\n SECTION 6.1. Conditions to Each Party’s Obligation……………….. 39
\n SECTION 6.2. Conditions to Obligation of Purchaser……………….. 39
\n SECTION 6.3. Conditions to Obligation of Seller………………….. 41<\/p>\n ARTICLE VII
\n Termination, Amendment and Waiver<\/p>\n
SECTION 7.1. Termination………………………………………. 41
\n SECTION 7.2. Amendments and Waivers…………………………….. 42<\/p>\n
ARTICLE VIII
\n Indemnification<\/p>\n
SECTION 8.1. Indemnification by Seller………………………….. 43
\n SECTION 8.2. Indemnification by Purchaser and SCA………………… 44
\n SECTION 8.3. Environmental Liability……………………………. 45
\n SECTION 8.4. Losses Net of Insurance……………………………. 47
\n SECTION 8.5. Limitation on Indemnification by Seller……………… 47
\n SECTION 8.6. Procedures Relating to Third Party Claims (other than Tax
\n Liabilities 48
\n SECTION 8.7. Procedures Relating to Non-Third Party Claims………… 49
\n SECTION 8.8. [Intentionally Omitted]……………………………. 49
\n SECTION 8.9. Acknowledgment……………………………………. 49
\n SECTION 8.10. Tax and Accounting……………………………….. 49
\n SECTION 8.11. Reasonableness of Parties; Obligation to Mitigate……. 49<\/p>\n
ARTICLE IX
\n General Provisions<\/p>\n
SECTION 9.1. Notices …………………………………………. 50
\n SECTION 9.2. Survival of Representations………………………… 51
\n SECTION 9.3. Severability……………………………………… 51
\n SECTION 9.4. Counterparts……………………………………… 51
\n SECTION 9.5. Entire Agreement; No Third Party Beneficiaries……….. 51
\n SECTION 9.6. Governing Law…………………………………….. 51
\n SECTION 9.7. Consent to Jurisdiction……………………………. 52
\n SECTION 9.8. Publicity………………………………………… 52
\n SECTION 9.9. Assignment……………………………………….. 52<\/p>\n
ARTICLE X
\n Definitions<\/p>\n
SECTION 10.1. Definitions……………………………………… 52
\n SECTION 10.2. Construction and Interpretation of Certain Terms and
\n Phrases…………………………………………. 63
\n<\/c><\/s><\/caption>\n<\/table>\n
iii<\/p>\n
Exhibit A [Intentionally left blank]<\/p>\n
Exhibit B Form of Human Resources Agreement<\/p>\n
Exhibit C Form of Opinion of Deputy General Counsel of Seller<\/p>\n
Exhibit D Form of Opinion of Special Counsel of Purchaser<\/p>\n
Exhibit E Form of Opinion of General Counsel of Purchaser<\/p>\n
Exhibit F Form of Paper Sludge Disposal Agreement<\/p>\n
Exhibit G Form of Parent Roll Supply Agreement<\/p>\n
Exhibit H Form of Coronet License Agreement<\/p>\n
Exhibit I Form of Finished Goods Agreement<\/p>\n
Exhibit J Form of Assumption Agreement<\/p>\n
Exhibit K Form of Transition Agreement<\/p>\n
Exhibit L Form of the WISCO Release<\/p>\n
iv<\/p>\n
SCHEDULES<\/p>\n
Schedule 2.4(a) Agreed Procedures<\/p>\n
Schedule 3.1(c) Organization, Standing and Qualifications<\/p>\n
Schedule 3.2(b) Conflicts, Breaches, Violations, Defaults, Liens<\/p>\n
Schedule 3.2(c) Required Permits<\/p>\n
Schedule 3.3(a)(i) Permits Held by Company<\/p>\n
Schedule 3.3(a)(ii) Compliance Exceptions<\/p>\n
Schedule 3.3(a)(iii) Governmental Investigations<\/p>\n
Schedule 3.4 Company’s Litigation; Decrees<\/p>\n
Schedule 3.5 Permitted Liens and Material Property, Asset and Equipment<\/p>\n
Schedule 3.6(a) Owned Property<\/p>\n
Schedule 3.6(b) Leased Property<\/p>\n
Schedule 3.6(c) Easements & Access<\/p>\n
Schedule 3.6(d) Leases, Subleases, Licenses and Occupancy Agreements<\/p>\n
Schedule 3.7(a) Company’s Intellectual Property<\/p>\n
Schedule 3.7(b) Company’s Intellectual Property Licenses, Sublicenses and
\n Agreements<\/p>\n
Schedule 3.7(d) Infringements<\/p>\n
Schedule 3.7(g) Computer Software Licenses<\/p>\n
Schedule 3.7(g)(i) Other Licenses<\/p>\n
Schedule 3.8(a) Insurance Policies<\/p>\n
Schedule 3.8(b) Inactive Insurance Policies<\/p>\n
Schedule 3.9(a) Material Contracts<\/p>\n
Schedule 3.9(b) Material Contracts (Extraordinary)<\/p>\n
Schedule 3.9(c) Change of Control<\/p>\n
Schedule 3.9(d) Contracts Assigned<\/p>\n
Schedule 3.10 Sufficiency of Assets<\/p>\n
Schedule 3.11 Seller’s Benefit Plans<\/p>\n
Schedule 3.11(a) Assumed Benefit Plan<\/p>\n
Schedule 3.11(e) Reportable Events<\/p>\n
Schedule 3.11(f) Actions, Suits or Claims<\/p>\n
Schedule 3.11(g) Post-Retirement Welfare Benefits<\/p>\n
Schedule 3.12 Environmental Matters<\/p>\n
Schedule 3.13 Tax Matters<\/p>\n
Schedule 3.14 Labor and Employment Matters<\/p>\n
Schedule 3.14(a) Collective Bargaining Agreements<\/p>\n
Schedule 3.14(b) Claims\/Grievances<\/p>\n
v<\/p>\n
Schedule 3.14(e) Employee List<\/p>\n
Schedule 3.14(f) Severance Arrangements<\/p>\n
Schedule 3.14(i) Headquarter Services<\/p>\n
Schedule 3.15 Absence of Certain Changes<\/p>\n
Schedule 3.16(a) Customers<\/p>\n
Schedule 3.16(b) Suppliers<\/p>\n
Schedule 3.17(c) Information and Materials<\/p>\n
Schedule 3.18(a) Company Balance Sheet<\/p>\n
Schedule 3.18(h) Projected Statement of Income<\/p>\n
Schedule 3.19 Liabilities<\/p>\n
Schedule 3.20 Transactions with Affiliates<\/p>\n
Schedule 3.22 Capitalization<\/p>\n
Schedule 3.23 Subsidiaries and Equity Interests<\/p>\n
Schedule 5.4 Remediation and Compliance Plans<\/p>\n
Schedule 5.7 Restructuring<\/p>\n
Schedule 5.12(b) Products and Quantities<\/p>\n
Schedule 8.1(a) Liabilities<\/p>\n
Schedule 8.5 Environmental Liabilities<\/p>\n
vi<\/p>\n
SECURITIES PURCHASE AGREEMENT<\/p>\n
This Securities Purchase Agreement (this “Agreement”) is made and entered
\ninto as of January 21, 2001, among Georgia-Pacific Corporation, a Georgia
\ncorporation (“GPC” or “Seller”), Georgia-Pacific Finance, LLC, a Delaware
\nlimited liability company (“GPF”), Svenska Cellulosa Aktiebolaget SCA (publ), a
\nSwedish corporation (“SCA”) and SCA Tissue, Inc., a Delaware corporation and a
\nwholly-owned subsidiary of SCA (“Purchaser”).<\/p>\n
PRELIMINARY STATEMENT<\/p>\n
WHEREAS, GPC owns 95% of the Membership Units of, and on or before the
\nClosing (as hereinafter defined) it will own 100% of the Membership Units of,
\nGeorgia-Pacific Tissue, LLC, a Delaware limited liability company (the
\n“Company”);<\/p>\n
WHEREAS, GPF holds the Notes in respect of the Company Indebtedness; and<\/p>\n
WHEREAS, Purchaser desires to purchase from GPC, and GPC desires to sell to
\nPurchaser, all of the Membership Units of the Company (the “Securities”) and
\nPurchaser desires to purchase from GPF and GPF desires to sell to Purchaser the
\nNotes, all of the foregoing, upon the terms and conditions hereinafter set
\nforth.<\/p>\n
NOW, THEREFORE, in consideration of the mutual representations, warranties,
\ncovenants and agreements herein contained, the parties, intending to be legally
\nbound, agree as follows:<\/p>\n
ARTICLE I
\n Purchase and Sale of Securities
\n ——————————-<\/p>\n
SECTION 1.1. Purchase Price of the Securities. Subject to all of the
\n ——————————–
\nterms and conditions of this Agreement, GPC in reliance on the covenants,
\nrepresentations and warranties of Purchaser and SCA contained herein, shall sell
\nthe Securities to Purchaser at the Closing (as defined in Section 2.1 below) and
\nPurchaser, in reliance on the covenants, representations and warranties of
\nSeller and GPF contained herein, shall purchase the Securities from GPC at the
\nClosing for a purchase price equal to $78,074,000 (the “Purchase Price”). The
\nPurchase Price shall be paid by Purchaser to GPC at the Closing, in immediately
\navailable funds. GPC shall deliver to Purchaser at the Closing certificates for
\nthe Securities duly endorsed or with duly executed stock powers attached.<\/p>\n
Subject to all of the terms and conditions of this Agreement, GPF
\nshall sell the Notes to Purchaser at the Closing and Purchaser shall acquire the
\nNotes from GPF at the Closing for a price equal to the aggregate principal
\namount outstanding under the Notes at the Closing plus an amount equal to all
\naccrued and unpaid interest thereon.<\/p>\n
ARTICLE II
\n The Closing; Purchase Price Adjustments
\n —————————————-<\/p>\n
SECTION 2.1. Closing Date. The closing of the sale and transfer of the
\n ————
\nSecurities (the “Closing”) shall take place at the offices of Troutman Sanders
\nLLP, Bank of America Plaza, 600 Peachtree Street N.E., Atlanta, Georgia 30308,
\nat 10:00 a.m., local time, on March 2, 2001, or, if the conditions to the
\nClosing set forth in Article VI shall not have been satisfied by such date, as
\nsoon as practicable after such conditions shall have been satisfied. The date
\non which the Closing shall occur is herein referred to as the “Closing Date.”<\/p>\n
SECTION 2.2. Transactions to be Effected at the Closing.
\n —————————————— <\/p>\n
(a) GPC shall deliver or cause to be delivered to Purchaser the following:<\/p>\n
(i) Certificates representing the Securities, duly endorsed (or
\n accompanied by duly executed stock powers), in proper form for transfer to
\n Purchaser;<\/p>\n
(ii) a duly executed copy of each of the Ancillary Agreements to
\n which GPC is a party; and<\/p>\n
(iii) [Intentionally left blank];<\/p>\n
(iv) such other instruments or documents, in form and substance
\n reasonably acceptable to Purchaser, the delivery of which is a condition to
\n Closing.<\/p>\n
(b) GPF shall deliver the Notes, duly endorsed, to Purchaser.<\/p>\n
(c) Purchaser shall deliver to GPC the following:<\/p>\n
(i) by wire transfer to an account designated in writing by GPC,
\n not less than seven days prior to the Closing, immediately available United
\n States dollars in an amount equal to the Purchase Price;<\/p>\n
(ii) a duly executed copy of each of the Ancillary Agreements to
\n which the Company is a party; and<\/p>\n
(iii) such other instruments or documents, in form and substance
\n reasonably acceptable to Seller, the delivery of which is a condition to
\n Closing.<\/p>\n
With the exception of Section 2.2(c)(ii), which will take place immediately
\nafter the Closing, all actions set forth in this Section 2.2 will take place at
\nor prior to the Closing.<\/p>\n
(d) Purchaser shall deliver to GPF by wire transfer to an account
\ndesignated in writing by GPF not less than seven days prior to the Closing, in
\nimmediately available United States dollars, an amount equal to the outstanding
\naggregate principal of the Company Indebtedness plus accrued and unpaid interest
\n(the “Notes Acquisition Price”).<\/p>\n
2<\/p>\n
SECTION 2.3. Equity Adjustment.
\n —————– <\/p>\n
(a) Within 90 days following the Closing Date, Purchaser and Company with
\nthe cooperation of GPC shall prepare, or cause to be prepared, and deliver to
\nGPC a balance sheet of the Company as of the Closing Date after giving effect to
\nthe Restructuring, which balance sheet shall be audited by PWC (the “Closing
\nBalance Sheet”).<\/p>\n
(b) GPC and its accountants shall have 30 days after the delivery to GPC of
\nthe Closing Balance Sheet to review the Closing Balance Sheet. In the event
\nthat GPC determines that the Closing Balance Sheet has not been prepared on the
\nbasis set forth in Section 2.5, GPC shall inform Purchaser in writing (an
\n“Objection”), setting forth a specific description of the basis of the Objection
\nand the adjustments to the Closing Balance Sheet which GPC believes should be
\nmade, which Objection must be delivered to Purchaser on or before the last day
\nof such 30-day period. Purchaser shall then have 30 days to review and respond
\nto the Objection. The parties shall attempt in good faith to reach an agreement
\nwith respect to any matters in dispute. If the parties are unable to resolve
\nall of their disagreements with respect to the determination of the foregoing
\nitems within 45 days following the delivery to GPC of Purchaser’s response to
\nthe Objection by GPC, they shall refer their remaining differences to Ernst & Young LLP or such other firm mutually agreed to by the parties (the “CPA Firm”),
\nwho shall determine in accordance with this Agreement, and only with respect to
\nthe remaining differences so submitted, whether and to what extent, if any, the
\nClosing Balance Sheet requires adjustment. The parties shall direct the CPA
\nFirm to use its best efforts to render its determination within 30 days after
\nsuch submission. In arriving at its decision, the CPA Firm shall rely on its
\nexpertise as certified public accountants and shall not be bound by the
\nsubmissions of the parties but shall be bound to apply the provisions of this
\nAgreement. The CPA Firm’s determination shall be conclusive and binding upon
\nPurchaser, Company, SCA, GPC and GPF. The fees and disbursements of the CPA
\nFirm shall be paid one-half by Purchaser and one-half by GPC. Purchaser and GPC
\nshall make readily available to the CPA Firm all relevant books and records and
\nany work papers (including those of the parties’ respective accountants)
\nrelating to the Closing Balance Sheet and all other items reasonably requested
\nby the CPA Firm. The “Final Closing Balance Sheet” shall be deemed to be (i)
\nthe Closing Balance Sheet in the event that no Objection is delivered by GPC
\nduring the 30-day period specified above, or (ii) if an Objection is delivered
\nby GPC, the Closing Balance Sheet, as adjusted by either (A) the agreement of
\nthe parties or (B) the decision of the CPA Firm.<\/p>\n
(c) GPC shall have the opportunity to participate in the preparation of the
\nClosing Balance Sheet by (i) observing the physical inventory taken in
\nconnection therewith (which may begin prior to the Closing Date), (ii) attending
\nany audit planning meetings in connection therewith, (iii) meeting with and
\ndiscussing procedures with Purchaser, Company and their accountants, and (iv)
\notherwise having full access to all information used by Purchaser in preparing
\nthe Closing Balance Sheet, including the books and records and the work papers
\nof its accountants (subject to the reviewing party executing any necessary
\nwaivers or indemnifications required by Purchaser’s or Company’s accountants).
\nThe Company shall provide reasonable advance notice to GPC of any such physical
\ninventory or audit planning meeting.<\/p>\n
(d) In reviewing any Objection, Purchaser and its accountants shall have
\nfull access to all information used by GPC in preparing such Objection,
\nincluding the work papers of GPC <\/p>\n
3<\/p>\n
and GPC’s accountants (subject to the reviewing party executing any necessary
\nwaivers or indemnifications required by GPC’s accountants).<\/p>\n
(e) If the total assets minus total liabilities as reflected on the Final
\nClosing Balance Sheet (the “Final Stockholder’s Equity”) is less than the total
\nassets minus total liabilities as reflected on the Pro Forma Business Balance
\nSheet (the “Management Stockholder’s Equity”), then, within ten Business Days
\nfollowing the issuance of the Final Closing Balance Sheet, GPC agrees to make a
\npayment to Purchaser in an amount, in immediately available funds, equal to the
\ndifference between the Management Stockholder’s Equity and the Final
\nStockholder’s Equity, plus interest on such amount at the prime rate (as set
\nforth in the “Money Rates” section of The Wall Street Journal) from the Closing
\n ———————–
\nDate through the date of payment. If the Final Stockholder’s Equity is greater
\nthan the Management Stockholder’s Equity, then within ten Business Days
\nfollowing issuance of the Final Closing Balance Sheet, Purchaser shall make a
\npayment to GPC, in immediately available funds, equal to the difference between
\nthe Final Stockholder’s Equity and the Management Stockholder’s Equity, plus
\ninterest on such amount at the prime rate (as set forth in the “Money Rates”
\nsection of The Wall Street Journal) from the Closing Date through the date of
\n ———————–
\npayment.<\/p>\n
SECTION 2.4. EBITDA Adjustment.
\n —————– <\/p>\n
(a) PWC shall audit the Company Financial Statements and perform the agreed
\nprocesses and procedures set out in Schedule 2.4(a) (the “Agreed Procedures”) on
\nthe Pro Forma Business Financial Statements and shall, before Closing, submit a
\nreport thereon with respect to the EBITDA for the Business for the fiscal year
\n2000 (the “PWC Report”).<\/p>\n
(b) GPC and its accountants shall have 30 days after the delivery of the
\nPWC Report to review the PWC Report. In the event that GPC determines that the
\nPWC Report has not been prepared on the basis set forth in Section 2.4(a), GPC
\nshall inform Purchaser in writing (a “Section 2.4 Objection”), setting forth a
\nspecific description of the basis of the Section 2.4 Objection and the
\nadjustments to the PWC Report which GPC believes should be made, which Section
\n2.4 Objection must be delivered to Purchaser on or before the last day of such
\n30-day period. Purchaser shall then have 30 days to review and respond to the
\nSection 2.4 Objection. The parties shall attempt in good faith to reach an
\nagreement with respect to any matters in dispute. If the parties are unable to
\nresolve all of their disagreements with respect to the determination of the
\nforegoing items within 45 days following the delivery of Purchaser’s response to
\nthe Section 2.4 Objection by GPC, they shall refer their remaining differences
\nto the CPA Firm, who shall determine in accordance with this Agreement, and only
\nwith respect to the remaining differences so submitted, whether and to what
\nextent, if any, the PWC Report requires adjustment. The parties shall direct
\nthe CPA Firm to use its best efforts to render its determination within 30 days
\nafter such submission. In arriving at their decision the CPA Firm shall rely on
\ntheir expertise as certified public accountants and shall not be bound by the
\nsubmissions of the parties but shall be bound to apply the provisions of this
\nAgreement. The CPA Firm’s determination shall be conclusive and binding upon
\nPurchaser, Company, SCA, GPC and GPF. The fees and disbursements of the CPA
\nFirm shall be paid one-half by Purchaser and one-half by GPC. Purchaser and GPC
\nshall make readily available to the CPA Firm all relevant books and records and
\nany work papers (including those of the parties’ respective accountants)
\nrelating to the PWC Report and all other items reasonably requested by the CPA<\/p>\n
4<\/p>\n
Firm. The “Final PWC Report” shall be deemed to be (i) the PWC Report in the
\nevent that no Section 2.4 Objection is delivered by GPC during the 30-day period
\nspecified above, or (ii) if a Section 2.4 Objection is delivered by GPC, the PWC
\nReport, as adjusted by either (A) the agreement of the parties or (B) the
\ndecision of the CPA Firm.<\/p>\n
(c) GPC shall have the opportunity to participate in the preparation of the
\nPWC Report by (i) observing any physical inventory taken in connection therewith
\n(which may begin prior to the Closing Date), (ii) attending any audit planning
\nmeetings in connection therewith, (iii) meeting with and discussing procedures
\nwith Purchaser, Company and their accountants, and (iv) otherwise having full
\naccess to all information used by Purchaser in preparing the PWC Report,
\nincluding the books and records and the work papers of its accountants (subject
\nto the reviewing party executing any necessary waivers or indemnifications
\nrequired by Purchaser’s or Company’s accountants). The Company shall provide
\nreasonable advance notice to GPC of any such physical inventory or audit
\nplanning meeting.<\/p>\n
(d) In reviewing any Section 2.4 Objection, Purchaser and its accountants
\nshall have full access to all information used by GPC in preparing such Section
\n2.4 Objection, including the work papers of GPC and GPC’s accountants (subject
\nto the reviewing party executing any necessary waivers or indemnifications
\nrequired by GPC’s accountants).<\/p>\n
(e) If the earnings before interest, tax, depreciation and amortization
\n(“EBITDA”), as shown in the Final PWC Report are less than sixty-eight million
\ndollars ($68,000,000), Seller agrees to make a payment to Purchaser in an
\namount, in immediately available funds, equal to 7.4 times the difference
\nbetween $68,000,000 and the EBITDA shown in the Final PWC Report plus interest
\non such amount at the prime rate (as set forth in the “Money Rates” section of<\/p>\n
The Wall Street Journal) from the Closing Date through the date of payment.
\n———————– <\/p>\n
SECTION 2.5. Accounting Principles. The Closing Balance Sheet will be
\n ———————
\nprepared from the books and records of the Company using U.S. GAAP consistent
\nwith those used in the preparation of GPC’s audited consolidated balance sheet
\nas of December 30, 2000 and the related audited consolidated statement of income
\nfor the fiscal year then ended, as filed by GPC with the Securities and Exchange
\nCommission.<\/p>\n
Notwithstanding anything herein to the contrary, the Closing Balance Sheet
\nshall be prepared based on the following accounting principles or methods:<\/p>\n
(1) Inventories will be stated at the lower of FIFO cost or market;<\/p>\n
(2) Inventories related to the SKU’s that will be supplied to the Company
\n pursuant to the Finished Goods Agreement shall be excluded;<\/p>\n
(3) Intangible assets, other those set forth on the Pro Forma Business
\n Balance Sheet, shall be excluded;<\/p>\n
(4) Whereas GPC, SCA and Purchaser have agreed to settle the issue
\n regarding certain employee benefit matters and, as a result the
\n Purchase Price has already been reduced by $7 million, the entry for
\n (x) the underfunding of the Wisconsin Tissue Mills Retirement Plans
\n for Hourly Employees and the Wisconsin Tissue <\/p>\n
5<\/p>\n
Mills, Inc. Chicago Operations Retirement Plan for Hourly Employees
\n and (y) the accumulated post retirement medical benefit obligation for
\n active union employees shall be $7,000,000;<\/p>\n
(5) The book value of any asset acquired by or transferred to the Company
\n after December 30, 2000 shall be disregarded to the extent that it is
\n in excess of the cash consideration paid for the asset and no effect
\n shall be given to any write-up of assets; and<\/p>\n
(6) If the Net Working Capital of the Company at the Closing exceeds
\n $130,000,000, the excess shall be disregarded.<\/p>\n
ARTICLE III
\n Representations and Warranties of Seller
\n —————————————-<\/p>\n
Seller hereby represents and warrants to Purchaser as follows:<\/p>\n
SECTION 3.1. Organization, Standing and Qualifications.
\n —————————————– <\/p>\n
(a) GPC is a corporation duly organized, validly existing and in good
\nstanding under the laws of the State of Georgia.<\/p>\n
(b) The Company is a limited liability company duly organized, validly
\nexisting and in good standing under the laws of the State of Delaware and has
\nfull power and authority to carry on its business as presently conducted by it
\nand to own, lease and operate its properties and assets in the places where it
\nmaintains offices and where its properties and assets are owned, leased or
\noperated. Copies of the operating agreement (and any other similar governing or
\norganizational documents), minute books, membership unit certificate books and
\nmembership unit transfer books of the Company have heretofore been delivered to
\nPurchaser and are true, correct and complete.<\/p>\n
(c) Schedule 3.1(c) sets forth (a) each jurisdiction in which the Company
\nis duly qualified to do business and in good standing, and (b) each jurisdiction
\nin which the Company is duly licensed, authorized or registered to conduct such
\nbusiness or businesses as are conducted by it and the type of business or
\nbusinesses for which it is so licensed, authorized or registered. Each such
\nqualification, license, authorization and registration (collectively,
\n“Qualification”) is in full force and effect and neither the character of the
\nproperties owned or held under lease or license by the Company nor the nature of
\nthe business conducted by the Company requires any additional Qualification in
\nany such jurisdiction or any Qualification in any other jurisdiction, except any
\nsuch jurisdiction wherein the failure to be so qualified, licensed, authorized
\nor registered would not have, individually or in the aggregate, a Material
\nAdverse Effect on the Company. No approval, consent or notification in
\nconnection with any Qualification is necessary in connection with the
\ntransactions contemplated by this Agreement or the Ancillary Agreements to
\nprevent the termination or withdrawal of any such Qualification as a result of<\/p>\n
6<\/p>\n
such transactions, except those the failure of which to obtain or make,
\nindividually or in the aggregate, would not have a Material Adverse Effect on
\nthe Company.<\/p>\n
SECTION 3.2. Authority.
\n ——— <\/p>\n
(a) Seller has all requisite power and authority to execute, deliver and
\nperform this Agreement and the Ancillary Agreements and to consummate the
\ntransactions contemplated hereby and thereby. The execution, delivery and
\nperformance of this Agreement and the consummation of the transactions
\ncontemplated hereby have been duly authorized by all necessary action on the
\npart of Seller and, in the case of the Ancillary Agreements and the consummation
\nof the transactions contemplated thereby, will be authorized by all necessary
\naction on the part of Seller (to the extent it is a party thereto) prior to the
\nClosing. This Agreement has been duly executed and delivered by Seller and
\nconstitutes, and each Ancillary Agreement to be entered into by Seller will be
\nduly executed and delivered at the Closing and when so executed and delivered
\nwill constitute, its legal, valid and binding obligation enforceable against it
\nin accordance with its terms.<\/p>\n
(b) Except as set forth on Schedule 3.2(b), the execution, delivery and
\nperformance of this Agreement and the Ancillary Agreements by Seller does not,
\nand the consummation by Seller of the transactions contemplated hereby and
\nthereby and the compliance by Seller with the terms hereof and thereof will not
\nconflict with, or result in any breach or violation of or default (with or
\nwithout the giving of notice or lapse of time, or both) under, or give rise to a
\nright of amendment, termination, cancellation or acceleration of any obligation
\nor loss of a benefit under, or result in the creation of any Lien upon any of
\nthe properties or assets of the Company under, any provision of (i) the articles
\nof incorporation or by-laws (or comparable organizational documents) of Seller
\nor the Company, (ii) subject to the filings and other matters referred to in the
\nfollowing paragraph (c), any Law, applicable to Seller, the Company or the
\nproperties, assets or business of the Company, (iii) any Permit that is held by
\nthe Company, or (iv) any of the terms, conditions or provisions of any Contract
\nto which the Company is a party or by which its properties or assets is bound,
\nexcept in the case of clauses (ii) through (iv), any such conflicts, breaches,
\nviolations, defaults, rights or Liens, that, individually or in the aggregate,
\nwould not have a Material Adverse Effect on any of the Company and Seller.<\/p>\n
(c) No Permit is necessary or required to be obtained or made by or with
\nrespect to the Company or Seller in connection with the execution, delivery and
\nperformance of this Agreement or the Ancillary Agreements or the consummation of
\nthe transactions contemplated hereby or thereby, except for (i) notice to and
\nconsent by the United States pursuant to Section V of the Consent Decree, (ii)
\nthose listed on Schedule 3.2(c) hereto, which have been duly obtained and are in
\nfull force and effect or which will have been duly obtained and will be in full
\nforce and effect on and at the Closing Date and (iii) those the failure of which
\nto obtain or make, individually or in the aggregate, would not have a Material
\nAdverse Effect on either the Company or Seller.<\/p>\n
SECTION 3.3. Compliance with Applicable Laws.
\n ——————————- <\/p>\n
(a) Schedule 3.3(a)(i) contains a complete and accurate list of all
\nmaterial Permits that are held by the Company including Permits required
\npursuant to Environmental Laws. The <\/p>\n
7<\/p>\n
Permits listed in Schedule 3.3(a)(i) constitute all of the material Permits,
\nincluding Permits required pursuant to Environmental Laws, necessary to permit
\nthe Company to conduct and operate the Business in a lawful manner. The Company
\nhas complied in all material respects with all of the terms and requirements of
\neach Permit identified or required to be identified in Schedule 3.3(a)(i).
\nExcept as set forth in Schedule 3.3(a)(ii) and except for Environmental Laws
\nwhich are addressed in Section 3.12, the Company is in compliance with, and has
\ncomplied in all respects with, all Laws applicable to it or to the conduct or
\noperation of its business or the ownership or use of any of its properties or
\nassets except where the failure to be in compliance would not have, individually
\nor in the aggregate, a Material Adverse Effect on the Company. Except as set
\nforth on Schedule 3.3(a)(iii) or Schedule 3.12, no investigation or review by
\nany Governmental Entity which is related to the Business or the properties or
\nassets of the Company is pending or, to the knowledge of Seller or the Company,
\nthreatened, nor has any Governmental Entity indicated an intention to conduct
\nany such investigation or review. This Section 3.3 does not apply to employee
\nbenefits matters for which Section 3.11 is applicable, Tax matters for which
\nSection 3.13 is applicable or labor and employment matters for which Section
\n3.14 is applicable.<\/p>\n
(b) The Company has delivered to Purchaser true and correct copies of all
\nmaterial Permits. None of Seller, the Company or any of their Affiliates has
\nreceived any written notification from any Governmental Entity to the effect
\nthat there is lacking any certificate of occupancy or other Permit needed in
\nconnection with the operation or use of any Owned Property or Leased Property.<\/p>\n
SECTION 3.4. Litigation; Decrees. Except as set forth in Schedules 3.4 or
\n ——————-
\n3.14, (i) there is no Order in effect to which the Company is a party or that
\notherwise is related to the Business or any of the properties or assets of the
\nCompany or that is related to or affects the transactions contemplated hereby or
\nin the Ancillary Agreements and (ii) the Company is not a party to, or engaged
\nin, or to the knowledge of Seller, has been threatened with, any Action, and, to
\nthe knowledge of Seller, no event has occurred or condition exists which would
\nform the basis of an Action described in this Section 3.4. Except as set forth
\nin Schedules 3.4 or 3.14, none of the Actions disclosed or required to be
\ndisclosed in Schedule 3.4, if adversely determined, will have a Material Adverse
\nEffect on the Company.<\/p>\n
SECTION 3.5. Title to Assets. Except for the Excluded Assets as to which
\n —————
\nno representation is made, the Company has good and valid title to all its
\nproperties and assets in each case free and clear of all Liens, except for
\nPermitted Liens. This Section 3.5 does not apply to Intellectual Property
\n(which is exclusively the subject of Section 3.7) or real property, interests in
\nreal property or leasehold interests (which are exclusively the subject of
\nSection 3.6). Attached as Schedule 3.5 is a complete list of all the Company’s
\nmaterial properties, assets and equipment (other than the Excluded Assets) which
\nsets forth for each such property, asset or equipment, its location, the
\napproximate date in service and cost thereof and, as applicable, its use in the
\nBusiness and capacity.<\/p>\n
SECTION 3.6. Real Property.
\n ————- <\/p>\n
(a) Schedule 3.6(a) sets forth a list of all real property and interests in
\nreal property owned by the Company, except for any of the Excluded Assets
\n(collectively, the “Owned <\/p>\n
8<\/p>\n
Property”). The Company has good and marketable title to all Owned Property free
\nand clear of all Liens other than (i) Permitted Liens and (ii) Permitted Real
\nProperty Encumbrances.<\/p>\n
(b) Schedule 3.6(b) sets forth a list of all real property and interests in
\nreal property leased to the Company other than the Excluded Assets (the “Leased
\nProperty”) together with the commencement date of each lease (each, a “Real
\nProperty Lease”) and the expiration date of each Real Property Lease. The
\nCompany is the lessee of each Leased Property and is in possession of each
\nLeased Property. True and correct copies of each Real Property Lease have been
\ndelivered to Purchaser prior to the date hereof. Each Real Property Lease is in
\nfull force and effect and will be in full force and effect on the Closing Date.
\nThe Company is not in default under any Real Property Lease and no lessor is in
\ndefault under any Real Property Lease, except for any such defaults that would
\nnot have, individually or in the aggregate, a Material Adverse Effect on the
\nCompany. The consummation of the transactions contemplated hereby and in the
\nAncillary Agreements will not cause the termination of any Real Property Lease
\nor any default thereunder.<\/p>\n
(c) All easements, licenses and other real property rights materially
\nnecessary for the use and operation (as currently operated) of and access to the
\nOwned Property and Leased Property and the Facilities and the supply of
\nutilities thereto have been obtained by the Company. True and correct copies of
\nall such documents have been delivered to Purchaser. Except as set forth on
\nSchedule 3.6(c), the buildings and improvements necessary for the operation of
\nthe Business are located on the Owned Property or Leased Property. Each Owned
\nProperty and Leased Property has legal access to a public road. There are no
\neasements burdening any Owned Property or Leased Property that would have a
\nMaterial Adverse Effect on the Company.<\/p>\n
(d) There are no leases, subleases, licenses or occupancy agreements
\naffecting the Owned Property or Leased Property, other than those set forth in
\nSchedule 3.6(d).<\/p>\n
(e) Seller has not received any notice of a violation of setback laws with
\nrespect to the Owned Property located in Neenah, Wisconsin.<\/p>\n
(f) Except for the PILOT, no Owned Property receives the benefit of any
\nreal estate tax exemption.<\/p>\n
(g) The current zoning classification of each Owned Property permits its
\ncurrent operation. The zoning classification for each Leased Property permits
\nits current operation. None of Seller, the Company or any of their Affiliates
\nhas received any notice that any of the improvements on any Owned Property or
\nLeased Property do not comply with legal requirements for the current use and
\noccupancy thereof.<\/p>\n
(h) None of Seller, the Company or any of their Affiliates has any
\nknowledge of and the Company has not received any notice of, any condemnation
\naffecting any Owned Property or Leased Property.<\/p>\n
(i) All buildings, plants and structures which are part of the Owned
\nProperty or Leased Property lie wholly within the boundaries of said property
\nand do not encroach upon the property of, or otherwise conflict with the
\nproperty rights of, any other Person except for such <\/p>\n
9<\/p>\n
encroachments and conflicts which do not, individually or in the aggregate, have
\na Material Adverse Effect on the Company.<\/p>\n
SECTION 3.7. Intellectual Property.
\n ——————— <\/p>\n
(a) “Intellectual Property” means all trademarks, service marks, trade
\nnames, copyrights (except copyrights to computer software), patents,
\ndomain\/URLs, inventions, trade secrets, know-how, technical or operational
\nprocesses, formulae, research and development data, proprietary business
\nmethods, including without limitation any registrations, applications, renewals,
\nextensions, continuations, divisions, continuations-in-part, reissues or foreign
\ncounterparts for any of the foregoing. “Company Intellectual Property” means
\nIntellectual Property owned, licensed or currently used or held for use by the
\nCompany but does not include any Intellectual Property that is part of the
\nExcluded Assets. Schedule 3.7(a) contains a true and complete list of all
\nunexpired letters patent and trademark registrations constituting Company
\nIntellectual Property specifying as to each, as applicable, the nature of such
\nIntellectual Property, the owner of such Intellectual Property, the
\njurisdictions by or in which such Intellectual Property is recognized (without
\nregard to registration) or has been issued or registered or in which an
\napplication for such issuance or registration has been filed, the registration
\nor application numbers, the termination or expiration dates and, if the
\nIntellectual Property is licensed to others, any applicable royalty.<\/p>\n
(b) Schedule 3.7(b) sets forth a list of all licenses, sublicenses and
\nother agreements as to which Seller or the Company is a party and pursuant to
\nwhich any Person is authorized to use any of the Company’s Intellectual
\nProperty, including the identity of all parties thereto, a description of the
\nnature and subject matter thereof, the applicable royalty and the term thereof.<\/p>\n
(c) Neither Seller nor the Company is aware of any unauthorized use,
\ndisclosure, infringement or misappropriation of any of the Company’s
\nIntellectual Property by a third party, including any employee or former
\nemployee of the Company.<\/p>\n
(d) Except as expressly set forth in either Schedule 3.4 or 3.7(d):<\/p>\n
(i) the Company currently is not a defendant in any action, suit,
\n investigation or proceeding relating to, and has not otherwise been
\n notified of, any alleged claim of infringement or misappropriation by it of
\n any Intellectual Property of any other Person, and neither Seller nor the
\n Company has any knowledge of any other such infringement by the Company;<\/p>\n
(ii) no trademark registration or letters patent comprising the
\n Company’s Intellectual Property is the subject of any pending opposition,
\n interference, cancellation proceeding, claim challenging the validity,
\n ownership or enforceability of the same, nor, to the knowledge of Seller or
\n the Company, has any such action been threatened by any Person;<\/p>\n
(iii) none of the Company’s Intellectual Property is subject to any
\n outstanding judgment, injunction, order, decree or agreement restricting
\n the use thereof by Seller or the Company, or restricting the licensing
\n thereof by the Company to any Person;<\/p>\n
10<\/p>\n
(iv) except in the normal course of purchasing or selling products,
\n the Company has not entered into any agreement to indemnify any other
\n person against any charge of infringement of Intellectual Property; and<\/p>\n
(v) to the best knowledge of Seller and the Company, the Company
\n does not infringe any valid claim of any of the patents claimed to be
\n infringed in the action described on Schedule 3.7(d).<\/p>\n
(e) None of the registrations or letters patent included in the
\nCompany’s Intellectual Property identified in Schedule 3.7(a) has been abandoned
\nor canceled, and, to the best knowledge of Seller, all of the Company’s
\nIntellectual Property is valid, enforceable and subsisting, and neither Seller
\nnor the Company knows of any reason why any such rights should be found invalid
\nor unenforceable.<\/p>\n
(f) After the Restructuring the Company will own, free and clear of any
\nLiens, all of the Company’s Intellectual Property necessary for the conduct of
\nthe Business as currently conducted.<\/p>\n
(g) Schedule 3.7(g)(i) contains a list of all computer software
\nlicenses, except locally purchased licenses, currently used in or for the
\nBusiness. Except as disclosed on Schedule 3.7(g)(i) and in the Transition
\nAgreement, those licenses appearing on the list and not owned by the Company can
\nand will be assigned to the Company as part of the Restructuring.<\/p>\n
SECTION 3.8. Insurance.
\n ——— <\/p>\n
(a) Schedule 3.8(a) contains a true and complete list of all casualty
\nand other property insurance policies related to the business, assets or
\nproperties of the Company and to which Seller or the Company is a party (the
\n“Insurance Policies”) as of the date of this Agreement, indicating in each case
\nthe type of coverage, name of the insured, the insurer, the expiration date of
\neach policy and the amount of coverage.<\/p>\n
(b) Except as set forth in Schedule 3.8(b), the Insurance Policies: (i)
\nare in full force and effect and will not lapse or terminate until the Closing
\nDate by reason of the execution, delivery or performance of this Agreement or
\nconsummation of the transactions contemplated hereby; (ii) insure the Company’s
\nassets constituting tangible property in amounts the Company believes are
\nreasonably sufficient against all risks usually insured against by Persons
\noperating similar businesses or properties in the localities where such
\nbusinesses or properties are located; and (iii) are sufficient for compliance
\nwith all requirements of Laws, Permits and Material Contracts (as defined
\nbelow). Each of Seller and the Company is current in all premiums or other
\npayments due thereunder and has otherwise performed all of its obligations under
\neach Insurance Policy. Each of Seller and the Company has given timely notice to
\nthe insurer of all claims that may be insured thereby. No Insurance Policy
\nprovides for any retrospective premium adjustment or other experience-based
\nliability.<\/p>\n
(c) Neither Seller nor the Company has received (i) any refusal of
\ncoverage or any notice that a defense will be afforded with reservation of
\nrights or (ii) any notice of cancellation or any other indication that any
\nInsurance Policy is no longer in full force or effect or will not be <\/p>\n
11<\/p>\n
renewed or that the issuer of any policy is not willing or able to perform its
\nobligations thereunder.<\/p>\n
SECTION 3.9. Contracts.
\n ——— <\/p>\n
(a) Except for Contracts listed in Schedules 3.6(b), 3.7(b), 3.9(a), 3.11
\nor 3.14, the Ancillary Agreements or those disclosed in or attached to the Human
\nResources Agreement, the Company is not a party to, and none of the Company’s
\nproperties or assets is bound by, any Contract that is:<\/p>\n
(i) (A) a Contract for the employment of any Person that has a
\n future liability in excess of $100,000 or any consulting agreement with any
\n Person involving payments by GPC or the Company in excess of $100,000 or
\n (B) providing for severance or other termination payment to any employee;<\/p>\n
(ii) a collective bargaining agreement with any labor union;<\/p>\n
(iii) a Contract with any current or former director, officer,
\n subsidiary or Affiliate of the Company or Seller;<\/p>\n
(iv) an indenture, note, loan or credit agreement or other Contract
\n relating to the borrowing of money by the Company or to the direct or
\n indirect guarantee or assumption by the Company of the obligations of any
\n other Person for borrowed money, including any arrangement which has the
\n economic effect although not the legal form of such a guarantee;<\/p>\n
(v) a power of attorney;<\/p>\n
(vi) a covenant not to compete (other than those of which the
\n Company is the beneficiary of the covenant in employee-related agreements);<\/p>\n
(vii) a lease or similar agreement under which (A) the Company is
\n lessee of, or holds or uses, any machinery, equipment, vehicle or other
\n tangible personal property owned by any third Person for an annual rent in
\n excess of $100,000 or (B) the Company is a lessor of, or makes available
\n for use by any third Person, any tangible personal property owned
\n (including ownership for Tax purposes) by the Company having a fair market
\n value in excess of $100,000;<\/p>\n
(viii) a mortgage, pledge, security agreement, deed of trust or other
\n document granting a material Lien (including Liens upon properties acquired
\n under conditional sales, capital lease or other title retention or security
\n devices);<\/p>\n
(ix) evidencing Plans;<\/p>\n
(x) relating to the ownership, Lease, management or operation of
\n any real property, including Leases relating to Leased Property;<\/p>\n
12<\/p>\n
(xi) for the purchase or sale of inventory, materials, supplies,
\n products, spare parts or real, personal or mixed property, or for the
\n furnishing or receipt of services to or by the Company pursuant to which
\n the Company is likely to pay or otherwise give or to receive consideration
\n of more than $100,000 in the aggregate during the 12-month period ending at
\n the first anniversary of the Closing or more than $100,000 in the aggregate
\n over the remaining term of such Contract or pursuant to which the Company
\n is obligated to “take or pay” for such purchases or sales or is otherwise
\n required to purchase the output of any Person or to purchase all or a major
\n part of its requirements of a particular good from any Person and which
\n cannot be canceled by the Company without penalty or further payment and by
\n notice of not more than 30 days;<\/p>\n
(xii) relating in whole or in part to Intellectual Property,
\n including any option, license or other Contracts under which the Company is
\n licensee or licensor of any such Intellectual Property, Contracts
\n restricting the goods for which, the form in which or the manner in which
\n any Intellectual Property may be used and Contracts with current or former
\n employees, consultants or contractors regarding the appropriation or
\n nondisclosure of any Intellectual Property;<\/p>\n
(xiii) under which (A) any Person has directly or indirectly
\n guaranteed indebtedness or other Liabilities of the Company, (B) the
\n Company has directly or indirectly guaranteed indebtedness or other
\n Liabilities of any Person (in each case other than endorsements for the
\n purpose of collection in the ordinary course of business) or (C) the
\n Company has any obligations relating to the financial condition of any
\n other Person (including so-called “keepwell” arrangements), and in each
\n case which cannot be canceled by the Company without penalty or further
\n payment and by notice of not more than 90 days;<\/p>\n
(xiv) under which the Company has, directly or indirectly, made
\n any advance, loan, extension of credit or capital contribution in excess of
\n $100,000 to, or other investment in, any Person or which involves a sharing
\n of profits, losses, costs or Liabilities by the Company with any other
\n Person;<\/p>\n
(xv) providing for or containing any mortgage, pledge, security
\n agreement, deed of trust or other instrument granting a Lien upon any of
\n the properties or assets of the Company;<\/p>\n
(xvi) providing for indemnification of any Person with respect to
\n Liabilities relating to any current or former business of the Company or
\n any predecessor Person;<\/p>\n
(xvii) with any broker distributor, dealer sales representative,
\n supplier, manufacturer or other Person (other than customers who are the
\n end-users of such products or services) relating to the marketing,
\n distribution, sale, rental, supply or manufacture of products or materials
\n or the marketing, sale or supply of services and in each case which cannot
\n be canceled by the Company without penalty or further payment and by notice
\n of not more than 90 days;<\/p>\n
13<\/p>\n
(xviii) for the purchase or sale (through the acquisition of
\n shares, assets or by merger, reorganization, or otherwise) of any business,
\n corporation, partnership, joint venture, association or other business
\n organization or any division, material assets, operating unit or product
\n line thereof;<\/p>\n
(xix) for the management, operation or control by or of any
\n Person or any division, material assets, operating unit or product line
\n thereof, including stockholder, joint venture, strategic alliance, joint
\n marketing, research and development, and any other similar Contract;<\/p>\n
(xx) which limits or purports to limit the ability of the Company
\n to compete in any line of business or with any Person or in any geographic
\n area or otherwise restricts the Company in any substantial way in the
\n conduct of its business;<\/p>\n
(xxi) with any Governmental Entity and in each case which cannot
\n be canceled by the Company without penalty or further payment and by notice
\n of not more than 90 days; or<\/p>\n
(xxii) otherwise material and is not described in any of the
\n categories specified in this Section.<\/p>\n
Each item set forth or required to be set forth in Schedule 3.9(a) is
\nreferred to herein as a “Material Contract.”<\/p>\n
(b) Except as set forth in Schedule 3.9(b) and the Ancillary
\nAgreements, (i) all Material Contracts were entered into in the ordinary course
\nof business of the Company; (ii) each such Material Contract is in full force
\nand effect and is legal, valid, and, except for term sheets or open bids,
\nbinding and enforceable in accordance with its terms; (iii) the Company has
\nperformed the obligations required to be performed by it to date and is not
\n(with or without the lapse of time or the giving of notice, or both) in breach
\nor default or alleged to be in breach or default under any such Material
\nContract and, to the knowledge of the Company, the other parties thereto have
\ncomplied in all respects thereunder, except for any such nonperformance, breach
\nor default which would not, individually or in the aggregate, have a Material
\nAdverse Effect on the Company; and (iv) no event has occurred or circumstance
\nexists that (with or without lapse of time or the giving of notice) may
\ncontravene, conflict with or result in a violation or breach of or give the
\nCompany or other Person the right to declare a default or exercise any remedy
\nunder or to accelerate the maturity of or to cancel, terminate or modify, any
\nsuch Material Contract. Except as set forth in Schedule 3.9(b), there are no
\nrenegotiations of, attempts or requests to renegotiate or outstanding rights to
\nrenegotiate any such Material Contract with any Person. Seller has previously
\ndelivered to Purchaser true and complete copies of all Material Contracts.
\nExcept as set forth in Schedule 3.9(b), the consummation of the transaction
\ncontemplated hereby and in the Ancillary Agreements will not result in or cause
\nany increase in any payment or change in any term under any Material Contract,
\nand no such Material Contract requires the Consent of, with or to any other
\nparty thereto or any increase in any payment or change in any term provided for
\nthereunder in connection with or as a result of the execution, delivery and
\nperformance of this Agreement and the Ancillary Agreements and the consummation
\nof the transactions contemplated hereby and thereby.<\/p>\n
14<\/p>\n
(c) Except as set forth in Schedule 3.9(c), (i) there are no change of
\ncontrol or similar provisions or any obligations arising under any Material
\nContract which are created, accelerated or triggered by the execution, delivery
\nor performance of this Agreement or the Ancillary Agreements or the consummation
\nof the transactions contemplated hereby and thereby and (ii) the transactions
\ncontemplated hereby and thereby will not constitute a “change of control,”
\nrequire the Consent from or the giving of notice to any Person, permit any
\nPerson to terminate a Material Contract or accelerate vesting, grant any
\nrepayment or repurchase rights to any Person, or create any other detriment,
\nunder the terms, conditions or provisions of any Material Contract.<\/p>\n
(d) The contracts listed on Schedule 3.9(d) have been legally and validly
\nassigned to the Company and any consents required in connection with such
\nassignments have been obtained.<\/p>\n
SECTION 3.10. Sufficiency of Assets.
\n ——————— <\/p>\n
(a) The buildings, plants, structures and equipment including utility
\nsystems and mechanical systems (collectively, the “Physical Plant”) of the
\nCompany (excluding the Excluded Assets and, specifically including the
\nTransferred Equipment) are in normal operating condition and repair, taking into
\naccount reasonable wear and tear, and are suitable for the uses for which they
\nare being used and are performing the functions for which they were intended and
\nhave not suffered any damages, destruction or other casualty that has not been
\nrepaired or otherwise remedied and are not the subject of any pending or, to the
\nknowledge of Seller, threatened, eminent domain proceeding. The paper machines
\nand converting equipment (including the Transferred Assets, as applicable) are
\ncapable of functioning at the average capacities and utilization rates set forth
\nin Schedule 3.10 if managed or operated in accordance with current operating
\npractices of the Company.<\/p>\n
(b) The Physical Plant of the Company (taking into account the services to
\nbe provided pursuant to, and the actions contemplated by, the Ancillary
\nAgreements and that portion of the Physical Plant located in the common area of
\nthe Alsip, Illinois Condominium Association) is sufficient for the continued
\nconduct of the Business after the Closing in substantially the same manner as
\nconducted prior to the Closing (after giving effect to the Restructuring).<\/p>\n
SECTION 3.11. Employee Benefits.
\n —————– <\/p>\n
(a) Schedule 3.11 contains an accurate and complete list of each Plan, in
\neach case currently maintained or contributed to by the Company or Seller or its
\nERISA Affiliates on behalf of Employees or former Employees of the Company
\nlocated at, or employed for the exclusive benefit of, the Converting Facilities,
\nthe Paper Mills and the Service Center (all the foregoing being herein called
\n“Seller’s Benefit Plans”). Schedule 3.11(a) contains a list of (i) each Plan
\nfor which Purchaser will assume any liability pursuant to this Agreement, the
\nHuman Resources Agreement or by operation of law, other than a Multiemployer
\nPlan, (“Assumed Benefit Plan”) and (ii) each Multiemployer Plan for which
\nPurchaser will assume any liability pursuant to this Agreement, the Human
\nResources Agreement or by operation of law (“Assumed Multiemployer Plan”).<\/p>\n
15<\/p>\n
(b) Seller has delivered, or will deliver prior to the Closing Date, to
\nPurchaser current, accurate and complete copies of (i) each Seller Benefit Plan
\nthat has been reduced to writing and all amendments thereto, other than any
\nMultiemployer Plan, (ii) all trust agreements, insurance contracts and, with
\nrespect to any 401(k) plan, investment management agreements, investment
\nadvisory agreements, administrative services agreements or similar agreements
\nmaintained in connection with any Assumed Benefit Plan, (iii) for each Assumed
\nBenefit Plan that is intended to be qualified under Section 401(a) of the Code
\n(“Assumed Qualified Plan”), the most recent determination letter issued by the
\nIRS, (iv) for each Assumed Benefit Plan with respect to which a Form 5500 series
\nannual report\/return is required to be filed, the two most recent such annual
\nreport\/returns, together with all schedules and exhibits, (v) the summary plan
\ndescription for each Assumed Benefit Plan subject to Title I of ERISA and each
\nMultiemployer Plan, and in the case of each other Assumed Benefit Plan, any
\nsimilar employee summary (including but not limited to any employee handbook
\ndescription), (vi) to the knowledge of Seller, copies of any correspondence from
\nthe IRS, Department of Labor (“DOL”) or other U.S. government agency or
\ndepartment relating to any audit or any current asserted or assessed penalty
\nwith respect to an Assumed Benefit Plan or relating to requested relief from any
\nliability or penalty (including, but not limited to, any correspondence relating
\nto the IRS’s EPCRS, VCR or CAP programs and the DOL’s amnesty programs for later
\nfilers and non-filers), (vii) for each Assumed Benefit Plan that is a defined
\nbenefit pension plan, copies of the two most recent actuarial valuation reports
\nand the most recent Form PBGC 1s, and (viii) for each Assumed Qualified Plan,
\ncopies of all applicable compliance testing results (including without
\nlimitation applicable nondiscrimination tests under Code Sections 401(a)(4),
\n401(k) and 401(m) and tests under Code Sections 402(g), 410(b), 415 and 416) for
\nthe two most recent plan years.<\/p>\n
(c) The Company would not incur any “withdrawal liability” as defined in
\nERISA under any Multiemployer Plan that is an Assumed Multiemployer Plan if it
\nwere to withdraw from such plan on November 30, 2000. To the knowledge of the
\nCompany and Seller after due inquiry, no such Assumed Multiemployer Plan is
\ninsolvent or in reorganization. None of the Company, Seller nor any ERISA
\nAffiliate has partially or completely withdrawn from a Multiemployer Plan within
\nthe six year period immediately preceding the Closing Date or entered into a
\nagreement covered by Section 4204 of ERISA which has or would result in a
\nmaterial liability to the Company.<\/p>\n
(d) To the knowledge of Seller, each Assumed Qualified Plan is so
\nqualified and the trust under each Assumed Qualified Plan is exempt from
\ntaxation under Section 501(a) of the Code. The IRS has issued a favorable
\ndetermination with respect to the qualified status of each Assumed Qualified
\nPlan, which takes into account amendments for which the remedial amendment
\nperiod has expired, and to the knowledge of the Company and Seller nothing has
\nbeen done or not done that could result adversely affect the qualified status of
\nsuch Assumed Qualified Plan and the IRS has taken no action to revoke any such
\ndetermination letter.<\/p>\n
(e) Except as set forth on Schedule 3.11(e), no “reportable event” as
\ndefined at Section 4043 of ERISA for which the 30 day notice provision has not
\nbeen waived or given has occurred with respect to any Assumed Benefit Plan
\nsubject to Title IV of ERISA. With respect to each Assumed Benefit Plan subject
\nto Section 412 of the Code, there is no accumulated funding deficiency which has
\nnot been waived under such Assumed Benefit Plan.<\/p>\n
16<\/p>\n
(f) To the knowledge of Seller, no “prohibited transaction” within the
\nmeaning of Section 406 of ERISA or Section 4975 of the Code has occurred with
\nrespect to any Assumed Benefit Plan, which is not otherwise exempt by statute,
\nregulation or administrative ruling or opinion which has resulted in or is
\nreasonably likely to result in a material liability to the Company. Except as
\nset forth in Schedule 3.11(f), there are no actions, suits or claims pending
\n(other than routine claims for benefits) nor are there any actions, suits or
\nclaims (other than routine claims for benefits) that could reasonably be
\nexpected to be asserted against any Assumed Benefit Plan or the assets or
\nfiduciaries of any Assumed Benefit Plan. To the knowledge of Seller, no Assumed
\nBenefit Plan nor any fiduciary of an Assumed Benefit Plan has been the direct or
\nindirect subject of an audit, investigation or examination by any governmental
\nor quasi-governmental agency.<\/p>\n
(g) Except for continuation of health coverage to the extent required
\nunder Section 4980B of the Code or Section 601 et seq. of ERISA, or as set forth
\non Schedule 3.11(g), there are no obligations under any Assumed Benefit Plan
\nproviding welfare benefits after termination of employment.<\/p>\n
(h) All contributions on behalf of Employees and former Employees to each
\nAssumed Benefit Plan have been made on a timely basis, except where such failure
\nto make timely payments is not reasonably likely to result in a Material Adverse
\nEffect.<\/p>\n
(i) Except for individual employment agreements, each Assumed Benefit Plan
\ncan be amended, modified or terminated without advanced notice to or consent by
\nany Employee, former employee or beneficiary, except as required by law or by
\nany collective bargaining agreement.<\/p>\n
SECTION 3.12. Environmental Matters. Except as disclosed in Schedule
\n ———————
\n3.12:<\/p>\n
(a) (i) The Company, with respect to the Business, is, and at all relevant
\ntimes since the formation of the Company has been, in material compliance with
\nall applicable Environmental Laws in effect during such period; and (ii) at all
\nrelevant times during the seven year period ending on the day after the
\nformation of the Company, to the knowledge of GPC, the Facilities have been, and
\nthe operations conducted thereat have been operated, in material compliance with
\nall applicable Environmental Laws in effect during such period; and<\/p>\n
(b) The Company holds, and the Company and the Business are and have at
\nall relevant times been in compliance with, all material Permits required with
\nrespect to the Business under Environmental Laws; and<\/p>\n
(c) (i) To the knowledge of Seller and the Company, there are no events,
\nconditions, actions or omissions relating to the operation of the Business that
\nhave given or will give rise to any Environmental Liability; (ii) neither Seller
\nnor the Company has received any notice of the institution or pendency, or
\nthreatened institution, of any lawsuit, action, proceeding, investigation or
\nclaim by any Person alleging any Environmental Liability arising from or
\nrelating to the Business; and (iii) no conditions are present at and no Releases
\nof Hazardous Substances have occurred at any of the Owned Properties or the
\nLeased Properties or any other location where Hazardous Substances from the
\nBusiness have been sent, Released or disposed except in <\/p>\n
17<\/p>\n
compliance with, and for which no remediation could reasonably be required
\nunder, applicable Environmental Laws.<\/p>\n
SECTION 3.13. Taxes. Except as set forth in Schedule 3.13:
\n —– <\/p>\n
(a) All Tax Returns required to be filed by or on behalf of the Company
\nhave been properly completed and filed on a timely basis and in correct form.
\nAs of the date of filing, the foregoing Tax Returns correctly reflected the
\nfacts regarding the income, business, assets, operations, activities, status or
\nother matters of the Company or any other information required to be shown
\nthereon.<\/p>\n
(b) All Taxes with respect to taxable periods or portions thereof covered
\nby such Tax Returns and all other material Taxes (without regard to whether a
\nTax Return was or is required) for which the Company is otherwise liable that
\nare due have been paid in full and to the extent the Liabilities for such Taxes
\nare not due, adequate reserves have been established on the Pro Forma Business
\nBalance Sheet in accordance with U.S. GAAP.<\/p>\n
(c) The Company has fully complied with all applicable Tax laws prior to
\nthe date hereof.<\/p>\n
(d) There is no audit, examination, deficiency or refund Action pending
\nwith respect to any Taxes for which the Company is or might otherwise be liable
\nand no taxing authority has given written notice of the commencement of any
\naudit, examination or deficiency Action with respect to any such Taxes.<\/p>\n
(e) No Liens for Taxes exist with respect to any of the assets or
\nproperties of the Company except Permitted Liens and no claims for Taxes have
\nbeen asserted in writing with respect to such assets or properties.<\/p>\n
(f) The Company has timely withheld proper and accurate amounts from its
\nemployees, customers, shareholders and others from whom it is or was required to
\nwithhold Taxes in compliance with all applicable laws and has timely paid all
\nsuch withheld amounts to the appropriate taxing authorities.<\/p>\n
(g) There are no outstanding commitments or waivers extending the
\nstatutory period of limitations applicable to any claim for, or the period for
\nthe collection or assessment of, Taxes of the Company due for any taxable
\nperiod.<\/p>\n
(h) None of the assets of the Company (i) is “tax exempt use property”
\nwithin the meaning of Section 168(h) of the Code; (ii) directly or indirectly
\nsecures any debt the interest on which is exempt under Section 103 of the Code;
\nor (iii) is property that is required to be treated as being owned by any Person
\n(other than the Company) pursuant to the provisions of Section 168(f)(8) of the
\nInternal Revenue Code of 1954, as amended, and in effect immediately before the
\nenactment of the Tax Reform Act of 1986.<\/p>\n
(i) Any amount or other entitlement that could be received (whether in
\ncash or property or the vesting of property) as a result of any of the
\ntransactions contemplated by this Agreement by any employee, officer or director
\nof the Company who is a “disqualified <\/p>\n
18<\/p>\n
individual” (as such term is defined in proposed Treasury Regulation Section
\n1.280G-1) under any employment, severance or termination agreement would not be
\ncharacterized as an “excess parachute payment” (as such term is defined in
\nSection 280G(b)(1) of the Code).<\/p>\n
(j) The Company is not a partner or a member of any partnership or joint
\nventure, or any other entity classified as a partnership for federal income tax
\npurposes.<\/p>\n
SECTION 3.14. Labor Matters. Except as set forth in Schedule 3.14 or as
\n ————-
\nset forth in the Human Resources Agreement:<\/p>\n
(a) Since March 31, 2000 , there have been no strikes, lockouts, work
\nstoppages, slowdowns pending or, to the knowledge of Seller or the Company,
\nthreatened against or involving any employees of the Company. Except as set
\nforth in Schedule 3.14(a), to the knowledge of Seller and the Company, there are
\nno organizational campaigns, petitions or other activity concerning union
\nrepresentation of any Employees. Schedule 3.14(a) contains a true and correct
\nlist of each collective bargaining agreement which covers any Employee of the
\nCompany. Seller has delivered to SCA copies of each such collective bargaining
\nagreement and, prior to Closing, Seller will deliver each material side
\nagreement.<\/p>\n
(b) As of the date hereof, there are no complaints, charges, claims or
\ngrievances against the Company pending or, to the knowledge of Seller or the
\nCompany, threatened to be brought or filed with any Governmental Entity,
\narbitrator or court based on or arising out of the employment by the Company of
\nany employee, except for those which, individually or in the aggregate, would
\nnot reasonably be expected to have a Material Adverse Effect on the Company.<\/p>\n
(c) The Company is in compliance with all laws, regulations, rules and
\norders of all Governmental Entities relating to the employment of labor,
\nincluding all such laws, regulations, rules and orders relating to wages, hours,
\ncollective bargaining, discrimination, civil rights, safety and health,
\nimmigration, workers’ compensation and layoffs, except where the failure to be
\nin compliance would not reasonably be expected to have a Material Adverse Effect
\non the Company.<\/p>\n
(d) Since March 31, 2000, except for customary bonuses and options granted
\nin the ordinary course of business under the Company’s existing Plans, the
\nCompany has not made any general uniform increase (other than statutory or
\nroutine salary or wage increases) in the compensation of its employees
\n(including, without limitation, any increase pursuant to any bonus, insurance,
\npension, profit sharing, stock option or other plan or commitment) or any
\nincrease in any such compensation payable to any officer, employee, consultant
\nor agent of the Company or entered into any employment severance or termination
\nagreement with any officer or employee, or made any loan to, or engaged in any
\ntransaction with, any officers or directors of the Company (other than relating
\nto their employee status).<\/p>\n
(e) Schedule 3.14(e) contains a complete and accurate list, as of January
\n18, 2001, of all employees of the Company, whether salaried or hourly, and
\nwhether or not on layoff, or medical, family or other authorized leave of
\nabsence (the “Employees”), along with each such Employee’s position, date of
\nhire, and base salary or wage.<\/p>\n
19<\/p>\n
(f) Except as set forth in Schedule 3.14(f), the Company is not a party to
\nany employment, termination, or severance contract or arrangement with any
\nemployee that is not terminable at will without costs or penalty.<\/p>\n
(g) Except as indicated in Schedule 3.14(g), neither the Company nor
\nPurchaser will by reason of the Closing be liable to any Employee for severance
\npay or any other payments (other than accrued salary, vacation or other
\ncompensation in accordance with normal policies or benefits under Seller’s
\nBenefits Plans).<\/p>\n
(h) The Employees, when considered together with the services to be
\nprovided by GPC pursuant to the Transition Agreement, the Human Resources
\nAgreement and all of the services set forth in Schedule 3.14(h), would be
\nsufficient to enable the Company to operate the Business substantially in the
\nsame manner as it was operated prior to the Closing.<\/p>\n
(i) Other than Persons who have been terminated or quit or been
\ntransferred in the ordinary course of business since April 1, 2000 and except as
\ncontemplated by the Human Resources Agreement, no Person who was an employee of
\nthe Company or GPC or its Affiliates provided services primarily to or for the
\nbenefit of the Company (after giving effect to the distribution of the Excluded
\nAssets) on April 1, 2000, other than the Employees and other Persons who
\nprovided or performed services that are to be provided by G-P pursuant to the
\nTransition Agreement and the Human Resources Agreement after the Closing.<\/p>\n
SECTION 3.15. Absence of Certain Changes. Except as set forth in
\n ————————–
\nSchedule 3.15 or as expressly permitted by this Agreement, since March 31, 2000,
\nthe Company has operated its business in the ordinary course consistent with
\npast practice and has not suffered any Material Adverse Effect, determined
\nwithout reference to the requirement that a Loss must exceed $50,000 (including
\nany damage to or destruction of its properties), and no condition or event,
\nchange or development has occurred which, individually or in the aggregate, may
\nresult in a Material Adverse Effect on the Company, determined without reference
\nto the requirement that a Loss must exceed $50,000.<\/p>\n
SECTION 3.16. Customers and Suppliers.
\n ———————– <\/p>\n
(a) Except with respect to the Excluded Assets, Schedule 3.16(a) sets
\nforth a list of the 20 most significant customers of the Company in terms of
\nrevenues for the period April 1, 2000 through October 31, 2000, showing the
\napproximate total revenues from each such customer during such period. Except to
\nthe extent set forth in Schedule 3.16(a) or with respect to the Excluded Assets,
\nthe Company has not received any notice or has any reason to believe that any
\nsignificant customer has ceased, or will cease, to use the products, equipment,
\ngoods or services of the Company, or has substantially reduced or will
\nsubstantially reduce, the use of such products, equipment, goods or services at
\nany time.<\/p>\n
(b) Except with respect to the Excluded Assets, Schedule 3.16(b) sets
\nforth a list of the 20 most significant suppliers of raw materials, supplies,
\nmerchandise or other goods to the Company in terms of purchases for the period
\nApril 1, 2000 through October 31, 2000, showing the amount which the Company
\npaid to each such significant supplier during such period. Except as disclosed
\nin Schedule 3.16(b) or with respect to the Excluded Assets, the Company has <\/p>\n
20<\/p>\n
no reason to believe that any such supplier will not sell raw materials,
\nsupplies, merchandise and other goods to the Company following the Closing on
\nthe same terms and conditions as those with respect to its current sales to the
\nCompany, subject only to general and customary price increases.<\/p>\n
SECTION 3.17. Disclosure.
\n ———- <\/p>\n
(a) No representation or warranty of Seller in this Agreement and no
\nstatement contained in any Ancillary Agreement contains any untrue statement or
\nomits to state a material fact necessary to make the statements made herein or
\ntherein, in light of the circumstances under which they were made, not
\nmisleading.<\/p>\n
(b) No notice given pursuant to this Agreement, including Section 5.1(b),
\nwill contain any untrue statement or omit to state a material fact necessary to
\nmake the statements made therein, in light of the circumstances under which they
\nwere made, not misleading.<\/p>\n
(c) The written information and materials provided to Purchaser and the
\nrepresentatives of Purchaser described in Schedule 3.17(c), taken as a whole, do
\nnot contain any untrue statement or omit to state a material fact necessary to
\nmake the statements made therein, in light of the circumstances under which they
\nwere made, not misleading.<\/p>\n
SECTION 3.18. Financial Statements
\n ——————–<\/p>\n
(a) Attached as Schedule 3.18 is a true and correct copy of the unaudited
\nconsolidated balance sheet of the Company as of December 30, 2000 (the “Company
\nBalance Sheet”) and the related unaudited consolidated statement of income for
\nthe twelve-month period ended December 30, 2000 (the “Company Income
\nStatement”), in each case prepared by the management of GPC including, in each
\ncase, a true and complete description of all accounting policies and procedures
\nused in the preparation thereof (collectively, the “Company Financial
\nStatements”).<\/p>\n
(b) Attached as Schedule 3.18 is a true and correct analysis of the
\nfinancial position of the Business, the left hand column of which is the Company
\nBalance Sheet and the right hand column of which represents the balance sheet of
\nthe Company as of December 30, 2000, assuming that the Restructuring had taken
\nplace immediately before the closing of the accounts for the balance sheet (the
\n“Pro Forma Business Balance Sheet”). Attached as Schedule 3.18 is a true and
\ncorrect detailed analysis of the Company Income Statement, the right hand column
\nof which represents the unaudited pro forma income statement for the Business
\nfor the same twelve-month period (the “Pro Forma Business Income Statement”).
\nThe Pro Forma Business Balance Sheet and the Pro Forma Business Income Statement
\n(collectively, the “Pro Forma Business Financial Statements”) were each prepared
\nby the management of GPC in connection with the transactions contemplated
\nhereby. In each case, a true and complete description of all accounting
\npolicies and procedures used in the preparation thereof are attached thereto.
\nThe Inventories in the Pro Forma Business Balance Sheet have been valued at the
\nlower of FIFO cost or market.<\/p>\n
(c) The Company Financial Statements were prepared from the books and
\nrecords of the Company and are true and correct and fairly present the financial
\ncondition and results of <\/p>\n
21<\/p>\n
operation of the Company as of the dates and for the periods indicated. Except
\nas described in Schedule 3.18 the Company Financial Statements have been
\nprepared using U.S. GAAP consistent with those used in the preparation of GPC’s
\naudited consolidated balance sheet as of December 30, 2000 and the related
\naudited consolidated statement of income for the 12-month period then ended, as
\nfiled by GPC with the Securities and Exchange Commission.<\/p>\n
(d) The Pro Forma Business Financial Statements were prepared from the
\nbooks and records of the Company and management of GPC believes they fairly
\npresent on a pro forma basis the financial condition and results of operation of
\nthe Business after giving effect to the Restructuring as of the dates and for
\nthe periods indicated. The Pro Forma Business Financial Statements contain a
\ndetailed, true and complete and verifiable description of all adjustments and
\nthe rationale and allocation method used for each adjustment and all other
\nassumptions used in the preparation of the Pro Forma Business Financial
\nStatements, and management of GPC believes that all of such adjustments and
\nassumptions correctly reflect the impact of the Restructuring. All group,
\ncorporate and other overhead costs and other allocated costs set forth in the
\nPro Forma Business Income Statement have been allocated on the basis of the
\nfactors set forth in the Pro Forma Business Financial Statements and are not
\nless than the proportional share of the actual costs for such items incurred by
\nGPC.<\/p>\n
In addition, the Pro Forma Business Balance Sheet entry for (x) the
\nunderfunding of the Wisconsin Tissue Mills Retirement Plans for Hourly Employees
\nand the Wisconsin Tissue Mills, Inc. Chicago Operations Retirement Plan for
\nHourly Employees and (y) the accumulated post retirement medical benefit
\nobligations for active union employees is $7,000,000.<\/p>\n
(e) The accounts receivable set forth in the Pro Forma Business Balance
\nSheet and Company Balance Sheet and to be set forth in the Final Closing Balance
\nSheet arose, in the case of the Pro Forma Business Balance Sheet and Company
\nBalance Sheet, and except as disclosed on Schedule 3.18 will have arisen, in the
\ncase of the Final Closing Balance Sheet, from bona fide sales and deliveries of
\ngoods in the ordinary course of business and have been, in the case of the Pro
\nForma Business Balance Sheet and Company Balance Sheet, and will have been, in
\nthe case of the Final Closing Balance Sheet, adequately reserved against therein
\nin accordance with U.S. GAAP.<\/p>\n
(f) All Inventory of the Company consists of good and saleable items of a
\nquality or quantity usable or salable at prevailing prices in the ordinary
\ncourse of the Company’s business and consistent with past practice (after giving
\neffect to the Restructuring), is not stale, obsolete or slow moving and does not
\nrelate to discontinued product lines. The quantities of each item of such
\nInventory (whether raw materials, work-in-progress, or finished goods) were
\nprocured or produced for sale in the ordinary course of the Company’s business
\nand consistent with past practice (after giving effect to the Restructuring),
\nand the volume of production or purchases thereof and of orders therefor have
\nbeen consistent with ordinary and necessary production, purchasing and orders.
\nAll Inventory included in the Company Balance Sheet and Pro Forma Business
\nBalance Sheet or to be included in the Final Closing Balance Sheet is or will
\nbe, as the case may be, reflected at the lower of cost or market value in
\naccordance with U.S. GAAP.<\/p>\n
(g) The fixed assets reflected in the Pro Forma Business Balance Sheet
\ninclude all fixed assets necessary to support the Business except for fixed
\nassets that are associated with <\/p>\n
22<\/p>\n
goods and services provided pursuant to the Ancillary Agreements and not located
\nat the Facilities.<\/p>\n
(h) Attached hereto as Schedule 3.18(h) is the projected statement of
\nincome of the Business for fiscal year 2001 together with appropriate supporting
\ndetails and a statement of the underlying assumptions (the “Projections”). The
\nProjections have been prepared by GPC in light of the past operations of the
\nCompany. As of November 28, 2000 the Projections, including the underlying
\nassumptions, were believed by GPC to be reasonable and to represent the good
\nfaith estimate of GPC and its senior management concerning the Business in 2001
\nand since such date nothing has come to the attention of GPC or its senior
\nmanagement to change such belief in a material way provided that no
\nrepresentation is made as to the impact of the expected change in ownership of
\nthe Company on the prospects of the Business. Without limiting the foregoing,
\nas of November 28, 2000 GPC was of the opinion that the assumptions regarding
\nthe levels of overhead and other costs included in the Projections were
\nreasonable based on the historical results of the Company’s operations and the
\nlikely effect of the Restructuring, and in particular the adjustment to the
\nlevel of costs for the Business after giving effect to the distribution of the
\nExcluded Assets and since such date nothing has come to the attention of GPC or
\nits management which has caused it to change such opinion in a material way
\nprovided that no representation is made as to the impact of the expected change
\nin ownership of the Company on the prospects of the Business. GPC does not
\nrepresent or warrant that the results set forth in the Projections are
\nachievable by the Business.<\/p>\n
SECTION 3.19. No Undisclosed Liabilities or Distributions.
\n ——————————————- <\/p>\n
(a) Except as set forth in Schedule 3.19 or, to the extent it is
\nreasonably apparent from the review of any other Schedule hereto, as set forth
\non such other Schedule attached hereto, the Company has no Liabilities (whether
\nabsolute, accrued, contingent, or otherwise) except for Liabilities or
\nobligations reflected or reserved against in the Company Balance Sheet and
\ncurrent Liabilities, which have been incurred since the date thereof in the
\nordinary course of business and consistent with past practice and which will be
\nreflected on the Final Closing Balance Sheet.<\/p>\n
(b) Since December 30, 2000, the Company has not made any distribution of
\nor otherwise transferred any of its assets or properties (including any cash) to
\nor for the benefit of any of its membership unit holders or any of their
\nrespective Affiliates, other than any such distribution or transfer contemplated
\nby the Restructuring or the payment of interest on Company Indebtedness in
\naccordance with the terms and conditions of such indebtedness in existence on
\nthe date hereof.<\/p>\n
SECTION 3.20. Transactions with Seller and Affiliate. Schedule 3.20 sets
\n ————————————–
\nforth each transaction or series of related transactions (including, without
\nlimitation, the sale, purchase exchange or lease of assets, property or
\nservices) to which the Company is or was a party and which are or were for the
\nbenefit of Seller or any Affiliate of Seller and all or a part of which were
\nentered into or performed within the last five years. All of such transactions
\nor series of related transactions set forth on or required to be set forth on
\nSchedule 3.20 were entered into in good faith and are on terms that are no less
\nfavorable to the Company than those that would be available in a comparable
\ntransaction in arm’s-length dealings with an unrelated third party. <\/p>\n
23<\/p>\n
Sales to Seller or Seller’s Affiliates have been made only to fill each
\npurchaser’s immediate needs for resale. During the period from January 1, 2000
\nuntil the date hereof, the share of sales made to Seller and Seller’s Affiliates
\nout of the total sales in the Business has remained constant in amount except
\nfor variances that are not material.<\/p>\n
SECTION 3.21. Title to Securities. GPC is the beneficial and record
\n ——————-
\nowner, free and clear of any Liens, of 95% of the outstanding Membership Units
\nand as of the Closing Date will be the beneficial and record owner, free and
\nclear of any Liens, of 100% of the outstanding Membership Units. GPC will sell,
\ntransfer, assign and deliver good and valid title to the Securities as provided
\nin this Agreement. GPC has the absolute and unconditional right to purchase all
\nthe Membership Units of the Company not owned by it. At the Closing, Purchaser
\nwill acquire good and valid title to the Securities, free and clear of any
\nLiens.<\/p>\n
SECTION 3.22. Capitalization. On the date of this Agreement, the
\n ————–
\nCompany’s authorized capitalization consists solely of 100 common membership
\nunits (the “Membership Units”), of which 100 Membership Units are issued and
\noutstanding to the Persons and in the amounts set forth on Schedule 3.22.
\nSeller has entered into an agreement pursuant to which it is entitled to
\npurchase the 5% membership interest it currently does not own on the terms and
\nconditions set forth therein. The Securities represent all the outstanding
\nequity securities of the Company. Such issued and outstanding Membership Units
\nare validly issued, fully paid and nonassessable. Except (a) as set forth in
\nSchedule 3.22 hereto, and (b) for rights granted to Purchaser under this
\nAgreement, there are no outstanding options, warrants or other rights to
\npurchase, obtain or acquire, or any outstanding securities or obligations
\nconvertible into or exchangeable for, or any voting agreements with respect to,
\nany Membership Units of the Company or any other securities of the Company and
\nthe Company is not obligated, now or in the future, contingently or otherwise,
\nto issue or purchase any Membership Units of the Company or any other securities
\nof the Company to or from any Person. There are no treasury Membership Units of
\nthe Company.<\/p>\n
SECTION 3.23. Subsidiaries and Equity Interests. Except as set forth in
\n ———————————
\nSchedule 3.23, the Company owns no capital stock, membership units or other
\nsecurities of any Person.<\/p>\n
SECTION 3.24. GPF Authority, etc. GPF is a limited liability corporation
\n ——————
\nduly organized, validly existing and in good standing under the laws of the
\nState of Delaware. GPF has all requisite power and authority to execute,
\ndeliver and perform this Agreement and to consummate the transactions
\ncontemplated hereby. The execution, delivery and performance of this Agreement
\nand the consummation of the transactions contemplated hereby have been duly
\nauthorized by all necessary action on the part of GPF. This Agreement has been
\nduly executed and delivered by GPF and constitutes its legal, valid and binding
\nobligation enforceable against it in accordance with its terms.<\/p>\n
SECTION 3.25. Notes. GPF is the beneficial and record owner of the Notes,
\n —–
\nfree and clear of any Liens. GPF will sell, transfer, assign and deliver good
\nand valid title to the Notes. At the Closing, Purchaser will acquire good and
\nvalid title to the Notes free and clear of any Liens. The outstanding aggregate
\nprincipal amount of the Notes is $755,200,000.<\/p>\n
24<\/p>\n
ARTICLE IV
\n Representations and Warranties of Purchaser and SCA
\n —————————————————<\/p>\n
Each of Purchaser and SCA, with respect to itself only, hereby represents
\nand warrants to Sellers as follows:<\/p>\n
SECTION 4.1. Organization, Standing and Power. It is a corporation duly
\n ——————————–
\norganized, validly existing and in good standing under the laws of the
\njurisdiction in which it is incorporated and has the requisite corporate power
\nand authority to carry on its business as currently conducted.<\/p>\n
SECTION 4.2. Authority.
\n ——— <\/p>\n
(a) The execution and delivery by it of this Agreement and each Ancillary
\nAgreement to which it is a party and the consummation of the transactions
\ncontemplated hereby and thereby have been duly authorized by all necessary
\ncorporate action on its part prior to the Closing. This Agreement and each
\nAncillary Agreement to which it is a party, when duly executed and delivered by
\nit, will constitute its legal, valid and binding obligation enforceable against
\nit in accordance with its respective terms.<\/p>\n
(b) Each of Purchaser and SCA has all requisite power and authority to
\nexecute, deliver and perform this Agreement and the Ancillary Agreements to
\nwhich it is a party and to consummate the transactions contemplated hereby and
\nthereby. The execution and delivery of this Agreement by each of Purchaser and
\nSCA does not, and the consummation by each of Purchaser and SCA of the
\ntransactions contemplated hereby and the compliance by each of Purchaser and SCA
\nwith the terms hereof will not conflict with, or result in any violation of or
\ndefault (with or without notice or lapse of time, or both) under, any provision
\nof (i) its certificate of incorporation or by-laws (or comparable organizational
\ndocuments), (ii) subject to the filings and other matters referred to in Section
\n4.2(c), any law, judgment, order, decree, statute, ordinance, rule or regulation
\napplicable to it, or (iii) any of the terms, conditions or provisions of any
\nContract to which it is a party or by which its properties or assets is bound
\nother than, in the case of clauses (ii) and (iii), any such conflicts,
\nviolations or defaults, that, individually or in the aggregate, would not
\nmaterially impair its ability to perform its obligations under this Agreement.
\nPurchaser is a direct or indirect wholly owned subsidiary of SCA.<\/p>\n
(c) No Permit is required to be obtained or made by or with respect to
\neach of Purchaser and SCA in connection with the execution and delivery of this
\nAgreement by it or the consummation by it of the transactions contemplated
\nhereby, except for (i) notice to and consent by the United States pursuant to
\nSection V of the Consent Decree, and (ii) those the failure of which to obtain
\nor make, individually or in the aggregate, would not materially impair its
\nability to perform its obligations under this Agreement.<\/p>\n
SECTION 4.3. Available Funds. SCA has, and on the Closing Date will make
\n —————
\navailable to Purchaser, sufficient funds to enable Purchaser to consummate the
\ntransactions contemplated hereby.<\/p>\n
25<\/p>\n
SECTION 4.4. Investment Intent. Purchaser is acquiring the Securities for
\n —————–
\nits own account for investment purposes only and not with a view to, or for sale
\nor resale in connection with, any public distribution thereof or with any
\npresent intention of selling, distributing or otherwise disposing of the
\nSecurities in violation of the Securities Act of 1933, as amended (the
\n“Securities Act”). Purchaser understands that the Securities have not been
\nregistered under the Securities Act or any state securities or “blue-sky” laws
\nby reasons that depend upon, among other things, the bona fide nature of its
\n —- —-
\ninvestment intent as expressed herein and as explicitly acknowledged hereby and
\nthat under such laws and applicable regulations such securities may not be
\nresold without registration under the Securities Act unless an applicable
\nexemption from registration is available.<\/p>\n
SECTION 4.5. Accredited Investor; Investment Representations. Purchaser
\n ———————————————–
\nis an “accredited investor” within the meaning of Rule 501 of Regulation D under
\nthe Securities Act. Purchaser, by reason of its business and financial
\nexperience in business, has such knowledge, sophistication and experience in
\nbusiness and financial matters as to be capable of evaluating the merits and
\nrisks of the purchase of the Securities, is able to bear the economic risk of
\nsuch investment in the Company, and is able to afford a complete loss of such
\ninvestment.<\/p>\n
SECTION 4.6. Litigation; Decrees. (i) There is no Order in effect to
\n ——————-
\nwhich either Purchaser or SCA is a party that is related to or affects the
\ntransactions contemplated hereby or in the Ancillary Agreements and (ii) neither
\nPurchaser nor SCA is a party to, or engaged in, or to the knowledge of Purchaser
\nor SCA, has been threatened with, any Action that is related to or affects the
\ntransaction contemplated hereby or in the Ancillary Agreements, and, to the
\nknowledge of Purchaser and SCA, no event has occurred or condition exists which
\nwould form the basis of any such Action.<\/p>\n
ARTICLE V
\n Covenants
\n ———<\/p>\n
SECTION 5.1. Conduct of Business. During the period from the date of this
\n ——————-
\nAgreement and continuing until the Closing (except as expressly provided in this
\nAgreement or the Schedules or to the extent that the parties shall otherwise
\nconsent in writing), Seller agrees and, as applicable, each of Purchaser and SCA
\nagrees, that:<\/p>\n
(a) Ordinary Course. Except for the Restructuring and with respect to
\n —————
\nmatters contemplated in the Ancillary Agreements or to the extent Purchaser
\nshall otherwise consent in writing, Seller agrees to cause the Company to
\noperate and maintain its properties and assets and otherwise conduct its
\nbusiness only in the usual and ordinary course in substantially the same manner
\nas presently conducted, maintained and operated, and to cause the Company to use
\nall commercially reasonable efforts to preserve intact its properties and assets
\nin their present condition, including the integrity of the Company’s trademarks
\nand brands. Except as otherwise provided in this Agreement and the Human
\nResources Agreement, Seller agrees to cause the Company to use commercially
\nreasonable efforts to (i) preserve intact its current business organization;
\n(ii) keep available the services of its current officers and employees; (iii)
\npreserve its relationship with customers, suppliers, licensers, licensees,
\nadvertisers, distributors and others having business dealings with the Company;
\n(iv) retain for the benefit of the Company all material current customer
\ncontracts on terms and conditions which are no less favorable to the <\/p>\n
26<\/p>\n
Company than the terms and conditions that are currently in existence; (v)
\npreserve goodwill; (vi) maintain all existing business permits, licenses,
\nqualifications and authorizations; and (vi) comply in all material respects with
\napplicable Laws, including Environmental Laws. Seller will cause the Company to
\nenter into transactions with Seller or Seller’s Affiliates only on terms that
\nare no less favorable to the Company than those that would be available in a
\ncomparable transaction in arm’s-length dealings with an unrelated third party.
\nSales to Seller or Seller’s Affiliates shall be made only to fill each
\npurchaser’s immediate needs for resale. Seller will, and agrees to cause the
\nCompany to, discuss with Purchaser, SCA and their representatives, as and when
\nrequested but upon reasonable prior notice, the status of the Company’s
\noperations and finances. Seller agrees to cause the Company to not increase the
\nsalary of any employee and not hire or terminate the employment of any employee
\nexcept in each case in the ordinary course of business and consistent with past
\npractices or in accordance with the terms of the Human Resources Agreement.<\/p>\n
(b) Notice of Changes. Seller shall promptly advise Purchaser in writing
\n —————–
\nof the occurrence of any material adverse change in the business, assets,
\ncondition (financial or otherwise), results of operations or prospects of the
\nCompany. In addition, from the date of this Agreement until the Closing Date,
\nSeller will promptly notify Purchaser in writing of (i) any notice or other
\ncommunication from any Person alleging that the Consent of such Person is or may
\nbe required in connection with the execution, delivery or performance of this
\nAgreement or any Ancillary Agreement or the consummation of the transactions
\ncontemplated hereby or thereby; (ii) any notice or other communication from any
\nGovernmental Entity in connection with the transactions contemplated hereby;
\n(iii) any actions or investigations commenced or, to the knowledge of Seller,
\nthreatened, and related to the Company or its properties, assets or business
\nwhich could reasonable be expected to have a Material Adverse Effect; (iv) any
\nOrder or notification relating to any material violation or claimed violation of
\nLaw by the Company; (v) the existence or nonexistence or occurrence or
\nnonoccurrence of any event, condition or circumstance the existence or
\nnonexistence or occurrence or nonoccurrence of which does or would cause any
\nrepresentation or warranty contained in this Agreement to be untrue or
\ninaccurate in any material respect at or prior to the Closing Date; and (vi) any
\nfailure of Seller to comply with or satisfy any covenant, condition or agreement
\nto be complied with or satisfied by it hereunder; provided, however, that no
\n ——– ——-
\nnotice of the facts, conditions or circumstances referred to therein delivered
\npursuant to this Section 5.1(b) may be considered in determining the fulfillment
\nof the conditions set forth in Article VI of this Agreement or be effective to
\ncure or correct any breach of a representation, warranty or covenant which would
\nhave existed by reason of Seller’s not giving such notice and will not limit or
\notherwise affect the remedies available to Purchaser.<\/p>\n
(c) Forbearance by Seller. Except for the Restructuring or as contemplated
\n ———————
\nby the Ancillary Agreements or disclosed in Schedule 3.9(b), Seller will not
\npermit the Company to:<\/p>\n
(i) sell, lease or otherwise dispose of, or agree to sell, lease or
\n otherwise dispose of, any of its assets except in the ordinary course of
\n business and consistent with past practices;<\/p>\n
(ii) amend or otherwise modify, or terminate, any Material Contract,
\n or enter into any other Material Contract, other than with the consent of
\n Purchaser;<\/p>\n
27<\/p>\n
(iii) increase or enhance in any manner the compensation or benefits
\n of any of its Employees or pay any pension or retirement benefit not
\n required by any existing Plan or Contract to any such Employee, or become a
\n party to, amend or commit itself to any pension, retirement, profit-sharing
\n or welfare benefit plan or agreement or employment agreement with or for
\n the benefit of any such Employee, other than increases in the compensation
\n of such Employees who are not officers or directors of the Company made
\n pursuant to collective bargaining agreements or in the ordinary course of
\n business and consistent with past practice, or, except to the extent
\n required by Law, Plan or any Contract delivered to Purchaser prior to the
\n date hereof, voluntarily accelerate the vesting of any compensation or
\n benefit to any Employee of the Company; provided, however, that the
\n ——– ——-
\n foregoing shall not in any way prohibit Seller from increasing or enhancing
\n the compensation or benefits of any Person who is jointly employed or is a
\n joint officer of the Company and Seller; and provided, further, that such
\n ——– ——-
\n Person will not be an Employee of the Company after the Closing;<\/p>\n
(iv) waive, amend or allow to lapse any term or condition of any
\n confidentiality, “standstill,” consulting, advisory or employment Contract;<\/p>\n
(v) enter into any transaction with any Affiliate other than in the
\n ordinary course of business and consistent with past practice;<\/p>\n
(vi) amend its operating agreement or other governing documents;<\/p>\n
(vii) issue or sell any membership units or any other securities or
\n issue any securities convertible into or exchangeable for, or options,
\n warrants to purchase, script, rights to subscribe for, calls or commitments
\n of any character whatsoever relating to, or enter into any contract,
\n understanding or arrangement with respect to the issuance of, any
\n membership units or any of its other securities, or enter into any
\n arrangement or contract with respect to the purchase or voting of
\n membership units, or adjusting, splitting, reacquiring, redeeming,
\n combining or reclassifying any of its securities, or making any other
\n changes in its capital structure;<\/p>\n
(viii) incur (contingently or otherwise) any indebtedness for borrowed
\n money;<\/p>\n
(ix) incur (contingently or otherwise) any other debt or other
\n obligation to pay money except for normal operating purposes in the
\n ordinary course of business;<\/p>\n
(x) declare, set aside or pay any dividends (in cash or in kind)
\n on, or make any distributions in respect of, the Membership Units (or any
\n other security) of the Company;<\/p>\n
(xi) guarantee or enter into any obligation to guarantee the
\n obligation of any Person;<\/p>\n
(xii) mortgage, pledge or subject to any Lien, charge or other
\n encumbrance, any of the assets or properties of the Company or Business;<\/p>\n
28<\/p>\n
(xiii) cancel any debt or claim or waive any right, or purchase or
\n otherwise acquire or lease any properties or assets, in each case except in
\n the ordinary course of business and consistent with past practices;<\/p>\n
(xiv) permit to lapse any right with respect to any Intellectual
\n Property or other intangible asset used in the conduct of the Business;<\/p>\n
(xv) accelerate the collection of accounts receivable, delay the
\n payment of accounts payable or defer maintenance and other expenses, reduce
\n inventories, or otherwise increase cash on hand, in a manner, in each case,
\n inconsistent with past practice or not in the ordinary course of business;<\/p>\n
(xvi) repay any indebtedness for borrowed money, except as required
\n by existing debt instruments;<\/p>\n
(xvii) make any material tax election, settle or compromise any
\n liability for Taxes, prepare and file tax returns other than on a basis
\n consistent with the Company’s past practices or, other than in the ordinary
\n course of business, engage in any transaction or operate the business in a
\n manner that would directly or indirectly result in any liability for Taxes
\n of the Company;<\/p>\n
(xviii) make any change in its accounting methods or practices; or<\/p>\n
(xix) take or agree to take any of the foregoing actions.<\/p>\n
SECTION 5.2. Access to Information. Seller shall and shall cause the
\n ———————
\nCompany to afford to Purchaser, SCA and their representatives reasonable access
\nduring normal business hours and upon reasonable prior notice during the period
\nprior to the Closing to all the Company’s properties, books, Contracts,
\ncommitments and records and during such period shall furnish promptly to
\nPurchaser any information concerning the Business as Purchaser may reasonably
\nrequest; provided, however, that they shall be under no obligation to disclose
\n ——– ——-
\nto Purchaser (i) any information the disclosure of which is restricted by
\ncontract or applicable law except in strict compliance with the applicable
\ncontract or law; and (ii) any information as to which the attorney-client or
\nwork product privilege may be available, until a mutually satisfactory
\nconfidentiality agreement has been executed by Purchaser and Seller (which the
\nparties agree to negotiate in good faith). Purchaser acknowledges that any
\ninformation being provided to it or its representatives by Seller or Company
\npursuant to or in connection with this Agreement is subject to the terms of the
\nConfidentiality Agreement, which terms are incorporated herein by reference.<\/p>\n
SECTION 5.3. Governmental Approval, Etc.
\n ————————– <\/p>\n
(a) Seller shall as promptly as practicable, but in no event later than
\ntwo business days following the execution and delivery of this Agreement, notify
\nthe United States Department of Justice of this Agreement and all Ancillary
\nAgreements as required by the Consent Decree. Each party agrees that it shall
\npromptly provide to the United States Department of Justice any supplemental
\ninformation requested by it. The parties shall consult with each other before
\nresponding in writing to any comment or request for information made by <\/p>\n
29<\/p>\n
the Department of Justice or by the court and shall, if appropriate, allow the
\nother party to attend any hearings, meetings and interviews in which it
\nparticipates provided that no party shall be obligated to share any competitive
\nor other confidential information. Seller shall take all commercially reasonable
\nefforts with respect to the United States Department of Justice to ensure that
\nPurchaser, and after the Closing, the Company, receive the benefits of this
\nAgreement and the Ancillary Agreements. Notwithstanding the terms of the Parent
\nRoll Supply Agreement, the parties agree to use their best efforts (which shall
\nnot require the expenditure of funds or the retention of any consultant or
\noutside expert) to obtain the approval of the United States Department of
\nJustice to a term of eight years for the Parent Roll Supply Agreement (an
\noriginal term of three years plus five one-year extensions) and upon obtaining
\nany such consent, to modify the form of the Parent Roll Supply Agreement prior
\nto the execution thereof to reflect such change in the term of such agreement.<\/p>\n
(b) Each of Purchaser and Seller shall as promptly as practicable comply
\nwith any other laws of any country which are applicable to any of the
\ntransactions contemplated hereby and pursuant to which any consent, approval,
\norder or authorization of, or registration, declaration or filing with, any
\nGovernmental Entity or any other Person in connection with such transactions is
\nnecessary. Each of Purchaser and Seller shall furnish to the other such
\nnecessary information and reasonable assistance as the other may request in
\nconnection with its preparation of any filing, registration or declaration which
\nis necessary under any such laws. Each of Purchaser and Seller shall keep the
\nother apprised of the status of any communications with, and any inquiries or
\nrequests for additional information from, any Governmental Entity, and shall
\ncomply promptly with any such inquiry or request.<\/p>\n
SECTION 5.4. Environmental Matters. Seller shall commence prior to the
\n ———————
\nClosing Date and thereafter diligently pursue to completion the remediation,
\ncompliance plans, and other actions listed on Schedule 5.4. This obligation
\nshall survive until such remediation is complete.<\/p>\n
SECTION 5.5. Expenses. Whether or not the Closing takes place, and except
\n ——–
\nas otherwise specifically provided in this Agreement (including with respect to
\nTransfer Taxes as defined in Section 5.11(c)), all costs and expenses incurred
\nin connection with this Agreement and the transactions contemplated hereby shall
\nbe paid by the party incurring such costs or expenses.<\/p>\n
SECTION 5.6. Brokers or Finders. Each of Purchaser and Seller represents,
\n ——————
\nas to itself and its affiliates, that no agent, broker, investment banker or
\nother Person is or will be entitled to any broker’s or finder’s fee or any other
\ncommission or similar fee in connection with any of the transactions
\ncontemplated by this Agreement, except, as to Seller and its Affiliates, Merrill
\nLynch & Co., Inc., whose fees and expenses will be paid by Seller and, as to
\nPurchaser and its Affiliates, Credit Suisse First Boston Corporation, whose fees
\nand expenses will be paid by Purchaser. Each of Purchaser and SCA on the one
\nhand and Seller on the other hand respectively agrees to indemnify and hold the
\nother harmless from and against any and all claims, liabilities or obligations
\nwith respect to the fees of Merrill Lynch & Co., Inc. in the case of Seller, and
\nCredit Suisse First Boston Corporation in the case of Purchaser and SCA, and any
\nother fees, commissions or expenses asserted by any Person on the basis of any
\nact or statement alleged to have been made by such party or its Affiliates. The
\nobligations set forth in the <\/p>\n
30<\/p>\n
preceding sentence shall survive the Closing for a period equal to the
\napplicable statute of limitations, as extended or tolled, plus 90 days.<\/p>\n
SECTION 5.7. Restructuring. Seller shall consummate and shall cause the
\n ————-
\nCompany to consummate the Restructuring in the manner and on the terms and
\nconditions set forth on Schedule 5.7 hereto.<\/p>\n
SECTION 5.8. No Oral Representations. Purchaser acknowledges and agrees
\n ———————–
\nthat none of Seller, its representatives or any other person has made any oral
\nrepresentation or warranty, expressed or implied, with respect to the Company,
\nits assets, properties or business or the accuracy or completeness of any
\ninformation regarding the Company or its properties, assets or business
\nfurnished or made available to Purchaser and its representatives.<\/p>\n
SECTION 5.9. Purchaser Notices. From the date of this Agreement until
\n —————–
\nthe Closing Date, Purchaser and SCA will promptly notify Seller in writing of
\n(i) any notice or other communication from any Person alleging that the Consent
\nof such Person is or may be required in connection with the execution, delivery
\nor performance of this Agreement or any Ancillary Agreement or the consummation
\nof the transactions contemplated hereby or thereby; (ii) any notice or other
\ncommunication from any Governmental Entity in connection with the transactions
\ncontemplated hereby; (iii) the existence or nonexistence or occurrence or
\nnonoccurrence of any event, condition or circumstance the existence or
\nnonexistence or occurrence or nonoccurrence of which does or would cause any of
\nits representations or warranties contained in this Agreement to be untrue or
\ninaccurate in any material respect at or prior to the Closing Date; and (iv) any
\nfailure of either of them to comply with or satisfy any covenant, condition or
\nagreement to be complied with or satisfied by either of them hereunder;
\nprovided, however, that no notice of the facts, conditions or circumstances
\n——– ——-
\nreferred to therein delivered pursuant to this Section 5.9 may be considered in
\ndetermining the fulfillment of the conditions set forth in Article VI of this
\nAgreement or be effective to cure or correct any breach of a representation,
\nwarranty or covenant which would have existed by reason of Purchaser’s or SCA’s
\nnot giving such notice and will not limit or otherwise affect the remedies
\navailable to Seller.<\/p>\n
SECTION 5.10. Accounts Receivable. Seller agrees to promptly pay to
\n ——————-
\nCompany an amount equal to the aggregate amount of all accounts receivable net
\nof any reserves for bad debts, as in existence on the Closing Date, to the
\nextent not paid in full within 90 days of the Closing Date (the “Bad
\nReceivables”). To the extent Seller pays to Company any amounts required to be
\npaid pursuant to the foregoing sentence with respect to any Bad Receivables,
\nPurchaser agrees to cause the Company to transfer to GPC such Bad Receivable.<\/p>\n
SECTION 5.11. Allocation; Tax Matters.
\n ———————– <\/p>\n
(a) Within 180 days following the Closing, Purchaser shall prepare and
\ndeliver to Seller a statement (the “Allocation Statement”) allocating the
\nPurchase Price and any assumed Liabilities among the assets of the Company in
\naccordance with Treas. Reg. (S)1.1060-1T (or any comparable provision of state
\nor local tax laws). Seller will have the right to raise reasonable objections
\nto the Allocation Statement within ten days after receipt thereof, in which case
\nPurchaser and Seller will negotiate in good faith to resolve said objections.
\nPurchaser and Seller <\/p>\n
31<\/p>\n
shall agree upon revisions to the Allocation Statement to reflect any
\nadjustments to the consideration for Tax purposes. Purchaser and Seller and each
\nof their respective Affiliates shall report the Tax consequences of the
\ntransactions contemplated by this Agreement in a manner consistent with the
\nAllocation Statement, as it may be revised from time to time, and shall not take
\nany position inconsistent therewith in any examination of any Tax Return, in any
\nrefund claim or in any litigation or investigation, except as required by
\napplicable law.<\/p>\n
(b) Purchaser and Seller shall file and cause to be filed all Tax Returns
\nand execute such other documents as may be required by any taxing authority, in
\na manner consistent with the Allocation Statement, as it may be revised from
\ntime to time. Purchaser shall prepare Internal Revenue Service Form 8594
\npursuant to Section 1060 of the Code relating to the transactions contemplated
\nby this Agreement based on the Allocation Statement, as it may be revised from
\ntime to time, and deliver such form to Seller. Purchaser and Seller shall file,
\nor cause the filing of, such form with each relevant taxing authority.<\/p>\n
(c) Seller shall bear, and to the extent permitted by law shall pay, all
\ntransfer, documentary, sales, use, registration, stamp, value-added and other
\nsimilar Taxes (including all applicable real estate transfer Taxes and real
\nproperty gains Taxes), including any penalties, interest and additions to Tax,
\nincurred in connection with the transactions contemplated hereby and any Taxes
\nor other costs relating to a transfer, or that would not otherwise be payable in
\nthe absence of such transfer (including as a result of the transactions
\ncontemplated by this Agreement and including the use of a Tax attribute to
\nreduce Taxes) (“Transfer Taxes”), and Seller shall reimburse Purchaser for any
\nTransfer Taxes paid by Purchaser within 30 days of Purchaser’s written request.
\nSeller and Purchaser shall cooperate in timely making and filing all Tax Returns
\nas may be required to comply with the provisions of any Transfer Tax laws and in
\nmaking arrangements that lawfully minimize Transfer Taxes without increasing
\nother Taxes above the amount that would otherwise be payable in the absence of
\nsuch arrangements. To the extent it is legally able to do so, Purchaser shall
\ndeliver to Seller exemption certificates satisfactory in form and substance to
\nSeller with respect to Transfer Taxes if such delivery would reduce the amount
\nof Transfer Taxes that would otherwise be imposed.<\/p>\n
(d) At the Closing, Seller shall deliver to Purchaser a duly executed
\ncertificate certifying that the transaction contemplated hereby is exempt from
\nwithholding under Section 1445 of the Code.<\/p>\n
(e) Seller shall prepare and file or shall cause to be prepared and timely
\nfiled all Tax Returns with respect to the Company, its assets or activities that
\n(i) are required to be filed on or before the Closing Date or (ii) are required
\nto be filed after the Closing Date and are with respect to Income Taxes for
\ntaxable periods ending on or before the Closing Date. Purchaser shall prepare
\nor cause to be prepared and shall file or cause to be filed all other Tax
\nReturns required of the Company or in respect of its assets or activities. Any
\nsuch Tax Returns that include periods ending on or before the Closing Date or
\nthat include the activities of the Company prior to the Closing Date shall,
\ninsofar as they relate to the Company, be prepared in accordance with the
\nmethodology used in prior taxable years.<\/p>\n
(f) Seller shall pay or cause to be paid all Taxes of the Company, its
\nassets and activities, due (i) for all tax periods ending on or before the
\nClosing Date and (ii) for that portion <\/p>\n
32<\/p>\n
of any Straddle Period that ends on the Closing Date. Purchaser shall pay or
\ncause to be paid all Taxes owed by the Company other than Taxes described in the
\npreceding sentence.<\/p>\n
(g) Purchaser and Seller shall each provide the other with such assistance
\nas may be reasonably requested (including making officers, employees and agents
\nreasonably available to provide information or testimony) in connection with the
\npreparation of any Tax Return or any audit or other proceeding that relates to
\nthe Company. Purchaser and Seller each shall, and shall cause their Affiliates
\nto, retain until seven years after the Closing Date all Tax Returns, schedules,
\nwork papers and other records that are owned by such Person immediately after
\nthe Closing and that relate to the Company, its assets and activities; after the
\nend of such period, before disposing of any such Tax Returns, schedules, work
\npapers or other records, each shall give notice to such effect to the other, and
\nshall give the other, at the other’s cost and expense, a reasonable opportunity
\nto remove and retain all or any part of such Tax Returns, schedules, work papers
\nor other records as the other may select.<\/p>\n
(h) In the event any Tax authority informs Seller on the one hand, or
\nPurchaser on the other, of any notice of a proposed audit, claim, assessment or
\nother dispute concerning an amount of Taxes with respect to which the other
\nparty may incur Liability hereunder, the party so informed shall promptly notify
\nthe other party of such matter. Such notice shall contain factual information
\n(to the extent known) describing any asserted Tax Liability in reasonable detail
\nand shall be accompanied by copies of the relevant portions of any notice or
\nother documents received from any Tax authority with respect to such matter.
\nThe failure to give such notice shall not affect the indemnification provided
\nhereunder except to the extent that the other party has actually been prejudiced
\nas a result of such failure.<\/p>\n
(i) The filing party under this Section 5.11 shall control any audits,
\ndisputes and administrative, judicial or other proceedings related to Taxes with
\nrespect to which either party may incur Liability hereunder. Subject to the
\npreceding sentence, in the event an adverse determination may result in each
\nparty having responsibility for an amount of Taxes under this Section 5.11, each
\nparty shall be entitled to fully participate in that portion of the proceedings
\nrelating to the Taxes with respect to which it may incur Liability hereunder.
\nFor purposes of this Section 5.11 the term “participation” shall include (i)
\nparticipation in the portion of conferences, meetings or proceedings with any
\nTax authority, the subject matter of which includes an item for which such party
\nmay have Liability hereunder; (ii) participation in appearances before any court
\nor tribunal, the subject matter of which includes an item for which a party may
\nhave Liability hereunder; and (iii) with respect to the matters described in the
\npreceding clauses (i) and (ii), participation in the portion of the submission
\nand determination of the portion of the content of the documentation, protests,
\nmemorandum of fact and law, briefs, and the conduct of oral arguments and
\npresentations.<\/p>\n
(j) In the case of any Straddle Period: (i) the periodic Taxes of the
\nCompany that are not based on income or receipts (e.g., property Taxes) for the
\nportion of any Straddle Period ending on the Closing Date (the “Pre-Closing Tax
\nPeriod”) shall be computed based upon the ratio of the number of days in the
\nPre-Closing Tax Period and the number of days in the entire Tax Period; and (ii)
\nTaxes of the Company for the Pre-Closing Tax Period (other than Taxes described
\nin clause (i)) shall be computed as if such taxable period ended as of the close
\nof business on the Closing Date, and in the case of any Taxes of the Company
\nattributable to the <\/p>\n
33<\/p>\n
ownership by the Company of any equity interest in any partnership of other
\n“flow-through” entity, as if the taxable period of such partnership ended as of
\nthe close of business on the Closing Date.<\/p>\n
(k) Purchaser and Seller hereby agree to utilize the “Standard Procedure”
\nset forth in Revenue Procedure 96-60, 1996-2 C.B. 399, or a corresponding future
\nrevenue procedure or other administrative pronouncement with regard to the
\nreporting requirements attributable to wages paid or to be paid to employees of
\nthe Company.<\/p>\n
SECTION 5.12. Ancillary Agreements.
\n ——————– <\/p>\n
(a) GPC shall, and each of the parties as appropriate shall cause the
\nCompany to, enter into the Parent Roll Supply Agreement, Finished Goods
\nAgreement, Human Resources Agreement, Transition Agreement, Sludge Agreement and
\nCoronet License Agreement. SCA shall enter into the Guaranty attached to the
\nHuman Resources Agreement.<\/p>\n
(b) Seller agrees to dismantle the Transferred Equipment in the presence of
\nrepresentatives of Purchaser and ship it to the destinations directed by
\nPurchaser, at the sole cost and expense of Seller. The Transferred Equipment
\nshall be reinstalled by Purchaser, at the sole cost and expense of Purchaser.
\nSeller agrees to take such actions (at the sole cost and expense of Seller) as
\nare necessary to ensure that the Transferred Equipment is capable of producing
\nthe products specified on Schedule 5.12(b) in the quantities therein set forth
\nand that the Transferred Equipment that are napkin converting machines are in a
\ncondition capable of being certified by Wendy’s or Burger King, as applicable,
\nfor the manufacture of the products specified on Schedule 5.12(b).<\/p>\n
SECTION 5.13. [Intentionally Omitted].
\n ——————— <\/p>\n
SECTION 5.14. Gary, Indiana Access. Seller shall obtain with reasonable
\n ——————–
\npromptness a permanent easement for pedestrian and vehicular ingress and egress
\n(and the parking and loading of vehicles), in form and substance reasonably
\nsatisfactory to Purchaser, for the Owned Property in Gary, Indiana over the area
\nof the Walbash Railroad property labeled “Asphalt Pavement” and the access way
\nto “Waite Street,” as shown on the Falk PLI Engineering & Surveying survey
\n#02AA0476 dated December 12, 2000.<\/p>\n
SECTION 5.15. Litigation Cooperation. After the Closing, each of the
\n ———————-
\nparties shall cooperate in the defense or prosecution of claims relating to the
\nCompany or the business of the Company whether or not such claims arise prior to
\nthe Closing. Such cooperation shall include the retention of records in
\naccordance with each party’s respective retention policy and the provision of
\nrecords and information which are reasonably relevant to such claims and making
\nEmployees available on a mutually convenient basis to provide additional
\ninformation and assistance with such claims.<\/p>\n
SECTION 5.16. Intellectual Property.
\n ——————— <\/p>\n
(a) Seller shall reasonably cooperate with the Company, Purchaser and their
\nassignees and successors in interest in executing any documents that may be
\nnecessary to secure, <\/p>\n
34<\/p>\n
confirm, evidence or establish the Company’s ownership of or rights to the
\nCompany’s Intellectual Property.<\/p>\n
(b) Immediately after the Closing, Purchaser will cause the Company to
\nsubmit to the appropriate governmental and jurisdictional authorities the
\nappropriate materials to change its name so that after giving effect to such
\nchange the name of the Company does not include the words “Georgia-Pacific,” “G-
\nP,” “G-P Tissue” or any confusingly similar words. The Company shall not
\ncommercially use the words “Georgia-Pacific” or “G-P” or any confusingly similar
\nwords in connection with the Business or in connection with any product or
\nservice after the Closing; provided, however, that the Company shall have the
\n ——– ——-
\nright to commercially use such terms on Inventory of finished goods existing on
\nthe Closing Date and goods packed in packaging materials included in Inventory
\non the Closing Date for such time as it takes to deplete such Inventory but in
\nany event for not longer than 12 months after the Closing Date.<\/p>\n
(c) Seller agrees that it, its Affiliates, or assignees and successors in
\ninterest shall not assert or bring any action or proceedings based upon Seller’s
\nIntellectual Property, either issued or pending as of the date of Closing, that
\nrestricts or limits the Company’s ability to conduct the Business in the same
\nmanner as it had been conducted prior to the date of Closing.<\/p>\n
SECTION 5.17. Supplemental Disclosure. Each party shall have the right
\n ———————–
\nfrom time to time prior to the Closing to supplement or amend the Schedules
\n(other than Schedule 5.7) with respect to any matter required to be set forth or
\ndescribed in such Schedules by such party; provided, that no such supplement or
\n ——–
\namendment shall be deemed to be a waiver of any kind with respect to the breach
\nof any representation or warranty previously made, affect the right of a party
\nto terminate this Agreement pursuant to Section 7.1, or be taken into
\nconsideration in determining whether or not the conditions precedent set forth
\nin Article VI have been satisfied.<\/p>\n
SECTION 5.18. Negotiations with Others. Seller will not (and Seller will
\n ————————
\nnot cause or permit the Company or any of Seller’s or the Company’s directors,
\nofficers, employees, agents or representatives to) (i) solicit, initiate, or
\nencourage the submission of any proposal or offer from any person relating to
\nthe acquisition of the Securities or the assets, properties or business of the
\nCompany; or (ii) participate in any discussions or negotiations regarding,
\nfurnish any information with respect to, assist or participate in, or facilitate
\nin any other manner any effort or attempt by any person to do or seek, initiate
\nor encourage any of the foregoing. Seller will notify Purchaser immediately if
\nSeller, the Company or any of their directors, officers, agents, employees or
\nrepresentatives receives any proposal, offer, inquiry or contact with respect to
\nthe foregoing.<\/p>\n
SECTION 5.19. Non-Solicitation .
\n —————- <\/p>\n
(a) Seller on the one hand, and the Company and SCA on the other, agree
\nthat, except pursuant to the Human Resources Agreement, for a period of one year
\nfrom the date of Closing, (i) none of Seller or any of its Affiliates shall hire
\nany individual who was an employee of the Company on the date of Closing and
\n(ii) none of the Company, SCA or any of their Affiliates shall, except to the
\nextent permitted by the Consent Decree, hire any individual who was an employee
\nof either GPC, or its subsidiaries (other than the Company) on the date of
\nClosing. Thereafter, for a period of one year no party shall solicit for
\nemployment any such individual, <\/p>\n
35<\/p>\n
except for any solicitation by Purchaser or its Affiliates to the extent
\npermitted by the Consent Decree; provided, however, that general advertisement
\n ——– ——-
\nof job openings shall not constitute a solicitation and during the second such
\nperiod, hiring employees of other parties who make unsolicited approaches
\nseeking employment shall not be prohibited.<\/p>\n
(b) In the event the transactions contemplated by this Agreement and the
\nAncillary Agreements result in a “reportable event” as defined in Section 4043
\nof ERISA with respect to any Assumed Benefit Plan, Seller shall file any
\nrequired notification within 30 days of the date this Agreement is executed.<\/p>\n
SECTION 5.20. Unisource. Seller shall cause Unisource Worldwide, Inc.
\n ———
\n(“UWW”), a wholly owned subsidiary of GPC, to enter into a distribution
\nagreement with the Company pursuant to which UWW shall be obligated for a period
\nof two years after the Closing to purchase annually from the Company a volume of
\ncases of away-from-home tissue products equal to the volume of purchases made by
\nUWW from the Company of products marketed in the Business during the period
\nbeginning January 1, 2000 and ending October 31, 2000 (on an annualized basis)
\nand of substantially similar types of products on terms and conditions
\nconsistent with prevailing market terms and conditions. After the expiration of
\nsuch two-year period, GPC will cause UWW to consider utilizing the Company as a
\nsupplier of AFH tissue products on a basis no less favorable than other
\npotential suppliers in light of its needs, and the price, volume and terms and
\nconditions offered by the Company.<\/p>\n
SECTION 5.21. Maintenance of Insurance. Until the Closing Date, Seller
\n ————————
\nshall maintain or cause the Company to maintain in full force and effect all
\npresently existing insurance coverage with respect to the Company and the
\noperation of its business, and will take no action which will cause a
\nretroactive cancellation, or a lapse or reduction of the benefits, thereof.<\/p>\n
SECTION 5.22. Resignations. On the Closing Date, Seller shall cause to
\n ————
\nbe delivered to Purchaser duly signed resignations, effective immediately after
\nthe Closing, of the auditors and Managers of the Company, and Seller shall take
\nall action as is necessary to accomplish the foregoing.<\/p>\n
SECTION 5.23. Certifications. Seller shall use its commercially
\n ————–
\nreasonable efforts to obtain and assist the Company in obtaining any
\ncertification or other Consent for or with respect to any of the Facilities
\nrequired or reasonably necessary to supply AFH tissue products to any Person
\nthat was a customer of the Company on the Closing Date or at any time during the
\nsix-month period ending on the Closing Date.<\/p>\n
SECTION 5.24. Licensed Computer Software and Leased Computer Hardware.
\n ——————————————————- <\/p>\n
(a) Notwithstanding any other provision of this Agreement and other than
\nwith respect to matters contemplated in the Ancillary Agreements, Seller shall
\nnot be responsible for obtaining or paying for (except as set forth in 5.24(d),
\nbelow) any necessary novations, transfer or other agreements, consents,
\napprovals, signatures or waivers (collectively “Assignments”) necessary for the
\nassignment, sublicense, transfer or novation of any computer software license
\nnot appearing on Schedule 3.7(g) or which is characterized as non-assignable on
\nSchedule 3.7 (g) and computer hardware leases necessary to permit Purchaser to
\nconduct the Business after the <\/p>\n
36<\/p>\n
Closing Date in the manner in which it was operated prior to the Closing Date
\n(collectively, the “IT Licenses and Leases”). Purchaser shall be responsible for
\nfulfilling, completing and discharging all of the obligations and liabilities of
\nSeller in the IT Licenses and Leases. After the Closing, Purchaser shall take
\nall actions reasonably necessary to relieve Seller and its affiliates of the
\nburdens of performance and other obligations under the IT Licenses and Leases,
\nincluding obtaining and paying for consent to assign or subcontract, if
\nnecessary, all IT Licenses and Leases. Purchaser agrees to and shall indemnify
\nand hold harmless Seller and its affiliates from and against any and all
\nobligations and liabilities of Seller relating to such performance or failure to
\nperform under such IT Licenses and Leases.<\/p>\n
(b) If Seller or its Affiliates shall be unable to make the assignments
\ndescribed in Section 5.24(a), or if such attempted assignment would give rise to
\nany right of termination or would otherwise adversely affect the rights of
\nSeller or its Affiliates or Purchaser under such IT Licenses and Leases, or
\nwould not assign all of the rights of Seller and its Affiliates thereunder at
\nthe Closing, Seller and its Affiliates shall be under no obligation to provide
\nPurchaser with all such rights. To the extent that Purchaser is provided the
\nbenefits of any IT Licenses and Leases referred to herein, Purchaser shall
\nperform at the direction of Seller and for the benefit of any third Person the
\nobligations of Seller and its Affiliates thereunder or in connection therewith,
\nand, except as provided in Section 5.24(d), Purchaser agrees to pay, perform,
\ndischarge and indemnify Seller against, and hold Seller harmless from, all
\nobligations and liabilities of Seller and its Affiliates relating to such
\nperformance or failure to perform, and in the event of a failure of such
\nindemnity, Seller shall cease to be responsible in respect of any of the
\nobligations under any of the IT Licenses and Leases which is the subject of such
\nfailure.<\/p>\n
(c) In connection with obtaining the consents contemplated by this Section
\n5.24, Purchaser shall not consent to any modification of any of the IT Licenses
\nor Leases which would adversely affect the rights of Seller and its Affiliates
\nwithout the prior written consent of Seller.<\/p>\n
(d) Immediately after the Closing, GPC shall deposit with the Company,
\n$150,000 (the “IT Fund”) for the purpose of paying for any necessary
\nAssignments, and if Assignment of a particular software license is not
\nobtainable, purchasing a new software license. Purchaser shall have the period
\nof six (6) months from the Closing Date to determine if any Assignments are
\nnecessary and appropriate, and if so, to obtain and pay for them using any
\nproceeds available in the IT Fund. Any portion of the IT Fund that remains
\nunused after the date that is six (6) months from the Closing Date shall be paid
\nby the Company to GPC.<\/p>\n
SECTION 5.25. Post Closing Deliveries. Seller shall, at its own cost
\n ———————–
\nand expense, continue to deliver to Purchaser from time to time after the
\nClosing upon their receipt thereof, any books, records (including any employment
\nand personnel records), papers and other files relating to the Business which
\nhave not previously been delivered to Purchaser.<\/p>\n
SECTION 5.26. PWC Report. Each party hereto shall cooperate with the
\n ———-
\nother parties hereto and use its reasonable commercial efforts to cause PWC to
\ndeliver the PWC Report, including but not limited to, providing PWC and its
\nrepresentatives access to all books and records of the Company, GPC and its
\nAffiliates which in any way relate to the Company, the Business or any income,
\nrevenue, costs, or charges allocated to the Company or the Business; provided,
\n ——–
\nhowever, that no party shall be under any obligation to disclose (i) any
\n——-
\ninformation the <\/p>\n
37<\/p>\n
disclosure of which is restricted by contract or applicable law except in strict
\ncompliance with the applicable contract or law; and (ii) any information as to
\nwhich the attorney-client or attorney-work product privilege may be available,
\nuntil a mutually satisfactory confidentiality agreement has been executed (which
\nthe parties agree to negotiate in good faith).<\/p>\n
SECTION 5.27. Undertaking to Keep Proprietary Information Confidential.
\n ——————————————————–
\nSeller agrees that, during a period of five years from Closing, Seller shall,
\nand shall cause any successor of Seller to, treat as confidential all
\ninformation in Seller’s possession and relating to the Business which has been
\ntreated as confidential by Seller or the Company and not disclose such
\ninformation to any third party or use it for purposes of competing with the
\nCompany or Purchaser or any successor in the Business. Purchaser agrees that,
\nduring a period of five years from the Closing, Purchaser shall, and shall cause
\nthe Company to, treat as confidential all information in Purchaser’s or the
\nCompany’s possession and relating to the Excluded Assets which has been treated
\nas confidential by Seller or the Company and not disclose such information to
\nany third party or use it for purposes of competing with GPC and its Affiliates
\nin the AFH tissue business. Notwithstanding the foregoing, a party shall be
\npermitted to disclose confidential information to the extent required by Law and
\neach party agrees to (x) promptly notify the other party to the extent it is
\nrequired by Law to disclose such confidential information so as to permit such
\nother party to timely object to the disclosure of such confidential information
\nand (y) cooperate with the other party in order to seek an appropriate
\nprotective order. Confidential information shall not include any information
\nthat (i) was publicly available when disclosed by one party hereto (the
\n“Disclosing Party”) to another party hereto (the “Receiving Party”) or (ii)
\nlater becomes publicly available through no fault of the Receiving Party or
\n(iii) is disclosed to the Receiving Party by a third party who did not thereby
\nbreach an obligation of confidentiality against the Disclosing Party.<\/p>\n
SECTION 5.28. Prohibited Transactions. So long as GPC’s indemnity
\n ———————–
\nobligations pursuant to Article VIII are in effect, GPC agrees that it will not,
\nin a single transaction or through a series of related transactions, sell,
\nconvey, assign, transfer, lease or otherwise dispose of, all or substantially
\nall of its properties or assets to any Person or group of Persons (including to
\nits stockholders by way of a “Morris Trust” spin off, spin out or other similar
\ntransaction) unless after giving effect thereto such Person or group of Persons
\nagrees to be bound by all of GPC’s obligations under and pursuant to this
\nAgreement and the Ancillary Agreements. Seller agrees that to the extent GPC
\nbreaches its obligations under this Section 5.28 that monetary damages will not
\nbe adequate and Seller hereby agrees that specific performance or injunctive
\nrelief will be available to the Company.<\/p>\n
SECTION 5.29. Obligation of SCA. SCA agrees to cause Purchaser to
\n —————–
\ncomply with its obligations and agreements contained herein.<\/p>\n
SECTION 5.30. Delivery of Certain Inventories. GPC shall at Closing
\n ——————————-
\nship to the Company at the Facilities or outside warehouses specified by
\nPurchaser, at GPC’s sole cost and expense, all the Company’s Inventories of
\nfinished goods not located at any of the Facilities or outside warehouses.<\/p>\n
SECTION 5.31. Warren and Washington Industry Development Agency. As
\n ————————————————-
\nsoon as practicable after the date hereof, GPC shall contact the appropriate
\nauthorities at the counties of <\/p>\n
38<\/p>\n
Warren and Washington Industrial Development Agency (the “IDA”) to advise the
\nIDA of the terms of the transactions contemplated hereby and to request that GPC
\nbe released from its guaranty (the “GPC Guaranty”) of the Company’s obligations
\nunder the Lease between the IDA and Wisconsin Tissue Mills Inc. (“WT”) dated
\nFebruary 1, 1998 (the “IDA Lease”) and the Agreement For Payment in Lieu of
\nTaxes between the IDA and WT dated February 1, 1998 (the “PILOT”). GPC shall
\nprovide to SCA reasonable prior notice of such contact and provide SCA with an
\nopportunity to participate in the discussions if it so elects. SCA agrees that
\nin the event the IDA requires as a condition to the release of the GPC Guaranty
\nthat SCA or an Affiliate of SCA provide a guaranty of the Company’s obligations
\nunder the IDA Lease and the PILOT in form and substance substantially similar to
\nthe GPC Guaranty, SCA will, or will cause its Affiliates to, provide such
\nguaranty. SCA shall also provide such reasonable information regarding its
\nfinancial condition to the IDA in the event the IDA requests such information as
\na condition to granting such consent.<\/p>\n
ARTICLE VI
\n Conditions Precedent
\n ——————–<\/p>\n
SECTION 6.1. Conditions to Each Party’s Obligation. The obligation of
\n ————————————-
\nPurchaser to purchase the Securities and the obligation of Seller to sell,
\nassign, transfer, convey and deliver the Securities to Purchaser, and to
\ncomplete the other actions contemplated by this Agreement to occur at the
\nClosing, shall be subject to the satisfaction prior to the Closing of the
\nfollowing conditions:<\/p>\n
(a) Consent to the divestiture. Seller shall have received written notice
\n ————————–
\nfrom the Department of Justice of the United States that the United States does
\nnot oppose the completion of the transactions contemplated herein and in the
\nAncillary Agreements.<\/p>\n
(b) No Injunctions or Restraints. No temporary restraining order,
\n —————————-
\npreliminary or permanent injunction or other legal restraint or prohibition
\npreventing the purchase and sale of the Securities or the other transactions
\ncontemplated hereby or in the Ancillary Agreements shall be in effect; provided,
\n ——–
\nhowever, that each of Purchaser and Seller shall have used their commercially
\n——-
\nreasonable efforts to prevent the entry of any such order, injunction or other
\nrestraint or prohibition against it and to appeal as promptly as possible any
\nsuch order, injunction or other restraint or prohibition that may be entered
\nagainst it.<\/p>\n
SECTION 6.2. Conditions to Obligation of Purchaser. The obligation of
\n ————————————-
\nPurchaser to purchase the Securities is subject to the satisfaction at and as of
\nthe Closing of each of the following conditions:<\/p>\n
(a) Representations and Warranties. The representations and warranties of
\n ——————————
\nSeller set forth in this Agreement shall be true and correct in all material
\nrespects as of the date of this Agreement and as of the Closing as though made
\nat and as of the Closing (except as otherwise contemplated by this Agreement but
\nwithout giving effect to any amendment or supplement permitted by Section 5.17),
\nand Purchaser shall have received a certificate from Seller signed by an
\nauthorized officer of Seller to such effect.<\/p>\n
39<\/p>\n
(b) Performance of Obligations of Seller. Seller shall have performed or
\n ————————————
\ncomplied in all material respects with all obligations, conditions and covenants
\nrequired to be performed or complied with by it under this Agreement at or prior
\nto the Closing, and Purchaser shall have received a certificate from Seller
\nsigned by an authorized officer of Seller to such effect.<\/p>\n
(c) Opinion of Seller’s Counsel. Purchaser shall have received an opinion
\n —————————
\ndated the Closing Date of Kenneth F. Khoury, Esq., Vice President and Deputy
\nGeneral Counsel of GPC, substantially in the form of Exhibit C.
\n ——— <\/p>\n
(d) The Final PWC Report shall have been delivered by PWC and show an
\nEBITDA for the Business for the fiscal year 2000 of not less than fifty-eight
\nmillion dollars ($58,000,000).<\/p>\n
(e) [Intentionally Omitted.]<\/p>\n
(f) Since March 31, 2000, there shall not have occurred any material
\nadverse change in the business, assets, condition (financial or otherwise),
\nresults of operations or prospects of the Company.<\/p>\n
(g) Seller shall have delivered to Purchaser certificates representing the
\nSecurities, duly endorsed in blank, or accompanied by appropriate stock powers
\nin proper form for transfer.<\/p>\n
(h) Effective immediately prior to the Closing, all amounts then payable
\nby Seller or any Affiliate of Seller (except for trade payables of UWW incurred
\nin the ordinary course) to the Company shall have been repaid in full.<\/p>\n
(i) The Company shall have consummated the Restructuring in the manner and
\non the terms and conditions set forth in Schedule 5.7.<\/p>\n
(j) [Intentionally Omitted.]<\/p>\n
(k) Seller shall have delivered to SCA and Purchaser an original executed
\ncopy of the WISCO Release.<\/p>\n
(l) Seller shall have delivered to Purchaser all of the material books,
\nrecords (including employment and personnel records), papers and other files and
\nmaterials relating to the Business.<\/p>\n
(m) Seller shall have delivered to Purchaser all necessary Consents
\nrequired by the Transition Agreement.<\/p>\n
(n) Purchasers shall have received a copy of the written notice specified
\nin Section 6.1(a).<\/p>\n
(o) Seller shall have delivered to Purchaser a written certification that
\nSeller is ready, willing and able to perform all its post Closing employee
\nleasing and other obligations required by the Human Resources Agreement.<\/p>\n
40<\/p>\n
SECTION 6.3. Conditions to Obligation of Seller. The obligation of Seller
\n ———————————-
\nto sell, assign, transfer, convey, and deliver the Securities is subject to the
\nsatisfaction at and as of the Closing of each of the following conditions:<\/p>\n
(a) Representations and Warranties. The representations and warranties
\n ——————————
\nof each of Purchaser and SCA set forth in this Agreement shall be true and
\ncorrect in all material respects as of the date of this Agreement and as of the
\nClosing as though made at and as of the Closing (except as otherwise
\ncontemplated by this Agreement but without giving effect to any amendment or
\nsupplement permitted by Section 5.17), and Seller shall have received a
\ncertificate signed by an authorized officer of each of Purchaser and SCA to such
\neffect.<\/p>\n
(b) Performance of Obligations of Purchaser and SCA. Each of Purchaser
\n ———————————————–
\nand SCA shall have performed or complied in all material respects with all
\nobligations, conditions and covenants required to be performed or complied with
\nby it under this Agreement at or prior to the Closing, and Seller shall have
\nreceived a certificate signed by an authorized officer of each of Purchaser and
\nSCA to such effect.<\/p>\n
(c) Opinion of Purchaser’s Counsel. Seller shall have received (i) an
\n ——————————
\nopinion dated the Closing Date of Chadbourne & Parke LLP, special counsel to
\nPurchaser, substantially in the form of Exhibit D; and (ii) an opinion dated the
\n ———
\nClosing Date of Anders Nyberg, Esq., General Counsel of SCA, substantially in
\nthe form of Exhibit E.
\n ——— <\/p>\n
ARTICLE VII
\n Termination, Amendment and Waiver
\n ———————————<\/p>\n
SECTION 7.1. Termination.
\n ———– <\/p>\n
(a) Notwithstanding anything to the contrary in this Agreement, this
\nAgreement may be terminated and the transactions contemplated hereby abandoned
\nat any time prior to the Closing:<\/p>\n
(i) by mutual written consent of Seller and Purchaser;<\/p>\n
(ii) by Seller if any of the conditions set forth in Sections 6.1
\n or 6.3 shall have become incapable of fulfillment (other than through the
\n failure of Seller or GPF to comply with their obligations under this
\n Agreement), and shall not have been waived by Seller; provided, that to the
\n ——–
\n extent Purchaser or SCA advises Seller pursuant to Section 5.9 that any
\n such condition has become incapable of fulfillment (other than through the
\n failure of Purchaser to comply with its obligations under this Agreement)
\n and such notice makes specific reference to this Section, Seller may only
\n exercise its right to so terminate this Agreement pursuant to this Section
\n 7.1(a)(ii) as a result of such condition becoming incapable of fulfillment
\n for a period of twenty days after receipt of the notice specified in such
\n Section 5.9;<\/p>\n
(iii) by Purchaser or SCA if any of the conditions set forth in
\n Sections 6.1 or 6.2 shall have become incapable of fulfillment (other than
\n through the failure of Purchaser or SCA to comply with its obligations
\n under this Agreement), and shall not <\/p>\n
41<\/p>\n
have been waived by Purchaser or SCA; provided, that to the extent Seller
\n ——–
\n advises Purchaser pursuant to Section 5.1(b) that any such condition has
\n become incapable of fulfillment (other than through the failure of Seller
\n or GPF to comply with their obligations under this Agreement) and such
\n notice makes specific reference to this Section, Purchaser or SCA may only
\n exercise its right to terminate this Agreement pursuant to this Section
\n 7.1(a)(iii) as a result of such condition becoming incapable of fulfillment
\n for a period of twenty days after receipt of the notice specified in such
\n Section 5.1(b); or<\/p>\n
(iv) by Seller, Purchaser or SCA if the Closing does not occur on
\n or prior to June 30, 2001 (the “Closing Deadline”); provided, however, that
\n ——– ——-
\n the party seeking termination pursuant to clause (ii), (iii) or (iv) is not
\n in breach in any material respect of any of its representations,
\n warranties, covenants or agreements contained in this Agreement.<\/p>\n
(b) In the event of termination by Seller, on the one hand, or Purchaser
\nor SCA, on the other hand, pursuant to this Section 7.1, written notice thereof
\nshall promptly be given to the other party and the transactions contemplated by
\nthis Agreement shall be terminated without further action by any party. If the
\ntransactions contemplated by this Agreement are terminated as provided herein:<\/p>\n
(i) Purchaser and SCA shall return all documents and other
\n material received from Seller and the Company relating to the transactions
\n contemplated hereby, whether so obtained before or after the execution
\n hereof, to GPC; and<\/p>\n
(ii) all confidential information received by Purchaser or SCA with
\n respect to the businesses of the Company or Seller shall be treated in
\n accordance with the Confidentiality Agreement which shall remain in full
\n force and effect notwithstanding the termination of this Agreement.<\/p>\n
(c) If this Agreement is terminated and the transactions contemplated
\nhereby are abandoned as described in this Section 7.1, this Agreement shall
\nbecome null and void and of no further force and effect, except for the
\nprovisions of (i) Section 5.2 relating to the obligation of SCA and Purchaser to
\nkeep confidential certain information and data obtained by it from Seller; (ii)
\nthe provision of this Agreement relating to expenses (including Sections 5.5 and
\n5.11(c)); (iii) Section 5.6 relating to finders’ fees and brokers’ fees; and
\n(iv) this Section 7.1; (v) Article VIII; and (vi) Article IX. Nothing in this
\nSection 7.1 shall be deemed to release either party from any Liability for any
\nbreach by such party of the terms and provisions of this Agreement or to impair
\nthe right of either party to compel specific performance by the other party of
\nits obligations under this Agreement.<\/p>\n
SECTION 7.2. Amendments and Waivers. This Agreement may not be amended
\n ———————-
\nexcept by an instrument in writing signed on behalf of each of the parties
\nhereto. By an instrument in writing, Purchaser, on the one hand, or Seller, on
\nthe other, may waive compliance by the other party with any term or provision of
\nthis Agreement that such other party was or is obligated to comply with or
\nperform.<\/p>\n
42<\/p>\n
ARTICLE VIII
\n Indemnification
\n —————<\/p>\n
SECTION 8.1. Indemnification by Seller.
\n ————————- <\/p>\n
(a) Seller agrees to indemnify Purchaser, the Company and their Affiliates
\nand their respective officers, directors, employees, stockholders, agents and
\nrepresentatives against, and agrees to hold them harmless from, any loss,
\nliability, claim, damage, demand, assessment, judgment or expense, including any
\nrelated awards, fines, sanctions, penalties, amounts paid in settlement,
\nreasonable costs, fees and expenses of attorneys, accountants, and consultants
\nand the cost of equipment installed, increased costs of operation, construction
\ncosts, costs for acquiring an easement, license or other real property interest
\nin additional real property, costs for acquiring permits, variances or other
\ngovernmental approvals and the cost of purchasing additional emissions
\nallowances, credits or offsets, in connection with resolving a violation of
\nEnvironmental Law (“Losses”) as incurred (on a cumulative pre-Tax basis) to the
\nextent arising from, relating to or otherwise in respect of (i) any breach of
\nany representation or warranty of Seller contained in this Agreement; (ii) any
\nbreach of any covenant of Seller or GPF contained in this Agreement; (iii)
\ndiscrimination, harassment, or other illegal maltreatment of the Company’s
\nemployees prior to Closing; (iv) any hazard or defect, or alleged hazard or
\ndefect, in the manufacture, design, material or workmanship of any product
\nshipped or manufactured by (including any part or component), or services
\nprovided by or otherwise related to the Company, prior to the Closing Date; (v)
\nany Liabilities set forth on Schedule 8.1(a) hereto; (vi) any action, claim or
\nproceedings involving allegations of infringement, or dispute regarding
\nownership or misappropriation by Seller or the Company of any Intellectual
\nProperty or copyright to computer software, to the extent the infringement,
\nownership, dispute or misappropriation occurred prior to the Closing Date; (vii)
\nthe ownership, leasing or using of the Excluded Assets, whenever the same shall
\narise or shall have occurred; (viii) the acquisition by GPC of the Membership
\nUnits and any Liability owing to Wisconsin Tissue Mills Inc., Chesapeake
\nCorporation or their Affiliates created by, in connection with or arising out of
\nthe formation of the Company or the Company’s organizational documents
\n(including the Joint Venture Agreement and the Operating Agreement, each dated
\nas of October 4, 1999); or (ix) the encroachment on neighboring properties and
\nviolation of any setback laws with respect to the Owned Property located in
\nNeenah, Wisconsin.<\/p>\n
(b) Except as set forth in Section 8.3 hereof, each of Purchaser and the
\nCompany acknowledges and agrees that its sole and exclusive remedy with respect
\nto any and all claims (other than with respect to fraud, fraud in the
\ninducement, Off-Site Environmental Liabilities, as specified in Section 5.6, or
\npursuant to the indemnification provisions of any Ancillary Agreement) relating
\nto the subject matter of this Agreement shall be pursuant to the indemnification
\nprovisions set forth in this Article VIII. In furtherance of the foregoing
\n(other than with respect to fraud, fraud in the inducement, Off-Site
\nEnvironmental Liabilities, as specified in Section 5.6, or pursuant to the
\nindemnification provisions of any Ancillary Agreement), each of Purchaser, SCA
\nand the Company hereby waives, to the fullest extent permitted under applicable
\nLaw, any and all rights, claims and causes of action it may have against Seller,
\nits Affiliates and their respective officers, directors, employees,
\nstockholders, agents and representatives arising under or based upon any
\nFederal, state, local or foreign statute, <\/p>\n
43<\/p>\n
law, ordinance, rule or regulation, except pursuant to the indemnification
\nprovisions set forth in this Article VIII.<\/p>\n
(c) Seller’s indemnification obligations with respect to the amount of any
\nLiability for which Seller may be obligated pursuant to Section 8.1(a)(i) shall
\nbe subject to the provisions of Section 8.5.<\/p>\n
SECTION 8.2. Indemnification by Purchaser and SCA.
\n ———————————— <\/p>\n
(a) Each of Purchaser and SCA, jointly and severally, hereby agrees to
\nindemnify GPC, its Affiliates and their respective officers, directors,
\nemployees, stockholders, agents and representatives against, and agrees to hold
\nthem harmless from, any Loss as incurred (on a cumulative pre-tax basis) to the
\nextent arising from, relating to or otherwise in respect of (i) any breach of
\nany representation or warranty of Purchaser or SCA contained in this Agreement;
\nor (ii) any breach of any covenant of Purchaser or SCA contained in this
\nAgreement; provided, however, that Purchaser and SCA shall not have any
\n ——– ——-
\nliability under clause (i) above unless the aggregate of all Losses for which
\nPurchaser or SCA would, but for this proviso, be liable exceeds on a cumulative
\npre-Tax basis an amount equal to $2,000,000 (the “Purchaser Threshold”) in which
\nevent the entire amount in respect of such Losses in excess of $1,000,000 will
\nbe payable; provided, however, that the maximum amount recoverable by GPC, GPF,
\n ——– ——-
\ntheir Affiliates and their respective officers, directors, employees,
\nstockholders, agents and representatives as a result of any liability under such
\nclause (i) will not, in the aggregate, exceed $425,000,000 and provided further,
\n ——– ——-
\nhowever, that any individual claim of less than $50,000 may not be aggregated
\n——-
\nfor purposes of reaching the Purchaser Threshold to the extent that such
\nindividual claim does not arise out of or relate to similar facts and
\ncircumstances that form the basis for any other individual claim.<\/p>\n
(b) The obligation of Purchaser and SCA to indemnify and hold harmless
\nGPC, its Affiliates and their respective officers, directors, employees,
\nstockholders, agents and representatives for breaches of Purchaser’s and SCA’s
\nrepresentations and warranties shall terminate two years after the Closing Date.
\nThe obligation of Purchaser and SCA to indemnify GPC, its Affiliates and their
\nrespective officers, directors, employees, stockholders, agents and
\nrepresentatives for breaches of Purchaser’s and SCA’s covenants and agreements
\ncontained herein shall terminate two years after the Closing Date except
\ncovenants which by their express terms continue for a longer period, as to which
\nsuch obligation to indemnify shall continue for a period of two years after such
\nobligation so terminates and for any breach of Section 5.6 (in respect of which
\nPurchaser’s and SCA’s obligation to indemnify shall not terminate).
\nNotwithstanding the foregoing, the obligation of Purchaser and SCA to indemnify
\nand hold harmless shall not terminate with respect to any item as to which
\nSeller shall have, before the expiration of the applicable period, previously
\nmade a claim by delivering a notice pursuant to this Article VIII (stating in
\nreasonable detail the basis of such claim) to Purchaser and SCA.<\/p>\n
(c) Each of Seller and GPF acknowledges and agrees that its sole and
\nexclusive remedy with respect to any and all claims (other than with respect to
\nfraud, fraud in the inducement, as specified in Section 5.6, or pursuant to the
\nindemnification provisions of any Ancillary Agreement) relating to the subject
\nmatter of this Agreement be pursuant to the indemnification provisions set forth
\nin this Article VIII. In furtherance of the foregoing (other<\/p>\n
44<\/p>\n
than with respect to fraud, fraud in the inducement, as specified in Section
\n5.6, or pursuant to the indemnification provisions of any Ancillary Agreement)
\neach of Seller and GPF hereby waives to the fullest extent permitted under
\napplicable Law, any and all rights, claims and causes of action it may have
\nagainst Purchaser, SCA, their Affiliates and their respective officers,
\ndirectors, employees, stockholders, agents and representatives arising under or
\nbased upon any Federal, state, local or foreign statute, law, ordinance, rule or
\nregulation, except pursuant to the indemnification provisions set forth in this
\nArticle VIII.<\/p>\n
SECTION 8.3. Environmental Liability.
\n ———————– <\/p>\n
(a) Seller hereby agrees to indemnify Purchaser, the Company and their
\nAffiliates and their respective officers, directors, employees, stockholders,
\nagents and representatives against, and agrees to hold them harmless from, any
\nLoss (on a cumulative pre-Tax basis) as incurred to the extent arising from,
\nrelating to or otherwise in respect of all Pre-Closing Environmental
\nLiabilities; provided, however, that Seller’s obligations hereunder shall not
\n ——– ——-
\ninclude any Losses to the extent that Purchaser’s or the Company’s actions or
\nomissions cause, contribute to or exacerbate any Pre-Closing Environmental
\nLiability after such Pre-Closing Environmental Liability becomes known to either
\nPurchaser or Company.<\/p>\n
(b) Seller’s indemnification obligation with respect to the amount of
\nany Pre-Closing Environmental Liability for which Seller is obligated to provide
\nindemnification under this Section 8.3 shall be subject to the provisions of
\nSection 8.5.<\/p>\n
(c) [Intentionally Omitted]<\/p>\n
(d)(i) If the Pre-Closing Environmental Liability for which Seller has
\nliability pursuant to Section 8.3(a) involves the implementation of a Remedial
\nAction at any Owned Property or Leased Property, such Remedial Action shall be
\ncontrolled by Seller, but Seller’s actions must not unreasonably interfere with
\nthe normal operations of the Company or restrict the use of the Owned Property
\nor Leased Property or cause damage to the Owned Property or Leased Property.
\nSeller agrees to fully repair and restore all Owned Property or Leased Property
\nthat is damaged or disturbed in connection with such Remedial Action.<\/p>\n
(ii) The Company shall provide Seller with reasonable access to
\nconduct any Remedial Action. The Company shall have the right to review and
\nprovide Seller with written comments in connection with (i) Seller’s selection
\nof consultants and contractors designated to perform the Remedial Action; (ii)
\nthe development of the scope of work for, and type of, the Remedial Action to be
\nimplemented; and (iii), if applicable, the submission of plans, reports and
\nsubmissions to any Governmental Entity regarding any such Remedial Action
\n(including those in connection with the scope of work for and type of Remedial
\nAction), which shall be provided in draft form to the Company at least ten
\nbusiness days (unless an emergency requires a shorter time) prior to
\ntransmission to such Governmental Entity. Seller shall review and reasonably
\nconsider the Company’s comments. The Company’s comments shall not prevent
\nSeller from taking all actions deemed necessary by a Governmental Entity in
\nconnection with such Remedial Action. The Company shall have the right to
\nmonitor and observe such work and to take split samples of all environmental
\ntests conducted by or on behalf of Seller hereunder. Seller shall <\/p>\n
45<\/p>\n
provide the Company with written notice at least seven days prior to undertaking
\na Remedial Action on any Owned Property or Leased Property.<\/p>\n
(iii) Prior to entering into a settlement agreement of any kind,
\nSeller shall notify the Company and shall provide the Company with a period not
\nto exceed 30 days, or such shorter period as may be necessary under the
\ncircumstances to comment on such settlement agreement and Seller shall
\nthereafter have a reasonable period not to exceed 30 days, or such shorter
\nperiod as may be necessary under the circumstances, to provide the Company with
\na good faith response to any such comments. Seller shall not enter into any
\nsettlement agreement without the consent of the Company, and such consent shall
\nnot be unreasonably withheld or delayed.<\/p>\n
(iv) Seller agrees to use commercially reasonable efforts to
\ncomplete the Remedial Action within a reasonable time. If Seller fails to
\ncomplete the Remedial Action within a reasonable time for the type of action
\ninvolved, then the Company shall have the right to undertake such Remedial
\nAction and Seller shall be responsible for indemnifying the Company for any
\nreasonable costs and liabilities associated with implementing such Remedial
\nAction.<\/p>\n
(v) Seller shall keep the Company informed with respect to their
\ndealings with any Governmental Entity regarding a Remedial Action and shall
\npromptly provide the Company with copies of all material environmental
\ninformation, including technical and analytical data, environmental reports,
\nassessments, evaluations, and correspondence or verbal or written information,
\nto or from any environmental consultant or Governmental Entity regarding a
\nRemedial Action. Nothing herein shall be deemed to prevent the Company from
\ncontacting or dealing with any Governmental Entity.<\/p>\n
(vi) The Remedial Action shall be deemed complete when the
\nrelevant Governmental Entity issues a binding determination that no further
\nRemedial Actions are required at such location at such time except for on-going
\nmonitoring activities which shall be the sole responsibility of Seller. The
\ncompletion of any Remedial Action shall not relieve Seller of its obligation to
\nindemnify the Company for any further liability that may arise in the future
\nwith respect to such conditions at the site of the Remedial Action.<\/p>\n
(vii) Purchaser and\/or the Company shall deliver notice of a claim
\ninvolving Remedial Action with reasonable promptness to Seller after becoming
\naware of circumstances giving rise to such claim; provided, however, that
\n ——– ——-
\nfailure to give such notification shall (1) not affect the indemnification
\nprovided hereunder except to the extent Seller shall have been actually
\nprejudiced as a result of such failure (except that Seller shall not be liable
\nfor any expense incurred during the period in which Purchaser and\/or the Company
\nfailed to give such notice) and (2) notwithstanding anything to the contrary
\ncontained in this Agreement, operate to extend the applicable time periods set
\nforth in Section 8.2(b) or 8.5(a). Disputes concerning Seller’s obligations
\nwith respect to any Remedial Action shall be subject to good faith negotiations
\nbetween the Parties. If the dispute is not resolved through negotiation, then
\nit shall be presented to an environmental consultant for a binding arbitration,
\nand any such disputes shall be resolved within 60 days of submission to the
\nenvironmental consultant. The environmental consultant shall be chosen by
\nSeller from a list of three consultants from nationally recognized environmental
\nconsulting firms submitted by Purchaser and the Company and none of the<\/p>\n
46<\/p>\n
consultants listed shall have a conflict of interest with respect to either
\nParty. The Parties shall mutually agree on the procedures to conduct the
\narbitration; provided, however, if the Parties can not agree on the procedures,
\n ——– ——-
\nthen the environmental consultant shall specify the arbitration procedures. The
\nenvironmental consultant shall be jointly retained by Seller and the Company who
\nshall share equally such environmental consultant’s fees and expenses.<\/p>\n
(e) If the Pre-Closing Environmental Liability for which Seller has
\nliability involves an Off-Site Environmental Liability, the resolution of such
\nmatter shall be controlled by Seller.<\/p>\n
SECTION 8.4. Losses Net of Insurance. Subject to the insurer’s
\n ———————–
\nmaintaining its right of recourse or contribution against a person who has
\ncaused an injury or damage, the amount of any Loss for which indemnification is
\nprovided under this Article VIII shall be net of any amounts recovered or
\nrecoverable by the Indemnified Party under insurance policies with respect to
\nsuch loss, liability, claim, damage or expense.<\/p>\n
SECTION 8.5. Limitation on Indemnification by Seller.
\n ————————————— <\/p>\n
(a) The obligation of Seller to indemnify and hold harmless Purchaser and
\nthe Company for breaches of Seller’s representations and warranties (except with
\nrespect to the representations and warranties in Sections 3.21, 3.22 and 3.25)
\nshall terminate two years after the Closing Date; provided, that the obligation
\n ——–
\nto indemnify for a breach of Seller’s representations and warranties in Sections
\n3.5, 3.13 and 3.14 shall survive the Closing for a period equal to the
\napplicable statute of limitations, as extended or tolled, plus 90 days. The
\nobligation of Seller to indemnify Purchaser and the Company for breaches of
\nSeller’s covenants and agreements contained herein shall terminate two years
\nafter the Closing Date except covenants which by their express terms continue
\nfor a longer period, as to which such obligation to indemnify shall continue for
\na period of two years after such obligation so terminates and for any breach of
\nSection 5.6 (in respect of which Seller’s obligation to indemnify shall not
\nterminate). Notwithstanding the foregoing, the obligation of Seller to
\nindemnify and hold harmless shall not terminate with respect to any item as to
\nwhich Purchaser or the Company shall have, before the expiration of the
\napplicable period, previously made a claim by delivering a notice pursuant to
\nthis Article VIII (stating in reasonable detail the basis of such claim) to
\nSeller. The obligation of Seller to indemnify and hold harmless Purchaser and
\nthe Company pursuant to Section 8.3 shall terminate seven years after the
\nClosing Date, except with respect to any Off-Site Environmental Liability or the
\nmatters listed on Schedule 8.5, in respect of which the obligation of Seller to
\nindemnify and hold harmless Purchaser shall not terminate.<\/p>\n
(b) Subject to the last sentence of this Section 8.5(b), Seller shall not
\nhave any liability under clause (a)(i) of Section 8.1 (other than with respect
\nto a breach of Section 3.19, 3.21, 3.22, 3.23 or 3.25) or under Section 8.3
\nunless the aggregate of all Losses for which Seller would, but for this Section
\n8.5(b) be liable exceeds on a cumulative pre-Tax basis an amount equal to
\n$2,000,000 (the “Seller’s Threshold”), in which event the entire amount in
\nrespect of such Losses in excess of $1,000,000 will be payable. Subject to the
\nlast sentence of this Section 8.5(b), the aggregate maximum amount recoverable
\nby Purchaser, the Company and their Affiliates and their respective officers,
\ndirectors, employees, stockholders, agents and representatives pursuant to
\nSection 8.1(a)(i) (other than with respect to a breach of Sections 3.21, 3.22
\nand 3.25) will not, in the aggregate, exceed $425,000,000 and pursuant to
\nSection 8.3 will <\/p>\n
47<\/p>\n
not, in the aggregate, exceed $850,000,000, less the amount of any
\nindemnification payments made pursuant to Section 8.1(a)(i). Except for Off-Site
\nEnvironmental Liabilities and any Environmental Liability associated with the
\nitems identified on Schedule 8.5 for which this Section 8.5(b) shall not apply,
\nand for which Seller shall be entirely responsible, any individual claim of less
\nthan $50,000 shall not be aggregated for purposes of reaching the Seller’s
\nThreshold to the extent that such individual claim did not arise out of or
\nrelate to similar facts and circumstances that form the basis for any other
\nindividual claim.<\/p>\n
SECTION 8.6. Procedures Relating to Third Party Claims (other than Tax
\n ———————————————————
\nLiabilities).
\n———— <\/p>\n
(a) In order for a Person making a claim for indemnification hereunder
\n(the “Indemnified Party”), to be entitled to any indemnification in respect of,
\narising out of or involving a claim made by any third Person against the
\nIndemnified Party (other than with respect to Tax liabilities or matters,
\nprocedures for which are specified in Section 5.11(h) and (i)) (a “Third Party
\nClaim”), such Indemnified Party must notify the Person from whom indemnity is
\nbeing sought (the “Indemnifying Party”) in writing, and in reasonable detail, of
\nthe Third Party Claim within ten business days after receipt by such Indemnified
\nParty of written notice of the Third Party Claim; provided, however, that
\n ——– ——-
\nfailure to give such notification shall (1) not affect the indemnification
\nprovided hereunder except to the extent the Indemnifying Party shall have been
\nactually prejudiced as a result of such failure (except that the Indemnifying
\nParty shall not be liable for any expenses incurred during the period in which
\nthe Indemnified Party failed to give such notice) and (2) notwithstanding
\nanything to the contrary contained in this agreement, operate to extend the
\napplicable time periods set forth in Section 8.2(b) or 8.5(a). Thereafter, the
\nIndemnified Party shall deliver to the Indemnifying Party, promptly after the
\nIndemnified Party’s receipt thereof, copies of all notices and documents
\n(including court papers) received by the Indemnified Party relating to the Third
\nParty Claim.<\/p>\n
(b) If a Third Party Claim is made against an Indemnified Party, the
\nIndemnifying Party will be entitled to participate in the defense thereof and,
\nif it so chooses, to assume the defense thereof with counsel selected by the
\nIndemnifying Party provided that such Indemnifying Party shall not be entitled
\nto assume the defense of any Third Party Claim (i) in which the Indemnified
\nParty and Indemnifying Party have or could reasonably be expected to have an
\nactual or potential conflict of interest or (ii) which involves entirely or
\npredominantly an environmental enforcement action encompassing a claim for
\ninjunctive relief or a requirement to install pollution controls or other
\ncapital improvements or restricts or increases the costs of operation
\n(“Environmental Enforcement Claim”). Should the Indemnifying Party be entitled
\nand so elect to assume the defense of a Third Party Claim, the Indemnifying
\nParty will not be liable to the Indemnified Party for any legal expenses
\nsubsequently incurred by the Indemnified Party in connection with the defense
\nthereof. If the Indemnifying Party so assumes such defense, the Indemnified
\nParty shall have the right to participate in the defense thereof and to employ
\ncounsel, at its own expense, separate from the counsel employed by the
\nIndemnifying Party, it being understood that the Indemnifying Party shall
\ncontrol such defense. The Indemnifying Party shall be liable for the fees and
\nexpenses of counsel employed by the Indemnified Party for any period during
\nwhich the Indemnifying Party has not assumed or is not entitled to assume the
\ndefense thereof (other than during any period in which the Indemnified Party
\nshall have failed to give notice of the Third Party Claim as provided above).
\nIf the Indemnifying Party chooses pursuant to the first sentence of this Section
\n8.6(b) to defend or prosecute a Third Party Claim, <\/p>\n
48<\/p>\n
all the parties hereto shall cooperate in the defense or prosecution thereof.
\nSuch cooperation shall include the retention and (upon the Indemnifying Party’s
\nrequest) the provision to the Indemnifying Party of records and information
\nwhich are reasonably relevant to such Third Party Claim and making employees
\n(including any employee familiar with such Third Party Claim) available on a
\nmutually convenient basis to provide additional information and explanation of
\nany materials provided hereunder. If the Indemnifying Party chooses to defend or
\nprosecute any Third Party Claim pursuant to the first sentence of this Section
\n8.6(b), the Indemnified Party will agree to any settlement, compromise or
\ndischarge of such Third Party Claim which the Indemnifying Party may recommend
\nand which by its terms obligates the Indemnifying Party to pay the full amount
\nof the liability in connection with such Third Party Claim unless (i) such Third
\nParty Claim involves an Environmental Enforcement Claim or (ii) such settlement
\nwould unreasonably interfere with the normal operations of the Indemnified Party
\nor cause material damage to it. Whether or not the Indemnifying Party shall have
\nassumed the defense of a Third Party Claim, the Indemnified Party shall not
\nadmit any liability with respect to, or settle, compromise or discharge, such
\nThird Party Claim without the Indemnifying Party’s prior written consent (which
\nconsent shall not be unreasonably withheld).<\/p>\n
SECTION 8.7. Procedures Relating to Non-Third Party Claims. In order for
\n ———————————————
\nan Indemnified Party to be entitled to any indemnification provided for under
\nthis Agreement in respect of a claim that does not involve a Third Party Claim
\nor a Remedial Action, the Indemnified Party shall deliver notice of such claim
\nwith reasonable promptness after having become aware of the existence of such
\nclaims to the Indemnifying Party. The failure by any Indemnified Party to so
\nnotify the Indemnifying Party shall (1) not relieve the Indemnifying Party from
\nany liability which it may have to such Indemnified Party under this Agreement,
\nexcept to the extent that the Indemnifying Party shall have been actually
\nprejudiced by such failure (except that the Indemnifying Party shall not be
\nliable for any expenses incurred during the period in which the Indemnified
\nParty failed to give such notice) and (2) notwithstanding anything to the
\ncontrary contained in this Agreement, operate to extend the applicable time
\nperiods set forth in Section 8.2(b) or 8.5(a). If the Indemnifying Party has
\ntimely disputed its liability with respect to such claim, the Indemnifying Party
\nand the Indemnified Party shall proceed in good faith to negotiate a resolution
\nof such dispute and, if not resolved through negotiations, such dispute shall be
\nresolved by litigation in an appropriate court of competent jurisdiction.<\/p>\n
SECTION 8.8. [Intentionally Omitted]<\/p>\n
SECTION 8.9. Acknowledgment. The indemnities provided for in Article VIII
\n ————–
\nshall not be construed as an admission or conclusion, express or implied, as to
\nliability or damages in respect of the subject matter of such indemnities.<\/p>\n
SECTION 8.10. Tax and Accounting. Indemnities shall constitute a
\n ——————
\nreduction of the Purchase Price. Each party hereto shall, for tax and
\naccounting purposes, treat any indemnity paid to Purchaser hereunder as a
\nreduction of the Purchase Price.<\/p>\n
SECTION 8.11. Reasonableness of Parties; Obligation to Mitigate. Each
\n ————————————————-
\nparty agrees that notwithstanding anything to the contrary in this Article VIII,
\nit will act to mitigate any Loss <\/p>\n
49<\/p>\n
or potential Loss and will otherwise act reasonably in enforcing its rights
\nunder, and otherwise dealing with the other parties hereto in connection with,
\nthis Article VIII.<\/p>\n
ARTICLE IX
\n General Provisions
\n ——————<\/p>\n
SECTION 9.1. Notices. All notices and other communications hereunder
\n ——-
\nshall be in writing (including telecopy or similar writing) and shall be sent,
\ndelivered or mailed, addressed or telecopied:<\/p>\n
(a) if to Purchaser or SCA, to: SCA Tissue, Inc.
\n 500 Baldwin Tower
\n Eddystone, Pennsylvania 19022
\n Attn: President
\n Telecopy No.: (610) 499-3410<\/p>\n
and<\/p>\n
Svenska Cellulosa Aktiebolaget SCA (publ)
\n P.O. Box 7827
\n SE-10397 Stockholm, Sweden
\n Attn: General Counsel
\n Telecopy No.: 011 468 678 2324<\/p>\n
with copies to:<\/p>\n
SCA Hygiene Products AG
\n P.O. Box 24 15 40
\n DE 85336 Munchen
\n Flughafen, Germany
\n Attn: Vice President Corporate Development
\n Telecopy No.: 011 498 0358 0256<\/p>\n
and<\/p>\n
SCA Hygiene Products AB
\n SE-40503 Goteborg, Sweden
\n Attn: Corporate Department – Legal Counsel
\n Telecopy No.: 011 467 461 908<\/p>\n
and<\/p>\n
Chadbourne & Parke LLP
\n 30 Rockefeller Plaza
\n New York, New York 10112
\n Attn: Thomas C. Meriam, Esq.
\n Telecopy No.: (212) 541-5369<\/p>\n
50<\/p>\n
(b) if to GPC or GPF, to: Georgia-Pacific Corporation
\n 133 Peachtree Street, N.E.
\n Atlanta, Georgia 30303
\n Attn: Office of General Counsel
\n Telecopy No.: (404) 230-7543<\/p>\n
Each such notice or other communication shall be given (i) by hand
\ndelivery; (ii) by nationally-recognized courier service; or (iii) by telecopy,
\nreceipt confirmed. Each such notice or communication shall be effective (x) if
\ndelivered by hand or by nationally-recognized courier service, when delivered at
\nthe address specified in this Section 9.1 (or in accordance with the latest
\nunrevoked direction from such party) and (y) if given by telecopy, when such
\ntelecopy is transmitted to the telecopy number specified in this Section 9.1 (or
\nin accordance with the latest unrevoked direction from such party), and
\nconfirmation is received; provided, that failure to deliver a copy of a notice
\n ——–
\nor communication as required above shall not invalidate the delivery of any such
\nnotice or communication to one of the parties to this Agreement to the extent
\nsuch notice or communication to such party is otherwise deemed given in
\naccordance with the foregoing provisions.<\/p>\n
SECTION 9.2. Survival of Representations. The representations and
\n —————————
\nwarranties contained in this Agreement and in any document delivered in
\nconnection herewith shall survive the Closing to the extent provided in Article
\nVIII.<\/p>\n
SECTION 9.3. Severability. If any provision of this Agreement (or any
\n ————
\nportion thereof) or the application of any such provision (or any portion
\nthereof) to any Person or circumstance shall be held invalid, illegal or
\nunenforceable in any respect by a court of competent jurisdiction, such
\ninvalidity, illegality or unenforceability shall not affect any other provision
\nhereof (or the remaining portion thereof) or the application of such provision
\nto any other persons or circumstances.<\/p>\n
SECTION 9.4. Counterparts. This Agreement may be executed in two or more
\n ————
\ncounterparts, all of which shall be considered one and the same agreement and
\nshall become effective when one or more counterparts have been signed by each of
\nthe parties and delivered (including by telecopy) to the other party.<\/p>\n
SECTION 9.5. Entire Agreement; No Third Party Beneficiaries. This
\n ———————————————-
\nAgreement, the Confidentiality Agreement and the Ancillary Agreements (a)
\nconstitute the entire agreements of the parties and supersede all prior
\nagreements and understandings, both written and oral, among the parties with
\nrespect to the subject matter hereof and (b) except for the Persons specifically
\nreferred to in Article VIII (other than employees of any Indemnified Person),
\nare not intended to confer upon any Person other than the parties hereto and
\ntheir successors and permitted assigns any rights or remedies hereunder.<\/p>\n
SECTION 9.6. Governing Law. This Agreement shall be governed by, and
\n ————-
\nconstrued in accordance with, the Laws of the State of New York applicable to
\nContracts made and to be performed entirely in the State of New York, regardless
\nof the Laws that might otherwise govern under applicable principles of conflicts
\nof Law.<\/p>\n
51<\/p>\n
SECTION 9.7. Consent to Jurisdiction. Each of Purchaser, SCA, Seller and
\n ———————–
\nGPF irrevocably submits to the nonexclusive jurisdiction of (a) the State Court
\nof New York, New York County, and (b) the United States District Court for the
\nSouthern District of New York located in New York, New York, for the purposes of
\nany suit, Action or other proceeding arising out of this Agreement or any
\ntransaction contemplated hereby. Each of Purchaser, SCA, Seller and GPF further
\nagrees that service of any process, summons, notice or document by U.S.
\nregistered mail to such party’s respective address set forth in Section 9.1
\nshall be effective service of process for any Action, suit or proceeding in New
\nYork with respect to any matters to which it has submitted to jurisdiction as
\nset forth above in the immediately preceding sentence. Each of Purchaser, SCA,
\nSeller and GPF irrevocably and unconditionally waives any objection to the
\nlaying of venue of any Action, suit or proceeding arising out of this Agreement
\nor the transactions contemplated hereby in (a) the State Court of New York, New
\nYork County, or (b) the United States District Court for the Southern District
\nof New York, and hereby further irrevocably and unconditionally waives and
\nagrees not to plead or claim in any such court that any such Action, suit or
\nproceeding brought in any such court has been brought in an inconvenient forum.<\/p>\n
SECTION 9.8. Publicity. From the date of this Agreement through the
\n ———
\nClosing, Seller shall not and shall cause Company not to, and neither Purchaser
\nnor SCA shall, issue or cause the publication of any press release or other
\npublic statement with respect to the transactions contemplated by this Agreement
\nwithout first notifying and consulting with the other parties hereto, except as
\nsuch release or announcement may be required by law or the rules or regulations
\nof any securities exchange having jurisdiction over one of the parties, in which
\ncase the party required to make the release or announcement shall allow the
\nother party reasonable time to comment on such release or announcement in
\nadvance of its issuance.<\/p>\n
SECTION 9.9. Assignment. Neither this Agreement nor any of the rights,
\n ———-
\ninterests or obligations hereunder (including any rights, interests or
\nobligations under Article VIII) shall be assigned by any party hereto without
\nthe prior written consent of the other party. Subject to the preceding
\nsentence, this Agreement will be binding upon, inure to the benefit of and be
\nenforceable by the parties and their respective successors and assigns.<\/p>\n
ARTICLE X
\n Definitions
\n ———–<\/p>\n
SECTION 10.1. Definitions. The following terms shall have the respective
\n ———–
\nmeanings set forth below throughout this Agreement:<\/p>\n
“Action” means any legal, administrative, arbitral, mediation or other
\n ——
\nalternative dispute resolution procedure or other action, proceeding, claim,
\ninquiry or investigation before any court, arbitrator or other Governmental
\nEntity.<\/p>\n
“Affiliate” means (i) any Person that directly, or indirectly through one
\n ———
\nor more intermediaries, controls, or is controlled by, or is under common
\ncontrol with, the Person specified; (ii) any Person that holds a Material
\nInterest (as defined below in this definition) in such specified Person; (iii)
\neach Person that serves as a director, officer, partner, executor, or trustee of
\nsuch specified Person (or in a similar capacity); (iv) any Person in which such<\/p>\n
52<\/p>\n
specified Person holds a Material Interest; (v) any Person with respect to which
\nsuch specified Person serves as a general partner or a trustee (or in a similar
\ncapacity); and (vi) any Affiliate of any individual described in clause (ii) or
\n(iii).<\/p>\n
For purposes of this definition, (a) “control” of a Person will mean the
\npossession, directly or indirectly, of the power to direct or cause the
\ndirection of its management or policies, whether through the ownership of voting
\nsecurities, by Contract or otherwise; and (b) “Material Interest” means direct
\nor indirect beneficial ownership (as defined in Rule 13d-3 under the Securities
\nExchange Act of 1934, as amended) of voting securities or other voting interests
\nrepresenting at least 10% of the outstanding voting power of a Person or equity
\nsecurities or other equity interests representing at least 10% of the
\noutstanding equity securities or equity interests in a Person.<\/p>\n
“AFH” means away-from-home.
\n — <\/p>\n
“Agreed Procedures” has the meaning set forth in Section 2.4(a).
\n —————– <\/p>\n
“Agreement” means this Securities Purchase Agreement, made and entered into
\n ———
\nas of January 21, 2001 among Georgia-Pacific Corporation, a Georgia corporation,
\nGeorgia Pacific Finance, LLC, a Delaware limited liability company, SCA Tissue,
\nInc., a Delaware corporation, and Svenska Cellulosa Aktiebolaget SCA (publ), a
\nSwedish corporation.<\/p>\n
“Ancillary Agreements” means the Human Resources Agreement (including the
\n ——————–
\nGuaranty attached thereto), the Coronet License Agreement, the Parent Roll
\nSupply Agreement, the Finished Goods Agreement, the Transition Agreement, the
\nAssumption Agreement and any certificate or other document delivered pursuant
\nhereto or thereto.<\/p>\n
“Allocation Statement” has the meaning set forth in Section 5.11(a).
\n ——————– <\/p>\n
“Assignments” has the meaning set forth in Section 5.24(a).
\n ———– <\/p>\n
“Assumed Benefit Plan” has the meaning set forth in Section 3.11(a).
\n ——————– <\/p>\n
“Assumed Multiemployer Plan” has the meaning set forth in Section 3.11(a).
\n ————————– <\/p>\n
“Assumed Qualified Plan” has the meaning set fort in Section 3.11(b).
\n ———————- <\/p>\n
“Assumption Agreement” means the Assignment and Assumption Agreement of GPC
\n ——————–
\nsubstantially in the form of Exhibit J.<\/p>\n
“Bad Receivables” has the meaning set forth in Section 5.10.
\n ————— <\/p>\n
“Business” means all business and operations conducted currently or in the
\n ——–
\npast by the Company with the exclusion of any business conducted by Wisconsin
\nTissue de Mexico S.A. de C.V., the manufacturing, marketing and sale of products
\nunder the Excluded Brands, and the manufacturing of products in or on the
\nExcluded Assets, but including the purchase and resale of AFH tissue products
\nmade in GPC Facilities in Palatka, Florida and Crossett, Arkansas on the
\nfollowing converting lines which constitute Excluded Assets:<\/p>\n
53<\/p>\n
\n\n Crossett Palatka
\n————————————– ——————————————————-
\n
\nD05 M-fold B8 Standard Bath Line
\nD07 M-fold B9 Jumbo Roll Bath Tissue Line
\nD01 C-fold I1 Napkin Folder (large dispenser)
\nD08 Facial Line I2 Napkin Folder (large dispenser)
\nD03 Napkin Folder (large dispenser) I3 Napkin Folder (dinner napkin\/large dispenser)
\nD04 Napkin Folder (small dispenser) I8 Napkin Folder (large dispenser)
\nB03 Standard Bath Line I9 Napkin Folder (large dispenser)
\nC03 Crossett T3 Palatka
\n<\/c><\/c><\/s><\/caption>\n<\/table>\n “Business Day” means any day other than a Saturday, a Sunday or a day on
\n ————
\nwhich banks in New York City are authorized or obligated by law or executive
\norder to close.<\/p>\n
“Closing” has the meaning set forth in Section 2.1.
\n ——- <\/p>\n
“Closing Balance Sheet” has the meaning set forth in Section 2.3(a).
\n ——————— <\/p>\n
“Closing Date” has the meaning set forth in Section 2.1.
\n ———— <\/p>\n
“Closing Deadline” has the meaning set forth in Section 7.1(a)(iv).
\n —————- <\/p>\n
“Code” means the Internal Revenue Code of 1986, as amended.
\n —- <\/p>\n
“Company” means Georgia-Pacific Tissue, LLC, a Delaware limited liability
\n ——-
\ncompany.<\/p>\n
“Company Balance Sheet” has the meaning set forth in Section 3.18(a).
\n ——————— <\/p>\n
“Company Financial Statements” has the meaning set forth in Section
\n —————————-
\n3.18(a).<\/p>\n
“Company Income Statement” has the meaning set forth in Section 3.18(a).
\n ———————— <\/p>\n
“Company Indebtedness” means $755,200,000 aggregate principal amount of
\n ——————–
\nindebtedness of the Company owed to GPF, as evidenced by the Notes.<\/p>\n
“Company Intellectual Property” has the meaning set forth in Section
\n —————————–
\n3.7(a).<\/p>\n
“Confidentiality Agreement” means that certain confidentiality letter
\n ————————-
\nagreement between SCA and GPC, dated August 1, 2000.<\/p>\n
“Consent Decree” means the Final Judgment with respect to United States of
\n ————– —————-
\nAmerica v. Georgia-Pacific Corporation and Fort James Corporation (Case No.
\n—————————————————————–
\n1:00CV02824) filed November 21, 2000.<\/p>\n
“Consents” means all consents, waivers, approvals, allowances,
\n ——–
\nauthorizations, declarations, filings, recordings, registrations, validations or
\nexemptions and notifications.<\/p>\n
54<\/p>\n
“Contract” means any agreement, understanding, contract, obligation,
\n ——–
\npromise or understanding (whether written or oral and whether express or
\nimplied), including license agreements, manufacturing agreements, supply
\nagreements, purchase orders, sales orders, distributor agreements, sales
\nrepresentation agreements, warranty agreements, indemnity agreements, service
\nagreements, employment and consulting agreements, guarantees, credit agreements,
\nnotes, mortgages, security agreements, financing leases, leases, comfort
\nletters, foreign currency forward exchange contracts, confidentiality
\nagreements, joint venture agreements, partnership agreements, open bids, powers
\nof attorney, letters of intent, and term sheets and including, in each case, all
\namendments, modifications and supplements thereto and Consents thereunder.<\/p>\n
“Converting Facilities” means the converting Facilities of the Company
\n ———————
\nlocated at Bellemont, Arizona, Brattleboro, Vermont, LaGrange, Georgia,
\nGreenwich, New York and Neenah, Wisconsin.<\/p>\n
“Coronet License Agreement” means the Coronet License Agreement between GPC
\n ————————-
\nand the Company substantially in the form of Exhibit H.
\n ——— <\/p>\n
“CPA Firm” has the meaning set forth in Section 2.3(b).
\n ——– <\/p>\n
“Disclosing Party” has the meaning set forth in Section 5.27.
\n —————- <\/p>\n
“DOL” has the meaning set forth in Section 3.11(b).
\n — <\/p>\n
“Employees” has the meaning set forth in Section 3.14(d).
\n ——— <\/p>\n
“Environmental Enforcement Action” has the meaning set forth in Section
\n ——————————–
\n8.6(b).<\/p>\n
“Environmental Laws” means any Law, injunction, judgment, decree,
\n ——————
\nregulation, common law or other enforceable requirement of any Governmental
\nEntity relating to the protection of human health, safety or the environment,
\nincluding any of the foregoing related to: (i) Remedial Actions; (ii) the
\nreporting, licensing, permitting, or investigating of the emission, discharge,
\nrelease or threatened release of Hazardous Substances into the air, surface
\nwater, ground water or land; (iii) the manufacture, Release, distribution, use,
\ngeneration, treatment, storage, disposal, transport or handling of Hazardous
\nSubstances; (iv) the protection of the health and safety of employees or the
\npublic; (v) loss of life and injury to persons or property; or (vi) damage to
\nnatural resources.<\/p>\n
“Environmental Liability” means any claim by any Governmental Entity or any
\n ———————–
\nthird party for compensation (including for personal injury to third parties and
\nemployees to the extent not covered by worker’s compensation and damage to
\nproperty and the environment), fines or Remedial Action in respect of any
\npresence, disposal, release, spillage, leak, discharge or emission of chemicals,
\nindustrial substances, contaminants, pollutants, or waste or material, whether
\nor not dangerous, toxic or Hazardous Substances or waste of any description into
\nthe natural environment or elsewhere or the generation or emission of any odor
\nwhich, prior to Closing, has occurred on or flowed from or to the Facilities
\nand\/or the Owned Property and the Leased Property or any other premises owned,
\nleased or otherwise used in the Company’s or its predecessors’ business or
\noccupied by the Company or its predecessors or in respect of any non-<\/p>\n
55<\/p>\n
compliance with or violation of any Environmental Law to the extent such non-
\ncompliance or violation has occurred in the Company’s or its predecessors’
\nbusiness prior to Closing.<\/p>\n
“ERISA” means the Employee Retirement Income Security Act of 1974, as
\n —–
\namended.<\/p>\n
“ERISA Affiliate” means any individual, person or entity which, together
\n —————
\nwith the Company or Seller, is treated as a single employer within the meaning
\nof Section 414(b), (c) or (m) of the Code or Section 4001(b) of ERISA.<\/p>\n
“Excluded Assets” means:
\n ————— <\/p>\n
(i) all customer lists, information, contracts, agreements,
\n Intellectual Property, designs, prototypes, equipment, tools, dies,
\n embossed rolls, inventory (including converted paper, end-caps and
\n wrappers), data, documents, records, base sheet and finished product
\n specifications and any other technology, all of the foregoing, to the
\n extent exclusively related to the Company’s dispenser systems distributed
\n under the names and marks CORMATIC(R), eCORMATIC(R) or ULTIMATIC(R)(in
\n logotype design or any other style or design, and any name or mark derived
\n from, substantially similar to, or including any of the foregoing) and the
\n Company’s sale of soap, skin care products and air fresheners and similar
\n products under the mark PACIFIC GARDEN(R), but no other product of any
\n kind, nature or description appearing in the Company’s product catalogues
\n or price-lists;<\/p>\n
(ii) all of the capital stock of Wisconsin Tissue de Mexico S.A.
\n de CV;<\/p>\n
(iii) all equipment and real property associated with the paper
\n mill sludge dewatering lagoons formerly used by the Gary, Indiana mill;<\/p>\n
(iv) all equipment and real property associated with the closed
\n paper mill sludge landfill (i.e., the Vineland Landfill) and the active
\n – –
\n paper mill sludge landfill (i.e., the North Landfill) used by the Menasha,
\n – –
\n Wisconsin mill;<\/p>\n
(v) the AFH converting operations in Palatka, Florida and
\n Crossett, Arkansas;<\/p>\n
(vi) all the membership interests in Wisconsin Tissue Management
\n LLC, a Delaware limited liability company;<\/p>\n
(vii) all causes of action, choses in action, lawsuits, judgments,
\n claims, rights under express or implied warranties, guarantees, indemnities
\n and similar rights in favor of Seller, rights of recovery, rights of set-
\n off, rights of subrogation and all other rights and demands of any nature
\n available to or being pursued by Seller to the extent related to the
\n Excluded Assets, whether arising by way of counterclaim or otherwise or
\n related to or arising out of (a) any matter for which GPC is indemnifying
\n Purchaser or the Company or (b) for which GPC has retained Liability
\n pursuant to this Agreement; and<\/p>\n
(viii) all rights and claims arising under any Insurance Policy.<\/p>\n
56<\/p>\n
“Excluded Brands” means the trade names and trademarks “Georgia-Pacific
\n —————
\nCorporation,” “Georgia-Pacific,” “G-P,” “GPT,” “GP,” “GEORGIA-PACIFIC TISSUE,”
\n“WISCONSIN TISSUE,” CORMATIC(R), eCORMATIC(R), ULTIMATIC(R), ULTIMA(R),
\nMULTIWIPE(R), HAACP GUARDIAN(R), and PACIFIC GARDEN(R) (in logotype design or
\nany other style or design, and any name or mark derived from, substantially
\nsimilar to, or including any of the foregoing), but no other brand or trademark
\nappearing in the Company’s product catalogues or price-lists;<\/p>\n
“Facilities” means any buildings, plants or structures located on the Owned
\n ———-
\nProperty or the Leased Property, improvements located thereon, fixtures
\ncontained therein and appurtenances attached thereto.<\/p>\n
“Final Closing Balance Sheet” has the meaning set forth in Section 2.3(b).
\n ————————— <\/p>\n
“Final Stockholder’s Equity” has the meaning set forth in Section 2.3(e).
\n ————————– <\/p>\n
“Finished Goods Agreement” means the Manufacturing and Finished Goods
\n ————————
\nSupply Agreement between the Company and GPC substantially in the Form of<\/p>\n
Exhibit I.
\n——— <\/p>\n
“Governmental Entity” means any: (i) federal, state, local, foreign or
\n ——————-
\ninternational government; (ii) court, arbitral or other tribunal or governmental
\nor quasi-governmental authority of any nature (including any governmental
\nagency, political subdivisions, instrumentalities, branch, department, official,
\nor entity); or (iii) body exercising, or entitled to exercise, any
\nadministrative, executive, judicial, legislative, police, regulatory, or taxing
\nauthority or power of any nature pertaining to government.<\/p>\n
“GPC” means Georgia-Pacific Corporation, a Georgia corporation.
\n — <\/p>\n
“GPC Guaranty” has the meaning set forth in Section 5.31.
\n ———— <\/p>\n
“GPF” means Georgia-Pacific Finance, LLC, a Delaware limited liability
\n —
\ncompany.<\/p>\n
“Hazardous Substance” means (i) any petrochemical or petroleum products,
\n ——————-
\noil or coal ash, radioactive materials, radon gas, asbestos in any form, urea
\nformaldehyde foam insulation and polychlorinated biphenyls; (ii) any chemicals,
\nmaterials or substances defined as or included in the definition of “hazardous
\nsubstances,” “hazardous wastes,” “hazardous materials,” “hazardous
\nconstituents,” “restricted hazardous materials,” “extremely hazardous
\nsubstances,” “toxic substances,” “contaminants,” “pollutants,” “toxic
\npollutants,” or words of similar meaning and regulatory effect under any
\napplicable Environmental Law; or (iii) any other chemical, material, substance
\nor irritant, including paper mill sludge, the manufacture, Release,
\ndistribution, use, generation, treatment, storage, disposal, transport or
\nhandling of which is prohibited, limited or regulated by any applicable
\nEnvironmental Law.<\/p>\n
“Human Resources Agreement” means the Human Resources Agreement among GPC
\n ————————-
\nand the Company substantially in the form of Exhibit B to this Agreement.
\n ——— <\/p>\n
“IDA” has the meaning set forth in Section 5.31.
\n — <\/p>\n
57<\/p>\n
“IDA Lease” has the meaning specified in Section 5.31.
\n ——— <\/p>\n
“Income Tax” means (a) any Tax based upon, measured by, or calculated with
\n ———-
\nrespect to (i) net income or profits (including, but not limited to, any capital
\ngains, minimum Tax and any Tax on items of Tax preference, but not including
\nsales, use, real or personal property, gross or net receipts, transfer or
\nsimilar Taxes) or (ii) multiple bases (including, but not limited to, corporate
\nfranchise, doing business or occupation Taxes) if one or more of the bases upon
\nwhich such Tax may be based, measured by, or calculated with respect to, is
\ndescribed in clause (i) above, or (b) any U.S. state or local franchise Tax.<\/p>\n
“Indemnified Party” has the meaning set forth in Section 8.6(a).
\n —————– <\/p>\n
“Indemnifying Party” has the meaning set forth in Section 8.6(a).
\n —————— <\/p>\n
“Insurance Policies” has the meaning set forth in Section 3.8(a).
\n —————— <\/p>\n
“Intellectual Property” has the meaning set forth in Section 3.7(a).
\n ——————— <\/p>\n
“Inventory” means all finished goods and all stores and accessories, raw
\n ———
\nmaterials, work in progress, supplies, parts and other packaging materials and
\ninventory.<\/p>\n
“IRS” means the Internal Revenue Service, or any successor thereto.
\n — <\/p>\n
“IT Fund” has the meaning set forth in Section 5.24(d).
\n ——- <\/p>\n
“IT Licenses and Leases” has the meaning set forth in Section 5.24(a).
\n ———————- <\/p>\n
“Laws” means all laws, principles of common law, statutes, decrees,
\n —-
\nconstitutions, treaties, rules, regulations, ordinances, codes, rulings, Orders
\nand determinations of all Governmental Entities.<\/p>\n
“Leased Property” has the meaning set forth in Section 3.6(b).
\n ————— <\/p>\n
“Leases” means all leases, subleases, right to occupy or use and other
\n ——
\narrangements with respect to Real Property, including, in each case, all
\namendments, modifications and supplements thereto and waivers and consents
\nthereunder.<\/p>\n
“Liability” means all debts, liabilities, obligations and commitments,
\n ———
\nwhether known or unknown, asserted or unasserted, fixed, absolute or contingent,
\nmatured or unmatured, accrued or unaccrued, liquidated or unliquidated, due or
\nto become due, whenever or however arising (including, whether arising out of
\nany Contract or tort based on negligence, strict liability or otherwise) and
\nwhether or not the same would be required by U.S. GAAP to be reflected as a
\nLiability in financial statements or disclosed in the notes thereto.<\/p>\n
“Lien” means mortgages, liens, security interests, easements, rights-of-
\n —-
\nway, pledges, restrictions or encumbrances of any nature whatsoever.<\/p>\n
“Losses” has the meaning set forth in Section 8.1(a).
\n —— <\/p>\n
58<\/p>\n
“Management Stockholder’s Equity” has the meaning set forth in Section
\n ——————————-
\n2.3(e).<\/p>\n
“Managers” means the managers of the Company appointed pursuant to its
\n ——–
\norganizational documents.<\/p>\n
“Material Adverse Effect” means (i) when used in connection with the
\n ———————–
\nCompany, any change or effect (or any development that, insofar as can
\nreasonably be foreseen, is likely to result in any change or effect) that,
\nindividually or in the aggregate with any such other changes or effects, is
\nmaterially adverse to the business, assets, condition (financial or otherwise),
\nresults of operations or prospects of the Company, it being understood and
\nagreed that any such change, effect or development that results in a Loss
\nagainst or to the Company must exceed $50,000 to be deemed a Material Adverse
\nEffect with respect to the Company; (ii) when used in connection with Seller,
\nany change or effect (or any development that, insofar as can reasonably be
\nforeseen, is likely to result in any change or effect) that, individually or in
\nthe aggregate with any such other changes or effects, is materially adverse to
\nthe business, assets, condition (financial or otherwise), results of operations
\nor prospects of Seller or will prevent such Seller from materially performing
\nits obligations under this Agreement or the Ancillary Agreements or consummating
\nthe transactions contemplated hereby or thereby; and (iii) when used in
\nconnection with Purchaser or SCA, any change or effect (or any development that
\ninsofar as can reasonably be foreseen, is likely to result in any change or
\neffect) that, individually or in the aggregate with any such other changes or
\neffects, will prevent Purchaser or SCA, as the case may be, from materially
\nperforming its obligations under this Agreement or the Ancillary Agreements or
\nconsummating the transactions contemplated hereby or thereby.<\/p>\n
“Material Contract” has the meaning set forth in Section 3.9(a).
\n —————– <\/p>\n
“Membership Units” has the meaning set forth in Section 3.22.
\n —————- <\/p>\n
“Multiemployer Plan” means any multiemployer plan as defined in Section
\n ——————
\n4001(a)(3) of ERISA.<\/p>\n
“Net Working Capital” means the sum of Inventory, noninterest bearing
\n ——————-
\noperational receivables, prepaid operational expenses, and other current assets
\nless the sum of accounts payable, accrued compensation, other current, non
\n—-
\ninterest bearing operational liabilities (the latter item thus excluding accrued
\ninterest and accrued pension and other post-retirement benefits). Applied on
\nthe Pro Forma Business Balance Sheet as per 30 December 2000 Net Working Capital
\nwas:<\/p>\n
59<\/p>\n
US$
\n (in millions)<\/p>\n
Inventory………………………………….. 75.6<\/p>\n
Non interest bearing
\n receivables………………………………… 89.1<\/p>\n
Prepaid expenses……………………………. .0<\/p>\n
Other current assets………………………… 0.4<\/p>\n
Less:
\n —-<\/p>\n
Accounts payable…………………………… (24.0)<\/p>\n
Accrued compensation……………………….. (9.0)<\/p>\n
Other current, non-interest bearing liabilities… (15.5)
\n —— <\/p>\n
116.6
\n =====<\/p>\n
“Notes” means the Notes dated May 1, 2000 and November 12, 1999 evidencing
\n —–
\nthe Company Indebtedness.<\/p>\n
“Notes Acquisition Price” has the meaning set forth in Section 2.2(d).
\n ———————– <\/p>\n
“Objection” has the meaning set forth in Section 2.3(b).
\n ——— <\/p>\n
“Off-Site Environmental Liabilities” means any Environmental Liability
\n ———————————-
\narising out of conditions present at any location other than an Owned Property
\nor Leased Property, including but not limited to (i) environmental conditions
\npresent at the Excluded Assets; (ii) environmental conditions present in the
\nGrand Calumet River, including the sediments adjacent to and beneath such river;
\nand (iii) environmental conditions present in the Fox River, including the
\nsediments adjacent to and beneath such river.<\/p>\n
“Order” means any award, decision, stipulation, injunction, judgment,
\n —–
\norder, ruling, subpoena, writ, decree or verdict entered, issued, made, or
\nrendered by any Governmental Entity.<\/p>\n
“Owned Property” has the meaning set forth in Section 3.6(a).
\n ————– <\/p>\n
“Paper Mills” means the paper mill Facilities of the Company located at
\n ———–
\nAlsip, Illinois, Flagstaff, Arizona, Gary, Indiana and Menasha, Wisconsin.<\/p>\n
“Parent Roll Supply Agreement” means the Paper Supply Agreement between GPC
\n —————————-
\nand the Company substantially in the Form of Exhibit G.
\n ——— <\/p>\n
“Permit” means all licenses, permits, certificates, variances, Consents, or
\n ——
\nother authorizations, issued, granted, given or otherwise made available by or
\nunder the authority of any Governmental Entity or pursuant to any Law.<\/p>\n
60<\/p>\n
“Permitted Liens” means (i) Liens disclosed in Schedule 3.5; (ii)
\n —————
\nmechanics’, carriers’, workmen’s, repairmen’s and other like Liens arising or
\nincurred in the ordinary course of business but not securing Liabilities
\nexceeding $5,000; (iii) Liens for Taxes, assessments and other governmental
\ncharges that are not yet due and payable; and (iv) with respect to any asset or
\nproperty, imperfections of title and other Liens that do not impair the
\ncontinued operation or use of such asset or property in the manner in which it
\nwas operated or used prior to the Closing Date; provided, that none of the
\n ——–
\nforegoing, individually or in the aggregate, (A) have a material adverse effect
\non the use of the property affected thereby, (B) materially impair the current
\nbusiness operations conducted on the affected property, or (C) materially reduce
\nthe value of the affected property.<\/p>\n
“Permitted Real Property Encumbrances” means (i) easements, covenants,
\n ————————————
\nrights-of-way and other encumbrances or restrictions of record set forth on
\nSchedule 3.6 hereof; (ii) any conditions that the surveys listed on Schedule 3.6
\nor physical inspection of any Owned Property may show; and (iii) zoning,
\nbuilding and other similar restrictions, none of which items set forth in
\nclauses (i), (ii), or (iii) above, individually or in the aggregate, materially
\nimpair the continued operations or use of the Owned Property or Leased Property
\nin the manner in which they were operated or used prior to the Closing Date.<\/p>\n
“Person” means any individual, corporation, partnership, limited liability
\n ——
\ncompany, joint venture, trust, business association or other entity, including
\nany Governmental Entity.<\/p>\n
“Physical Plant” has the meaning set forth in Section 3.10(a).
\n ————– <\/p>\n
“PILOT” has the meaning set forth in Section 5.31.
\n —– <\/p>\n
“Plan” means any pension, retirement, cash-balance, money purchase,
\n —-
\nsavings, profit sharing, annuity, deferred compensation, bonus, incentive
\n(including, without limitation, cash, stock option, stock bonus, stock
\nappreciation, phantom stock, restricted stock and stock purchase), medical,
\ndental, vision, hospitalization, long-term care, prescription drug and other
\nhealth, employee assistance, cafeteria, flexible benefits, life insurance, short
\nand long term disability, vacation pay, severance pay, other welfare and fringe
\nbenefit and similar plans, programs, understandings, arrangements or agreements,
\nincluding, without limitation, any employee benefit plan as defined in Section
\n3(3) of ERISA sponsored or maintained by the Company or Seller or to which the
\nCompany or Seller is a party or required to contribute or has any liability,
\nwhether written or oral, direct or indirect, or actual or contingent.<\/p>\n
“Pre-Closing Environmental Liabilities” means any Environmental Liability
\n ————————————-
\n(whether or not discovered or made manifest prior to the Closing Date), any
\nmatters identified in Schedules 3.12, 5.4, and 8.5, and any Off-Site
\nEnvironmental Liabilities; provided, however, that any claim from any
\n ——– ——-
\nGovernmental Entity or any third party for natural resources damages under the
\nComprehensive Environmental Response Compensations and Liability Act of 1980 (42
\nUSC (S)(S) 9601 et. seq.) and any equivalent local and state legislation or
\nfines or remedial action in respect of an Environmental Liability (other than
\nany Off-Site Environmental Liability) shall constitute a Pre-Closing
\nEnvironmental Liability only if it is based on Environmental Laws in effect as
\nof the Closing Date, or Environmental Laws subject to a delayed effective date,
\nproposed, or publicly announced as of the Closing Date.<\/p>\n
61<\/p>\n
“Pre-Closing Tax Periods” means taxable periods ending on or before the
\n ———————–
\nClosing Date and the portion ending on the Closing Date of any taxable period
\nthat includes but does not end on the Closing Date.<\/p>\n
“Pro Forma Business Balance Sheet” has the meaning set forth in Section
\n ——————————–
\n3.18(b).<\/p>\n
“Pro Forma Business Financial Statements” has the meaning set forth in
\n —————————————
\nSection 3.18(b).<\/p>\n
“Pro Forma Business Income Statement” has the meaning set forth in Section
\n ———————————–
\n3.18(b).<\/p>\n
“Projections” has the meaning set forth in Section 3.18(h).
\n ———– <\/p>\n
“Purchase Price” has the meaning set forth in Section 1.1.
\n ————– <\/p>\n
“Purchaser” means SCA Tissue, Inc., a Delaware corporation.
\n ——— <\/p>\n
“Purchaser Threshold” has the meaning set forth in Section 8.2(a).
\n ——————- <\/p>\n
“PWC” means PricewaterhouseCoopers LLP.
\n — <\/p>\n
“PWC Report” has the meaning set forth in Section 2.4(a).
\n ———- <\/p>\n
“Qualification” has the meaning set forth in Section 3.1(c).
\n ————- <\/p>\n
“Real Property Lease” has the meaning set forth in Section 3.6(b).
\n ——————- <\/p>\n
“Receiving Party” has the meaning set forth in Section 5.27.
\n ————— <\/p>\n
“Release” means release, spill, leak, discharge, dispose of, pump, pour,
\n ——-
\nemit, empty, inject, leech, dump or allow to escape into or through the
\nenvironment.<\/p>\n
“Remedial Action” means any response action, removal action, remedial
\n —————
\naction, corrective action, monitoring program, sampling program, investigation
\nor other cleanup activity required by or necessary to ensure compliance with any
\nEnvironmental Law to respond to, clean up, remove, remediate, treat or abate any
\nHazardous Substance in the environment at one or more of the Facilities, the
\nOwned Property or the Leased Property.<\/p>\n
“Restructuring” means the transactions described on Schedule 5.7.
\n ————- <\/p>\n
“SCA” means Svenska Cellulosa Aktiebolaget SCA (publ), a Swedish
\n —
\ncorporation.<\/p>\n
“Section 2.4 Objection” has the meaning set forth in Section 2.4(b).
\n ——————— <\/p>\n
“Securities” has the meaning set forth in the Preliminary Statement.
\n ———- <\/p>\n
“Securities Act” has the meaning set forth in Section 4.4.
\n ————– <\/p>\n
“Seller” has the meaning set forth in the first paragraph of this
\n ——
\nAgreement.<\/p>\n
62<\/p>\n
“Seller’s Benefit Plans” has the meaning set forth in Section 3.11(a).
\n ———————- <\/p>\n
“Seller’s Threshold” has the meaning set forth in Section 8.5(b).
\n —————— <\/p>\n
“Service Center” means the Company’s stand-alone AFH tissue customer
\n ————–
\nservice center located in Neenah, Wisconsin.<\/p>\n
“Sludge Agreement” means the Paper Sludge Disposal Agreement between the
\n —————-
\nCompany and GPC, substantially in the form of Exhibit F.<\/p>\n
“Straddle Period” means a taxable period that includes but does not end on
\n —————
\nthe Closing Date.<\/p>\n
“Tax” means all federal, state, foreign or other governmental Taxes,
\n —
\nassessments, duties, fees, levies or similar charges of any kind, including all
\nincome, profit, franchise, excise, property, use, intangibles, sales, payroll,
\nemployment, withholding and other Taxes, and including all interest additions to
\nTax, fines and penalties imposed with respect to such amounts.<\/p>\n
“Tax Return” means any federal, state, local or foreign return, report,
\n ———-
\nform, declaration, statement, document or other information required to be filed
\nfor any period with any taxing authority with respect to Taxes.<\/p>\n
“Third Party Claim” has the meaning set forth in Section 8.6(a).
\n —————– <\/p>\n
“Transfer Taxes” has the meaning set forth in Section 5.11(c).
\n ————– <\/p>\n
“Transferred Assets” means the Transferred Equipment and Transferred
\n ——————
\nIntellectual Property.<\/p>\n
“Transferred Equipment” has the meaning set forth in Schedule 5.7.
\n ——————— <\/p>\n
“Transferred Intellectual Property” has the meaning set forth in Schedule
\n ———————————
\n5.7.<\/p>\n
“Transition Agreement” means the Transition Agreement between GPC and the
\n ——————–
\nCompany substantially in the form of Exhibit K.<\/p>\n
“UWW” means Unisource Worldwide, Inc., a wholly owned subsidiary of GPC.
\n — <\/p>\n
“U.S. GAAP” means United States generally accepted accounting principles as
\n ———
\nof the date hereof as set forth in the opinions and pronouncements of the
\nAccounting Principles Board of the American Institute of Certified Public
\nAccountants and statements and pronouncements of the Financial Accounting
\nStandards Board.<\/p>\n
“WISCO Release” means the release of WISCO in the form attached hereto as
\n ————-
\nExhibit L.
\n——— <\/p>\n
“WT” has the meaning specified in Section 5.31.
\n — <\/p>\n
SECTION 10.2. Construction and Interpretation of Certain Terms and
\n —————————————————-
\nPhrases. Unless the context of this Agreement otherwise requires, (i) words of
\n——-
\nany gender include each other<\/p>\n
63<\/p>\n
gender; (ii) words using the singular or plural number also include the plural
\nor singular number, respectively; (iii) the terms “hereof,” “herein,” “hereby”
\nand derivative or similar words refer to this entire Agreement; and (iv) the
\nterms “Article” or “Section” refer to the specified Article or Section of this
\nAgreement. Whenever this Agreement refers to a number of days, such number shall
\nrefer to calendar days unless Business Days are specified. The table of contents
\nand headings contained in this Agreement are for reference purposes only and
\nshall not affect in any way the meaning or interpretation of this Agreement. Any
\naccounting terms not defined herein shall have the meaning ascribed thereto
\nunder U.S. GAAP The word “patent” includes, whenever used in this Agreement,
\ndesign patents and design registrations. For purposes of any indemnification
\nprovision in this Agreement, the word “expenses” shall mean out-of-pocket
\nexpense, and shall not include any allocations of internal salaries and other
\nexpenses. Whenever the words “included,” “includes” or “including” are used in
\nthis Agreement, they shall be deemed to be followed by the words “without
\nlimitation.” Any matter set forth in any Schedule shall be deemed set forth in
\nall other Schedules to the extent relevant and to the extent it is reasonably
\napparent that such information is so relevant. Whenever a representation or
\nwarranty hereunder is made subject to Seller’s knowledge or to the best of
\nSeller’s knowledge or a similar limitation relating to knowledge, information or
\nbelief, Seller’s knowledge, shall include information which is known or would
\nhave been known to the directors, officers, and employees at a managerial level
\nof Seller or the Company after reasonable inquiry, including inquiry made of
\nthose directors, officers and employees of Seller and the Company who might
\nreasonably be expected to possess such knowledge, and information which such
\nmanagerial staff has reason to believe is true.<\/p>\n
64<\/p>\n
IN WITNESS WHEREOF, Seller, GPF, SCA and Purchaser have caused this
\nAgreement to be signed by their respective officers thereunto duly authorized,
\nall as of the date first written above.<\/p>\n
GEORGIA-PACIFIC CORPORATION<\/p>\n
By: \/s\/ Danny W. Huff
\n ————————–
\n Name: Danny W. Huff
\n Title: Executive Vice President
\n – Finance and Chief
\n Financial Officer<\/p>\n
GEORGIA-PACIFIC FINANCE, LLC<\/p>\n
By: \/s\/ Danny W. Huff
\n ——————————–
\n Name: Danny W. Huff
\n Title: Executive Vice President
\n – Finance and Chief
\n Financial Officer<\/p>\n
SCA TISSUE, INC.<\/p>\n
By: _______________________________
\n Name:
\n Title:<\/p>\n
SVENSKA CELLULOSA AKTIEBOLAGET SCA
\n (publ)<\/p>\n
By: _________________________________
\n Name:
\n Title <\/p>\n
IN WITNESS WHEREOF, Seller, GPF, SCA and Purchaser have caused this
\nAgreement to be signed by their respective officers thereunto duly authorized,
\nall as of the date first written above.<\/p>\n
GEORGIA-PACIFIC CORPORATION<\/p>\n
By:
\n ————————–
\n Name:
\n Title: <\/p>\n
GEORGIA-PACIFIC FINANCE, LLC<\/p>\n
By:
\n ——————————–
\n Name:
\n Title: <\/p>\n
SCA TISSUE, INC.<\/p>\n
By: \/s\/ Bertil Stromberg
\n —————————-
\n Name: Bertil Stromberg
\n Title: President<\/p>\n
SVENSKA CELLULOSA AKTIEBOLAGET SCA
\n (publ)<\/p>\n
By: \/s\/ Bertil Stromberg
\n —————————-
\n Name: Bertil Stromberg
\n Title: Power-of-Attorney<\/p>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[7633],"corporate_contracts_industries":[9484],"corporate_contracts_types":[9622,9627],"class_list":["post-43573","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-georgia-pacific-corp","corporate_contracts_industries-materials__wood","corporate_contracts_types-planning","corporate_contracts_types-planning__purchase"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/43573","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=43573"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=43573"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=43573"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=43573"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}