2.02. Assumed Liabilities.............................................5
SECTION 2.03. Excluded Liabilities............................................5
SECTION 2.04. Assignments Requiring Consent...................................6
SECTION 2.05. Purchase Price..................................................6
SECTION 2.06. Closing.........................................................7
SECTION 2.07. Time and Place of Closing.......................................7
SECTION 2.08. Termination of Agreements.......................................7
SECTION 2.09. Termination of Merger Agreement.................................8
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF BUYER
SECTION 3.01. Organization....................................................8
SECTION 3.02. Authority.......................................................9
SECTION 3.03. No Violation....................................................9
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF SELLER
SECTION 4.01. Title to Purchased Assets......................................10
SECTION 4.02. Organization...................................................10
SECTION 4.03. Authority......................................................10
SECTION 4.04. No Violation...................................................10
ARTICLE 5
COVENANTS OF BUYER AND SELLER
SECTION 5.01. Efforts to Consummate..........................................11
SECTION 5.02. Consents.......................................................11
SECTION 5.03. Conduct of Seller's Business...................................11
SECTION 5.04. Antitrust......................................................12
SECTION 5.05. Notices of Certain Events......................................12
SECTION 5.06. Public Announcements...........................................12
SECTION 5.07. Insurance......................................................12
SECTION 5.08. Information....................................................13
ARTICLE 6
CONDITIONS TO CLOSING
SECTION 6.01. Conditions to Obligations of Buyer and Seller..................13
SECTION 6.02. Conditions to Obligation of Seller.............................14
SECTION 6.03. Conditions to Obligation of Buyer..............................14
ARTICLE 7
SURVIVAL; INDEMNIFICATION
SECTION 7.01. Survival of Representations and Warranties.....................14
SECTION 7.02. Indemnification................................................15
ARTICLE 8
TERMINATION
SECTION 8.01. Termination....................................................16
SECTION 8.02. Effect of Termination..........................................16
ARTICLE 9
MISCELLANEOUS
SECTION 9.01. Notices........................................................17
SECTION 9.02. Expenses.......................................................18
SECTION 9.03. Entire Agreement...............................................18
SECTION 9.04. Successors and Assigns.........................................18
SECTION 9.05. Amendments and Waivers.........................................19
SECTION 9.06. Third Party Beneficiaries......................................19
SECTION 9.07. Governing Law..................................................19
SECTION 9.08. WAIVER OF JURY TRIAL, ETC......................................19
SECTION 9.09. Counterparts...................................................19
SECTION 9.10. Captions.......................................................20
SECTION 9.11. Specific Performance...........................................20
SECTION 9.12. Representations, Warranties, Covenants and Agreements..........20
ASSET PURCHASE AGREEMENT
AGREEMENT dated as of May 10, 1998 between Jefferson Smurfit
Corporation (U.S.), a Delaware corporation ("Buyer"), and Smurfit Paperboard,
Inc., a Delaware Corporation ("Seller").
W I T N E S S E T H
WHEREAS, Buyer is a wholly owned Subsidiary of Jefferson Smurfit
Corporation, a Delaware corporation ("JSC"); and
WHEREAS, Seller wishes to sell to Buyer, and Buyer wishes to purchase
from Seller, the No. 2 linerboard machine that on the date hereof is located at
JSC's Fernandina Beach, Florida paper mill (the "Fernandina Mill") and the other
Purchased Assets (as defined herein);
The parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.01. Definitions. (a) The following terms, as used herein,
have the following meanings:
"Affiliate" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by or under common control with
such other Person; provided that, for purposes of this Agreement, JSC and its
Subsidiaries shall not be considered Affiliates of Seller.
"Applicable Law" means any domestic or foreign, federal, state or local
statute, law, ordinance, rule, administrative interpretation, regulation, order,
writ, injunction, directive, judgment, decree or other requirement of any
Governmental Authority.
"Closing Date" means the date of the Closing.
"Collateral Trustee" means Bankers Trust Company, as collateral
trustee.
"Collateral Trustee Lien" means the Liens granted by Buyer or Seller to
the Collateral Trustee in the Purchased Assets to secure the obligations under
the Credit Agreement dated as of May 17, 1996 among JSC, JSCE, Inc., Buyer and
the banks party thereto and related agreements.
"Contracts" means all contracts, agreements, leases, licenses,
commitments, purchase and sales orders and other instruments of any kind,
whether written or oral (including, in each case, deposits relating thereto),
other than any contracts, agreements or other arrangements or instruments of any
kind relating to any Tax or Indebtedness.
"Governmental Authority" means any foreign, domestic, federal,
territorial, state or local governmental authority, quasi-governmental
authority, instrumentality, court, government or elf-regulatory organization,
commission, tribunal or organization or any regulatory, administrative or other
agency, or any political or other subdivision, department or branch of any of
the foregoing.
"HSR Act" means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of
1976, as amended.
"Indebtedness" means any liability or obligation in respect of (i) any
indebtedness for borrowed money or for the deferred purchase price of property
or services or which is evidenced by a note, bond, debenture or similar
instrument; (ii) any accounts payable for goods and services, (iii) any capital
lease; (iv) any obligation (whether fixed or contingent) to reimburse a bank or
other Person in respect of amounts paid or payable under a letter of credit,
performance bond or similar agreement or arrangement, or (v) any guarantee.
"Lien" means, with respect to any property or asset, any mortgage,
lien, pledge, charge, security interest or encumbrance in respect of such
property or asset.
"Permitted Liens" means (i) the Collateral Trustee Lien and (ii)
mechanics', materialsman's, carrier's, repairer's and other similar Liens
arising or incurred in the ordinary course of business that are not yet due and
payable or are being contested in good faith.
"Person" means an individual, corporation, partnership, limited
liability company, association, trust or other entity or organization, including
a government or political subdivision or an agency or instrumentality thereof.
"Subsidiary" means, with respect to any Person, any corporation or
other entity of which securities or other ownership interests having ordinary
voting power to elect a majority of the board of directors or other Persons
performing similar functions are at the time directly or indirectly owned by
such Person.
"Tax" means (i) all taxes or other levies imposed by any Governmental
Authority, domestic or foreign (a "Taxing Authority") including, without
limitation, any net income, alternative or add-on minimum tax, gross income,
gross receipts, sales, use, ad valorem, value added, transfer, franchise,
profits, license, registration, recording, documentary, conveyancing, gains,
withholding on amounts paid to or by Seller, payroll, employment, excise,
severance, stamp, occupation, premium, property, environmental or windfall
profit tax, custom duty or other tax or other like assessment, together with any
interest, penalty, addition to tax or additional amount imposed by any Taxing
Authority, or (ii) liability for the payment of any amounts of the type
described in (i) as a result of being a member of an affiliated, consolidated,
combined or unitary group or being a party to any agreement under which
liability is determined or taken account with reference to the liability of any
other Person; or (iii) liability for the payment of any amounts of the type
described in (i) as a result of any express or implied obligation to indemnify
any other Person or as a result of being party to any other arrangement or
agreement.
(b) Each of the following terms is defined in the Section set forth
opposite such term:
Term Section
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Assumed Liabilities 2.02
Buyer Indemnified Parties 7.02(a)
Closing 2.07
Excluded Liabilities 2.03
Indemnification Claim 7.02(c)
Losses 7.02(a)
Merger Agreement 2.09
No. 2 Machine 2.01(a)
Operating Agreement 2.08(a)
Purchased Assets 2.01
Purchase Price 2.05
Rescission Notice 2.09
Rights Agreement 2.08(a)
Seller Indemnified Parties 7.02(b)
SPI Assets 2.01(b)
ARTICLE 2
PURCHASE AND SALE
SECTION 2.01. Purchased Assets. Upon the terms and subject to the
conditions of this Agreement, Buyer agrees to purchase from Seller and Seller
agrees to sell, convey, transfer, assign and deliver, or cause to be sold,
conveyed, transferred, assigned and delivered, at the Closing to Buyer, free and
clear of all Liens other than the Collateral Trustee Lien, all of Seller's
right, title and interest in, to and under the following assets, properties and
rights as the same shall exist on the Closing Date (collectively, the "Purchased
Assets"):
(a) the No. 2 linerboard machine and related structures, equipment and
other property located at the Fernandina Mill as described on Schedule A to this
Agreement1 (such machine and other property, as now configured and as altered or
supplemented from time to time, "Machine No. 2");
(b) the additions or enhancements to a certain pulp washer and digester
located at the Fernandina Mill, which additions or enhancements are described on
Schedule B to this Agreement,2 as now configured and as altered or supplemented
from time to time (collectively with Machine No. 2, the "SPI Assets");
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1 To be conformed to Schedule B to the Rights Agreement.
2 To be conformed to Schedule C to the Rights Agreement.
(c) to the extent primarily used or held for use, sale or consumption
in connection with, or arising from or otherwise directly related to, the SPI
Assets, the Fernandina Mill or any products that are, in whole or in part,
manufactured at the Fernandina Mill:
(i) all machinery, equipment, fixtures, spare and replacement
parts, operating supplies and similar personal property;
(ii) all Contracts, if any;
(iii) all raw materials, work in progress, finished goods,
supplies, rolls and storeroom contents, fuel and other inventories;
(iv) all domestic and foreign inventions, trademarks, service
marks, trade names, mask works, patents, trade secrets, copyrights,
know-how (including any registrations or applications for registration
of any of the foregoing), and any other similar type of intellectual
property right;
(v) all transferable licenses, permits or other governmental
authorizations;
(vi) all software, communications equipment, computer applications
and operating programs;
(vii) all books, records, files and papers, whether in hard copy or
computer format, including without limitation engineering information,
sales and promotional literature, manuals and data, sales and purchase
correspondence, lists of present and former suppliers, lists of present
and former customers, design and engineering specifications, production
standards and practices; and
(viii) all other tangible or intangible personal property and other
interests owned by Seller or any of its Affiliates;
(ix) all of Seller's rights, claims, counterclaims, crossclaims,
credits, causes or action or rights of set-off against third parties
relating to the Purchased Assets or Assumed Liabilities, including
without limitation unliquidated rights under manufacturers' and
vendors' warranties; and
(d) all goodwill associated with the Purchased Assets.
SECTION 2.02. Assumed Liabilities. Upon the terms and subject to the
conditions of this Agreement, Buyer agrees, effective at the time of the
Closing, to assume and to pay, perform and discharge all Assumed Liabilities. As
used herein, the term "Assumed Liabilities" means all liabilities and
obligations of Seller (whether absolute or contingent, foreseen or unforeseen,
or known or unknown and whether or not arising before or after the Closing) to
the extent arising primarily from, primarily related to or incurred primarily in
connection with the operation or use of the Purchased Assets or any portion
thereof prior to the Closing Date, including without limitation all liabilities
and obligations of Seller arising under any Contracts (other than Contracts
entered into or made in violation of this Agreement); provided that in no event
will the Assumed Liabilities include any Excluded Liabilities.
SECTION 2.03. Excluded Liabilities. Notwithstanding any provision in
this Agreement or any other writing to the contrary, Buyer is assuming only the
Assumed Liabilities and is not assuming any other liability or obligation of
Seller or any of its Affiliates of whatever nature, whether presently in
existence or arising hereafter. All such other liabilities and obligations shall
be retained by and remain obligations and liabilities of Seller (all such
liabilities and obligations not being assumed being herein referred to as the
"Excluded Liabilities"). Without limiting the effect of the foregoing and
notwithstanding anything to the contrary in this Agreement or any other writing,
all of the following shall be Excluded Liabilities:
(a) any Indebtedness of Seller or any of its Affiliates;
(b) any liability or obligation of Seller or any of its Affiliates for
any Taxes; provided that any transfer taxes incurred in connection with the
transactions contemplated by this Agreement shall be paid in the manner set
forth in Section 9.02 hereof;
(c) any liability or obligation of Seller or any of its Affiliates
relating to employee compensation, employee benefits or similar matters;
(d) any liability or obligation whether presently existing or
hereafter arising relating to fees, commissions or expenses owed to any broker,
finder, investment banker, accountant, attorney or other intermediary or advisor
employed by Seller or any of its Affiliates in connection with the transactions
contemplated by this Agreement; and
(e) any liability or obligation of Seller or any of its Affiliates to
Buyer, JSC or any of their respective Affiliates, including without limitation
the liabilities and obligations of Seller to Buyer under the Operating
Agreement.
SECTION 2.04. Assignments Requiring Consent. Anything in this Agreement
to the contrary notwithstanding, this Agreement shall not constitute an
agreement to assign any Purchased Asset or any right thereunder if an attempted
assignment, without the consent of a third party, would constitute a breach or
in any way adversely affect the rights of Buyer or Seller thereunder. If such
consent is not obtained, Seller and Buyer will cooperate in a mutually agreeable
arrangement under which Buyer would obtain the benefits of, and assume the
obligations under, the relevant Purchased Asset in accordance with this
Agreement. To the extent that Buyer and Seller have not been able to enter into
such an alternative arrangement, the Purchase Price shall be appropriately
reduced.
SECTION 2.05. Purchase Price. The purchase price to be paid by Buyer at
the Closing to Seller for the Purchased Assets (the "Purchase Price") is
$175,000,000. The Purchase Price will be paid as provided in Section 2.06.
SECTION 2.06. Closing. At the Closing:
(a) Buyer will issue a promissory note to Seller in the form of
Exhibit A hereto with a face amount equal to the Purchase Price (the "Promissory
Note") unless the Closing shall occur following consummation of the Merger
between a wholly owned Subsidiary of JSC and Stone Container Corporation, a
Delaware corporation ("Stone"), in which case the Buyer will wire transfer the
Purchase Price to Seller in immediately available funds to an account designated
by Seller by written notice to Buyer not later than two business days prior to
the Closing; and
(b) Seller will enter into an Assignment and Assumption Agreement
substantially in the form attached hereto as Exhibit B and, subject to the
provisions hereof, Seller will deliver to Buyer such bills of sale,
endorsements, consents, assignments and other good and sufficient instruments of
conveyance and assignment as the parties and their respective counsel shall deem
reasonably necessary to vest in Buyer all right, title and interest in, to and
under the Purchased Assets.
SECTION 2.07. Time and Place of Closing. The consummation of the
purchase and sale of the Purchased Assets hereunder (the "Closing") will take
place at the offices of ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇ January 15, 1999, subject to the satisfaction or waiver (by the
relevant party) of the conditions set forth in Article 6 or at such other time
or place as Buyer and Seller may agree.
SECTION 2.08. Termination of Agreements. (a) Subject to Sections
2.08(c) and 2.09, Buyer and Seller hereby agree to terminate, effective as of
the Closing Date, the Operating Agreement dated as of April 30, 1992, as amended
(the "Operating Agreement"), between Buyer and Seller, the Rights Agreement
dated as of April 30, 1992 (the "Rights Agreement") among Buyer, Seller and
Bankers Trust Company, as Collateral Trustee, and any other agreements between
Buyer and Seller relating to Machine No. 2 or any other Purchased Assets (other
than this Agreement or any other agreements entered into on or after the date
hereof).
(b) Any amounts payable by Buyer or Seller pursuant to Article II of
the Operating Agreement for any period ending on or prior to the Closing Date
will be reconciled and paid in accordance with past practice.
(c) Notwithstanding termination of the Operating Agreement and Rights
Agreement, the rights and obligations of Buyer and Seller under Article VII of
the Operating Agreement (Exculpation and Indemnification), to the extent arising
out of events occurring prior to the Closing Date, shall survive such
termination.
(d) Seller agrees that notwithstanding Section 8.5 of the Rights
Agreement, all of Seller's rights under the Rights Agreement shall be released
and waived, effective as of the Closing Date. Seller agrees that if requested by
the Collateral Trustee, Seller will deliver a certificate or other instrument to
the Collateral Trustee and Buyer in accordance with Section 8.4 of the Rights
Agreement.
SECTION 2.09. Termination of Merger Agreement. In the event that the
Agreement and Plan of Merger dated as of the date hereof (the "Merger
Agreement") among JSC, a wholly-owned Subsidiary of JSC and Stone is terminated
prior to the consummation of the merger contemplated thereby, Buyer shall be
entitled, by delivery of a written notice (a "Rescission Notice") to such effect
to Seller within 30 business days of the termination of the Merger Agreement, to
terminate this Agreement in the event this Agreement has not previously been
consummated or to rescind the transactions contemplated hereby, in which case
(i) the Purchased Assets shall be reconveyed to Seller, (ii) Seller shall
reassume all Assumed Liabilities, (iii) the Operating Agreement and Rights
Agreement shall be reinstated, (iv) Buyer's obligations under the Promissory
Note shall be extinguished, (v) this Agreement (other than the provisions of
this Section 2.09, Section 8.02 and Article 9) shall terminate and (vi) Buyer
and Seller shall enter into all agreements and arrangements necessary or
appropriate to implement the transactions contemplated by this Section 2.09. Any
decision as to whether Buyer should deliver a Rescission Notice shall be made
exclusively by the Board of Directors of JSC (on behalf of Buyer) other than any
members of the Board of Directors selected by Smurfit International B.V.
("SIBV") pursuant to the Stockholders Agreement dated as of May 3, 1994 among
SIBV, Jefferson Smurfit Corporation and various other parties.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller as of the date hereof and as of
the Closing Date that:
SECTION 3.01. Organization. Buyer is a corporation duly organized,
validly existing and in good standing under the laws of Delaware.
SECTION 3.02. Authority. Buyer has all corporate power and authority to
execute and deliver this Agreement and to consummate the transactions
contemplated on its part hereby. The execution, delivery and performance by
Buyer of this Agreement and the consummation of the transactions contemplated
hereby have been duly authorized by all necessary corporate action on the part
of Buyer. No other action on the part of Buyer is necessary to authorize the
execution and delivery of this Agreement by Buyer or the performance by Buyer of
its obligations hereunder. This Agreement has been duly executed and delivered
by Buyer and constitutes a legal, valid and binding agreement of Buyer,
enforceable against it in accordance with its terms, subject to applicable
bankruptcy, insolvency, moratorium, reorganization or similar laws affecting
creditors' rights generally and subject to general equitable principles
(regardless of whether such enforceability is considered in a proceeding in
equity or at law). When issued and delivered in accordance with the terms of
this Agreement, the Promissory Note will have been duly issued and delivered by
Buyer and will constitute a legal, valid and binding obligation of Buyer,
enforceable against it in accordance with its terms, subject to applicable
bankruptcy, insolvency, moratorium, reorganization or similar laws affecting
creditors' rights generally and subject to general equitable principles
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).
SECTION 3.03. No Violation. The execution and delivery of this
Agreement by Buyer, and performance by Buyer of its obligations hereunder and
the consummation of the transactions contemplated hereby will not: (a) violate
any provision of law, rule, regulation, order, writ, judgment, injunction,
decree, determination or aware applicable to Buyer, (b) require the consent,
waiver, approval, license or authorization or any filing by Buyer with any
Governmental Authority (other than a notification form filed under the HSR Act
and such consents, waivers, approvals, licenses and authorizations and filings
as are set forth on Schedule 3.03 hereto) or (c) assuming compliance with the
matters referred to in clause (b) (and except as otherwise set forth on Schedule
3.03 hereto), violate, result (with or without notice or the passage of time, or
both) in a breach of or give rise to the right to accelerate, terminate or
cancel any obligation under or constitute (with or without notice or the passage
of time, or both) a default under, any of the terms or provisions of any charter
or other governing document, bylaw, agreement, note, indenture, mortgage,
contract, order, judgment, ordinance, regulation or decree to which Buyer is
subject or by which Buyer is bound and which would have an adverse effect on the
ability of Seller to perform its obligations under this Agreement.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer as of the date hereof and as of
the Closing Date that:
SECTION 4.01. Title to Purchased Assets. Seller has good and marketable
title to all Purchased Assets, free and clear of all Liens other than Permitted
Liens. At the Closing, Buyer will acquire all of Seller's right, title and
interest in and to the Purchased Assets, free and clear of any and all Liens
other than the Collateral Trustee Lien.
SECTION 4.02. Organization. Seller is a corporation duly incorporated,
validly existing and in good standing under the laws of Delaware.
SECTION 4.03. Authority. Seller has all corporate power and authority
to execute and deliver this Agreement, and to consummate the transactions
contemplated on its part hereby. The execution, delivery and performance by
Seller of this Agreement and the consummation of the transactions contemplated
hereby have been duly authorized by all necessary corporate action on the part
of Seller. No other action on the part of Seller is necessary to authorize the
execution and delivery of this Agreement by Seller or the performance by Seller
of its obligations hereunder. This Agreement has been duly executed and
delivered by Seller and constitutes a legal, valid and binding agreement of
Seller, enforceable against it in accordance with its terms, subject to
applicable bankruptcy, insolvency, moratorium, reorganization or similar laws
affecting creditors' rights generally and subject to general equitable
principles (regardless of whether such enforceability is considered in a
proceeding in equity or at law).
SECTION 4.04. No Violation. The execution and delivery of this
Agreement by Seller, and performance by Seller of its obligations hereunder and
the consummation of the transactions contemplated hereby will not: (a) violate
any provision of law, rule, regulation, order, writ, judgment, injunction,
decree, determination or aware applicable to Seller, (b) require the consent,
waiver, approval, license or authorization or any filing by Seller with any
Governmental Authority (other than a notification form filed under the HSR Act
and such consents, waivers, approvals, licenses and authorizations and filings
as are set forth on Schedule 4.04 hereto), (c) assuming compliance with the
matters referred to in clause (b), violate, result (with or without notice or
the passage of time, or both) in a breach of or give rise to the right to
accelerate, terminate or cancel any obligation under or constitute (with or
without notice or the passage of time, or both) a default under, any of the
terms or provisions of any charter or other governing document, bylaw,
agreement, note, indenture, mortgage, contract, order, judgment, ordinance,
regulation or decree to which Seller is subject or by which Seller is bound and
which would have an adverse effect on the ability of Seller to perform its
obligations under this Agreement or (d) result in the creation or imposition of
any Tax or Lien on any Purchased Assets, except for transfer taxes, if any.
ARTICLE 5
COVENANTS OF BUYER AND SELLER
SECTION 5.01. Efforts to Consummate. Upon the terms and subject to the
conditions of this Agreement, each of Buyer and Seller agrees to use its best
efforts to take, or cause to be taken, all actions and to do, or cause to be
done, all things necessary, proper or advisable to consummate the transactions
contemplated by this Agreement and the other transactions contemplated hereby.
In case at any time after the Closing Date any further action is reasonably
necessary or desirable to carry out the purposes of this Agreement, the proper
partners, officers or directors of each party to this Agreement will take all
such reasonably necessary action. No party hereto will take any action for the
purpose of delaying, impairing or impeding the receipt of any required consent,
authorization, order or approval or the making of any required filing.
SECTION 5.02. Consents. Each of Buyer and Seller agrees to use its best
efforts to obtain or to cause to be obtained all necessary and material waivers,
consents and approvals of all Persons (including, without limitation,
Governmental Authorities) necessary to consummate the transactions contemplated
by this Agreement.
SECTION 5.03. Conduct of Seller's Business. (a) From the date of this
Agreement until the Closing Date, Seller agrees that it will (and will cause its
Affiliates to) (i) conduct the portion of its (or their) business relating to or
affecting the Purchased Assets in the ordinary course consistent with past
practices; (ii) not sell, lease, offer to sell or lease, pledge, encumber or
otherwise dispose of or transfer any interest in or create or suffer to exist
any Lien on any of the Purchased Assets other than Permitted Liens; (iii) not
amend or otherwise modify any Contract without the prior written consent of
Buyer; or (iv) enter into any contract, agreement or commitment with respect to
any of the foregoing.
(b) Without limiting the effect of the foregoing, Seller agrees that
if its consent is required under the Operating Agreement at any time after the
date hereof, its consent will not be unreasonably withheld, delayed or
conditioned. Seller agrees to use the same standards for determining whether to
give any such consent as it used prior to the date hereof.
SECTION 5.04. Antitrust. Each of Buyer and Seller agrees to use its
best efforts to take, or cause to be taken, all action, and to do, or cause to
be done, all things necessary or required by the United Stated Federal Trade
Commission or the United States Department of Justice in connection with the
expiration or termination of the waiting period under the HSR Act as a result of
the transactions contemplated by this Agreement.
SECTION 5.05. Notices of Certain Events. Each of Buyer and Seller
agrees that it will, upon obtaining knowledge of any of the following, promptly
notify the other parties hereto of: (a) any notice or other communication from
any Person alleging that the consent of such Person is or may be required in
connection with the transactions contemplated hereby; (b) any notice or other
communication from any Governmental Authority in connection with the
transactions contemplated hereby; (c) any actions, suits, claims, investigations
or proceedings commenced or, to its knowledge threatened against, relating to or
involving or otherwise affecting Buyer, Seller or JSC that relates to this
Agreement or the consummation of the transactions contemplated hereby.
SECTION 5.06. Public Announcements. Except as required by law or
regulation or the rules of any stock exchange, so long as this Agreement is in
effect, each of Buyer and Seller agrees that it will not, and each of Buyer and
Seller agrees to cause its Affiliates not to, issue or cause the publication of
any press release or other announcement with respect to the transactions
contemplated by this Agreement without the consent of the other party hereto and
JSC, which consent will not be unreasonably withheld or delayed.
SECTION 5.07. Insurance. (a) From and after the date of this Agreement
(including after the Closing Date), Seller will (and will cause its Affiliates)
not take or fail to take any action if such action or inaction, as the case may
be, would adversely affect the applicability of any insurance in effect on the
date of this Agreement that covers all or any part of the Purchased Assets or
Assumed Liabilities with respect to events occurring prior to the Closing
("Applicable Insurance").
(b) Seller agrees that, from and after the Closing Date, all
Applicable Insurance directly or indirectly applicable to any Purchased Asset or
Assumed Liability will be for the benefit of Buyer. Without limiting the
generality of the foregoing, from and after the Closing Date and in any manner
requested by Buyer, Seller will use its best efforts to ensure that all
Applicable Insurance policies and arrangements are modified, amended or assigned
so that Buyer is the direct beneficiary of such Applicable Insurance with all
rights to enforce, obtain the benefit of and take all other action in respect of
such Applicable Insurance; provided that, if the modifications, amendments or
assignments contemplated by this Section 5.07(b) are not permissible, Seller
will enter into such other arrangements as Buyer may request to ensure that
Buyer is entitled to the benefit (to the fullest extent set forth in the
relevant policies and arrangements) of any Applicable Insurance.
SECTION 5.08. Information. (a) Except as may be deemed appropriate to
ensure compliance with any Applicable Laws and subject to any applicable
privileges (including, without limitation, the attorney-client privilege), from
and after the Closing, Seller will (and will cause its Affiliates to) afford
promptly to Buyer and its representatives reasonable access to the books and
records of Seller and its Affiliates during normal business hours and upon
reasonable prior notice to the extent reasonably necessary to permit Buyer to
determine any matter relating to any of the Purchased Assets or Buyer's rights
and obligations under this Agreement; provided that any such access by Buyer or
its representatives shall not unreasonably interfere with the conduct of the
business of Seller or any of its Affiliates.
(b) Except as may be deemed appropriate to ensure compliance with any
Applicable Laws and subject to any applicable privileges (including, without
limitation, the attorney-client privilege), from and after the Closing, Buyer
will (and will cause its Affiliates to) afford promptly to Seller and its
representatives reasonable access to the books and records of Buyer and its
Affiliates during normal business hours and upon reasonable prior notice to the
extent reasonably necessary to permit Seller to determine any matter relating to
its rights and obligations under this Agreement; provided that any such access
by Seller or its representative shall not unreasonably interfere with the
conduct of Buyer or any of its Affiliates.
ARTICLE 6
CONDITIONS TO CLOSING
SECTION 6.01. Conditions to Obligations of Buyer and Seller. The
respective obligations of Buyer and Seller to consummate the Closing are subject
to the satisfaction or waiver by the Buyer and Seller of each of the following
conditions:
(a) No governmental authority or other agency or commission or court or
judicial body of competent jurisdiction shall have enacted, issued, promulgated,
enforced or entered any statute, rule, regulation, injunction or other order
(whether temporary, preliminary or permanent) that is in effect and has the
effect of prohibiting consummation of the transactions contemplated by this
Agreement.
(b) Any applicable waiting period under the HSR Act shall have expired
or been terminated.
(c) Buyer shall have received the consents, waivers, approvals,
licenses and authorizations and filings set forth on Schedule 3.03 hereto, if
and to the extent necessary to prevent a breach of the debt instruments referred
to thereon.
SECTION 6.02. Conditions to Obligation of Seller. The obligation of
Seller to consummate the Closing is subject to the satisfaction of the following
further condition:
(a) The representations and warranties of Buyer contained in this
Agreement shall be true and correct in all material respects at and as of the
Closing Date as if made at and as of such date.
SECTION 6.03. Conditions to Obligation of Buyer. The obligation of
Buyer to consummate the Closing is subject to the satisfaction of each of the
following further conditions:
(a) Seller shall have performed in all material respects its
obligations under this Agreement required to be performed by it on or prior to
the Closing Date pursuant to the terms hereof.
(b) The representations and warranties of Seller contained in this
Agreement shall be true and correct in all material respects at and as of the
Closing Date as if made at and as of such date.
ARTICLE 7
SURVIVAL; INDEMNIFICATION
SECTION 7.01. Survival of Representations and Warranties. The
representations, warranties, covenants and agreements of the parties contained
in this Agreement will survive the Closing.
SECTION 7.02. Indemnification. (a) Seller hereby indemnifies Buyer and
each of its Affiliates and each officer, director, partner, shareholder,
employee, advisor or representative of Buyer or any of its Affiliates
(collectively, the "Buyer Indemnified Parties") against any and all liabilities,
damages, losses, costs or expenses whatsoever, including reasonable fees of
counsel and expenses of investigation (collectively, "Losses"), incurred or
suffered by any Buyer Indemnified Party arising out of or resulting from:
(i) any misrepresentation or breach of any warranty, covenant or
agreement made or to be performed by Seller pursuant to this Agreement;
(ii) any Excluded Liability; or
(iii) the enforcement of their rights under this Section 7.02.
(b) Buyer hereby indemnifies Seller and each of its Affiliates and each
officer, director, partner, shareholder, employee advisor or representative of
Seller or any of its Affiliates (collectively, the "Seller Indemnified Parties")
against any and all Losses incurred or suffered by any Seller Indemnified Party
arising out of or resulting from:
(i) any misrepresentation or breach of any warranty, covenant or
agreement made or to be performed by Buyer pursuant to this Agreement;
(ii) any Assumed Liability; or
(iii) the enforcement of their rights under this Section 7.02.
(c) If any third party asserts a claim against any indemnified party
for which indemnification would be available under Section 7.02 hereof (an
"Indemnification Claim"), the indemnified party will promptly give notice of
such Indemnification Claim, describing such Indemnification Claim with
reasonable specificity, to the indemnifying party; provided that the failure to
give such notice will not affect the right of the indemnified party to
indemnification hereunder except to the extent that such failure prejudices the
ability of the indemnifying party to defend any Indemnification Claim or take
any other remedial action. The indemnifying party shall be entitled to assume
the defense of such Indemnification Claim, including the employment of counsel
reasonably satisfactory to the indemnified party; provided that if the
indemnified party reasonably determines in good faith that its interest with
respect to such Indemnification Claim cannot appropriately be represented by the
indemnifying party, such indemnified party shall have the right to assume
control of the defense of such Indemnification Claim. In addition, in the event
that such indemnifying party, within a reasonable time after notice of any such
Indemnification Claim, fails to defend any indemnified party, such indemnified
party will (upon further notice to such indemnifying party) have the right to
undertake its defense of such Indemnification Claim for the account of such
indemnifying party and to have its expenses reimbursed promptly with respect to
such Indemnification Claim. Regardless of which party in controlling the defense
of any Indemnification Claim, both the indemnifying party and the indemnified
party shall act in good faith and no settlement of such Indemnification Claim
may be agreed to without the written consent of the indemnifying party, which
consent shall not be unreasonably withheld. The controlling party shall deliver,
or cause to be delivered to the other party copies of all correspondence,
pleadings, motions, briefs, appeals or other written statement relating to or
submitted in connection with the defense of any such Indemnification Claim, and
timely notices of any hearing or other court proceeding relating to such
Indemnification Claim. No indemnifying party shall, without the written consent
of the applicable indemnified party, effect a settlement or compromise of, or
consent to the entry of any judgment with respect to, any Indemnified Claim
(whether or not the indemnified party is an actual or potential party to such
action or claim) unless such settlement, compromise or judgment includes an
unconditional release of all applicable indemnified parties for all liability
arising out of or relating to such Indemnified Claim. Notwithstanding the
foregoing, in any matter the indemnifying party shall not be liable for the fees
and expenses of more than one counsel for all indemnified parties under this
Agreement in addition to one local counsel.
ARTICLE 8
TERMINATION
SECTION 8.01. Termination. This Agreement may be terminated at any time
prior to the Closing by written notice to the other parties hereto, as follows,
and in no other manner:
(a) by mutual written agreement of Buyer and Seller; and
(b) subject to Section 2.09, by Buyer or Seller if the Merger Agreement
is terminated;
SECTION 8.02. Effect of Termination. If this Agreement is terminated
pursuant to Section 8.01, all further obligations of the parties hereto under
this Agreement shall terminate without further liability or obligation of any
party to any other party, including liability for damages; provided that (i)
such termination shall not relieve any party hereto from liability for breach of
this Agreement, (ii) no termination pursuant to Section 8.01(b) shall limit or
affect any party's rights or obligations set forth in Section 2.09 and (iii) the
provisions of this Section 8.02 and Article 9 shall survive any termination of
this Agreement.
ARTICLE 9
MISCELLANEOUS
SECTION 9.01. Notices. All notices, requests and other communications
to any party hereunder shall be in writing (including facsimile transmission)
and shall be given,
if to Buyer to:
Jefferson Smurfit Corporation (U.S.)
Jefferson Smurfit Centre
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇,
Vice President and Chief Financial Officer
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
if to Seller, to:
Smurfit Paperboard, Inc.
Jefferson Smurfit Centre
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Vice President
and Chief Financial Officer
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Wachtell, Lipton, ▇▇▇▇▇ & ▇▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇
Attention: Houghton Fry, Esq.
Fax: ▇▇▇-▇-▇▇▇-▇▇▇▇
All such notices, requests and other communications shall be deemed received on
the date of receipt by the recipient thereof if received prior to 5:00 p.m. in
the place of receipt and such day is a business day in the place of receipt.
Otherwise, any such notice, request or communication shall be deemed not to have
been received until the next succeeding business day in the place of receipt.
SECTION 9.02. Expenses. All costs and expenses incurred in connection
with the Agreement and the transactions contemplated hereby will be paid by the
party incurring such cost or expense; provided that any transfer taxes incurred
in connection with the transactions contemplated by the Agreement shall be paid
by Seller.
SECTION 9.03. Entire Agreement. This Agreement (including any Schedules
and Exhibits hereto) constitutes the entire agreement between the parties with
respect to the subject matter of this Agreement and supersedes all prior
agreements and understandings, both oral and written, between the parties with
respect to the subject matter of this Agreement.
SECTION 9.04. Successors and Assigns. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns; provided that no party may assign, delegate
or otherwise transfer any of its rights or obligations under this Agreement
without the consent of each other party hereto, except that Buyer may transfer
or assign, in whole or from time to time in party, to any one or more of its
direct or indirect majority-owned Subsidiaries, the right to purchase all or a
portion of the Purchased Assets, but no such transfer or assignment will relieve
Buyer of its obligations hereunder.
SECTION 9.05. Amendments and Waivers. (a) Any provision of this
Agreement may be amended or waived if, but only if, such amendment or waiver is
in writing and is signed, in the case of an amendment, by each party to this
Agreement, or in the case of a waiver, by the party against whom the waiver is
to be effective; provided that any amendment or waiver of Section 9.06 will also
require the written consent of JSC and Stone.
(b) No failure or delay by any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or remedies
provided by law.
SECTION 9.06. Third Party Beneficiaries. No provision of this Agreement
is intended to confer upon any Person other than the parties hereto any rights
or remedies hereunder, except that each of JSC and Stone are hereby designated
as third party beneficiaries to this Agreement.
SECTION 9.07. Governing Law. This Agreement shall be governed by and
construed in accordance with the law of the State of New York, without regard to
the conflicts of law rules of the State of New York.
SECTION 9.08. WAIVER OF JURY TRIAL, ETC. EACH OF THE PARTIES HERETO
HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY. THE PARTIES AGREE, SOLELY IN RESPECT OF THE INTERPRETATION
AND ENFORCEMENT OF THE PROVISIONS OF THE AGREEMENT, TO SUBMIT TO THE EXCLUSIVE
JURISDICTION OF, AND TO WAIVE ANY OBJECTION AS TO VENUE IN, THE FEDERAL OR STATE
COURTS LOCATED IN THE COUNTY OF NEW YORK, STATE OF NEW YORK. SERVICE OF PROCESS
IN ANY ACTION ARISING OUT OF OR RELATING TO THIS AGREEMENT SHALL BE EFFECTIVE IF
DELIVERED OR SENT IN ACCORDANCE WITH THE PROVISIONS OF SECTION 9.01 HEREOF.
SECTION 9.09. Counterparts. This Agreement may be signed in any number
of counterparts, each of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument. This Agreement
shall become effective when each party hereto shall have received a counterpart
hereof signed by the other party hereto.
SECTION 9.10. Captions. The captions herein are included for
convenience of reference only and shall be ignored in the construction or
interpretation hereof.
SECTION 9.11. Specific Performance. The parties hereto acknowledge
that, in view of the uniqueness of the parties hereto and the transactions
contemplated hereby, the parties hereto would not have an adequate remedy at law
for money damages in the event that this Agreement were not performed in
accordance with its terms, and therefore agree that the parties shall be
entitled to specific enforcement of the terms hereof in addition to any other
remedy to which the parties hereto may be entitled at law or in equity.
SECTION 9.12. Representations, Warranties, Covenants and Agreements.
References in representations, warranties, covenants and agreements in this
Agreement to the "transactions contemplated by this Agreement" (and similar
references) shall not be deemed to include the Merger.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
JEFFERSON SMURFIT CORPORATION
(U.S.)
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President and Chief
Financial Officer
SMURFIT PAPERBOARD, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President and General
Counsel
EXHIBIT B
ASSIGNMENT AND ASSUMPTION AGREEMENT
ASSIGNMENT AND ASSUMPTION AGREEMENT, dated as of ________ __, 199_,
between Jefferson Smurfit Corporation (U.S.), a Delaware corporation ("Buyer"),
and Smurfit Paperboard, Inc., a Delaware Corporation ("Seller").
W I T N E S S E T H :
WHEREAS, Buyer and Seller have concurrently herewith consummated the
purchase by Buyer of the Purchased Assets pursuant to the terms and conditions
of the Asset Purchase Agreement dated as of May 10, 1998 between Buyer and
Seller, (the "Asset Purchase Agreement"; terms defined in the Asset Purchase
Agreement and not otherwise defined herein being used herein as therein
defined);
WHEREAS, pursuant to the Asset Purchase Agreement, Buyer has agreed to
assume certain liabilities and obligations of Seller with respect to the
Purchased Assets;
NOW, THEREFORE, in consideration of the sale of the Purchased Assets
and in accordance with the terms of the Asset Purchase Agreement, Buyer and
Seller agree as follows:
(a) (i) Seller does hereby sell, transfer, assign and deliver to Buyer
all of the right, title and interest of Seller in, to and under the Purchased
Assets; provided that no sale, transfer, assignment or delivery shall be made of
any or any material portion of any Purchased Asset if an attempted sale,
assignment, transfer or delivery, without the consent of a third party, would
constitute a breach or other contravention thereof or in any way adversely
affect the rights of Buyer or Seller thereunder (in which case the provision of
Section 2.04 of the Asset Purchase Agreement shall be applicable).
(ii) Buyer does hereby accept all the right, title and interest of
Seller in, to and under all of the Purchased Assets (except as aforesaid) and
Buyer assumes and agrees to pay, perform and discharge promptly and fully when
due all of the Assumed Liabilities.
(b) This Agreement shall be governed by and construed in accordance
with the law of the State of New York, without regard to the conflicts of law
rules of such state.
(c) This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original, but all of which together shall
constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
JEFFERSON SMURFIT CORPORATION
(U.S.)
By:
-------------------------------
Name:
Title:
SMURFIT PAPERBOARD, INC.
By:
-------------------------------
Name:
Title:
