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EXHIBIT 2.1.1
AMENDMENT NO. 1
to
Stock Purchase Agreement
THIS AMENDMENT entered into as of August 13, 1999 to the STOCK
PURCHASE AGREEMENT (the "Agreement") dated May 18, 1999 between Inexcon Maine,
Inc. ("Buyer") and Bowater Incorporated ("Seller"),
WITNESSETH
WHEREAS, Seller and Buyer each desire an amendment of the
Agreement to reflect changes with regard to the payment of the Purchase Price
and other terms of the Agreement.
NOW, THEREFORE, to effectuate such changes and in
consideration of the mutual agreements hereinafter set forth and other good and
valuable consideration, the receipt of which is hereby acknowledged by each
Party, and intending to be legally bound hereby, the Parties agree as follows:
1. All capitalized terms used and not otherwise defined herein
shall have the meanings given thereto in the Agreement; references to Sections
are to Sections of the Agreement.
2. The definitions of "Election Amount," "Escrow Agreement"
and "Subordinated Note" set forth in Section 1.01 are deleted.
3. The following definition is added to Section 1.01:
"Bank of Montreal Undertaking" shall have the meaning
set forth in Section 6.01."
4. In the first sentence of Section 2.01(a), the clause, "Cash
in the amount of $90,000,000." is replaced with the following: "A purchase price
note in the principal amount of $110,000,000 payable on demand in the form
attached hereto as Exhibit X".
5. Section 2.02(c) is deleted.
6. Section 3.02 is deleted and replaced with the following:
"3.02 Promissory Note. At the Closing, Buyer shall
deliver to Seller the
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Term Note, dated the Closing Date."
7. Section 4.12 is amended by adding thereto, prior to the
final parenthetical therein: "and (vi) any liability assumed by Buyer pursuant
to Section 7.19."
8. Section 6.01 is deleted and replaced with the following:
"6.01 SECTION 338(h)(10) ELECTION. (a) Seller and
Buyer will jointly make an election under Section
338(h)(10) of the Code (and any corresponding
election under State of Maine tax law) (collectively
a "Section 338(h)(10) Election") with respect to the
purchase and sale of the GNP Shares hereunder. Seller
will include any income, gain, loss, deduction, or
other tax item resulting from the Section 338(h)(10)
Election on its Tax Returns to the extent permitted
by applicable law, and will indemnify Buyer and GNP
against any Tax imposed in GNP as a result of the
deemed asset sale resulting from the Section
338(h)(10) election, except to the extent Buyer is
otherwise required to indemnify Seller. It is the
intent of the Parties to neutralize the impact on
Buyer of making the Section 338(h)(10) Election. Due
to the inability of the Parties to determine with
specificity the amount of additional taxes incurred
by Buyer, therefor, Seller shall pay in full
satisfaction of the above indemnification: (i)
$2,000,000 to the Buyer upon receipt by Seller of
payment in full of the Purchase Price Note; and (ii)
$20,000,000 on behalf of Buyer to the Bank of
Montreal or its assigns on or before September 29,
2000 pursuant to an agreement in the form of Exhibit
Y hereto (the "Bank of Montreal Undertaking"). The
Bank of Montreal Undertaking shall be executed and
delivered by Seller to the Bank of Montreal at the
Closing."
If there is a Final Negative Determination as herein
defined, Buyer shall thereupon pay to Seller in cash
the full $22,000,000 paid by Seller pursuant to
Section 6.01(a) plus interest thereon from the date
of the payment thereof by Seller until repaid at the
"prime rate" as reported from time to time in the
Wall Street Journal, or if not so reported, such
other comparable fluctuating rate as Seller may
select in its reasonable discretion. "Final Negative
Determination" shall mean a determination that the
Section 338(h)10 Election by Seller is invalid by
reason of the failure of the sale of the GNP Shares
under this Agreement to constitute a "qualified stock
purchase" under Section 338(d)(3) of the Code which
(i) is reflected in a decision, judgment, decree or
other order by any court of competent jurisdiction,
which decision, judgment, decree or other order has
become final, i.e., when all allowable appeals have
been exhausted by Seller; (ii) is embodied in a
closing agreement entered into under Section
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7121 of the Code or any other binding settlement
agreement entered into in connection with an
administrative or judicial proceeding, or (iii)
results from the expiration of the time for
instituting a claim for refund, or if such a claim
was filed, the expiration of the time for instituting
suit with respect thereto. The provisions of Section
11.05(f) shall apply in the event Seller receives
notice from the Internal Revenue Service indicating
that the Service may challenge the validity of the
Section 338(h)10 Election.
9. Section 8.03(d) is deleted and replaced with the following:
"Seller agrees to permit its existing guaranty (the
"Guaranty") dated January 1, 1992 to GNP's workers
compensation self insurance obligations and its
letter of credit to remain in place for a period of
up to ninety (90) days after the Closing Date. On or
prior to the expiration of such ninety (90) day
period Buyer shall cause GNP to purchase workers
compensation insurance coverage, or continue
self-insurance coverage without the benefit of the
Guaranty and Seller's letter of credit, for workers
compensation claims that are incurred on or after the
Closing Date. Notwithstanding any contrary provisions
of Section 2.05 and 7.19, and in lieu of the
assumption thereof, and in each case subject to
Section 11.05, Seller agrees to indemnify and defend
Buyer against any claim for workers compensation
claims incurred prior to the Closing Date, including
reported and unreported claims, which claims shall
constitute Retained Liabilities. With respect to
workers compensation claimants, Buyer will cause GNP
to continue to administer personnel policies and
procedures consistent with GNP's past practices.
Buyer agrees to indemnify and defend, and to cause
GNP to indemnify and defend, Seller against any
liability arising from a workers compensation claim
incurred on or after the Closing Date."
All other terms and conditions of the Agreement not
specifically amended shall remain in full force and effect in accordance with
the terms therein.
* * * * *
10. Pursuant to Section 7.19, Bowater and Inexcon agree that
the liabilities assumed by Inexcon shall include OPEB liabilities and
liabilities for bark pile remediation in an aggregate amount not to exceed
$102,000,000, which shall be measured as of the Closing Date by Xxxxxx
Associates LLC giving effect to the new collective bargaining agreements with
GNP labor unions and, using normal and customary actuarial assumptions according
to past practices utilized by Seller and GNP. In the event that the measured
amount exceeds $102,000,000, Bowater shall pay the excess amount to Inexcon in
quarterly installments as and when Inexcon
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makes payments to existing retirees up to the amount of such retiree
payments; in the event that the measured amount is less than $102,000,000,
Inexcon shall not be obligated to make any payment to Bowater.
11. As soon as practicable after the Closing, Bowater will pay
a signing bonus payment in the amount of $5,000 to each employee of GNP who is a
member of a union that has approved the new collective bargaining agreement
prior to the Closing. Concurrently with such payment, Inexcon will reimburse
Bowater $500 for each $5,000 bonus payment made by Bowater. Liability for any
new pension plan adopted by GNP pursuant to the new collective bargaining
agreements shall be borne by Inexcon.
INEXCON MAINE, INC.
By: /s/ Xxxxxx Xxxx
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Name: Xxxxxx Xxxx
Title: Chairman and Chief Executive
Officer
BOWATER INCORPORATED
By: /s/ Xxxxx X. Xxxxxxxx
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Name: Xxxxx X. Xxxxxxxx
Title: Senior Vice President
and Chief Financial Officer
Attachments Omitted
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Exhibit X: Form of purchase price note.
Exhibit Y: Form of Bank of Montreal Undertaking.
