<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 15, 1995
REGISTRATION NO. 33-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
INTERNATIONAL PAPER COMPANY
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
NEW YORK 13-0872805
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
------------------------
TWO MANHATTANVILLE ROAD
PURCHASE, NEW YORK 10577
(914) 397-1500
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
with a copy to:
JAMES W. GUEDRY, ESQ. JOHN P. FONZO, ESQ.
ASSOCIATE GENERAL COUNSEL SENIOR BUSINESS COUNSEL
AND SECRETARY INTERNATIONAL PAPER COMPANY
INTERNATIONAL PAPER COMPANY 50 EAST RIVERCENTER BLVD.
TWO MANHATTANVILLE ROAD SUITE 700
PURCHASE, NY 10577 COVINGTON, KY 41011
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OR AGENT FOR SERVICE)
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. / /
------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED PROPOSED
MAXIMUM MAXIMUM
TITLE OF EACH CLASS OFFERING AGGREGATE AMOUNT OF
OF SECURITIES TO BE AMOUNT TO BE PRICE PER OFFERING REGISTRATION
REGISTERED REGISTERED UNIT(1) PRICE(1) FEE
<S> <C> <C> <C> <C>
Common Stock of
International Paper
Company (par value $1.00
per share)............... 1,441,000 $72.31 $104,198,710 $35,930.59
Common Share Purchase
Rights(2)................ (2) (2) (2) $100
</TABLE>
(1) Based upon the reported average of the high and low prices of the Company's
Common Stock on the New York Stock Exchange Composite Tape on March 9, 1995,
and estimated solely for the purpose of determining the amount of the
registration fee.
(2) Each share of Common Stock offered pursuant to this Registration Statement
will be accompanied by one Common Share Purchase Right. The Common Share
Purchase Rights are also being registered by this Registration Statement.
The $100 registration fee paid with respect to the Common Share Purchase
Rights represents the minimum statutory fee pursuant to Section 6(b) of the
Securities Act of 1933.
------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
SUBJECT TO COMPLETION, DATED MARCH 15, 1995
PROSPECTUS
1,441,000 SHARES
INTERNATIONAL PAPER COMPANY
COMMON STOCK, $1.00 PAR VALUE
------------------------
The shares of Common Stock are being offered for the accounts of certain
securityholders (the 'Selling Securityholders') of International Paper Company
(the 'Company'). The Company will receive no proceeds from any sales of the
shares offered hereby.
------------------------
The Company's Common Stock is traded on the New York Stock Exchange. On
March 14, 1995 the reported closing price of the Common Stock on The New York
Stock Exchange Composite Tape was $72.50.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION, NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
THE DATE OF THIS PROSPECTUS IS MARCH , 1995.
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF SUCH STATE.
<PAGE>
NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR THE
SOLICITATION OF AN OFFER TO BUY, ANY SECURITIES OTHER THAN THE SECURITIES TO
WHICH IT RELATES, OR ANY OFFER TO SELL, OR THE SOLICITATION OF AN OFFER TO BUY,
SUCH SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS
UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER
SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO
CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT THE
INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information............................... 3
Incorporation of Certain Documents by Reference..... 3
International Paper Company......................... 3
Selling Securityholders............................. 5
Plan of Distribution................................ 6
Use of Proceeds..................................... 6
Description of Capital Stock........................ 6
Common Share Purchase Rights........................ 7
Legal Opinion....................................... 8
Experts............................................. 8
</TABLE>
2
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the United
States Securities Exchange Act of 1934 (the 'Exchange Act') and in accordance
therewith files, reports and other information with the Securities and Exchange
Commission (the 'Commission'). Reports, proxy statements, and other information
filed by the Company can be inspected and copied at the public reference
facilities of the Commission at Room 1024, Judiciary Plaza, 450 Fifth Street,
N.W., Washington, D.C. 20549, and at the following Regional Offices of the
Commission: Northwestern Atrium Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661-2511; and 75 Park Place, New York, New York 10007.
Copies of such material may also be obtained from the Public Reference Section
of the Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C.
20549, at prescribed rates. Certain securities of the Company are listed on, and
reports, proxy statements and other information concerning the Company can be
inspected at the offices of, the New York Stock Exchange, 20 Broad Street, New
York, New York 10005. This Prospectus does not contain all information set forth
in the Registration Statement and Exhibits thereto which the Company has filed
with the Commission under the United States Securities Act of 1933, as amended
(the 'Act'), to which reference is hereby made.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission pursuant
to the Exchange Act (File No. 1-3157) are incorporated in this Prospectus by
reference: (a) Current Report on Form 8-K dated March 6, 1995 containing the
audited financial statements and related notes, and Management's Discussion and
Analysis of Financial Condition and Results of Operations for the year ended
December 31, 1994; (b) Current Reports on Form 8-K, dated October 17, 1994,
December 6, 1994, January 13, 1995 and January 17, 1995; (c) the description of
the Company's capital stock which is contained in the Company's registration
statement on Form 8-A, dated July 20, 1976, as amended, and the Company's
registration statement on Form S-3, filed January 8, 1992 (33-44855); and (d)
registration statement on Form 8-A, dated April 17, 1987, as amended December
14, 1989 (relating to the Common Share Purchase Rights), and the related Current
Report on Form 8-K, dated April 17, 1987.
All documents filed pursuant to Sections 13(a), 14, or 15(d) of the
Exchange Act by the Company subsequent to the date of this Prospectus and prior
to the termination of the offering of the Securities made by this Prospectus
shall be deemed to be incorporated by reference in this Prospectus and to be a
part of this Prospectus from the date of filing of such document.
Any statement contained in a document, all or a portion of which is
incorporated or deemed to be incorporated by reference herein, or contained in
this Prospectus, shall be deemed to be modified or superseded for purposes of
this Prospectus to the extent that a statement contained herein or in any
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Prospectus.
The Company will provide without charge to each person to whom a copy of
this Prospectus is delivered, on the written or oral request of such person, a
copy of any or all of the documents referred to above which have been or may be
incorporated by reference in this Prospectus, other than exhibits to such
documents. Such written or oral request should be directed to International
Paper Company, Two Manhattanville Road, Purchase, New York 10577, Attention:
Investor Relations Department (914) 397-1632.
INTERNATIONAL PAPER COMPANY
International Paper Company, a New York corporation incorporated in 1941 as
the successor to the New York corporation of the same name organized in 1898, is
a worldwide producer of printing and writing papers, paperboard and packaging,
and wood products, and distributes paper and office supply products in both the
United States and Europe. It also produces pulp, laminated products, and
specialty products, including photosensitive films and papers, nonwovens,
chemicals and minerals.
3
<PAGE>
In the United States, the Company operates 24 pulp and paper mills, 53
converting and packaging plants, 44 wood products facilities, 18 specialty
panels and laminated products plants, six nonwoven products facilities and two
envelope plants. Production facilities in Europe, Asia, Latin America and Canada
include 13 pulp and paper mills, 30 converting and packaging plants, three wood
products facilities, five specialty panels and laminated products plants and
five nonwoven products facilities.
The Company distributes fine paper, printing and industrial products and
building materials, principally manufactured by other companies, through over
280 distribution branches located principally in the United States. In addition,
the Company produces photosensitive films and papers and photographic equipment
(three U.S. and six international locations) and specialty chemicals (seven U.
S. and two international locations), and engages in domestic oil and gas and
real estate activities.
In January 1995, the Company acquired the assets of Seaman-Patrick Paper
Company, a printing paper distributor headquartered in Detroit, Michigan. Also
in January, the Company acquired the assets of the Grand Rapids, Michigan-based
Carpenter Paper Company, a distributor of printing and writing papers.
In July 1994, the Company, through a subsidiary, acquired certain assets of
Papelera Kif and Ogi Papel, distributors of printing papers in Juarez and
Chihuahua, Mexico. In December, the Company completed a merger with Kirk Paper
Corporation, a paper distributor headquartered in Downey, California, using the
pooling-of-interests accounting method and acquired additional stock of Zanders
Feinpapiere AG.
In March 1994, the Company, through a subsidiary, acquired from Brierley
Investments Limited an additional 8 percent interest in Carter Holt Harvey
Limited ('Carter Holt'), a major New Zealand forest products and paper company
with substantial assets in Chile. The purchase increased the Company's ownership
of Carter Holt to 24 percent.
In April 1993, the Company acquired certain assets of the Los Angeles-based
Ingram Paper Company, a distributor of industrial and fine printing papers. In
December, J.B. Papers, Inc., a paper distribution company located in Union, New
Jersey, was purchased. Also in December, the assets of Monsanto Company's
Kentucky-based Fome-Cor division, a manufacturer of polystyrene foam products,
were acquired.
In the first quarter of 1992, the operating assets of Western Paper Company
(Western Pacific), a printing and industrial paper distribution business based
in Portland, Oregon, were purchased. In the second quarter, the Company acquired
an equity interest in Scitex Corporation Ltd. (Scitex), an Israel-based world
leader in digital visual information communication for the graphic design,
printing, publishing and video industries. In the third quarter, Zaklady
Celulozowa-Papierniecze S.A. w Kwidzynie (Kwidzyn) was acquired from the
Government of the Republic of Poland. Kwidzyn is Poland's largest white papers
manufacturer and the only integrated bleached pulp and paper company in Poland.
In the fourth quarter, certain assets of the chemical division of Norway-based
M. Peterson & Son AS (Peterson) were acquired.
All of the 1994, 1993 and 1992 acquisitions, except the merger with Kirk
Paper Corporation, were accounted for using the purchase method. The effects of
these mergers and acquisitions, both individually and in the aggregate, were not
significant to the Company's consolidated financial statements.
From 1990 through 1994, the Company's capital expenditures approximated
$5.9 billion, excluding mergers and acquisitions. These expenditures reflect
continuing efforts to improve product quality, environmental performance, lower
costs, expand production capacity, and acquire and improve forestlands. Capital
spending in 1994 was $1.1 billion and is expected to exceed $1.3 billion in
1995.
The Company, which owns a majority interest in IP Timberlands, Ltd., a
Texas limited partnership ('IPT'), controlled approximately 6.1 million acres of
forestlands in the United States at December 31, 1994. IPT was formed to succeed
to substantially all of International Paper's forest products business for the
period 1985 through 2035, unless earlier terminated.
The Company's corporate headquarters is located at Two Manhattanville Road,
Purchase, New York 10577, and its telephone number is (914) 397-1500.
4
<PAGE>
SELLING SECURITYHOLDERS
COMMON STOCK
The following table sets forth the number of shares of Common Stock of the
Company being offered hereby by each Selling Securityholder. Such shares
constituted all of the shares owned by each Selling Securityholder on February
28, 1995. No Selling Securityholder owns one percent or more of the outstanding
Common Stock and no Selling Securityholder has or has had within the past three
years any office, position or other material relationship with the Company. The
shares represent the consideration paid to the shareholders or donees of such
shareholders of Kirk Paper Corporation, Kirk Paper Arizona, Inc., Carpenter
Paper Company, Seaman-Patrick Holding Company and Seaman-Patrick Paper Company
in the respective merger and asset purchases of these corporations.
<TABLE>
<CAPTION>
NUMBER
SELLING SECURITYHOLDER OF SHARES
- --------------------------------------------------------------------- ---------
<S> <C>
W. and H. Close Living Trust dated September 15, 1975................ 895,938
Roman Catholic Archbishop of Los Angeles, a corporation sole......... 26,315
Childrens' Hospital of Los Angeles, a non-profit public benefit
corporation........................................................ 1,315
Richard D. Akkashian, Trustee of the Richard D. Akkashian Trust, UAD
2/11/91............................................................ 10,793
George H. Ashley Trust, UAD 6/7/84, as amended....................... 47,279
William Cartwright................................................... 21,233
Raymond Fisher....................................................... 21,233
David M. LaMothe..................................................... 21,233
John Orlando......................................................... 13,494
James Reno........................................................... 11,589
F. Michael Starling, Trustee for Forrest M. Starling Trust, UAD
5/18/82, as amended................................................ 188,852
John F. Walsh, Trustee for John F. Walsh Living Trust dated
12/17/93........................................................... 46,626
W. John Wickett, Jr. Trustee for the W. John Wickett Trust UAD
11/21/84........................................................... 61,083
Seaman-Patrick Paper Company Employee Stock Ownership Plan No. 003... 32,781
Richard Hansknecht................................................... 12,432
Frank G. Geary....................................................... 12,432
James Holtsclaw...................................................... 12,432
James Fraher......................................................... 985
Randall Riemersma.................................................... 985
Steven DeKruyter..................................................... 985
Mark Holtsclaw....................................................... 985
---------
TOTAL........................................................... 1,441,000
---------
---------
</TABLE>
5
<PAGE>
PLAN OF DISTRIBUTION
Each Selling Securityholder is free to offer and sell his shares of Common
Stock at such times, in such manner and at such prices as he shall determine, in
one or more types of transactions, which may or may not involve brokers, dealers
or cash transactions, and which may or may not be affected on the New York Stock
Exchange. Selling Securityholders whose securities are covered by this
Prospectus will also be free to sell such securities pursuant to Rule 144 under
the Securities Act.
There is no underwriter or coordinating broker acting in connection with
this offering. Each Selling Securityholder may be deemed an 'underwriter' within
the meaning of the Securities Act with respect to the stock offered by him. Each
Selling Securityholder has agreed to comply with all applicable securities laws
and regulations, including rules under the Exchange Act which restrict purchases
and solicitations of purchases by others of the Company's securities during the
offering.
USE OF PROCEEDS
The Company will receive no proceeds from any sale of the securities being
offered hereby. The Company will bear all expenses of the offering except for
any brokerage, legal, accounting and other professional fees incurred by
individual Selling Securityholders. The expenses previously paid and to be paid
by the Company are estimated to be $73,680.59.
DESCRIPTION OF CAPITAL STOCK
The authorized capital stock of the Company consists of 400,000,000 shares
of Common Stock, 400,000 shares of $4 Preferred Stock and 8,750,000 shares of
Serial Preferred Stock. At February 28, 1995, 126,598,115 shares of Common Stock
and 15,824 shares of $4 Preferred Stock were issued and outstanding. The issued
and outstanding shares of Common Stock are fully paid and nonassessable.
Dividends on the Common Stock are, in effect, limited by the terms of the
Company's $4 Preferred Stock to the amount of the Company's retained earnings.
At December 31, 1994, the Company had available approximately $4.7 billion in
retained earnings for the payments of dividends. In addition, under the
Company's Restated Certificate of Incorporation, no dividends may be declared,
paid, or set aside for payment on the Common Stock unless full cumulative
dividends are paid on the Company's $4 Preferred Stock and any issued and
outstanding Serial Preferred Stock.
The holders of Common Stock are entitled to one vote per share and are not
entitled to any preemptive or preferential rights. Under certain circumstances
involving a failure by the Company to pay dividends on any issued and
outstanding Serial Preferred Stock, holders of Serial Preferred Stock may be
entitled to elect two directors to the Board of Directors of the Company.
In the event of liquidation or dissolution of the Company, the holders of
Common Stock are entitled to share pro rata in any balance remaining after
payment to the holders of the $4 Preferred Stock of $100 per share upon
involuntary liquidation and $105 per share upon voluntary liquidation.
The Company's Restated Certificate of Incorporation contains provisions
which: (1) divide the Board of Directors into three classes of as nearly equal
size as possible, with directors in each class being elected for terms of three
years; (2) require the affirmative vote of 80% of the outstanding shares of
voting stock to remove any director except for cause; (3) require the
affirmative vote of (a) 80% of the outstanding shares of voting stock and (b) a
majority of the voting stock not owned by an Interested Stockholder (an owner of
10% or more of voting power) to approve any Business Combination with an
Interested Stockholder unless (x) the Business Combination shall have been
approved by the Board of Directors at a time when Disinterested Directors (those
directors unaffiliated with an Interested Stockholder who were either on the
Board of Directors prior to the time the Interested Stockholder became an
Interested Stockholder or succeeded a Disinterested Director and were
recommended for a nomination or election by a majority of the Disinterested
Directors) constitute a majority of the entire Board of Directors or (y) in the
case of a Business Combination involving the payment of consideration to holders
of capital stock, certain conditions concerning the adequacy of the
consideration are met; (4) require the affirmative vote of 80% of the
outstanding shares of voting stock to amend or repeal those provisions of the
Company's Restated Certificate of Incorporation described in clauses (1) and (2)
above; and (5) require the
6
<PAGE>
affirmative vote of (x) 80% of the outstanding shares of voting stock and (y) a
majority of the voting stock not owned by an Interested Stockholder, to approve
any proposal made by such Interested Stockholder to amend or repeal those
provisions of the Company's Restated Certificate of Incorporation described in
clause (3) above, unless such proposal is recommended by the Board of Directors
at a time when Disinterested Directors constitute a majority of the entire Board
of Directors.
The overall effect of these provisions may be to deter or discourage
hostile takeover attempts by making it more difficult for a person who has
gained a substantial equity interest in the Company effectively to exercise
control.
COMMON SHARE PURCHASE RIGHTS
Each share of Common Stock offered hereby will be accompanied by one Common
Share Purchase Right (a 'Right'). Except as provided below, each Right entitles
the registered holder to purchase from the Company one share of Common Stock at
an exercise price of $155, subject to adjustment as provided below (the
'Purchase Price').
The Rights will be evidenced by the Common Stock certificates until the
earlier of (i) the tenth day after the commencement of, or first public
disclosure of an intention to commence, a tender or exchange offer by a person
or group other than the Company if, upon consummation of the offer, such person
or group has acquired beneficial ownership of 20% or more of the outstanding
Common Stock, or (ii) the tenth day after the first public announcement that an
Acquiring Person has acquired the beneficial ownership of 20% or more of the
shares of Common Stock (the earlier of such dates being called the 'Distribution
Date'). The Rights will be transferable with and only with the shares of Common
Stock until the Distribution Date. As soon as practicable following the
Distribution Date, separate Right Certificates will be mailed to holders of
record of shares of Common Stock as of the close of business on the Distribution
Date, and such separate Right Certificates alone will thereafter evidence the
Rights.
The Rights are not exercisable until the Distribution Date and will expire
on April 29, 1997 (the 'Final Expiration Date'), unless earlier redeemed by the
Company as provided below. Until a Right is exercised, the holder thereof will
have no additional rights as a shareholder of the Company, including, without
limitation, the right to vote or to receive dividends on shares of Common Stock
subject to the Rights.
In the event that, following the Distribution Date, the Company (i) engages
in a merger or other business combination transaction with a Principal Party in
which the shares of Common Stock are changed into, or exchanged for, stock or
other securities of any other person or cash or other property, or (ii) sells or
transfers 50% or more of its assets or earnings power to a Principal Party, each
holder of a Right (except as provided below) shall thereafter have the right to
receive, upon exercise thereof at the Purchase Price, Common Stock of such
Principal Party having a value of twice such Purchase Price. In the event that
(i) an Acquiring Person shall acquire beneficial ownership of 20% or more of the
shares of Common Stock outstanding, other than pursuant to an offer for all
outstanding shares of Common Stock which the Continuing Directors, as defined
below, determine to be in the best interest of the Company and its shareholders,
(ii) the Company merges with an Acquiring Person and the Company is the
surviving corporation and all shares of Common Stock remain outstanding and
unchanged, or (iii) an Acquiring Person engages in one or more 'self-dealing'
transactions with the Company, each holder of a Right will be entitled to
purchase, at the Purchase Price, (A) shares of Common Stock of the Company
having a value of twice the Purchase Price, or (B) in certain circumstances as
determined by the Continuing Directors, any combination of cash, property,
shares of Common Stock or other securities equal to twice the Purchase Price
(any of the events described in this paragraph being called 'Triggering
Events'). Any Rights that are or were at any time on or after the earlier of the
Distribution Date or the Stock Acquisition Date, beneficially owned by an
Acquiring Person will become null and void upon the occurrence of a Triggering
Event and any holder of any such Right will be unable to exercise such Right
after the occurrence of a Triggering Event.
At any time prior to the earlier of (i) the tenth day following the Stock
Acquisition Date or (ii) the Final Expiration Date, the Board of Directors of
the Company may redeem the Rights in whole, but not part, at a price of $.05 per
Right.
The Purchase Price payable, and the number of shares of Common Stock or
other securities or property issuable, upon exercise of the Rights are subject
to adjustment from time to time to prevent dilution (i) in the
7
<PAGE>
event of a stock dividend on, or a subdivision, combination or reclassification
of, the Common Stock, (ii) upon the grant to holders of Common Stock of certain
rights or warrants to subscribe for shares of Common Stock or convertible
securities at less than the current market price of the Common Stock, or (iii)
upon the distribution to holders of Common Stock of evidences of indebtedness,
securities, cash or assets (excluding regular periodic dividends) or of
subscription rights or warrants (other than those referred to above). With
certain exceptions, no adjustment in the Purchase Price will be required until
cumulative adjustments require an adjustment of at least 1% in the Purchase
Price.
The term 'Continuing Director' is defined in the Rights Agreement as any
member of the Board of Directors of the Company who was a member of the Board
prior to the Stock Acquisition Date, and any successor of a Continuing Director
who is recommended, or elected to succeed such Continuing Director, by a
majority of the Continuing Directors but shall not include an Acquiring Person
or a representative or nominee of an Acquiring Person.
The Rights have certain antitakeover effects. The Rights may cause
substantial dilution to a person or group that attempts to acquire the Company
on terms not approved by the Board of Directors of the Company. The Rights
should not interfere with any merger or other business combination approved by
the Board of Directors of the Company since the Rights may be redeemed by the
Company at a price of $.05 per Right prior to the time that a person or group
has acquired beneficial ownership of 20% or more of the outstanding Common
Stock.
The Rights Agreement dated as of April 14, 1987, as amended December 14,
1989, between the Company and Chemical Bank, as successor to Manufacturers
Hanover Trust Company, as Rights Agent, specifies the terms of the Rights. The
foregoing description of the Rights is qualified in its entirety by reference to
such Rights Agreement, which is an exhibit to the Company's registration
statement on Form 8-A, dated April 17, 1987, as amended, incorporated by
reference herein. Capitalized terms used herein and not otherwise defined shall
have the meaning assigned thereto in the Rights Agreement.
LEGAL OPINION
The validity of the Common Stock offered hereby will be passed upon for the
Company by James W. Guedry, Esq., Associate General Counsel and Secretary of the
Company. Mr. Guedry owns no material or significant amount of the Company's
outstanding Common Stock. He participates in the International Paper Company
Stock Option Plan and in its Salaried Savings Plan, having an interest in a fund
under that plan which invests in the Company's Common Stock.
EXPERTS
The financial statements and schedules incorporated by reference in this
registration statement, to the extent and for the periods indicated in their
reports, have been audited by Arthur Andersen LLP, independent public
accountants, and are incorporated by reference herein in reliance upon the
authority of said firm as experts in giving said reports.
8
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
<TABLE>
<S> <C>
Securities and Exchange Commission filing fee....... $36,030.59
Blue Sky fee and expenses........................... 5,000.00*
New York Stock Exchange listing fees................ 1,650.00*
Fees of certified public accountants................ 10,000.00*
Printing and engraving.............................. 20,000.00*
Miscellaneous expenses.............................. l,000.00*
----------
$73,680.59*
----------
----------
</TABLE>
- ------------------
* Estimates.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 721 of the New York Business Corporation Law ('BCL') provides that,
in addition to the indemnification provided in Article 7 of the BCL, a
corporation may indemnify a director or officer by a provision contained in its
certificate of incorporation or bylaws, or by a duly authorized resolution of
its shareholders or directors or by agreement provided that no indemnification
may be made to or on behalf of any director or officer if a judgment or other
final adjudication adverse to the director or officer establishes that his acts
were committed in bad faith or were the result of active and deliberate
dishonesty and material to the cause of action, or that such director or officer
personally gained in fact a financial profit or other advantage to which he was
not legally entitled.
Section 722(a) of the BCL provides that a corporation may indemnify a
director or officer made, or threatened to be made, a party to any action other
than a derivative action, whether civil or criminal, against judgments, fines,
amounts paid in settlement and reasonable expenses actually and necessarily
incurred as a result of such action, if such director or officer acted, in good
faith, for a purpose which he reasonably believed to be in, or not opposed to,
the best interest of the corporation and, in criminal actions or proceedings, in
addition, had no reasonable cause to believe that his conduct was unlawful.
Section 722(c) of the BCL provides that a corporation may indemnify a
director or officer, made or threatened to be made a party in a derivative
action, against amounts paid in settlement and reasonable expenses actually and
necessarily incurred by him in connection with the defense or settlement of such
action or in connection with an appeal therein if such director or officer
acted, in good faith, for a purpose which he reasonably believed to be in, or
not opposed to, the best interests of the corporation, except the BCL in respect
of a threatened or pending action which is settled or otherwise disposed of or
any claims as to which such director or officer shall have been adjudged liable
to the corporation, unless and only to the extent that the court in which the
action was brought, or, if no action was brought, any court of competent
jurisdiction, determines, upon application, that, in view of all the
circumstances of the case, the director or officer is fairly and reasonably
entitled to indemnity for such portion of the settlement amount and expenses as
the court deems proper.
Section 723 of the BCL specifies the manner in which payment of
indemnification under Section 722 of the BCL or indemnification permitted under
Section 721 of the BCL may be authorized by the corporation. It provides that
indemnification by a corporation is mandatory in any case in which the director
or officer has been successful, whether on the merits or otherwise, in defending
an action. In the event that the director or officer has not been successful or
the action is settled, indemnification must be authorized by the appropriate
corporate action as set forth in Section 723. Section 724 of the BCL provides
that, upon application by a director or officer, indemnification may be awarded
by a court to the extent authorized under Sections 722 and 723. Section 725 of
the BCL contains certain other miscellaneous provisions affecting the
indemnification of directors and officers.
II-1
<PAGE>
Section 726 of the BCL authorizes the purchase and maintenance of insurance
to indemnify (1) a corporation for any obligation which it incurs as a result of
the indemnification of directors and officers under the above sections, (2)
directors and officers in instances in which they may be indemnified by a
corporation under such sections, and (3) directors and officers in instances in
which they may not otherwise be indemnified by a corporation under such
sections, provided the contract of insurance covering such directors and
officers provides, in a manner acceptable to the New York State Superintendent
of Insurance, for a retention amount and for co-insurance.
Article VII of the Restated Certificate of Incorporation of International
Paper Company provides in part as follows:
Each Director of the Corporation shall be indemnified by the
Corporation against expenses actually and necessarily incurred by him in
connection with the defense of any action, suit or proceeding in which he
is made a party by reason of his being or having been a Director of the
Corporation, except in relation to matters as to which he shall be adjudged
in such action, suit or proceeding to be liable for negligence or
misconduct in the performance of his duties as such Director, provided that
such right of indemnification shall not be deemed exclusive of any other
rights to which a Director of the Corporation may be entitled, under any
bylaw, agreement, vote of stockholders or otherwise.
Article IX of the Bylaws, as amended, of the Company provides as follows:
The Corporation shall indemnify each Officer or Director who is made,
or threatened to be made, a party to any action by reason of the fact that
he or she is or was an Officer or Director of the Corporation, or is or was
serving at the request of the Corporation in any capacity of the
Corporation or any other enterprise, to the fullest extent permitted by
applicable law. The Corporation may, so far as permitted by law, enter into
an agreement to indemnify and advance expenses to any Officer or Director
who is made, or threatened to be made, a party to any such action.
The Company has purchased certain liability insurance for its officers and
directors as permitted by Section 727 of the BCL, has entered into indemnity
agreements with its directors and officers providing indemnification in addition
to that provided under the BCL, as permitted by Section 721 of the BCL.
ITEM 16. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------------------------------------------------------------------
<S> <C>
2(a) -- Agreement and Plan of Merger, dated as of December 28, 1994, as
amended, between the Selling Securityholders of Kirk Paper
Corporation and Kirk Paper Arizona, Inc. and International Paper
Company and IPK Acquisition Corp.
(b) -- Amended and Restated Asset Purchase Agreement, dated as of December
1, 1994, between Carpenter Paper Company and International Paper
Company and International Paper-Carpenter Acquisition Corp.
(c) -- Amended and Restated Asset Purchase Agreement, dated as of December
1, 1994, between Seaman-Patrick Holding Company and Seaman-Patrick
Paper Company and International Paper Company and IPS Acquisition
Corp.
5 -- Opinion of James W. Guedry, Esq.
23(a) -- Consent of Arthur Andersen LLP.
(b) -- Consent of James W. Guedry, Esq. (included in Exhibit 5)
24 -- Power of Attorney.
</TABLE>
II-2
<PAGE>
ITEM 17. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement to include
any material information with respect to the plan of distribution not
previously disclosed in the registration statement or any material change
to such information in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report, pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
registration statement, shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions described under Item 15 above, or
otherwise, the registrant has been advised that, in the opinion of the
Securities and Exchange Commission, such indemnification is against public
policy as expressed in said Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in said Act and
will be governed by the final adjudication of such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, International
Paper Company certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
registration statement to be signed on its behalf by the undersigned thereunto
duly authorized, in the City of Purchase, and State of New York, on the 15th day
of March, 1995.
INTERNATIONAL PAPER COMPANY
(Registrant)
By: /s/ JAMES W. GUEDRY
-------------------------------
James W. Guedry
Secretary
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below on the 15th day of March, 1995, by
the following persons in the capacities indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE
- ----------------------------------- ------------------------------------------
<S> <C>
/s/ JOHN A. GEORGES Director, Chairman of the Board and Chief
- ----------------------------------- Executive Officer
(John A. Georges)
/s/ JOHN T. DILLON* Director and Executive Vice President
- -----------------------------------
(John T. Dillon)
/s/ WILLARD C. BUTCHER* Director
- -----------------------------------
(Willard C. Butcher)
Director
- -----------------------------------
(Robert J. Eaton)
/s/ STANLEY C. GAULT* Director
- -----------------------------------
(Stanley C. Gault)
/s/ THOMAS C. GRAHAM* Director
- -----------------------------------
(Thomas C. Graham)
Director
- -----------------------------------
(Arthur G. Hansen)
/s/ DONALD F. MCHENRY* Director
- -----------------------------------
(Donald F. McHenry)
</TABLE>
II-4
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE
- ----------------------------------- ------------------------------------------
<S> <C>
/s/ PATRICK F. NOONAN* Director
- -----------------------------------
(Patrick F. Noonan)
/s/ JANE C. PFEIFFER* Director
- -----------------------------------
(Jane C. Pfeiffer)
/s/ EDMUND T. PRATT, JR.* Director
- -----------------------------------
(Edmund T. Pratt, Jr.)
/s/ CHARLES R. SHOEMATE* Director
- -----------------------------------
(Charles R. Shoemate)
/s/ ROGER B. SMITH* Director
- -----------------------------------
(Roger B. Smith)
/s/ ROBERT C. BUTLER Senior Vice President and
- ----------------------------------- Chief Financial Officer
(Robert C. Butler)
/s/ ANDREW R. LESSIN Controller and
- ----------------------------------- Chief Accounting Officer
(Andrew R. Lessin)
By: /s/ JAMES W. GUEDRY
-------------------------------
James W. Guedry
Attorney-in-Fact
</TABLE>
II-5
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------------------------------------------------------------------
<S> <C>
2(a) -- Agreement and Plan of Merger, dated as of December 28, 1994, as
amended, between the Selling Securityholders of Kirk Paper
Corporation and Kirk Paper Arizona, Inc. and International Paper
Company and IPK Acquisition Corp.
(b) -- Amended and Restated Asset Purchase Agreement, dated as of December
1, 1994, between Carpenter Paper Company and International Paper
Company and International Paper-Carpenter Acquisition Corp.
(c) -- Amended and Restated Asset Purchase Agreement, dated as of December
1, 1994, between Seaman-Patrick Holding Company and Seaman-Patrick
Paper Company and International Paper Company and IPS Acquisition
Corp.
5 -- Opinion of James W. Guedry, Esq.
23(a) -- Consent of Arthur Andersen LLP.
(b) -- Consent of James W. Guedry, Esq. (included in Exhibit 5)
24 -- Power of Attorney.
</TABLE>
<PAGE>
EXHIBIT 2(a)
<PAGE>
EXHIBIT 2(a)
AGREEMENT AND PLAN OF MERGER
dated
December 28, 1994
among
KIRK PAPER CORPORATION,
KIRK PAPER, ARIZONA INC.,
W. AND H. CLOSE LIVING TRUST,
INTERNATIONAL PAPER COMPANY
and
IPK ACQUISITION CORP.
<PAGE>
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT (hereinafter "this Agreement") dated December 28, 1994, among
KIRK PAPER CORPORATION ("Kirk Paper"), a California corporation, and KIRK
PAPER, ARIZONA INC. ("Kirk Arizona"), a California corporation (jointly the
"Company"), the W. and H. Close Living Trust, dated September 15, 1975 (the
"Trust"), the sole shareholder of Kirk Paper and of Kirk Arizona, INTERNATIONAL
PAPER COMPANY, a New York corporation ("Buyer"), and IPK ACQUISITION CORP., a
California corporation and a wholly-owned subsidiary of Buyer ("Merger
Subsidiary"), evidences that, for and in consideration of the mutual covenants
set forth herein, the parties hereto hereby agree as follows:
WHEREAS, Kirk Arizona desires to merge into Merger Subsidiary and Merger
Subsidiary desires thereafter to merge with and into Kirk Paper, Buyer desires
that Merger Subsidiary merge into Kirk Paper and Kirk Paper desires to have
Merger Subsidiary merge into Kirk Paper, upon the terms and conditions set forth
herein and in accordance with the laws of the state of California, in a
transaction or transactions that would qualify as a "reorganization" as that
term is used in Section 368(a) of the Internal Revenue Code of 1986, as
amended (the "Code"), and upon the terms and conditions in this Agreement.
NOW THEREFORE, the parties hereto agree as follows:
ARTICLE I
THE MERGER
SECTION 1.01. THE MERGER. (a) At the Effective Time (as defined in Section
1.01(b), Kirk Arizona shall be merged with and into the Merger Subsidiary and
Merger Subsidiary shall be merged with and into Kirk Paper (the "Merger") in
accordance with the California General Corporation Law ("the California Law"),
whereupon the separate existence of Kirk Arizona and Merger Subsidiary shall
cease, and Kirk Paper shall be the surviving corporation (sometimes herein
referred to as the "Surviving Corporation" or "the Company").
(b) The Closing (the "Closing") of the transactions contemplated hereby
shall take place on the earlier to occur of (i) December 29, 1994; or (ii) as
soon as practicable after satisfaction of or, to the extent permitted
hereunder, waiver of all conditions to the Merger, at the offices of Tuttle &
Taylor, 355 South Grand Avenue, Los Angeles, CA 90071-3101, or at such other
place as the parties shall mutually agree upon, but, in no event, later than
December 31, 1994.
On or prior to the date of Closing, the parties will file an agreement of
merger and related documents with the Secretary of State of the State of
California and make all other filings or recordings required by the California
Law in connection with the Merger, and the Merger shall be consummated and shall
become effective at such time as the agreement of
<PAGE>
merger is duly filed with the Secretary of State of the State of California or
at such later time as is specified in the agreement of merger (the "Effective
Time").
(c) From and after the Effective Time, the Surviving Corporation shall
possess all the rights, privileges, powers and franchises and be subject to all
of the restrictions, disabilities and duties of the Company and Merger
Subsidiary, all as provided under the California Law.
SECTION 1.02. CONVERSION OF SHARES. (a) At the Effective Time:
(i) each share of capital stock of Merger Subsidiary
outstanding immediately prior to the Effective Time shall, by
virtue of the Merger and without any action on the part of the
holder thereof, be converted into and become one share of capital
stock of the Surviving Corporation with the same rights and
privileges, as set forth in Kirk Paper's articles of incorporation,
and shall constitute the only outstanding shares of capital stock
of the Surviving Corporation; and
(ii) each share (a "Share" and, collectively, the "Shares") of
common stock, par value $100 per share of Kirk Paper (the "Common
Stock") outstanding immediately prior to the Effective Time shall,
by virtue of the Merger and without any action on the part of the
holder thereof, be converted into that number of shares of fully
voting common stock, $1.00 par value per share, of Buyer (the
"Buyer Stock") determined by dividing (A) the "Shareholder Equity"
(as defined in Section 1.02 (b) hereof), plus the sum of $21.8
million by (B) the Transaction Share Price (as defined in Section
1.02 (b) hereof) and then dividing the result by the total number of
Shares of Common Stock of Kirk Paper outstanding at the Effective
Time. The total number of Shares of Buyer Stock issued hereunder is
called herein the "Merger Consideration."
(iii) each Share of Kirk Arizona shall be cancelled at the
Effective Time.
(b) For the purposes of this Agreement, the following definitions
shall apply:
"Shareholder Equity" shall mean the aggregate value of the
assets on the "Closing Balance Sheet" (as defined in Section 3.09
hereof), less the aggregate amount of the liabilities on the
Closing Balance Sheet (including, but not limited to, trade
accounts payable, bank debt, accrued liabilities) and a liability
for a supplemental incentive program for certain of Company's
executives not reflected on the December 31, 1993 financial
statements of the Company, determined in accordance with generally
accepted accounting principles ("GAAP"); provided, however, that
the liability for the supplemental incentive program shall not
exceed the liability which would be appropriate for a Subchapter C
corporation with the Buyer's tax rate. In the event that William M.
Close, before the date that the Closing Balance Sheet is prepared
in the manner set forth in Section 3.09, terminates his
participation in the Supplemental Incentive Program referred to in
the preceding sentence, the liability associated with his
participation shall not be reflected on the
-2-
<PAGE>
Closing Balance Sheet. One component of Shareholder Equity is
Inventory, which shall be valued at FIFO cost, with adjustments as
provided in Section 3.24, for purposes of calculating the Merger
Consideration.
"Transaction Share Price" shall mean the average per share
closing price of Buyer Stock on the New York Stock Exchange
("NYSE") as reported on the Composite tape for NYSE listed
securities for the twenty (20) consecutive trading days ending five
(5) trading days prior to the Closing.
"Trust" shall mean the W. and H. Close Living Trust dated
September 15, 1975, said Trust being the sole shareholder of the
Company.
"Trustee" shall mean William M. Close.
(c) No fractional shares of Buyer Stock shall be issued in the
Merger. All fractional shares of Buyer Stock that a holder of
Shares would otherwise be entitled to receive as a result of the
Merger shall be aggregated and if a fractional share results from
such aggregation, such holder shall be entitled to receive a full
share of Buyer Stock.
(d) The portion of the Merger Consideration to be exchanged at
the Effective Time shall be determined as set forth in Section
1.05, notwithstanding the provisions of this Section 1.02, and
Section 1.03.
SECTION 1.03. EXCHANGE OF SHARES. (a) At the Closing of the
transactions contemplated hereby, the Trust shall deliver its Shares in
exchange for the Buyer Stock to which it is entitled hereunder.
(b) If any certificate representing Buyer Stock is to be issued in
the name of a person other than the registered holder of the Shares
represented by the certificate or certificates surrendered in exchange
therefor, it shall be a condition to such issuance that the
certificate or certificates so surrendered shall be properly endorsed or
otherwise be in proper form for transfer and that the person
requesting such issuance shall pay to the Exchange Agent any transfer
or other taxes required as a result of issuance to a person other than
the registered holder of such shares or establish to the satisfaction of
the Exchange Agent that such tax has been paid or is not payable.
(c) After the Effective Time, the stock transfer books of the Company
shall be closed and there shall be no further registration of transfers
of shares of capital stock of the Company which were outstanding
immediately prior to the Effective Time.
(d) No dividends, interest or other distributions with respect to
Buyer Stock shall be paid to the holder of any unsurrendered
certificates representing Shares until such certificates are
surrendered as provided in this Section. Upon such surrender, there
shall be paid, without interest, to the person in whose name the
certificates representing shares of Buyer Stock into which such Shares
were converted are registered, all dividends, interest
-3-
<PAGE>
and other distributions payable in respect of such securities on a date
subsequent to, and in respect of a record date after, the Effective
Time.
(e) At the Effective Time, all Shares, by virtue of the Merger and
without any action on the part of the holders thereof, shall no longer
be outstanding and shall be canceled and retired and shall cease to
exist, and the holder of a certificate representing any such Shares
shall thereafter cease to have any rights with respect to such Shares,
except the right of holder to receive Buyer Stock.
(f) All shares of Buyer Stock shall be deemed to have been issued in
full satisfaction of all rights pertaining to such exchanged Shares.
(g) At the Effective Time, the Buyer shall cause to be issued
certificates of Buyer Stock, in the amount of Shares to be designated,
in advance, by the Trustee, in the name of the Trust. One (1)
certificate shall be for the number of Shares of Buyer Stock to be held
in Escrow pursuant to Article XI.
SECTION 1.04. ADJUSTMENTS. If at any time during the period between
the date of this Agreement and the Effective Time, any change in the
outstanding shares of Buyer Stock shall occur, including by reason of
any merger, reorganization, consolidation, sale or exchange of assets,
subdivision, reclassification, readjustment, exchange or issuance of
shares, recapitalization, stock split or combination, or any stock
dividend, extraordinary or liquidating dividend thereon or subscription
rights (any of the foregoing is hereinafter referred to as a "Change"),
then the consideration constituting Merger Consideration shall be
appropriately and equitably adjusted and/or changed into such number of
shares of Buyer Stock, such number and kind of securities and/or other
kind of property such that each holder of Shares shall be entitled to
receive upon an exchange of Shares as provided in Section 1.03, such
number and kind of Buyer Stock, securities and/or other property which
such holder would have been entitled to receive if immediately prior to
such Change he had exchanged such Shares for the Merger Consideration
as then constituted.
SECTION 1.05. PRELIMINARY MERGER CONSIDERATION PAYMENT.
Notwithstanding Sections 1.02 and 1.03, inasmuch as it will be
impossible to determine the Merger Consideration as of the Effective
Time, at the Effective Time Buyer shall exchange a number of shares of
Buyer Stock (the "Preliminary Merger Consideration") determined in the
following manner:
By dividing $59,000,000 by the Transaction Share Price, reduced
by a number of Shares arrived at by dividing the amount of the
"Escrow," established pursuant to Article XI hereof, by the
Transaction Share Price.
As soon as the Shareholder Equity from the Closing Balance Sheet is
determined, as set forth in Sections 1.02 and 3.09, the Merger
Consideration shall be determined in the manner set forth in Section
1.02, and the number of shares of Buyer Stock shall be determined in
the manner set forth in Sections 1.02 and 1.03. To the extent that the
Merger
-4-
<PAGE>
Consideration exceeds the preliminary Merger Consideration, Buyer shall
immediately thereupon deliver to the Trust, additional shares of Buyer
Stock equal to the difference between the Preliminary Merger
Consideration and the Merger Consideration. To the extent that the
Preliminary Merger Consideration exceeds the Merger Consideration, the
Trust shall deliver to Buyer a number of shares of Buyer Stock equal to
the difference between the Merger Consideration and the preliminary
Merger Consideration. (These payments, however, will not affect, and
will be exclusive of, the "Escrow" described in Article XI.) The
Transaction Share Price shall be used in each instance in determining
the number of shares of Buyer Stock to be delivered by the Trust to
Buyer or by Buyer to the Trust, as the case may be, from the preceding
sentences.
ARTICLE II
THE SURVIVING CORPORATION
SECTION 2.01. ARTICLES OF INCORPORATION. The articles of
incorporation of Kirk Paper, in effect at the Effective Time, shall be
the articles of incorporation of the Surviving Corporation until
amended in accordance with applicable law.
SECTION 2.02. BYLAWS. The bylaws of Merger Subsidiary in effect at
the Effective Time shall be the bylaws of the Surviving Corporation
until amended in accordance with applicable law.
SECTION 2.03. DIRECTORS AND OFFICERS. From and after the Effective
Time, until successors are duly elected or appointed in accordance with
applicable law, (i) the directors of Merger Subsidiary at the Effective
Time shall be the directors of the Surviving Corporation, and (ii) the
officers of the Merger Subsidiary at the Effective Time shall be the
officers of the Surviving Corporation.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF THE COMPANY
The Company represents and warrants to Buyer that:
SECTION 3.01. ORGANIZATION AND EXISTENCE. The Company is a
corporation duly incorporated, validly existing and in good standing
under the laws of the state of California. The Company has full
corporate power and authority and all governmental licenses,
authorizations, consents and approvals required to own and lease the
properties and assets it now owns and leases and to carry on its
businesses as and where such properties and assets are now owned or
leased and such businesses are now conducted. The Company has
heretofore made available to Buyer true, correct and complete copies of
the articles of
-5-
<PAGE>
incorporation and bylaws or equivalent governing instruments, each as
amended to the date hereof, of the Company. The Company is duly licensed
or qualified to do business as a foreign corporation and is in good
standing in all jurisdictions in which the character of the properties
and assets now owned or leased by it or the nature of the business now
conducted by it requires it to be so licensed or qualified.
SECTION 3.02. CAPITALIZATION. (a) The authorized stock of Kirk Paper
consists of 2,500 shares of capital stock, par value $100 per share.
The authorized stock of Kirk Arizona consists of 1,000 shares of
capital stock.
(b) As of December 31, 1993, there were outstanding 463 shares of
capital stock of Kirk Paper and 1,000 shares of Kirk Arizona capital
stock.
(c) All outstanding Shares have been duly authorized and validly
issued and are fully paid and nonassessable, except as provided by the
California Law. Except for the Shares, there are outstanding no shares
of capital stock or other voting securities of the Company, there are
no securities of the Company convertible into or exchangeable for
shares of capital stock or voting securities of the Company, and there
are no options or other rights to acquire from the Company, and no
obligation of the Company to issue, any capital stock, voting
securities or securities convertible into or exchangeable for Common
Stock.
(d) No capital stock of the Company is held in its treasury.
SECTION 3.03. AUTHORITY AND APPROVALS. (a) The Company has the
corporate power and authority to execute, deliver and perform this
Agreement and to consummate the Merger. Except for any required
approval by the Company's shareholders in connection with the
consummation of the Merger, all corporate acts and proceedings required
to be taken by or on the part of the Company to authorize it to
execute, deliver and perform this Agreement and to consummate the
Merger have been duly and validly taken, and upon receipt of such
shareholder approval, this Agreement will constitute the valid and
binding agreement of the Company enforceable against it in accordance
with its terms, subject as to enforcement to bankruptcy, insolvency and
other laws of general application, relating to or affecting creditors
rights and to general equity principles.
(b) The execution, delivery and performance by the Company of this
Agreement and the Consummation of the Merger by the Company require no
action by or in respect of, or filing with, any governmental body,
agency, official or authority by the Company other than (i) the filing
of an agreement of merger and related documents in accordance with the
California Law; (ii) compliance with any applicable requirements of the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the
"HSR Act"); (iii) compliance, if required, with any applicable
requirements of the Securities Act of 1933, as amended (the "1933 Act");
and (iv) compliance with the applicable state securities or "Blue Sky"
laws or other applicable state antitakeover laws.
-6-
<PAGE>
(c) Except as heretofore disclosed in Schedule 3.03, no consent,
approval, waiver or other action by any person (other than the
governmental authorities referred to in Section 3.03(b) hereof and the
parties pursuant to Article 8 hereof) under any contract, agreement,
indenture lease, instrument or other document listed in Schedule 3.20 to
which the Company is a party or by which it is bound is required or
necessary for the execution, delivery and performance of this
Agreement by the Company or the consummation of the Merger; except such
as shall have been obtained at or prior to such time as shall permit the
consummation of the Merger.
SECTION 3.04. CERTAIN INTERESTS. (a) Except as heretofore disclosed
in Schedule 3.04, the Company owns no note, bond, debenture or other
indebtedness, nor is otherwise a creditor, of any director or officer
of the Company or any Immediate Relative (as hereinafter defined) of
any such officer or director, except for employee advances in the
ordinary course of business, and no such officer or director, Immediate
Relative of any such officer or director or affiliate of the Company or
any such officer or director owns any note, bond, debenture or other
indebtedness, or is otherwise a creditor, of the Company, except for
obligations of the Company to pay compensation or reimburse expenses.
Except as disclosed in Schedule 3.04, the Company does not own any
voting security or other equity interest in any person, in other than
the temporary investment of excess cash.
(b) Except as set forth on Schedule 3.04, no officer or director of
the Company nor any Immediate Relative of any such officer or director,
nor any person of which any such officer, director, or Immediate
Relative is an officer, trustee, director, employee, agent, owner,
beneficiary or stockholder (other than any such affiliation with an
entity whose securities are listed on a national securities exchange or
on the National Association of Securities Dealers Automated Quotation
System, if such officer, director or Immediate Relative is the
beneficial owner of less than five percent (5%) of the outstanding
shares or other units of each class of securities issued by such
person), is a party to or has any interest with respect to any material
contract which relates to or affects the business of the Company or has
any interest in any material property, real or personal, tangible or
intangible, used in or pertaining to the business of the Company. For
purposes of this Agreement, "Immediate Relative" means any parent or
grandparent (whether by blood or adoption), spouse or lineal descendant
of a person.
SECTION 3.05. NO CONFLICT. Except as disclosed in Schedule 3.03 or 3.29,
the execution, delivery and performance of this Agreement by the
Company do not, and the consummation by the Company of the Merger does
not (i) violate or conflict with the articles of incorporation or
bylaws or equivalent governing instruments of the Company, (ii)
assuring satisfaction of the matters referred to in Section 3.03(b),
violate or conflict with any law or governmental regulation or any
judicial, administrative or arbitration order, award, judgment, writ,
injunction or decree currently applicable to the Company, (iii) require
any filing by the Company with, or approval, consent, authorization or
other action with respect to the Company by, any governmental agency
other than those specified in Section 3.03(b), (iv) except as disclosed
in Schedule 3.03, violate or conflict with, result in a breach of,
constitute a default under (whether with notice or the lapse of time or
both), or accelerate or permit the acceleration of the performance
required by, any right or
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obligation of the Company, or (v) result in the creation of any Lien
upon any asset of the Company. For purposes of this Agreement, "Lien"
means, with respect to any asset, any mortgage, lien, pledge, security
interest or encumbrance of any kind in respect of such asset.
SECTION 3.06. LITIGATION. Except as disclosed in Schedule 3.06, there
is no suit, action or legal, administrative, arbitration, or, to
Company's knowledge, other proceeding, or investigation by any
governmental agency against the Company, including (but not limited to)
matters involving safety or health standards, or products liability or
product safety, nor, to the best of Company's knowledge, is there any
pending or threatened change in the zoning or building ordinances
affecting the properties or leasehold interests of the Company.
SECTION 3.07. NO DEFAULT. There is no material default under, and no
event has occurred which, to the knowledge of the Company, with notice
or lapse of time or both, would give rise to a default under, any
material instrument binding upon, or other material agreement or
material obligation of the Company. To Company's knowledge, all material
agreements to which Company is a party are in full force and effect and
such agreements are without material default by Company.
SECTION 3.08. COMPLIANCE. The Company is not in violation of, nor
has it received any notice that during the three years preceding the
date of this Agreement the Company has violated, any applicable
provisions of any law, regulation, order, judgment or decree of any
federal or state court or governmental authority.
SECTION 3.09. FINANCIAL INFORMATION. Schedule 3.09 contains audited
financial statements of the Company for the years ended December 31,
1991, 1992 and 1993. The Company shall cause its financial statements,
consisting of a balance sheet, statement of income (and loss) and
changes in financial position as, at and for the ten (10) month period
ending October 31, 1994, to be audited according to GAAP, and a copy
thereof delivered to Buyer and the Trust, and made a part of Schedule
3.09. An unaudited financial statement, including a balance sheet and a
statement of income and loss, will be prepared by the Company, Buyer
and the Trust, and shall be dated as of December 29, 1994, the proposed
Effective Time. This unaudited balance sheet will be prepared according
to GAAP, and will be referred to as the "Closing Balance Sheet."
The closing financial statements for the period ending December 29,
1994, and the Closing Balance Sheet will be prepared in accordance with
GAAP, and will represent fairly the financial condition of the Company
as of the date thereof, and the results of its position for the period
then ended, and will reflect all sales of the Company through and
including December 29, 1994, whether or not invoiced.
Buyer and the Trust shall participate fully in the preparation and
audit of the October 31, 1994 financial statements and the October 31,
1994 balance sheet, including, but not limited to, participating in the
taking and valuing of Company's inventory and fixed assets, shall have
access to the audit working papers, and reviewing the establishment of an
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appropriate reserve for doubtful accounts receivable, slow-moving,
obsolete and damaged inventory, and other reserves.
Buyer and the Trust shall participate fully in the preparation of
the Closing Balance Sheet and other December 29, 1994 financial
statements, including, but not limited to, participating in the taking
and valuing of the Company's inventory and fixed assets, shall have
access to the audit working papers, and reviewing the establishment of
an appropriate reserve for doubtful accounts receivable, slow-moving,
obsolete and damaged inventory, and other reserves.
The Company has also furnished Buyer with copies of its complete
1990,1991, 1992 and 1993 state and federal income tax returns.
The references in this Section 3.09 and in this Agreement to the
financial statements and Closing Balance Sheet of the Company include
those of Kirk Paper and Kirk Arizona. The reserves on the Closing
Balance Sheet will be based, in part, upon actual results from
operations of the Company up to the date of the preparation of the
Closing Balance Sheet.
If Buyer, the Company and the Trust are unable to resolve any
disagreement regarding the audit of the October 31, 1994 financial
statements or the preparation of the Closing Balance Sheet or other
December 29, 1994 financial statements (including, without limitation,
disagreements over the valuation of inventory and fixed assets and over
the establishment or amount of appropriate reserves), such
disagreement(s) shall promptly be referred for resolution to Coopers &
Lybrand (or to Price Waterhouse if Coopers & Lybrand is unwilling to
resolve such disagreement). Such accounting firm's resolution of the
disagreement(s) shall be made in accordance with GAAP and shall be
binding, final and conclusive upon all of the parties to this Agreement.
Buyer and the Trust shall share equally the fees and expenses of such
accounting firm. Buyer represents that it has not engaged Coopers &
Lybrand or Price Waterhouse to render any accounting services to it,
and that it will not do so prior to the preparation of the Closing
Balance Sheet unless another accounting firm is selected by the parties
to resolve disagreements in accordance with the foregoing provisions.
SECTION 3.10. CONDUCT OF THE COMPANY SINCE DATE OF THE LAST AUDITED
FINANCIAL STATEMENTS. Except as disclosed in Schedule 3.10, the Company
has not since December 31, 1993:
(a) Mortgaged, pledged or subjected to Lien any of its properties or
assets beyond that disclosed in Schedules hereto, except in the
normal and ordinary course of business;
(b) Sold or transferred any of its assets, tangible or intangible,
except in each case in the ordinary and usual course of business,
and except by transfers and dividends of assets not included in the
computations of Shareholder Equity;
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(c) Incurred any extraordinary losses or incurred or become liable
for any obligations or liabilities except current liabilities
incurred in the ordinary and usual course of business, or made any
extraordinary expenditures other than for additions and betterments
to existing plant, equipment, and facilities;
(d) Incurred any material adverse change in the condition (financial
or otherwise), of the business, taken as a whole;
(e) Incurred any damages to (other than ordinary wear and tear),
or destruction or loss of, any of its properties or other items
carried in its accounts, or incurred cancellation of any of its
customer contracts for purchase of product of more than Fifty
Thousand Dollars ($50,000.00) (whether or not covered by insurance),
nor incurred cancellation of any of its contracts by any
governmental authority or otherwise;
(f) Experienced any labor interruption or labor dispute;
(g) Given to any person or organization for any purpose any power of
attorney which is currently in effect;
(h) Conducted its business in other than the ordinary and usual
course, consistent with past practices;
(i) Made any change in, or applied to the Internal Revenue Service
for approval of any change in, any method of accounting or
accounting practice or policy used by it;
(j) Written down or written up the value of any Inventory, or
written off as uncollectible any Account Receivable, except for
write-downs, write-ups and write-offs in the ordinary course of
business, consistent with past practice; nor
(k) Made any amendment of the articles of incorporation or bylaws or
equivalent governing instruments of the Company except such as may
be necessary to comply with the terms of this Agreement;
(l) Incurred any change in the outstanding shares of the capital
stock or other ownership interests in or the capitalization of the
Company, whether by reason of a reclassification, recapitalization,
stock split or combination, exchange or readjustments of shares,
stock dividend or otherwise; or
(m) Participated in any repurchase, redemption or other acquisition
by the Company of any outstanding shares of capital stock or other
ownership interests in or other securities of the Company.
SECTION 3.11. REAL PROPERTY. Schedule 3.11 sets forth a complete
list and summary description, including location, of all land, and of
all easements and rights-of-way which are
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known to Company to have an effect on the use or operation of the
property, buildings and real property owned, leased or occupied by the
Company. With respect to each such property owned by the Company,
Schedule 3.11 lists each Lien, the holder thereof and the amount and
repayment terms of any debt or obligation which created such Lien, if
any, except for Liens for current taxes not yet due and payable. Except
as disclosed in Schedule 3.11, the Company has received no notices or
claims made by governmental authorities of any violations relating to
any building occupied or owned by the Company, or the operations of the
Company, of any law, ordinance, code or regulation. All buildings,
fixtures, mechanical systems (including electrical, plumbing and
heating), and roof and structural systems of facilities shown in
Schedule 3.11 are in good operating condition and repair. The Company
is not in default of any of the provisions of the leases which are set
forth in Schedule 3.11, nor has it received notice of default.
SECTION 3.12. INTANGIBLE PROPERTY. Schedule 3.12, containing the
Intangible Property, lists all trademarks, service marks, trade names,
copyrights and patents and computer system(s) which are owned or used
by the Company and each registration, application, license, grant or
other right or agreement to which the Company is a party with respect to
the use of any trademark, trade name, service mark, copyright or patent
pertaining to the Company. The Company is the sole owner of all
trademarks, service marks, trade names, copyrights, patents shown on
Schedule 3.12, except as noted therein (the "Intangible Property");
(ii) does not use any Intangible Property by consent of any other
person, except as shown on said Schedule 3.12; (iii) is not required to,
and does not, make any payments to others with respect thereto, except
as shown on said Schedule 3.12; (iv) owns or possesses adequate
licenses or other rights to use all Intangible Property used in the
conduct of its business as now operated; (v) in using or possessing any
Intangible Property, does not infringe on the rights of any other
person; and (vi) has not been notified, advised of or threatened with
any claim of any other person relating to any Intangible Property or
any process or confidential information of the Company.
SECTION 3.13. TANGIBLE PERSONAL PROPERTY. Schedule 3.13 describes the
material items of tangible personal property (except Inventory held
for sale) and its location, owned, rented, leased or used by the
Company. With respect to each item of Tangible Personal Property owned
by the Company, Schedule 3.13 to this Agreement lists each Lien, the
holder thereof and the amount and repayment terms of any debt or
obligation which such Lien secures. With respect to each item of
Tangible Personal Property leased or rented by the Company, Schedule
3.13 lists the type and quantity of such property, the lessor, the date
and term of the lease or rental agreement. Each lease or other
instrument referred to on Schedule 3.13 is in full force and effect and
constitutes a valid and binding obligation of the Company. Each item of
Tangible Personal Property owned or leased by the Company is presently
in operating condition and repair.
SECTION 3.14. INSURANCE. Schedule 3.14 is a list, complete and
correct in all respects, of all insurance policies and fidelity bonds
covering the assets, business, equipment, properties, operations,
employees, officers and directors of the Company. Except as set forth
on Schedule 3.14, there are no claims pending under any such policies or
disputes with underwriters, and all premiums due and payable have been
paid. There are no pending or
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threatened terminations with respect to any such policies and Company is
in compliance in all respects with all conditions contained therein and
all such policies are in full force and effect.
SECTION 3.15. EMPLOYEE BENEFIT PLANS. Schedule 3.15, which lists all
of the Company's employee pension plans and employee welfare plans, is
a true, correct and complete schedule and brief description of:
(a) All "employee pension benefit plans", as such term is defined in
Section 3(2) of the Employee Retirement Income Security Act of
1974, as amended ("ERISA") ("Pension Plans") maintained by Company,
including any such plans as have been terminated or with respect to
which an application regarding termination is pending. With respect
to such plans:
(i) Current copies of all such plan documents, summary plan
descriptions thereof and related trust agreements will be
furnished to Buyer by January 5, 1995;
(ii) Such plans are qualified under Section 401(a) of the Code,
and such trusts are exempt from tax under Section 501(a) of the
Code. Nothing has occurred which would adversely affect the
qualified status of the Pension Plans, except to the extent the
same are required to be amended to comply with the provisions
of the Tax Reform Act of 1986 and subsequent amendments to
the Code or other tax legislation. A copy of the most recent
Internal Revenue Service ("IRS") determination letter issued for
each such plan and trust with respect to the Code has been
furnished to Buyer;
(iii) All government reporting requirements with respect to the
Pension Plans have been satisfied and are current;
(iv) Copies of the two most recent Forms 5500 (which state the
Pension Plans' assets and liabilities) as filed with the IRS,
together with all attachments thereto for each Plan, will be
furnished to Buyer by January 5, 1995;
(v) The Company does not maintain any pension plan which is
subject to the provisions of Section 412 of the Code and/or
Title IV of ERISA. No representations, oral or written, with
respect to participation, eligibility for benefits, vesting,
benefit accrual or coverage under any Pension Plan have been
made to employees of Company which are not in accordance with
the terms and conditions of such Plan;
(vi) Neither any of the plans or trusts, nor any trustee or
administrator thereof, has engaged in a transaction which might
subject any of the plans, trusts, or any trustee or
administrator thereof, or any party dealing with the plans or
trusts, to a tax penalty on prohibited transactions imposed by
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Section 4975 of the Code or to a civil penalty imposed by
Section 502 of ERISA;
(vii) The Company has notified Buyer of any of its plans which
has been completely or partially terminated since September 2,
1974 and has provided any documentation relating to any such
termination in Schedule 3.15;
(viii) The Company has contributed to a "Multiemployer Plan" as
defined in Section 3(37) of ERISA, but has not withdrawn from
any such plan in a complete withdrawal within the meaning of
Section 4203 of ERISA or a partial withdrawal within the
meaning of Section 4205 of ERISA; and no withdrawal liability
will be incurred upon the consummation of the transaction
contemplated by this Agreement.
(b) All "employee welfare benefit plans" as such term is defined in
Section 3(1) of ERISA ("Plans"), whether insured or otherwise. All
such Plans are in compliance with the provisions of ERISA, and
current copies of such Plans have been furnished to Buyer, together
with the copies of the two most recent Forms 5500 for each Plan.
(c) All vacation, termination, stock option, stock appreciation
rights and other employee benefit plans or policies (the "Non-ERISA
Plans") maintained by the Company, including, without limitation,
deferred compensation arrangements or other similar programs,
whether or not formally designated as a plan, except as covered by
policies of insurance.
The Company further represents as to Employee Benefits:
(A) There are no pending, nor, to the Company's knowledge, are there
any anticipated or threatened claims against or otherwise
involving any of the Company's Plans or Pension Plans, or any
fiduciary thereof, by or on behalf of the Plans or Pension Plans by
any employee or beneficiary covered under the Plans or Pension
Plans, or otherwise involving the Plans or Pension Plans (other than
routine claims for benefits). There is no judgment, decree,
injunction, rule or order of any court, governmental body,
commission, agency or arbitrator outstanding against or in favor of
any Plan or Pension Plan or any fiduciary thereof.
(B) WELFARE PLANS. Except to the extent such liabilities are covered by
insurance policies or similar plans in existence as of the
Closing, the Closing Balance Sheet shall reflect the Company's
liabilities that are ascertainable as of the date thereof with
respect to any medical, dental, hospitalization benefits, life
insurance, disability, workers compensation, unemployment
compensation, severance benefits and other claims (collectively
"Welfare Claims") incurred on or for former or present employees of
the Company, whether or not hereafter employed by the Buyer, arising
from events (injury or occurrence) prior to the Effective Time. The
Company shall maintain its current medical, dental or
hospitalization, survivor benefits, life insurance, disability and
workers' compensation plans through the Closing.
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(C) COLLECTIVE BARGAINING AGREEMENTS. The Company represents that,
except as otherwise disclosed to Buyer in Schedule 3.15(C), it is
not a party to any collective bargaining agreement and that its
employees are not covered by any such agreement. Since January 1,
1993, there has not been, and there is not presently pending or
existing, any strike, slowdown, picketing, work stoppage, labor
arbitration or proceeding in respect of the grievance of any
employee, and the Company has no knowledge of an application or
complaint filed by an employee or union with the National Labor
Relations Board or comparable government body, organizational
activity or other labor dispute against or affecting the Company,
and has no knowledge of an application for certification of
collective bargaining agent is pending or threatened. There is no
lockout of any employees by the Company, nor is any such action
contemplated. The Company has complied in all respects with all
legal requirements relating to employment, equal employment
opportunity, nondiscrimination, immigration, wages, hours,
benefits, collective bargaining, the payment of Social Security and
similar taxes, occupational safety and health and plant closing
laws. The Company is not aware of, and has no reason to believe that
any underfunding liability regarding the collective bargaining
agreements currently exists, nor that any withdrawal liability will
be incurred upon the Merger, or as a result of the Merger.
(D) VACATION AND VACATION PAY. The Company shall accrue for
vacations, bonuses and all other income earned by the Company's
employees, but not taken or paid as of the Closing.
(E) FORMER, SEVERED OR RETIRING COMPANY'S EMPLOYEES. Except as set
forth in Schedule 3.15(E), the Company does not and has not provided
benefits, including, without limitation, death or medical benefits
(whether or not insured), with respect to current or former
employees of Company, beyond retirement or other termination of
service, other than life insurance benefits, retirement benefits,
and COBRA mandated health continuation benefits under the Plans or
Pension Plans.
(F) The Company does not maintain for Company employees any pension
plan or similar retirement plan outside of the United States.
(G) EMPLOYEES. Schedule 3.15(G) contains a current list setting forth
the following information for each employee of the Company who
earned in excess of $50,000 for the nine (9) months ended September
30, 1994; the compensation (base and incentive), and any change in
the method of compensation since December 31, 1993, including
changes in commissioned sales rates, vacation accrued and service
credited for purposes of vesting and an eligibility to participate
under the Company's profit sharing and other benefit plans. There
is no "employee benefit plan," as defined in Section 3(3) of ERISA,
which (i) is subject to any provision of ERISA, and (ii) is
maintained, administered or contributed to by the Company and covers
any employee or former employee of the Company and under which the
Company has any liability which has not, as of the date hereof,
been disclosed to Buyer.
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(H) The Company has or will have contributed to, prior to the
Closing, or accrued for on the Closing Balance Sheet, all amounts
required to be contributed prior to the Closing, to Plans and
Pension Plans, and Multiemployer Pension and Welfare Plans.
(I) The Company will have accrued on the Closing Balance Sheet for
all unpaid commissions, bonuses, perquisites and other obligations
not specifically set forth in the preceding sections of Article III.
SECTION 3.16. ENVIRONMENTAL. (a) The Company has complied with, is
currently in compliance with, has not been charged with, has not
received any notice of, and, to its knowledge, is not under
investigation for, its failure to comply with, any statute, law,
ordinance, rule, regulation, order or directive of any governmental
agency with respect to the use, generation, dumping, releasing,
burying, disposing, or emitting of any particles, materials, substances
or emissions that are determined by any governmental agency to be
"Hazardous Materials" (as herein defined), pertaining to its business,
its assets, its real (owned or leased) or personal property, or the
operation or conduct thereof; the Company has no knowledge that any
other person ever has disposed of any Hazardous Materials at any of the
real property owned or leased by it regardless of whether such material
or substances constituted Hazardous Materials at such time of disposal.
(b) For purposes of this Agreement, the term "Hazardous Materials"
shall mean those materials or substances defined as "hazardous
substances", "hazardous materials", "hazardous waste", "toxic
substances" or other similar designations under the Comprehensive
Environmental Response, Compensation and Liability Act of 1980
(42 U.S.C. Section 9601, et seq.), the Resource Conservation and Recovery
Act (42 U.S.C. Section 1801, et seq.) or other applicable state
statutes or regulations.
(c) To Company's knowledge, each hazardous waste transporter (other
than transportation of product for resale) and disposal facility that
has transported and disposed of any Hazardous Materials on behalf of
the Company is listed on Schedule 3.16, was properly licensed at such
time of transportation or disposal and properly transported or disposed
of such Hazardous Materials at a licensed facility. All manifests
required by any and all of the statutes, laws, ordinances, rules,
regulations, orders and directives of any Governmental Agency to be
completed and retained by the Company in connection with each such
instance of transportation were so completed and retained, and copies
thereof are provided in Schedule 3.16.
(d) None of the real property owned or leased by the Company is or
has ever been listed on any federal or state registry, list or report
of active or inactive hazardous waste disposal sites.
Section 3.17. TAXES. The Company has duly filed, and caused to be
filed, all income, ad valorem, property, sales and use, and all other
tax returns and tax reports required by law to be filed by it when due
and has duly paid all taxes reflected as payable on such returns and
reports. Except as disclosed in Schedule 3.17, no proceeding or other
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action is pending nor, to Company's knowledge, threatened for the
assessment or collection of additional taxes. Also, except as disclosed
in Schedule 3.17, no deficiency for any tax has been asserted or
assessed against the Company. Except as disclosed in Schedule 3.17, the
Company is not, to its knowledge, currently subject to any outstanding
federal, state or local tax audit or investigation, and the Company has
no notice of any such assessment, audit or investigation of the
Company. All taxes and other assessments and levies which the Company
is required by law to withhold or collect have been duly withheld and
collected, and have been paid over to the proper governmental
authorities or are held by the Company for such payment, and all such
withholdings and collections and all other payments due in connection
therewith as of December 31, 1993, are duly reflected in the financial
statements of the Company as of December 31, 1993, to the extent
required to be reflected therein, pursuant to GAAP. The Company has not
received any notice of any tax deficiency outstanding, proposed or
assessed against it, nor has the Company executed any waiver of any
statute of limitations on the assessment or collection of any tax. All
tax liabilities of the Company for any period after December 31, 1993
have been provided for on the books of the Company consistent with past
practices. The Company shall accurately accrue for 1994 payroll taxes
through the Closing.
Except as disclosed on Schedule 3.17:
(i) the Company has no interest in real property in the State of
New York;
(ii) none of the property owned or used by the Company is
subject to a tax benefit transfer lease executed in accordance with
Section 168(f)(8) of the Internal Revenue Code of 1954, as amended
by the Economic Recovery Tax Act of 1981;
(iii) none of the property owned by or used by the Company
constitutes "tax-exempt use property" within the meaning of
Section 168(h) of the Code;
(iv) the Company is not currently under any contractual
obligation to indemnify any other person with respect to any and
all taxes;
(v) the Company will not be required (a) as a result of a change
in method of accounting for any period prior to the Closing, to
include any adjustment under Section 481(c) of the Code in taxable
income for any period after the Closing; or (b) as a result of any
closing agreement as defined in Section 7121 of the Code to include
any item of income or exclude any item of deduction from any taxable
period after the Closing;
(vi) the Company has not entered into a transaction that
requires an effective protective carryover basis election pursuant
to Section 338 of the Code with respect to all transactions where
an affirmative action carryover Section 338 election could be
applicable;
(vii) the Company is not subject to withholding under Section
1445 of the Code with respect to any transfer of any "United
States real property interest"; and
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(viii) No property of the Company is subject to any arrangements
(including, but not limited to, a lease) whereby ownership of such
property has been transferred, for tax purposes, to another person,
under provisions of any applicable law.
Notwithstanding the duration of the indemnification set forth in
Article X hereof, the representations and warranties set forth in Section
3.17 shall survive for the shorter of the statute of limitations
applicable to the subject matter of the representation and warranty, or
for one (1) year.
SECTION 3.18. PROSPECTUS. The information with respect to the
Company that the Company furnishes to Buyer or Merger Subsidiary and
expressly identified for use in the Form S-3 (as defined in Section
6.03) will not at the time that the Form S-3 becomes effective contain
any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements
made therein not misleading.
SECTION 3.19. BROKERS FEES. The Company represents and warrants to
Buyer that neither the Company nor its shareholders has dealt with any
agent, finder, broker, or other representative in any manner which
could result in any party being liable for any fee or commission in
the nature of a finder's or originator's fee in connection with the
transaction described herein.
SECTION 3.20. AGREEMENTS AND CONTRACTS. Schedule 3.20 sets forth a
list of each material contract, agreement, lease, option, instrument,
obligation or commitment to which the Company is a party (the
"Agreements"), other than: (i) contracts for the purchase of inventory
or services, the aggregate purchase price under any one of which does
not exceed $100,000.00; (ii) contracts for the sale of inventory or
services, the aggregate sales price under any one of which does not
exceed $100,000.00, and under all of which do not exceed $200,000.00
per customer; and (iii) other contracts involving total payments of
under $50,000.00. Schedule 3.20 specifies the name and address of each
party to such Agreement and the subject matter thereof. Each Agreement
listed in Schedule 3.20 is binding on the Company and, to the best of
Company's knowledge, is binding on the other party thereto. The Company
is not in default and, to the best of its knowledge, no other party is
in default under any such Agreement, and no party to any such Agreement
has given notice to any other party thereto that the latter is in
default thereunder.
SECTION 3.21. ACCOUNTS AND NOTES RECEIVABLE. All of the accounts and
notes receivable to be reflected on the Closing Balance Sheet arose in
the ordinary and usual course of business, represent valid obligations
due the Company, are fully collectible, except to the extent reserved
for on the Closing Balance Sheet, and Company is not aware of any
account that is subject to counterclaim or setoff. As of October 31,
1994, the Company had a fully adequate reserve, in accordance with
GAAP, with respect to uncollectible accounts; and similarly fully
adequate reserves will have been established for accounts receivable
arising after October 31, 1994, and as of the date of the Closing
Balance Sheet, with respect to the collectibility of accounts.
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SECTION 3.22. TRADE NAME OF THE COMPANY. The Company is, and shall
be at Closing, authorized to conduct business as "Kirk Paper
Corporation" or "Kirk Paper Company" and any other names by which it
currently does business, and is not aware of the right of any other
entity to operate under those designations, styles, or names, or that
has the full and exclusive right to use said names. The shareholders of
the Company shall not, after the date of Closing, use, attempt to use,
or do business under, the name "Kirk Paper Company", or any other name
under which the Company presently does, or within three (3) years prior
to this Agreement did, business.
SECTION 3.23. COMPANY LOGO AND TRADEMARKS. To its knowledge, the
Company has the exclusive right to use the "Kirk Paper Company" logo.
The shareholders of the Company shall not, after the date of Closing
use or attempt to use the "Kirk Paper Company" logo.
SECTION 3.24. INVENTORY. The Company represents that as of the
Effective Time, all Inventory of the Company shall be free and clear of
any Liens (except as reflected in the closing financial statements
prepared as of December 29, 1994, or schedules thereto, or which arose
in the ordinary and regular course of business), shall not be damaged
nor obsolete, and shall be saleable in the ordinary course of business
subsequent to the Effective Time, except for such items of Inventory
identified in Schedule 3.24 as slow-moving, obsolete, outdated or
damaged, and except as reserved for on the Closing Balance Sheet. The
quantities and each type of Inventory are not excessive, but are at
reasonable levels in the present circumstances of the Company.
Notwithstanding that Shareholder Equity will reflect Inventory at FIFO
cost, for purposes of determining the Merger Consideration, as provided
in Section 1.02(b), the Closing Balance Sheet shall reflect Inventory at
LIFO cost. The Company represents that the Shareholder Equity will be
based on Inventory at FIFO cost, adjusted for obsolete, damaged and
slow-moving inventory, as determined from criteria to be applied, as
determined by Company, the Trust and Buyer, and shall be further
adjusted to reflect unrealized profit from intercompany sales from
Company to any of its operating divisions.
SECTION 3.25. SUBSIDIARIES. The Company has no subsidiaries, except as
disclosed herein.
SECTION 3.26. GENERAL REPRESENTATIONS AND WARRANTIES. No representation or
warranty made by the Company in this Agreement, and no statement made by
the Company in any certificate or schedule furnished in connection with
this Agreement and the transaction herein contemplated, contains any
untrue statement of a fact or omits to state any fact necessary to make
such representation or warranty or any such statement not misleading.
SECTION 3.27. CUSTOMERS AND SUPPLIERS. Schedule 3.27, containing
customers and suppliers to the Company, for the twelve-month period
ending December 31, 1993, lists: (i) the name of each customer of the
Company that accounted for revenues from the sale of products
(indicating the general type of product sold) or the lease or rental of
equipment
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(indicating the general type of equipment leased or rented) exceeding
$100,000.00 during such twelve-month period, and (ii) the name and
aggregate purchases from each supplier of goods or services to the
Company (indicating the general type of goods or services supplied)
from which aggregate purchases exceeded $250,000.00 during such
twelve-month period. Except as set forth in Schedule 3.27, the Company
has not received notice of intent to terminate the relationship with
any customer or supplier listed on Schedule 3.27.
SECTION 3.28. ABSENCE OF PROCEEDINGS. To the best of Company's
knowledge, no action or proceeding has been instituted against the
Company or any of the shareholders of the Company before any court or
other governmental body by any person or public authority seeking to
restrain or prohibit the execution and delivery of this Agreement or the
consummation of the transactions contemplated hereby.
SECTION 3.29. NO BREACH. Except as disclosed in Schedule 3.29, the
execution of this Agreement and consummation of the transactions
contemplated hereby will not result in the breach of any of the terms,
conditions or provisions of, or constitute a default under, any
indenture, agreement or other instrument to which the Company is a party
or by which the Company may be bound or affected, which default or
breach will restrict the ability of the Company to consummate the
transactions contemplated hereby, adversely affect the business of the
Company, nor give any person the right to declare a default or exercise
any remedy under, or to accelerate the maturity or performance of, or
cancel, eliminate or modify any contract, nor result in a violation by
the Company of any state, local or other law, regulation, judgment,
order or rule in any of the foregoing events.
SECTION 3.30. LIABILITIES. The Company has no material liabilities,
contingent or otherwise, except those to be reflected in the closing
financial statements as of December 29, 1994 to be included in Schedule
3.09 hereto (which liabilities are required by GAAP to be reflected in
such financial statements), or except those shown in other Schedules to
this Agreement, other than current liabilities incurred in the ordinary
and usual course of business since December 31, 1993, that are not
required to be reflected on the Closing Balance Sheet according to
GAAP, or which are permitted under this Agreement.
SECTION 3.31. All Schedules to this Agreement are attached hereto
and incorporated as if set forth herein.
SECTION 3.32. There are no prepayment penalties associated with the
Company's long-term debt (or bank debt).
SECTION 3.33. All of the representations and warranties of the
Company shall be true and accurate as of the Closing.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to the Company and to the Trust that:
SECTION 4.01. ORGANIZATION AND EXISTENCE. Each of the Buyer and Merger
Subsidiary is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation and has all
corporate powers and all material governmental licenses, authorizations,
consents and approvals required to carry on their respective businesses as now
conducted. Since the date of its incorporation, Merger Subsidiary has not
engaged in any activities. The copies of the Buyer's and Merger Subsidiary's
articles of incorporation and bylaws previously furnished to the Company are
true and correct.
SECTION 4.02. AUTHORITY AND APPROVALS. Each of the Buyer and Merger
Subsidiary has the corporate power and authority to execute, deliver and
perform this Agreement and to consummate the Merger. All corporate acts and
proceedings required to be taken by or on the part of Buyer and Merger
Subsidiary to authorize it to execute, deliver and perform this Agreement
and to consummate the Merger have been duly and validly taken, and no
approval of Buyer's or Merger Subsidiary shareholders is required in
connection herewith. This Agreement constitutes the valid and binding
agreement of Buyer and Merger Subsidiary enforceable against each of them
in accordance with its terms, subject as to enforcement to bankruptcy,
insolvency and other laws of general application, relating to or affecting
creditors rights and to general equity principles.
SECTION 4.03. GOVERNMENTAL AUTHORIZATION; CONSENTS. (a) The execution,
delivery and performance by Buyer and Merger Subsidiary of this Agreement and
the consummation by Buyer and Merger Subsidiary of the Merger require no action
by or in respect of, or filing with, any governmental body, agency, official or
authority other than (i) the filing of the agreement of merger and related
documents in accordance with the California Law, (ii) compliance with any
applicable requirements of the HSR Act; (iii) compliance with any applicable
requirement of the 1933 Act; (iv) compliance with any state securities or blue
sky laws; and (v) approval of the NYSE to list Buyer Stock subject to the
official notice of issuance. The Buyer is an "Accredited Investor" as defined
in the 1933 Act and the rules and regulations thereunder and is acquiring the
stock of the Company by merger for investment purposes and not with a view to
the sale or distribution thereof.
(b) No consent, approval, waiver or other action by any person (other than
the governmental authorities referred to in (a) above) under any contract,
agreement, indenture, lease, instrument or other document to which Buyer or
Merger Subsidiary is a party or by which they are bound is required or
necessary for the execution, delivery and performance of this Agreement by
Buyer or Merger Subsidiary or the consummation of the Merger, except for such
consents, approvals or actions as may be required by the NYSE in connection
with the listing of shares of Buyer Stock thereon.
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SECTION 4.04. NO CONFLICT. The execution, delivery and performance of this
Agreement by Buyer and Merger Subsidiary do not, and the consummation by Buyer
and Merger Subsidiary of the Merger will not, (i) violate or conflict with the
certificate of incorporation or bylaws or equivalent governing instruments of
Buyer or Merger Subsidiary, (ii) violate or conflict with any law or
governmental regulation currently applicable to Buyer or Merger Subsidiary or
any agreement or instrument, or currently applicable award, judgment or decree,
to which Buyer or Merger Subsidiary is a party or by which it is bound, or
(iii) give rise to any right of termination, cancellation or acceleration of any
right of Buyer or Merger Subsidiary or to a loss of any benefit to which Buyer
or Merger Subsidiary is entitled.
SECTION 4.05. FINDERS' FEES. There is no investment banker, broker, finder
or other intermediary who might be entitled to any fee or commission from the
Company, any of its shareholders, or any of its affiliates in connection with
the transaction described in this Agreement.
SECTION 4.06. BROKERS FEE. Neither Buyer, Merger Subsidiary, nor anyone
acting on their behalf has any liability to any broker, finder or agent or has
agreed to pay any brokerage commission with respect to the transactions
contemplated by this Agreement.
SECTION 4.07. FINANCIAL INFORMATION. The consolidated financial statements
(including any related notes or schedules) in the Buyer's 10-K and the Buyer's
10-Q fairly present, in conformity with generally accepted accounting
principles consistently applied (except as disclosed in the notes thereto), the
consolidated financial position of Buyer and its consolidated subsidiaries as
of such date and their consolidated results of operations and changes in
financial position for the periods then ended (subject to normal year-end
adjustments in the case of the unaudited interim financial statements contained
in Buyer's 10Q).
SECTION 4.08. SEC FILINGS. (a) Buyer has delivered to the Company (i) its
annual report on Form 10-K for its fiscal year ended December 31, 1993
("Buyer's 10K"), (ii) its quarterly reports on Form 10-Q for its fiscal
quarters ended March 31, 1994, June 30, 1994, and September 30, 1994
("Buyer's 10Q"), (iii) its proxy statement relating to the meeting of the
Shareholders held on May 10, 1994, and (iv) all of its other reports or
registration statements filed with the SEC since December 31, 1992 (all such
documents referred to in clauses (i)-(iv) being referred to herein as
"Buyer's SEC Reports").
(b) As of its filing date, each such report or statement filed pursuant to
the Securities Exchange Act of 1934, as amended (the "1934 Act") did not contain
any untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements made therein, in the light of the
circumstances under which they were made, not misleading.
(c) Each such registration statement as amended or supplemented, if
applicable, filed pursuant to the 1933 Act when such statement or amendment
became effective did not
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contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading.
(d) Buyer is eligible to file the S-3 registration statement referred to in
Section 6.03 below with respect to the resale by the Trust and its transferees
of the Shares of Buyer Stock issued as a result of the Merger and constituting
the Merger Consideration.
(e) Buyer is, and agrees to remain at all times hereafter, in compliance
with the Rule 144 availability requirements.
(f) The S-3 registration statement, including the prospectus contained
therein, will not contain any misstatements or omissions.
(g) Merger Subsidiary is Buyer's wholly-owned subsidiary.
(h) The issuance of Buyer Stock will comply with federal and state
securities laws.
SECTION 4.09. CAPITALIZATION. (a) As of September 30, 1994, the authorized
and outstanding capital stock of Buyer is as described in Buyer's l0-Q.
(b) A11 outstanding shares of capital stock of Buyer have been duly
authorized and validly issued and are fully paid and nonassessable. Except as
set forth in this Section and except for changes since September 30, 1994
resulting from the exercise of employee stock options outstanding on such date,
there are outstanding (i) no shares of capital stock or other voting securities
of Buyer, (ii) no securities of Buyer convertible into or exchangeable for
shares of capital stock or voting securities of Buyer, and (iii) no options or
other rights to acquire from Buyer, and no obligation of Buyer to issue, any
capital stock, voting securities or securities convertible into or exchangeable
for Buyer Stock.
(c) The shares of Buyer Stock to be issued in the Merger pursuant to Article
I hereof have been duly authorized and, when issued pursuant to this Agreement,
will be validly issued, fully paid and non-assessable, fully voting common
stock of Buyer, with no personal liability attaching thereto and will
not be subject to preemptive rights.
SECTION 4.10. REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Buyer herein or in any certificate or other writing delivered by
Buyer pursuant hereto or in connection with the Merger do not contain any
untrue statement of a material fact or, taken together, omit to state a
material fact necessary in order to make the statements herein and therein not
misleading in light of the circumstances in which made, and will remain
accurate as of the Effective Time.
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ARTICLE V
COVENANTS OF THE COMPANY
The Company agrees that:
SECTION 5.01. CONDUCT OF THE COMPANY. From the date hereof until the
Effective Time, the Company shall conduct its business in the ordinary course,
consistent with past practice, and will use all reasonable efforts (which shall
not involve the payment of money) to preserve intact its business organization
and relationships with third parties and to keep available the services of its
present officers and employees. Without limiting the generality of the
foregoing, from the date hereof until the Effective Time (or such other time as
may be specified therein) except as specifically approved by Buyer as to each
particular act:
(a) except for those assets listed on Schedule 5.01 hereto, the Company will
not declare, set aside or pay any dividend or other distribution with respect
to any shares of capital stock of the Company;
(b) the Company will not amend or alter any term of any outstanding security
of the Company except to the extent required to implement the terms of this
Agreement;
(c) the Company will not (i) incur, assume or guarantee any debt for
borrowed money other than in the ordinary course of business, on terms
consistent with past practices pursuant to the Company's loan agreement listed
in Schedule 3.09; (ii) issue or sell any securities convertible into or
exchangeable for debt securities of the Company; or (iii) issue or sell any
options or other rights to acquire from the Company, directly or indirectly,
any debt securities of the Company or any securities convertible into or
exchangeable for any such debt securities;
(d) the Company will not create, assume or incur any Lien;
(e) the Company will not make any loan, advance to or investment in any
person other than loans, advances or contributions to or investments of excess
cash made in the ordinary course of business consistent with past practices;
(f) the Company will not issue or sell any shares of Common Stock and the
Company will not redeem, repurchase or otherwise acquire shares of capital stock
or other ownership interest in or other securities of the Company;
(g) other than in the ordinary course of business in a manner consistent
with past practice, the Company will not enter into any transaction, contract or
agreement, make any commitment relating to its assets or business (including
the acquisition or disposition of any substantial assets), relinquish any
material contract or other right of the Company or make any change in its
operations that is material to the Company other than those contemplated by
this Agreement;
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(h) the Company will not adopt any change in any method of accounting or
accounting practice used by the Company other than by reason of a concurrent
change in generally accepted accounting principles;
(i) the Company will not (i) grant or make any severance or termination
payments to any employee of the Company, except under outstanding agreements;
(ii) enter into any employment, deferred compensation or other similar
agreement (or enter into any amendment to any such existing agreement) with any
officer, director or employee of the Company, (iii) increase benefits payable
under any existing severance or termination pay policies or employment
agreements, or (iv) pay or provide for any increase in compensation, bonus, or
other benefits payable to officers, directors or employees of the Company, not
consistent with the policies of the Company as currently in force;
(j) the Company will not amend its articles of incorporation or bylaws;
(k) the Company will not merge or consolidate with any person, acquire any
stock or other ownership interest in any person or the assets of any business
as an entirety or liquidate, dissolve or otherwise reorganize or seek
protection from creditors;
(l) the Company will not take any action, the taking of which, or omit to
take any action, the omission of which, would reasonably be expected to (i)
affect adversely the tax free nature of the Merger or the treatment thereof as
a "pooling of interest" for accounting purposes, or (ii) cause any of the
representations and warranties in Article III to be inaccurate in any respect
at or as of any time prior to the Effective Time;
(m) the Company will have used all its reasonable efforts to obtain, prior
to the Effective Time and, in the event such consents are not obtained as of
the Effective Time, shall thereafter continue to use its best efforts to obtain
from its lessors of real property leases, a list of which is set forth in
Schedule 5.01(m) of this Agreement, said lessors consents (if required), in the
manner required in said leases, to the Merger;
(n) the Company shall use its best efforts to obtain from its lessors of
personal property consents, if required, to the Merger; and
(o) the Company shall use all its best efforts to obtain consents to the
Merger from the lessors of and, where required, from the mortgagees, under the
agreements listed in Schedules 3.03, 3.29, or the other schedules hereto that
require the consent of a third party.
SECTION 5.02. ACCESS TO INFORMATION. The Company will give Buyer, its
counsel, financial advisors, auditors and other authorized representatives full
access on reasonable notice during normal business hours to the offices,
properties, books and records of the Company and will furnish to Buyer, its
counsel, financial advisors, auditors and authorized representatives such
financial and operating data and other information as such persons may
reasonably request and will instruct the Company's employees, counsel and
financial advisors to cooperate with Buyer in its investigation of the business
of the Company; provided that
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no investigation pursuant to this Section shall affect any representation or
warranty given by the Company to Buyer hereunder and such investigation shall be
conducted in a reasonable manner and so as not to interfere with the normal
business operations of the Company.
SECTION 5.03. OTHER OFFERS. (a) The Company will promptly notify Buyer
after receipt of any offer or indication that any person is considering making
an offer with respect to an Acquisition Proposal (as hereinafter defined) or
any request for non-public information relating to the Company or for access
to the properties, books or records of the Company by any person that may be
considering making, or has made, an offer with respect to an Acquisition
Proposal and will keep Buyer fully informed of the status and details of any
such offer, indication or request. "Acquisition Proposal" means any proposal
for a merger or other business combination involving the Company or the
acquisition of any equity interest in, or a substantial portion of the
assets of, the Company, other than the Merger.
(b) From the date hereof until the termination hereof, the Company, and the
officers of the Company and the Subsidiaries will not and the Company will use
its all reasonable efforts to cause its directors, employees and agents not to,
directly or indirectly, subject to the directors' fiduciary obligations under
applicable law, (A) take any action to solicit, initiate or encourage any offer
or indication of interest from any person with respect to any Acquisition
Proposal, (B) engage in negotiations with, or disclose any non-public
information relating to the Company or (C) afford access to the properties,
books or records of the Company to, any person that may be considering making,
or has made, an offer with respect to an Acquisition Proposal.
SECTION 5.04. NOTICE OF CERTAIN EVENTS. The Company shall promptly notify
Buyer of:
(i) any notice or other communication from any person alleging that
the consent of such person is or may be required in connection with the
Merger;
(ii) any notice or other communication from any governmental or
regulatory agency or authority in connection with the Merger; and
(iii) any actions, suits, claims, investigations or proceedings
commenced or, to the best of its knowledge threatened against, relating to
or involving or otherwise affecting the Company which, if pending on the
date of this Agreement, would have been required to have been disclosed
pursuant to Section 3.06 or which relate to the consummation of the Merger.
SECTION 5.05. CONFIDENTIALITY. The Company will hold, and will use its best
efforts to cause its officers, directors, employees, consultants, advisors and
agents to hold, in confidence, unless compelled to disclose by judicial or
administrative process or by other requirements of law, all confidential
documents and information concerning the Buyer and its subsidiaries furnished
to the Company in connection with the Merger, except to the
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extent that such information can be shown to have been (i) previously known on
a nonconfidential basis by the Company, (ii) in the public domain through
no fault of the Company, or (iii) later lawfully acquired by the Company
from sources other than Buyer; provided that the Company may disclose such
information to its officers, directors, employees, consultants, advisors
and agents in connection with the Merger so long as such persons are
informed by the Company of the confidential nature of such information and
are directed by the Company to treat such information confidentially. The
Company's obligation to hold such information in confidence shall be
satisfied if it exercises the same care with respect to such information as
it would exercise to preserve the confidentiality of its own similar
information. If this Agreement is terminated, such confidence shall be
maintained and the Company will, and will use its best efforts to cause its
officers, directors, employees, consultants, advisors and agents to,
destroy or deliver to the Buyer, upon request, all documents and other
materials, and all copies thereof, obtained by the Company or on its behalf
from the Buyer in connection with this Agreement that are subject to such
confidence.
SECTION 5.06. BOOKS AND RECORDS. The Company agrees that any of its books
and records which are not delivered to Buyer at the Closing shall be maintained
and made available to Buyer for a period of four (4) years following the
Closing, and thereafter the Company agrees to provide Buyer with 90 days'
advance notice of any destruction of such books and records and an opportunity
to remove or copy those to be destroyed.
SECTION 5.07. RULE 145 AFFILIATES. Prior to the Effective Time, the Company
shall identify all persons who are deemed to be "affiliates" of the Company for
purposes of Rule 145 under the 1933 Act (the "1933 Act Affiliates"). The
Company shall use its best efforts to cause each person who is identified as a
1933 Act Affiliate to enter into prior to the Effective Time an agreement
substantially in the form of Exhibit A to this Agreement.
ARTICLE VI
COVENANTS OF BUYER
Buyer agrees that:
SECTION 6.01. CONFIDENTIALITY. Buyer will hold, and will use its best
efforts to cause its officers, directors, employees, consultants, advisors and
agents to hold, in confidence, unless compelled to disclose by judicial or
administrative process or by other requirements of law, all confidential
documents and information concerning the Company furnished to Buyer in
connection with the Merger, except to the extent that such information can be
shown to have been (i) previously known on a nonconfidential basis by Buyer,
(ii) in the public domain through no fault of Buyer, or (iii) later lawfully
acquired by Buyer from sources other than the Company; provided that Buyer may
disclose such information to its officers, directors, employees, consultants,
advisors and agents, lenders and other investors in connection with the Merger
so long as such persons are informed by Buyer of the confidential nature of
such information and are directed by Buyer to treat such information
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confidentially. Buyer's obligation to hold any such information in confidence
shall be satisfied if it exercises the same care with respect to such
information as it would take to preserve the confidentiality of its own similar
information as if the Buyer were not a public company subject to SEC disclosure
and filing requirements. If this Agreement is terminated, such confidence
shall be maintained and Buyer will, and will use its best efforts to cause its
officers, directors, employees, consultants, advisors and agents to, destroy or
deliver to the Company, upon request, all documents and other materials, and
all copies thereof, obtained by Buyer or on its behalf from the Company in
connection with this Agreement that are subject to such confidence.
SECTION 6.02. OBLIGATIONS OF MERGER SUBSIDIARY. Buyer will take all action
necessary to cause Merger Subsidiary to perform its obligations under this
Agreement and to consummate the Merger on the terms and conditions set forth
in this Agreement.
SECTION 6.03. FORM S-3. As soon as practicable after the date hereof, but in
no event later than March 15, 1995, Buyer shall prepare and file with the SEC a
Registration Statement on Form S-3 with respect to the Merger and the resale of
the Buyer Stock, and/or any other securities constituting a part of the Merger
Consideration (the "Form S-3"), and shall use its best efforts to have the
Form S-3 declared effective by the SEC as soon as practicable
thereafter. The Form S-3 shall contain all information required under the 1933
Act and the applicable rules and regulations promulgated thereunder.
Exhibit "B" attached hereto and incorporated herein contains various
additional representations and agreements of Buyer concerning its filing and
registration with the SEC of the Form S-3 with regard to the Merger and Buyer
Stock.
SECTION 6.04. STOCK EXCHANGE LISTING. Buyer shall cause the shares of Buyer
Stock to be issued in connection with the Merger to be listed on the NYSE,
subject to official notice of issuance.
SECTION 6.05. NO ACTION. Buyer will not, and will not permit any of its
subsidiaries to (i) take any action, the taking of which, or omit to take any
action, the omission of which, would reasonably be expected to (a) affect
adversely the tax-free nature of the Merger, (b) affect adversely the treatment
thereof as a "pooling of interests" for accounting purposes, or (c) cause any
of the representations and warranties in Article IV to be inaccurate in any
respect at or as of any time prior to the Effective Time; or (ii) without
adjusting the Merger Consideration accordingly, declare, set aside or pay any
dividend or other distribution with respect to any shares of Buyer Stock,
except for regular quarterly dividends.
SECTION 6.06. Approval of the shareholders of Buyer shall not be required.
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ARTICLE VII
COVENANTS OF BUYER AND THE COMPANY
The parties hereto agree that:
SECTION 7.01. BEST EFFORTS. Subject to the terms and conditions of this
Agreement and to the fiduciary obligations of the Company's directors under
applicable law, each party will use all reasonable efforts to take, or cause to
be taken, all action and to do, or cause to be done, all things necessary,
proper or advisable under applicable laws and regulations to consummate the
Merger as soon as practicable after the satisfaction of the conditions set
forth in Article VIII hereof.
SECTION 7.02. CERTAIN FILINGS. The Company and Buyer shall cooperate with
one another (a) in connection with the preparation of the Form S-3, and (b)
in determining whether any other action by or in respect of, or filing with,
any governmental body, agency or official, or authority or any actions,
consents, approvals or waivers are required to be obtained from parties to any
material contracts in connection with the consummation of the Merger and (c) in
seeking any such actions, consensus, approvals or waivers or making any such
filings, furnishing information required in connection therewith or with the
Form S-3 and seeking timely to obtain any such actions, consents, approvals or
waivers. In the event that a filing is required under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, amended (the "Act"), each of the Company
and Buyer will make any and all filings required to be made on its part under
the Act. The Company and Buyer shall furnish to each other such necessary
information and reasonable assistance as the other may request in connection
with its preparation of the necessary filings or submissions under the
provisions of the Act, and copies of any proposed submission prior to filing.
Buyer agrees to pay any and all filing fees in connection with such filing and
any fees and expenses in obtaining such approval.
SECTION 7.03. PUBLIC ANNOUNCEMENTS. Buyer and the Company will consult
with each other before issuing any press release or making any public statement
with respect to this Agreement and the Merger and, except as may be required by
applicable law or any listing agreement with any national securities exchange,
will not issue any such press release or make any such public statement prior to
such consultation.
SECTION 7.04. FURTHER ASSURANCES. At and after the Effective Time, the
officers and directors of the Surviving Corporation will be authorized to
execute and deliver, in the name and on behalf of the Company or Merger
Subsidiary, any deeds, bills of sale, assignments or assurances and to take and
do, in the name and on behalf of the Company or Merger Subsidiary, any other
actions and things to best, perfect or confirm of record or otherwise in the
Surviving Corporation any and all right, title and interest in, to and under
any of the rights, properties or assets of the Company acquired or to be
acquired by the Surviving Corporation as a result of, or in connection with,
the Merger.
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ARTICLE VIII
CONDITIONS TO THE MERGER
SECTION 8.01. CONDITIONS TO THE OBLIGATIONS OF EACH PARTY. The obligations
of each of the Company, Buyer and Merger Subsidiary to consummate the Merger
are subject to the satisfaction of the following conditions:
(i) this Agreement shall have been adopted by the shareholders of
the Company in accordance with the California Law and the bylaws and
articles of incorporation of the Company;
(ii) any applicable waiting period under the HSR Act that may pertain
to the Merger shall have expired;
(iii) no provision of any applicable law or regulation and no
judgment, injunction, order or decree shall prohibit the consummation of
the Merger; and
(iv) all consents under agreements which are required shall have been
obtained.
SECTION 8.02. CONDITIONS TO THE OBLIGATION OF THE COMPANY. The
obligation of the Company to consummate the Merger is subject to the
satisfaction of the following further conditions:
(i) Buyer and Merger Subsidiary shall have performed in all material
respects all of their obligations hereunder required to be performed by
them at or prior to the Effective Time;
(ii) the representations and warranties of Buyer contained in this
Agreement and in any certificate or other writing delivered by Buyer
pursuant hereto shall be true and correct in all material respects at and
as of the date of this Agreement (except for representations and warranties
specifically relating to a time or times other than the date of this
Agreement which shall have been true and correct in all material respects at
such time or times), and as of the Effective Time as if made at and as of
such time;
(iii) the Company shall have received a certificate signed by an
officer of Buyer to the effect set forth in clauses (i) and (ii) of this
Section;
(iv) the Company shall have received all documents it may reasonably
request relating to the existence of Buyer and Merger Subsidiary and their
corporate authority for this Agreement, all in form and substance
satisfactory to the Company;
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(v) the Company shall have received an opinion of James W. Guedry,
Esquire, counsel to Buyer and Merger Subsidiary, in the form of Exhibit C
to this Agreement;
(vi) the Company shall have received an opinion from its tax counsel
or accountants to the effect that the Merger will constitute a tax-free
reorganization under the Code;
(vii) the NYSE shall have listed, subject to official notice of
issuance, the shares of Buyer Stock to be issued to the shareholders of the
Company pursuant to the Merger;
(viii) since the date hereof, there shall have been no material adverse
change in the condition (financial or otherwise), business or results of
operations of Buyer, taken as a whole;
(ix) all actions by or in respect of, or filings with, any
governmental body, agency, official or authority referred to in Section
3.03(a) or required to permit the consummation of the Merger, shall or have
been taken, made or obtained, and the Company shall have received, or be
satisfied that it will receive evidence of, such actions.
SECTION 8.03. CONDITIONS TO THE OBLIGATIONS OF BUYER AND MERGER SUBSIDIARY.
The obligations of Buyer and Merger Subsidiary to consummate the Merger are
subject to the satisfaction of the following further conditions:
(i) the Company shall have performed in all material respects all of
its obligations hereunder required to be performed by it at or prior to the
Effective Time;
(ii) the representations and warranties of the Company contained in
this Agreement and in any certificate or other writing delivered by the
Company pursuant hereto shall be true and correct in all material respects
at and as of the date of this Agreement (except for representations and
warranties specifically relating to a time or times other than the date of
this Agreement which shall have been true and correct in all material
respects at such time or times), and as of the Effective Time as if made
at and as of such time;
(iii) Buyer shall have received a certificate signed on behalf of the
Company by the President of the Company to the effect set forth in clauses
(i) and (ii) of this Section;
(iv) all actions by or in respect of, or filings with, any
governmental body, agency, official or authority referred to pursuant to
Sections 3.03(a) or required to permit the consummation of the Merger so
that the Surviving Corporation shall be able to continue to carry on the
business of the Company substantially in the manner
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now conducted shall have been taken, made or obtained and Buyer shall have
received or be satisfied that it will receive evidence of all such actions;
(v) Buyer shall have received an opinion of Tuttle & Taylor,
counsel to the Company, in the form of Exhibit D to this Agreement;
(vi) no court, arbitrator or governmental body, agency or official
shall have issued any order restraining or prohibiting the effective
operation of the business of the Company after the Effective Time and no
proceeding challenging this Agreement or seeking to prohibit, alter,
prevent or materially delay the Merger shall have been instituted and
be pending;
(vii) since the date hereof, there shall have been no material adverse
change in the condition (financial or otherwise), business, operations or
results of operations of the Company.
ARTICLE IX
TERMINATION
SECTION 9.01. TERMINATION. This Agreement may be terminated and the
Merger may be abandoned at any time prior to the Effective Time
(notwithstanding any approval of this Agreement by the shareholders of the
Company);
(i) by mutual written consent of the Company and Buyer;
(ii) by either the Company or Buyer, if there has been a material
misrepresentation or breach of warranty on the part of the other
party in the representations and warranties contained herein;
(iii) by either the Company or Buyer, if the Merger has not been
consummated by December 31, 1994; provided that no party may terminate this
Agreement pursuant to this clause if such party's failure to fulfill any of
its obligations under this Agreement shall have been the reason that the
Effective Time shall not have occurred on or before said date;
(iv) by either the Company or Buyer, if there shall be any law or
regulation that makes consummation of the Merger illegal or otherwise
prohibited or if any judgment, injunction, order or decree enjoining Buyer
or the Company from consummating the Merger is entered and such judgment,
injunction, order or decree shall become final and nonappealable;
(v) by Buyer, if any change has occurred since the date hereof which
has caused, or is reasonably likely to cause, a material adverse effect on
Company;
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(vi) by the Company, if any change has occurred since the date hereof
which has caused, or is reasonably likely to cause, a material adverse
effect on the Buyer.
SECTION 9.02. EFFECT OF TERMINATION. If this Agreement is terminated
pursuant to Section 9.01, this Agreement shall become void and of no effect
with no liability on the part of any party hereto, except that the agreements
contained in Sections 5.06 and 6.01 shall survive the termination hereof.
ARTICLE X
INDEMNIFICATION
SECTION 10.01. (a) For a period of one (1) year from the Closing, the
Company and the Trust agree to Indemnify and hold harmless Buyer from and
against any and all demands, claims, actions, assessments, damages,
liabilities, losses, costs and expenses (including but not limited to
reasonable attorneys' fees, interest and penalties) with respect to, or arising
out of, any misrepresentation, breach of warranty or nonfulfillment of any
covenant by the Company under this Agreement pertaining to the period up to the
Closing, including, without limitation, any misrepresentation in, or omission
from, any schedule, exhibit, written statement, certificate, report or other
document furnished or to be furnished to the Buyer pursuant to this Agreement.
Buyer shall have no right to recover for any and all breaches of the
representations, warranties and covenants of the Company contained herein until
the aggregate amount of the damages suffered by the Buyer from all such
breaches shall have exceeded the threshold amount of $50,000, in which case
Buyer may recover any amount of damages so suffered. In addition, Buyer
shall not assert any claim or commence any action for breach of any
representation, warranty or covenant contained herein, unless the amount of its
damage in respect of any such breach exceeds $5,000. In the event of any
successful claim asserting a breach of representation, warranty or covenant by
the Company which is required to be satisfied by the Company or the Trust
hereunder, the claim may be satisfied by delivery by the Company or the Trust to
the Buyer of shares of Buyer Stock in an amount equal to the result obtained by
dividing the amount of such damage by the Transaction Share Price used in
determining the number of shares of Buyer Stock delivered at Closing, or in
cash. Notwithstanding anything in the Agreement to the contrary, the maximum
indemnification shall be the Merger Consideration.
(b) If any claim is asserted by a third party against an Indemnified Party
that is claimed by it to be the basis for a right of indemnification pursuant
to this Article X, Indemnified Party shall promptly notify Indemnifying Party,
in writing, of such claim and whether or not it has elected to contest the
same. Indemnified Party may, but shall not be obligated to, contest the
claim, but if Indemnified Party elects to so contest the claim, Indemnifying
Party shall be permitted to participate on an equal basis in the contest at its
own expense. If Indenmified Party elects not to contest the claim, and if within
thirty (30) days after Indemnified Party has given Indemnifying Party written
notice of such claim Indemnifying Party shall have failed either to cause such
claim so asserted to be discharged
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or to notify Indenmified Party of Indemnifying Party's election to contest such
claim, then the full amount of such claim shall forthwith be conclusively held
to be covered by the indemnity provided in Section 10.01 or 10.02 hereof.
However, if Indemnifying Party notifies Indemnified Party in writing within
such thirty (30) day period that it disputes Indemnified Party's assertion that
such claim is the basis for indemnification, then the amount of such claim
shall not be payable, except when, after, and to the extent, it is determined
by the final judgment, unappealed and unappealable by failure to appeal or
otherwise, of a court of competent jurisdiction, or by the agreement of the
parties hereto, that such claim is the basis for indemnification. If
Indemnifying Party elects to contest any such claim and give proper notice
thereof, Indemnifying Party shall contest the claim at its own expense, shall
indemnify and hold harmless Indemnified Party from and against any liability,
loss, damage, cost or expense (including attorneys' fees) in connection with
such contest, including, without limitation, any loss by reason of any
attachment, execution, distraint, judgment, lien or other legal process.
Indemnity shall be deferred until thirty (30) days after the final
determination of any such contest by a final judgment, unappealed and
unappealable by failure to appeal or otherwise, of a court of competent
jurisdiction, or by the agreement of the parties hereto.
(c) At any time after the commencement of the defense by Indemnified Party
of any claim referred to in Section 10.01(b) hereof, Indemnifying Party may
request Indemnified Party in writing to abandon such contest or agree to the
payment or compromise by Indemnifying Party of the asserted claim, whereupon
such action shall be taken unless Indemnified Party determines to continue the
contest and so notifies Indemnifying Party in writing within thirty (30) days
following such written request. In such case, Indemnifying Party shall not be
liable under the provisions of Section 10.01 hereof for any excess of such
claim over and above the amount which the other party to the contest shall have
agreed in writing to accept in payment or compromise as of the time
Indemnifying Party made its request therefor to Indemnified Party.
(d) The time period in this Article X pertaining to indemnification
notwithstanding, the indemnification by Company and the Trust of Buyer for tax
audits, liens and liabilities shall be the shorter of the applicable statute of
limitations or one (1) year.
(e) Any claims by the Buyer against the Company or the Trust pursuant to
this Article X, shall be first satisfied out of the Buyer Stock that is the
subject of the Escrow as set forth in Article XI.
SECTION 10.02. For a period of one (1) year from the Closing, the Buyer
agrees to indemnify and hold harmless the Company, the Trust and the Trustee
from and against any and all demands, claims, action, assessments, damages,
liabilities, costs and expenses (including, but not limited to, reasonable
attorneys' fees, interest and penalties) with respect to, or arising out of,
any misrepresentation, breach of warranty or non-fulfillment of any covenant by
the Buyer or the Merger Subsidiary under this Agreement, including, without
limitation, any material misrepresentation in, or omission from, any schedule,
exhibit, written statement, certificate, report or other document, including,
but not limited to, Buyer's SEC reports, furnished or to be furnished to the
Company or the Trust pursuant to this
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Agreement. Notwithstanding the foregoing, (i) Buyer's indemnification and hold
harmless obligations with respect to its agreements, representations and
warranties pertaining to the Form S-3 shall not expire, and (ii) Buyer's
indemnification and hold harmless obligations with respect to any other covenant
to be performed by Buyer after the Closing shall not expire.
ARTICLE XI
The provisions of Sections 1.02, 1.03 and 1.05 of this Agreement
notwithstanding, Buyer shall hold in escrow (the "Escrow"), as trustee, a
number of shares of Buyer Stock having a value as of the Effective Time of Five
Million and 00/100 Dollars ($5,000,000.00) (and determined by dividing Five
Million and 00/100 Dollars ($5,000,000.00) by the Transaction Share Price),
from the Preliminary Merger Consideration to be exchanged, as an escrow against
the Company's representations and warranties in Article III, and as a non-
exclusive means of satisfying claims by Buyer against the Indemnification, as
set forth in Article X.
The Escrow shall be disbursed as follows:
(a) Six (6) months after the Closing, a number of Shares of Buyer Stock
having a value as of the Closing Date of Two Million and 00/100
($2,000,000.00) shall be payable to the Trust, less the amount of any
claims against the Escrow at that time agreed to by the parties, or that
Buyer otherwise is entitled to pursuant to Article X, in the manner
provided in Article X;
(b) Twelve (12) months after Closing, the remaining Shares of Buyer Stock
being held in Escrow shall be disbursed to the Trust, less any claims
agreed to by the parties, or that Buyer otherwise is entitled to pursuant
to Article X in the manner provided in Article X of this Agreement;
(c) Any and all dividends declared and paid on the Buyer Stock that is held
in Escrow shall be paid to the Trust, and not retained with the escrowed
Buyer Stock, and the Trust shall have the right to vote the Buyer Stock
that is held in Escrow;
(d) In determining the number of Shares of Buyer Stock to be released (less
claims), pursuant to subparagraph (a) of this Article XI, and for
determining the number of Shares of Buyer Stock represented by any claim
resolved in favor of the Buyer, the equivalent cash value of such claim
shall be divided by the Transaction Share Price and the Trust shall not
have the right to substitute collateral;
(e) The Shares of Buyer Stock to be held in Escrow shall be evidenced by a
certificate or certificates issued in the name of the Trust; and
(f) The Trust's right to receive escrowed shares of Buyer Stock shall not
be transferable except by operation of law.
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ARTICLE XII
MISCELLANEOUS
SECTION 12.01. NOTICES. All notices, requests and other communications to
any party hereunder shall be in writing (including by facsimile or similar
writing) and shall be given,
if to Buyer or Merger Subsidiary, to:
Thomas E. Costello, Vice President
International Paper Company
50 East RiverCenter Boulevard
Suite 700
Covington, KY 41011
Facsimile: (606) 655-2141
with a copy to:
John P. Fonzo, Esq.
International Paper Company
50 East RiverCenter Boulevard
Suite 700
Covington, KY 41011
Facsimile: (606) 431-4138
if to the Company, to:
Mr. William Close
Kirk Paper Company
7500 Amigos Avenue
Downey, CA 90242
with a copy to:
C. David Anderson, Esq.
Tuttle & Taylor
355 South Grand Avenue
Los Angeles, CA 90071-3101
Facsimile: (213) 683-0225
or such other address or facsimile number as such party may hereafter specify
for the purpose by notice to the other parties hereto. Each such notice,
request or other communication shall be effective (i) if given by facsimile,
when such facsimile is transmitted to the facsimile number specified in this
section and the appropriate answerback is received or (ii) if given by any
other means, when delivered at the address specified in this section.
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SECTION 12.02. SURVIVAL OF REPRESENSATIONS AND WARRANTIES. The
representations and warranties contained herein and in any certificate or other
writing delivered pursuant hereto shall survive the Effective Time for a
period of one (1) year (except for the shorter period specified in Section
10.01(d)), and thereafter no action shall be filed thereon. However, Buyer's
representations and warranties contained herein regarding the Form S-3 shall
not expire.
SECTION 12.03. AMENDMENTS; NO WAIVERS. (a) Any provision of this Agreement
may be amended or waived prior to the Effective Time if, and only if, such
amendment or waiver is in writing and signed, in the case of an amendment, by
the Company, the Trust, Buyer and Merger Subsidiary or in the case of a waiver,
by the party against whom the waiver is to be effective; provided that after
the adoption of this Agreement by the shareholders of the Company, no such
amendment or waiver shall, without the further approval of such shareholders,
alter or change (i) the amount or kind of consideration to be received in
exchange for any Shares of capital stock of the Company or (ii) any of the
terms or conditions of this Agreement if such alteration or change would
materially adversely affect the holders of any Shares of capital stock of the
Company.
(b) No failure or delay by any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any right to injunctive
relief.
SECTION 12.04. EXPENSES; FEES. All costs and expenses incurred in connection
with this Agreement, and the transactions contemplated hereby, will be paid by
the party incurring such costs and expenses. Such costs, fees and expenses
incurred on behalf of the Company, but remaining unbilled as of the Effective
Time, will be paid for by the Trust despite the bill or statement issuing in
the name of the Company, unless such costs, fees and expenses are reflected as
liabilities on the Closing Balance Sheet.
SECTION 12.05. SUCCESSORS AND ASSIGNS. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, provided that no party may assign, delegate
or otherwise transfer any of its rights or obligations under this Agreement
without the consent of the other parties hereto.
SECTION 12.06. GOVERNING LAW. This Agreement shall be construed in
accordance with and governed by the law of the State of New York except for
matters governed by California Law.
SECTION 12.07. COUNTERPARTS; EFFECTIVENESS. This Agreement may be signed in
any number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
This Agreement shall
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become effective when each party hereto shall have received counterparts hereof
signed by all of the other parties hereto.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective authorized officers as of the
day and year first above written.
INTERNATIONAL PAPER COMPANY
By: /s/ Thomas E. Costello
Name: Thomas E. Costello
Title: Vice President
IPK ACQUISITION CORP.
By: /s/ John P. Fonzo
Name: John P. Fonzo
Title: Assistant Vice-President
KIRK PAPER CORPORATION
By: /s/ William M. Close
Name: William M. Close
Title: Chief Executive Officer
KIRK PAPER, ARIZONA INC.
By: /s/ William M. Close
Name: William M. Close
Title: President
W. AND H. CLOSE LIVING TRUST
By: /s/ William M. Close
Name: William M. Close
Title: Trustee
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EXHIBIT 2(b)
<PAGE>
EXHIBIT 2(b)
AMENDED AND RESTATED
ASSET PURCHASE AGREEMENT
THIS AGREEMENT is made and entered into as of this 1st
day of December, 1994, by and between INTERNATIONAL PAPER
COMPANY, a New York corporation, with a principal place of
business at Two Manhattanville Road, Purchase, New York 10577,
on behalf of itself and its subsidiary International
Paper-Carpenter Acquisition Corp. (the "Subsidiary")
(International Paper Company and Subsidiary being collectively
referred to as "International Paper"), and CARPENTER PAPER
COMPANY ("Carpenter"), a Michigan corporation with its
principal place of business at 3710 Roger B. Chaffee Memorial
Blvd. S.E., Grand Rapids, Michigan 49548.
WHEREAS, Carpenter desires to sell to
International Paper and International Paper desires to purchase
from Carpenter, upon the terms and conditions set forth herein,
certain assets of Carpenter.
NOW, THEREFORE, in consideration of the premises
and promises herein set forth, the parties agree as follows:
ARTICLE I
THE TRANSACTION
1.1. Purchase of Certain Assets and Assumption of
Certain Liabilities. At the Closing, Carpenter will sell,
convey, transfer, assign and deliver to Subsidiary, upon the
terms and conditions set forth herein, all of its right, title
and interest in and to the "Assets" as defined in Paragraph
1.1(a) of this Agreement, and Subsidiary will, upon the terms
and conditions set forth herein, purchase and accept
Carpenter's right, title and interest in and to the "Assets,"
and Subsidiary agrees to pay therefore the Purchase Price
specified in Paragraph 1.2 of this Agreement. Subsidiary shall
also assume certain liabilities of Carpenter, as set forth in
Paragraph 1.1(b).
(a) As used herein, the term "Assets" shall
include the "Inventory," "Accounts Receivable"
(subject to limitations and indemnifications as set
forth in Paragraphs 1.2(a)(4) and 11.1 of this
Agreement), certain "Tangible Personal Property,"
"Intangible Property," and certain "Other Assets" (all
as hereinafter defined) of Carpenter, and shall
exclude only the assets of Carpenter listed on
Schedule l.l(a).
<PAGE>
(b) Subsidiary will also assume certain
liabilities (the "Liabilities") of Carpenter,
consisting of "Trade Accounts Payable," "Accrued
Liabilities," "Long-term Debt" and other specific
contractual liabilities of Carpenter, all as
hereinafter defined or specified in Paragraph 1.3
herein.
1.2. Purchase Price. The Purchase Price and full
consideration, to be paid for in shares of common stock of
International Paper Company ("Buyer's Stock") (the number of
which to be determined as provided in Paragraph 1.2(b)), shall
be the aggregate of the value of the Assets less the
Liabilities, as determined from an audited balance sheet of
Carpenter as of December 31, 1994 (the "Closing Balance
Sheet"), although the date of Closing (the "Closing Date") will
be after said date, or at such other time to be agreed to by
the parties, plus the sum of Four Million Five Hundred Thousand
and 00/100 Dollars ($4,500,000.00).
(a) Asset Value Determination. For purposes of
determining the Purchase Price, the value of the Assets shall
be determined as follows:
1. Inventory. A physical inventory shall be
taken prior to the Closing Date, and will be valued at
FIFO cost (replacement cost, consistent with
Carpenter's past practice), and adjusted for obsolete,
slow-moving and damaged inventory, based on the
Closing Balance Sheet, which shall reflect criteria to
be furnished by International Paper and approved by
Carpenter; provided, that customer-specific inventory
with a fixed sales price will be valued at cost (also
consistent with Carpenter's past practice). The
inventory amount in the Closing Balance Sheet will be
expressed at LIFO value plus LIFO reserve.
2. Tangible Personal Property as set forth in
Schedule 1.2(a)2 to this Agreement.
3. Intangible Property consisting of trademarks,
logos, trade names, customer list, trade name and
non-compete agreements from Carpenter Shareholders (as
hereinafter set forth in Paragraph 5.2(d)).
4. Accounts and Notes Receivable, in the
aggregate amount as shown on the Closing Balance Sheet
and at Schedule 1.2(a)(4) to this Agreement, less
allowance for doubtful accounts. At Paragraph 2.24 of
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this Agreement, Carpenter represents and warrants the
collectibility of Accounts and Notes Receivable, and
at Paragraph 11.6, agrees to indemnify International
Paper for uncollected Accounts and Notes Receivable.
5. Accrued and Prepaid Expenses, in the amounts
set forth on the books of Carpenter.
6. Other Assets, as set forth on Schedule
1.2(a)6.
7. Discounts. In the ordinary course of
Carpenter's business, discounts for prompt payment are
offered to customers by Carpenter ("Customer
Discounts"), and similarly discounts for prompt
payment are available to Carpenter from trade vendors
("Vendor Discounts"). For purposes of the Closing
Balance Sheet and the Purchase Price Balance Sheet,
Accounts Receivable and Accounts Payable will be
stated at their gross amounts (disregarding both
Customer Discounts and Vendor Discounts).
(b) Purchase Price Determination. The purchase
price shall be the aggregate of Assets, less Liabilities, plus
$4.5 million (the "Purchase Price"), and shall be payable in
the form of shares of International Paper Company common stock
("Buyer's Stock"). The number of shares of Buyer's Stock to be
delivered at Closing as the "Price," shall be determined by
dividing the Purchase Price by the average closing price of
Buyer's Stock on the New York Stock Exchange for a twenty (20)
day trading period ending three (3) trading days prior to the
Closing (the "Closing Price"). By way of example, if the
Purchase Price is $10.5 million and the Closing Price is $70,
the Price shall be 150,000 shares of Buyer's Stock. For
purposes of this paragraph, the shares of Buyer's Stock placed
in "Escrow" as set forth in Article XII shall be deemed
delivered at Closing.
Notwithstanding the preceding paragraph, if the
Closing Price is less than $70, the Price will be determined by
dividing the Purchase Price by $70 so that, in the example
provided above, regardless of the Closing Price, the Price
would never be more than 150,000 shares of Buyer's Stock.
Fractional shares shall not be exchanged, and any amount of the
Purchase Price not divisible evenly by the Closing Price shall
be paid in an additional share of Buyer's Stock.
(c) International Paper shall exchange for the
Assets registered shares of its common stock on the latter of
the Closing on the sale of the Assets or as soon thereafter as
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is practical after SEC approval of the share registration.
Unregistered shares (transfer restricted) shall be tendered if
registered shares are not available at the Closing, and shall
be exchanged for registered shares as soon as registered shares
are available, as set forth in the preceding sentence.
International Paper shall file for registration of shares to be
tendered promptly upon execution of this Agreement, and shall
take all actions necessary for the expeditious effectiveness of
the registration. In International Paper's discretion, the
filing may be deferred until no later than March 15, 1995 in
order to coordinate with other SEC filings of International
Paper. All cost of registering Buyer's Stock shall be borne by
International Paper.
1.3. Assumption of Certain Liabilities. At the
Closing, Subsidiary will assume Carpenter's Trade Accounts
Payable, as set forth in Schedule 1.3(1), in the amount set
forth on the Closing Balance Sheet, certain Accrued
Liabilities, as set forth in Schedule 1.3(2), also as shown on
the Closing Balance Sheet, and Long-term Debt, as shown on the
Closing Balance Sheet and as set forth in Schedule 1.3(3), and
the specified liabilities as set forth in Schedule 1.3(4). The
Purchase Price shall be reduced by the aggregate of the
Liabilities assumed by Subsidiary. Subsidiary's assumption of
Liabilities shall be updated through the Closing Date to
reflect the Liabilities shown on the Purchase Price Balance
Sheet as defined in Paragraph 1.4.
1.4. Purchase Price Payment. Notwithstanding
Paragraph 1.2 hereof, as it will be impossible to determine the
exact amount of the Purchase Price on the Closing Date, a
preliminary determination of the Purchase Price ("Preliminary
Purchase Price") will be made, based on the Closing Balance
Sheet. Ninety percent (90%) of the Closing Balance Sheet, plus
the $4.5 million, shall be tendered in Buyer's Stock (as
determined pursuant to Paragraph 1.2) at the Closing. The
parties shall determine the actual Purchase Price based on an
unaudited balance sheet representative of activities and
financial operations of Carpenter for the period January 1,
1995 to the Closing Date, prepared on a basis consistent with
the Closing Balance Sheet and this Agreement. The unaudited
balance sheet, for purposes of determining the Purchase Price
(the "Purchase Price Balance Sheet") shall be made available as
soon after the Closing Date as is practicable and, in no event,
later than thirty (30) days after the Closing Date. If the
Purchase Price, as finally determined from the Purchase Price
Balance Sheet, is more than the Preliminary Purchase Price,
International Paper shall immediately pay, in shares of Buyer's
Stock, the difference between the Preliminary Purchase Price
and the Purchase Price. If the Purchase Price is less than the
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Preliminary Purchase Price, International Paper shall withhold
from the remainder of the Preliminary Purchase Price not paid
on the Closing Date, the difference between the Preliminary
Purchase Price and the Purchase Price. In the event that the
difference exceeds the portion of the Preliminary Purchase
Price retained by International Paper on the Closing Date,
Carpenter shall tender to International Paper the number of
shares of Buyer's Stock equal to the difference. In the event
of any disagreement regarding the Purchase Price Balance Sheet,
the matter shall be referred to the firm of Ernst & Young,
whose determination shall be conclusive.
1.5. Open Orders. Subsidiary shall assume all
unfilled vendor purchase orders (including purchase orders for
goods in transit on the Closing Date), and all unfilled
customer sales orders, entered into by Carpenter in the
ordinary course of business prior to the Closing. Such
assumption of open orders will not affect the Purchase Price
hereunder, to the extent not reflected in the Closing Balance
Sheet.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF CARPENTER
To induce International Paper to enter into and
perform its obligations under this Agreement, Carpenter
represents and warrants to International Paper as follows: each
of which representations and warranties Carpenter covenants
shall be true at the Closing:
2.1. Organization. Carpenter is a corporation duly
organized, validly existing and in good standing under the laws
of Michigan and has all requisite corporate power and authority
to own, operate and lease its properties and to carry on its
business substantially as it is being conducted on the date
hereof. Carpenter is qualified to do business as a corporation
in the state of Indiana, and there are no other jurisdictions
in which Carpenter is required to be so qualified. The
certified copies of the Certificate of Incorporation and the
Bylaws of Carpenter, as amended to the date hereof, and which
have been furnished International Paper, are true and correct.
The Articles of Incorporation and Bylaws of Carpenter are in
full force and effect, unamended since the respective dates of
such certifications. The minute books of Carpenter contain
complete and accurate records of all corporate actions,
including a resolution of the Board of Directors of Carpenter
authorizing the transactions contemplated by this Agreement,
including actions taken at meetings, or by written consents in
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lieu of meetings, by the Board of Directors and any committee
of the Board of Directors purporting to take formal corporate
action in lieu of action by the Board of Directors and of the
shareholders of Carpenter, and accurately reflect all
transactions which are required by law to be passed upon by the
Board of Directors, any committees thereof or the shareholders
of Carpenter.
2.2. Validity. This Agreement constitutes the legal,
valid and binding obligation of Carpenter and is enforceable
against Carpenter in accordance with its terms. All corporate
action on the part of Carpenter necessary for the execution and
delivery of this Agreement and consummation of all transactions
contemplated hereunder has been effected. No approvals,
filings or notifications are required under any statutes,
governmental regulations or agreements (except loan agreements
as to which consents will have been received prior to Closing)
to which Carpenter is a party in order to and as a condition to
closing on the transaction contemplated by this Agreement,
except as acquired by the Hart-Scott-Rodino Premerger
Notification Act.
2.3. Tangible Personal Property. The schedule of
Tangible Personal Property attached hereto as Schedule 1.2(a)2
generally describes the items of tangible personal property to
be acquired by International Paper. Schedule 1.2(a)2 describes
the material items of tangible personal property (except
Inventory held for sale) and its location, owned, rented,
leased or used by Carpenter. With respect to each item of
Tangible Personal Property owned or leased by Carpenter,
whether material to Carpenter's business or not, Schedule 2.3
to this Agreement lists each lien, encumbrance, or security
arrangement, the holder thereof and the amount and repayment
terms of any debt or obligation which such lien, encumbrance,
title retention or security arrangement secures. With respect
to each item of Tangible Personal Property leased or rented by
Carpenter, Schedule 2.3 lists the type and quantity, of such
property, the lessor, the date and term of the lease or rental
agreement, the amount of rent payable (including escalations)
and renewal and purchase options, if any. Each lease or other
instrument referred to on Schedule 2.3 is in full force and
effect and constitutes a legal, valid and binding obligation of
Carpenter and the other parties thereto, enforceable in
accordance with its terms. Each item of Tangible Personal
Property owned or leased by Carpenter is presently in operating
condition, except as disclosed in Schedule 2.3. Subject to the
foregoing sentence, all Tangible Personal Property will be
delivered at the Closing in its present condition "AS-IS",
WHERE IS".
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2.4. Inventory. All Inventory of Carpenter, except
for such items of Inventory identified in Schedule 1.2(a)1 as
slow-moving, obsolete, outdated or damaged, are of good and
merchantable quality. Carpenter further represents that as of
the Closing, all Inventory of Carpenter shall be free and clear
of any encumbrances, and, except as so identified on Schedule
1.2(a)1 shall be saleable in the ordinary course of business by
International Paper subsequent to the Closing. The Inventory
shall be accurate and complete as of the Closing Balance
Sheet. The quantities and each type of Inventory are not
excessive, but are at reasonable levels in the present
circumstances of Carpenter, and are consistent with relevant
past practices.
2.5. Real Property. The schedule of Real Property
attached hereto as Schedule 2.5 and incorporated herein by
reference, sets forth a complete list and summary description,
including location, of all buildings and real property occupied
by Carpenter. With respect to each such property owned by
Carpenter, Schedule 2.5 lists each lien, encumbrance, title
retention or security arrangement, the holder thereof and the
amount and repayment terms of any debt or obligation which such
lien, encumbrance, title retention or security arrangement
secures, if any, except for liens for current taxes not yet due
and payable. Except as disclosed in Schedule 2.5, there are no
notices or claims made by governmental authorities of any
violations relating to any building occupied or used by
Carpenter, or the operations of Carpenter, of any applicable
law, ordinance, code or regulation. Carpenter is not in
default of any of the provisions of the leases which are set
forth in Schedule 2.5.
2.6. Financial Information. Carpenter has delivered
or will deliver to International Paper or its agents the
following documents and information which constitute true and
correct statements as of such dates of the financial condition
of Carpenter and of its Assets, Liabilities and income:
(a) Audited financial statements for the years
ended December 31, 1991, 1992 and 1993, copies of which are
attached hereto as Schedule 2.6(a) and incorporated herein by
reference;
(b) Unaudited financial statements for the
period ending September 30, 1994, copies of which are attached
as Schedule 2.6(b) and incorporated herein by reference;
(c) The Closing Balance Sheet, prepared in
accordance with the requirements of this Agreement, will be
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furnished as soon as the same is completed, and prior to
January 23, 1995;
(d) An unaudited balance sheet as of the Closing
Date (the "Purchase Price Balance Sheet");
The financial statements of Carpenter included in
such documents have been prepared in accordance with generally
accepted accounting principles ("GAAP") applied on a consistent
basis (except for Inventory which shall be represented as set
forth in Paragraph 1.2(a)1), and represent fairly the financial
position of Carpenter as of the dates thereof and the results
of its operations for the periods then ended. The Closing
Balance Sheet and the Purchase Price Balance Sheet shall be
prepared on a basis consistent with such Carpenter financial
statements.
2.7. Conduct of Carpenter Since Date of Last Audited
Annual Financial Statement. Except as disclosed in Schedule
2.7 attached hereto and incorporated herein by reference,
Carpenter has not since December 31, 1993:
(a) Mortgaged, pledged or subjected to lien or
encumbrance any of its properties or assets beyond that
disclosed in Schedules hereto;
(b) Sold or transferred any of its assets,
tangible or intangible, except in each case in the ordinary and
usual course of business;
(c) Incurred any extraordinary losses or
incurred or become liable for any obligations or liabilities
except current liabilities incurred in the ordinary and usual
course of business, or made any extraordinary expenditures
other than for additions and betterments to existing plant,
equipment, and facilities;
(d) Incurred any material adverse change in the
condition (financial or otherwise), of its assets, equity,
liabilities, earnings or business, taken as a whole;
(e) Incurred any damages to, or destruction or
loss of, any of its properties to the extent of more than
$50,000 (whether or not covered by insurance);
(f) Experienced any labor interruption or labor
dispute;
(g) Given to any person or organization for any
purpose any power of attorney which is currently in effect,
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except for purposes of submission of retirement plans for IRS
approval;
(h) Conducted its business in other than the
ordinary and usual course, consistent with past practices;
(i) made any change in, or applied for approval
of any change in, any method of accounting or accounting
practice or policy used by it;
(j) Written down or written up the value of any
Inventory, or written off as uncollectible any Account
Receivable, except for write-downs, write-ups and write-offs in
the ordinary course of business, consistent with past practice;
nor
(k) Disposed of or permitted to lapse any item
of Intangible Property used by Carpenter or in which Carpenter
has any rights, except in the ordinary course of business,
consistent with past practice.
2.8. Liabilities. Carpenter has no liabilities,
contingent or otherwise, beyond those reflected in Schedule
1.3(4), and the financial statements attached as Schedules
2.6(a) or 2.6(b), other than current liabilities incurred in
the ordinary and usual course of business since December 31,
1993.
There is no liability associated with the Long-term
Debt of Carpenter that International Paper is agreeing to
assume in Article I of this Agreement, in the nature of
prepayment penalties, fees or expenses, upon assumption or
payment.
2.9. No Defaults. There is no material default
under, and no event has occurred which, to the knowledge of
Carpenter, with notice or lapse of time or both, would give
rise to a default under, any material instrument binding upon,
or other agreement or obligation of Carpenter. All material
agreements to which Carpenter is a party are in full force and
effect, without material default by Carpenter.
2.10. No Breach. The execution of this Agreement and
consummation of the transactions contemplated hereby will not
result in the breach of any of the unwaived terms, conditions
or provisions of, nor constitute a default under, any
indenture, agreement or other instrument to which Carpenter is
a party or by which Carpenter may be bound or affected, which
default or breach will restrict the ability of Carpenter to
consummate the transactions contemplated hereby, adversely
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affect the business of Carpenter, nor give any person the right
to declare a default or exercise any remedy under, or to
accelerate the maturity or performance of, or cancel, eliminate
or modify, any written contract (or oral contract disclosed in
writing to International Paper) to be assigned to International
Paper at the Closing, nor result in a violation by Carpenter of
any state, local or other law, regulation, judgment, order or
rule.
2.11. Absence of Proceedings. No action or
proceeding has been instituted against Carpenter or any of the
shareholders of Carpenter (the "Shareholders") before any court
or other governmental body by any person or public authority
seeking to restrain or prohibit the execution and delivery of
this Agreement or the consummation of the transactions
contemplated hereby.
2.12. Brokers Fee. Carpenter represents and warrants
to International Paper that any fee or commission in the nature
of a finder's or originator's fee incurred by Carpenter in
connection with the transaction described herein shall be for
the account of Carpenter, but shall not be reflected in the
Closing Balance Sheet. Carpenter has dealt with only two (2)
representatives, R. A. Reeves and The Robinson-Humphrey
Company, Inc., and shall be solely responsible for payment of
any fees or expenses incurred in connection with the
transaction which is the subject of this Agreement. Carpenter
disputes any claim by The Robinson-Humphrey Company, Inc. and
shall indemnify International Paper against any liability
therefor.
2.13. Intangible Property. The schedule of
Intangible Property attached hereto as Schedule 2.13 lists all
trademarks, service marks, trade names, copyrights and patents
and computer system(s) which are owned, held, claimed or used
by Carpenter and each registration, application license, grant
or other right or agreement to which Carpenter is a party with
respect to the use of any trademark, trade name, service mark,
copyright or patent pertaining to Carpenter. As to each such
item of Intangible Property, Schedule 2.13 also describes any
license or other agreement with respect to such property to
which Carpenter is a party, the identity of any other party to
such license or agreement, the term (including renewal
options), and license fees, royalties and all other periodic
and non-periodic payments due thereunder (including any
escalations and variations in such fees, royalties or other
payments). Except as disclosed in Schedule 2.13, Carpenter:
(i) has received no notice whereby any third party claims any
rights in any trademarks, service marks, trade names,
copyrights, patents, trade secrets, and unpatented technology
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(the "Intangible Property") owned, held, claimed or used by
Carpenter; (ii) does not use any Intangible Property by consent
of any other person; (iii) is not required to, and does not,
make any payments to others with respect thereto; (iv) to the
best of Carpenter's knowledge, owns or possesses adequate
licenses or other rights to use all Intangible Property used in
the conduct of its business as now operated; and (v) has not
been notified, advised of or threatened with any claim of any
other person relating to any Intangible Property or any process
or confidential information of Carpenter. Carpenter has no
knowledge of any basis for any charge or claim that would
adversely affect its right to use any Intangible Property.
2.14. Agreement and Contracts. The schedule of
Agreements and Contracts attached hereto as Schedule 2.14 sets
forth a list of each contract, agreement, lease, option,
instrument, obligation or commitment to which Carpenter is a
party (the "Agreements"), other than: (i) contracts for the
purchase of inventory or services, the aggregate purchase price
under any one of which does not exceed $250,000, and under all
of which do not exceed $1,000,000 per vendor; and (ii)
contracts for the sale of inventory or services, the aggregate
sales price under any one of which does not exceed $250,000,
and under all of which do not exceed $1,000,000 per customer;
and (iii) real estate leases, which are listed on Schedule
2.5. Schedule 2.14 specifies the type of Agreement, the name
and address of each party to such Agreement, a detailed
description of the subject matter, the effective date and term,
dollar value and renewal options, if any. Each Agreement
listed in Schedule 2.14 is in full force and effect,
constitutes a legal, valid and binding obligation of Carpenter
and of the other parties thereto, enforceable in accordance
with its terms. Carpenter is not in default and, to the best
of its knowledge, no other party is in default under any such
Agreement, and no party to any such Agreement has given notice
to any other party thereto that the latter is in default
thereunder.
2.15. Customers and Suppliers. The schedule of
Customers and Suppliers attached hereto as Schedule 2.15 sets
forth, for the period ended December 31, 1993: (i) the name,
address and aggregate revenues from each customer of Carpenter
that accounted for revenues from the sale of products or the
lease or rental of equipment exceeding $250,000 per annum, and
(ii) the name, address and aggregate purchases from each
supplier of goods or services to Carpenter from which aggregate
purchases exceeded $1,000,000 per annum. Except as set forth
in Schedule 2.15, revenues from each such customer and
purchases from each such supplier are consistent with
Carpenter's prior year, and Carpenter has not received notice
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of intent to terminate any contracts or orders with any
customer or supplier listed on Schedule 2.15.
2.16. Employee Benefits. The schedule of employee
pension plans and employee welfare plans and other plans
attached as Schedule 2.16 is a true, correct and complete
listing of:
(a) All "employee pension benefit plans," as
such term is defined in Section 3 of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA") ("Pension
Plans"), maintained by Carpenter, or in which employees of
Carpenter participate, including any such plans as have been
terminated or with respect to which an application regarding
termination is pending. With respect to such plans:
(i) Current copies of all such plan documents,
summary plan descriptions thereof and related trust
agreements have been furnished to International Paper;
(ii) Such plans and trusts are qualified under
Section 401(a) of the Internal Revenue Code of 1986,
as amended (the "Code"), and nothing has occurred
which would adversely affect the qualified status of
the Pension Plans. A copy of the most recent Internal
Revenue Service ("IRS") determination letter issued
for each such plan and trust has been furnished to
International Paper;
(iii) All government reporting requirements with
respect to such plans have been satisfied and are
current;
(iv) A copy of the two most recent Forms 5500
(which state such plans' assets and liabilities and
current actuarial valuations), as filed with the IRS,
together with all attachments thereto for each plan,
has been furnished to International Paper.
(v) All Pension Plans are fully funded on an
ongoing basis in accordance with their respective
terms, as of the date of Closing. There has been no
misstatement of pension liabilities that would result
in the imposition of tax under law or code. Carpenter
is not aware of any claim that any representations,
oral or written, with respect to participation,
eligibility for benefits, vesting, benefit accrual or
coverage under any Plan have been made to employees of
Carpenter which are not in accordance with the terms
and conditions of such Plan.
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(vi) Neither any of the plans or trusts, nor any
trustee or administrator thereof, has engaged in a
transaction which might subject any of the plans,
trusts, or any trustee or administrator thereof, or
any party dealing with the plans or trusts, to a tax
penalty on prohibited transactions imposed by Section
4975 of the Code or to a civil penalty imposed by
Section 502 of ERISA;
(vii) All plans which have been completely or
partially terminated since September 2, 1974 are
listed in Schedule 2.16;
(viii) None of the plans or trusts referred to
or included in Schedule 2.16 has incurred any
"accumulated funding deficiency," as such term is
defined in Section 412 of the Code, whether or not
waived; and
(ix) Carpenter has contributed to the Central
States Southeast and Southwest Areas Pension Fund
("Union Plan"), which is a "Multiemployer Plan," as
defined in Section 3(37) of ERISA, but has not
withdrawn from any plan in a complete withdrawal
within the meaning of Section 4203 of ERISA or a
partial withdrawal within the meaning of Section 4205
of ERISA, nor will Carpenter withdraw from any such
plan prior to Closing. Except for the Union Plan,
Carpenter has not contributed to any "Multiemployer
Plan." The consummation of the transaction
contemplated by this Agreement will constitute a
complete withdrawal by Carpenter from the Union Plan.
With respect to the Union Plan, the representations
made in subsection (i) through (viii) and A through G
of this Section 2.16 are to the best of Carpenter's
knowledge, after review of available documentation,
which will be delivered to International Paper
promptly. See Section 13.7 for provisions regarding
withdrawal liability with respect to the Union Plan.
(b) All "employee welfare benefit plans," as
such term is defined in Section 3 of ERISA ("Welfare Plans"),
whether insured or otherwise. All such Plans are in material
compliance with the provisions of ERISA, and current copies of
such Plans have been furnished to International Paper, together
with copies of the two most recent Forms 5500 for each Plan.
(c) All vacation and other employee benefit
plans or policies not subject to ERISA (the "Other Plans")
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maintained by Carpenter, whether or not formally designated as
a plan.
Carpenter further represents as to Employee Benefits:
(A) There are no pending, anticipated or
threatened claims against or otherwise involving any
of Carpenter's Welfare Plans or Pension Plans or Other
Plans, or any fiduciary thereof, by or on behalf of
the Welfare Plans or Pension Plans or Other Plans by
any employee or beneficiary covered under the Welfare
Plans or Pension Plans or Other Plans, or otherwise
involving the Welfare Plans or Pension Plans or Other
Plans (other than routine claims for benefits). There
is no judgment, decree, injunction, rule or order of
any court, governmental body, commission, agency or
arbitrator outstanding against or in favor of any
Welfare Plan or Pension Plan or Other Plans or any
fiduciary thereof.
(B) Welfare Benefits. Carpenter shall be
responsible for any medical, dental, or
hospitalization benefits, life insurance, disability,
workers compensation and other claims (collectively
"Welfare Claims") incurred by former or present
employees of Carpenter, whether or not hereafter
employed by International Paper, arising from events
(injury or occurrence) prior to the effective time of
the Closing; provided, that International Paper shall
administer (for the account of Carpenter) legally
required COBRA benefits with respect to the Carpenter
Employee Health Plan to any former employees of
Carpenter who are entitled to such benefits by law;
and provided, further, that in the case of illness of
an employee hired by International Paper (or a
dependent of such employee) which spans the Closing
Date, Carpenter shall be responsible for costs
incurred up to the Closing Date and International
Paper shall be responsible for costs incurred on and
after the Closing Date. Carpenter shall maintain its
current medical, dental, hospitalization, survivor
benefit, life insurance, disability and workers'
compensation plans through the Closing.
(C) Collective Bargaining Agreements. Carpenter
represents that, except as otherwise disclosed to
International Paper in Schedule 2.16(C) attached
hereto and incorporated herein, it is not a party to
any collective bargaining agreement and that its
employees are not covered by any such agreement. Since
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January 1, 1992, there has not been, and there is not
presently pending or existing, any strike, slowdown,
picketing, work stoppage, labor arbitration or
proceeding (other than routine matters in the ordinary
course of business) in respect of the grievance of any
employee, an application or complaint filed by an
employee or union with the National Labor Relations
Board or comparable government body, organizational
activity or other labor dispute against or affecting
Carpenter, and no application for certification of
collective bargaining agent is pending or threatened.
No facts or circumstances exist which could provide
the basis for any work stoppage or other labor
dispute. There is no lockout of any employees by
Carpenter, or is any such action contemplated.
Carpenter has complied in all material respects with
all legal requirements relating to employment, equal
employment opportunity, nondiscrimination,
immigration, wages, hours, benefits, collective
bargaining, the payment of occupational and similar
taxes, social security taxes, occupational safety and
health, profit sharings and plant closing laws.
(D) Former, Severed or Retiring Carpenter
Employees. Carpenter has made full disclosure to
International Paper of the nature and extent of any
medical expenses it currently anticipates incurring
for its employees, or their dependents. Carpenter
does not provide and has not provided benefits,
including, without limitation, death or medical
benefits (whether or not insured), with respect to
current or former employees of Carpenter, beyond
retirement or other termination of service, other than
retirement benefits, COBRA-mandated health
continuation benefits, and continued medical benefits
required by the Union Contract. International Paper
shall have no obligation to pay severance or any other
consideration respecting retired Carpenter employees,
Carpenter employees on long-term disability, or
employees of Carpenter.
(E) Carpenter does not maintain for Carpenter
employees any pension plan or similar retirement plan
outside the United States.
(F) Employees. Schedule 2.16(G) contains a
current list setting forth the following information
for each employee of Carpenter including, without
limitation, each employee on leave of absence or
layoff status: name; job title; current compensation
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paid or payable and showing any change in compensation
since December 31, 1993; vacation accrued and service
credited for purposes of vesting and eligibility to
participate under Carpenter's pension, retirement,
profit sharing, thrift-savings, cash bonus, employee
stock ownership, insurance, medical, welfare and
vacation plans. There is no "employee benefit plan",
as defined in Section 3(3) of ERISA which (i) is
subject to any provision of ERISA, and (ii) is
maintained, administered or contributed to by
Carpenter and covers any employee or former employee
of Carpenter or under which Carpenter has any
liability which has not, as of the date hereof, been
disclosed to International Paper.
(G) Carpenter has or will have, prior to
Closing, contributed or accrued all amounts required
to be contributed to the Plans and Pension Plans, for
periods up to the Closing. International Paper shall
assume such accrued liability as provided in Paragraph
1.3 and as set forth in Schedule 1.3(2).
2.17. Litigation. Except as disclosed in Schedule
2.17, no suit, action or legal, administrative, arbitration or
other proceeding, or investigation by any governmental agency,
pertaining to the business and assets of Carpenter including,
but not limited to, matters involving safety, or health
standards, or products liability or product safety, or any
change in the zoning or building ordinances affecting the
properties or leasehold interest of Carpenter is pending or
threatened against Carpenter which would materially and
adversely affect the financial condition or business of
Carpenter, its properties and assets, or the conduct of
Carpenter's business; Carpenter is not, to its knowledge, in
violation of any federal, state or local statutes, ordinances
or regulations, including, but not limited to, those relating
to safety, building, product safety or health standards, the
violation of which would have a material adverse effect on the
financial condition or assets of Carpenter.
2.18. Taxes. Carpenter has duly filed, caused to be
filed or will file when due, all income, ad valorem, property,
sales and use, and all other tax returns and tax reports
required by law to be filed by it when due and has duly paid
all taxes reflected as payable on such returns and reports. No
proceeding or other action is pending or threatened for the
assessment or collection of additional taxes. No deficiency
for any tax has been asserted or assessed against Carpenter.
Carpenter is not currently subject to any outstanding federal,
state or local tax audit or investigation, and Carpenter has no
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notice of any such assessment, audit or investigation of
Carpenter. All taxes and other assessments and levies which
Carpenter is required by law to withhold or collect have been
duly withheld and collected, and have been paid over to the
proper governmental authorities or are held by Carpenter for
such payment, and all such withholdings and collections and all
other payments due in connection therewith as of September 30,
1994, are duly reflected in the financial statements of
Carpenter as of September 30, 1994, to the extent required to
be reflected therein, pursuant to GAAP. Carpenter has not
received any notice of any tax deficiency outstanding, proposed
or assessed against it, nor has Carpenter executed any waiver
of any statute of limitations on the assessment or collection
of any tax. All tax liabilities of Carpenter for any period
after September 30, 1994 have been provided for on the books of
Carpenter consistent with past practices. Carpenter shall
accurately accrue for payroll taxes through the Closing.
Except as disclosed on Schedule 2.18:
(i) Carpenter has no interest in real property
in the State of New York;
(ii) none of the property owned or used by
Carpenter is subject to a tax benefit transfer lease
executed in accordance with Section 168(b) of the
Internal Revenue Code of 1986, as amended (the "Code");
(iii) none of the property owned by or used by
Carpenter constitutes "tax-exempt use property" within
the meaning of Section 168(h) of the Code;
(iv) Carpenter is not currently under any
contractual obligation to indemnify any other person
with respect to any and all taxes;
(v) Carpenter will not be required (a) as a
result of a change in method of accounting for any
period prior to the Closing, to include any adjustment
under Section 481(c) of the Code in taxable income for
any period after the Closing; or (b) as a result of
any closing agreement as defined in Section 7121 of
the Code to include any item of income or exclude any
item of deduction from any taxable period after the
Closing.
(vi) Carpenter has not entered into a
transaction that requires an effective protective
carryover basis election pursuant to Section 338 of
the Code with respect to all transactions where an
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affirmative action carryover Section 338 election
could be applicable; and
(vii) Carpenter is not subject to withholding
under Section 1445 of the Code with respect to any
transfer of any "United States real property interest."
(viii) No property of Carpenter is subject to
any arrangements (including, but not limited to, a
lease) whereby ownership of such property has been
transferred, for tax purposes, to another person,
under provisions of any applicable law.
Notwithstanding the duration of the indemnification
set forth in Article XI hereof, the representations and
warranties set forth in Section 2.17 shall survive for the
longer of the statute of limitations applicable to the subject
matter of the representation and warranty, or for two (2) years.
2.19. Trade Names of Carpenter Paper Company.
Carpenter has, and shall have at Closing, the legal right to
conduct business as "Carpenter Paper Company" and any other
name by which it currently does business, and is not aware of
the right of any other entity to operate under those
designations, styles, or names, and represents that
International Paper shall at Closing obtain all of Carpenter's
rights to use said names; and further warrant and represent
that neither Carpenter nor its Shareholders shall, after the
date of Closing use, attempt to use, or do business under, the
name "Carpenter Paper Company," or any other name under which
it presently does, or within three (3) years prior to this
Agreement, did business, and shall, prior to or at Closing,
assign the name to International Paper.
2.20. Carpenter Logo and Trademarks. Carpenter has
the legal right to use the Carpenter Paper Company "logo," and
the same is an Asset to be acquired by International Paper
pursuant to this Agreement, and Carpenter further warrants and
represents that neither Carpenter, nor its shareholders shall,
after the date of Closing, use, or attempt to use, the
Carpenter Paper Company "logo."
2.21. Environmental Compliance.
(a) To the best of its knowledge after
reasonable inquiry, Carpenter has complied with and is
currently in compliance with, and has not been charged with,
has not received any notice of and is not under investigation
for its failure to comply with, any statute, law, ordinance,
rule, regulation, order or directive of any governmental agency
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with respect to the use, generation, dumping, releasing,
burying, disposing, or emitting of any particles, materials,
substances or emissions that are determined by any governmental
agency to be of a hazardous, toxic, pollutive or ecologically
or environmentally damaging nature ("Hazardous Materials")
pertaining to its businesses, its assets, its real (owned or
leased) or personal property, or the operation or conduct
thereof. Carpenter has not and, to the best of its knowledge
after reasonable inquiry, no other person ever has, disposed of
any Hazardous Materials at any of the real property owned or
leased by it regardless of whether such material or substances
constituted Hazardous Materials at such time of disposal.
(b) For purposes of this Agreement, the term
"Hazardous Materials" shall include those materials or
substances defined as "hazardous substances," "hazardous
materials," "hazardous waste," "toxic substances" or other
similar designations under the environmental laws and
regulations of the United States.
(c) Each hazardous waste transporter and
disposal facility that has transported and disposed of any
Hazardous Materials on behalf of Carpenter is listed on
Schedule 2.22, attached hereto and incorporated herein by
reference and, to the best of the knowledge of Carpenter was
properly licensed at such time of transportation or disposal
and properly transported or disposed of such Hazardous
Materials at a licensed facility. All manifests required by
any and all of the statutes, laws, ordinances, rules,
regulations, orders and directives of any governmental agency
to be completed and retained by Carpenter in connection with
each such instance of transportation were so completed and
retained, and copies thereof are provided in Schedule 2.22.
(d) To the best of the knowledge of Carpenter
after reasonable inquiry, none of the real property owned or
leased by Carpenter is or has ever been listed on any federal
or state registry, list or report of active or inactive
hazardous waste disposal sites.
2.22. Insurance. Attached hereto as Schedule 2.22
and incorporated herein by reference is a list, complete and
correct in all material respects, of all insurance policies and
fidelity bonds covering the assets, business, equipment,
properties, operations, employees, officers and directors of
Carpenter. Except as set forth on Schedule 2.23, there are no
material claims pending under any such policies or material
disputes with underwriters, and all premiums due and payable
have been paid. There are no pending or threatened
terminations with respect to any such policies and Carpenter is
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in compliance in all material respects with all conditions
contained therein. All such policies are in full force and
effect.
2.23. Accounts and Notes Receivable. All of the
Accounts and Notes Receivable to be reflected in the Closing
Balance Sheet, or that have arisen since such date, arose in
the ordinary and usual course of business, will represent valid
obligations to Carpenter, and have been collected or are or
will be collectible in each case in the aggregate amounts
thereof recorded on the books of Carpenter, except to the
extent of the allowance for doubtful accounts included in the
Closing Balance Sheet. There is no valid defense or setoff to
Carpenter's rights to collect such Accounts and Notes
Receivable in the full recorded amounts thereof, less such
reserves, and none of such Accounts or Notes Receivable are
payable or will be paid by credits, except for credits which
are duly reflected in Carpenter's accounts receivable records
(and netted against accounts receivable). With respect to
Accounts and Notes Receivable of Carpenter, whether listed on
Schedule 1.2(a)(4) or not, none of such Accounts and Notes
Receivable of Carpenter is subject to counterclaims or setoffs,
and all of such Accounts and Notes Receivable are good and
collectible at the aggregate thereof (net of cash discounts)
recorded on Carpenter's books. Any Accounts and Notes
Receivable not collected by International Paper within one
hundred twenty (120) days of Closing (after giving effect to
the allowance for doubtful accounts), shall be paid by
Carpenter, upon demand, pursuant to the indemnification
provisions of Paragraph 11.6.
2.24. General Representation and Warranty. No
representation or warranty made in this Agreement, and no
statement made in any certificate or schedule furnished in
connection with the transaction herein contemplated, contains,
or would if made at the Closing, contain, any untrue statement
of a material fact or omits or will omit to state any material
fact necessary to make such representation or warranty or any
such statement not misleading to a prospective purchaser of all
of the stock or Assets of Carpenter who is seeking full
information as to Carpenter and its affairs.
2.25. Bulk Sales Compliance. Carpenter will comply
in all material respects with any applicable Bulk Sale Act or
law of the states where Carpenter is licensed to do and is
doing business, and will either provide a certificate of
compliance or certificate of exemption from the sale of Assets
as contemplated by this Agreement. Alternatively,
International Paper may waive such compliance and be entitled
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to indemnification against any claims under any applicable Bulk
Sales Act.
ARTICLE III
REPRESENTATIONS OF INTERNATIONAL PAPER
To induce Carpenter to enter into and perform its
obligations under this Agreement, International Paper
represents to Carpenter as follows:
3.1. Organization. International Paper Company and
Subsidiary are both corporations organized and duly existing
under the laws of the State of New York.
3.2. Validity. This Agreement constitutes the legal,
valid and binding obligation of International Paper and is
enforceable against International Paper in accordance with its
terms. All corporate action on the part of International Paper
necessary for the execution and delivery of this Agreement and
consummation of all transactions contemplated hereunder has
been effected. No approvals, filings or notifications are
required under any statutes, governmental regulations or
agreements to which International Paper is a party in order to
and as a condition to closing on the transaction contemplated
by this Agreement, except as required by the Hart-Scott-Rodino
Premerger Notification Act.
3.3. Brokers Fee. Neither International Paper nor
anyone acting on its behalf has any liability to any broker,
finder or agent or has agreed to pay any brokerage commission
with respect to the transactions contemplated by this Agreement.
3.4. Litigation. There are no actions, suits or
proceedings pending or, to the knowledge of International
Paper, threatened against International Paper that would
prevent or hinder the consummation of the transaction
contemplated by this Agreement or which may reasonably be
expected to have a material adverse effect on the condition
(financial or otherwise), business, assets, liabilities,
capitalization, financial position or results of operations of
International Paper taken as a whole.
3.5. Registration Statement.
(a) The registration statement contemplated by
Paragraph 1.2(c) (the "Registration Statement") will, at the
time it and all pre-effective and post-effective amendments
thereto are filed with the SEC and at the time it is declared
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effective by the SEC, comply as to form in all material
respects with the applicable requirements of the Securities Act
of 1933, as amended, and all applicable rules and regulations
promulgated thereunder.
(b) The Registration Statement will not at the
time it becomes effective, at the time of Closing and at the
time of delivery of registered shares of Buyer's Stock in
payment of the Purchase Price, contain any untrue statement of
a material fact or omit to state any material fact necessary in
order to make the statements made therein not misleading.
3.6 SEC Filings.
(a) International Paper has delivered to the
Company (i) its annual report on Form 10-K for its fiscal year
ended December 31, 1993 ("l993 10-K"), (ii) its quarterly
reports on Form 10-Q for its fiscal quarters ended March 31,
1994, June 30, 1994 and September 30, 1994 ("l994 10-Q's"),
(iii) its proxy statement relating to its 1994 annual
shareholder meeting, and (iv) all of its other reports or
registration statements filed with the SEC since December 31,
1993 (all such documents referred to in clauses (i)-(iv) being
referred to herein as "SEC Reports").
(b) As of its filing date, each such report or
statement filed pursuant to the Securities Exchange Act of
1934, as amended (the "1934 Act") did not contain any untrue
statement of a material fact or omit to state any material fact
necessary in order to make the statements made therein, in the
light of the circumstances under which they were made, not
misleading.
(c) Each such registration statement as amended
or supplemented, if applicable, filed pursuant to the 1933 Act
when such statement or amendment became effective did not
contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or
necessary to make the statements therein not misleading.
3.7. Financial Information. The consolidated
financial statements (including any related notes or schedules)
in International Paper's 10-K and 10-Qs fairly present, in
conformity with generally accepted accounting principles
consistently applied (except as disclosed in the notes
thereto), the consolidated financial position of International
Paper and its consolidated subsidiaries as of such date and
their consolidated results of operations and changes in
financial position for the periods then ended (subject to
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normal year-end adjustments in the case of the unaudited
interim financial statements contained in the 10-Qs).
3.8. Undisclosed Liabilities. Except for (i)
liabilities reflected in the 10-K and the 10-Qs and the
financial statements contained therein and (ii) liabilities
incurred in the ordinary course of business of International
Paper and its subsidiaries subsequent to September 30, 1994,
International Paper and its subsidiaries have no liabilities
that are material to the business, financial condition or
results of operations of International Paper or any of its
subsidiaries and there is no existing condition, situation or
set of circumstances which could reasonably be expected to
result in such a liability.
3.9. Capitalizations.
(a) As of September 30, 1994 the authorized and
outstanding capital stock of International Paper is as
described in International Paper's 10-Q of that date.
(b) All outstanding shares of capital stock of
International Paper have been duly authorized and validly
issued and are fully paid and nonassessable. Except as set
forth in this Section 3.9 and except for non-material changes
since September 30, 1994, there are outstanding (i) no shares
of capital stock or other voting securities of International
Paper, (ii) no securities of International Paper convertible
into or exchangeable for shares of capital stock or voting
securities of International Paper, and (iii) no options or
other rights to acquire from International Paper, and no
obligation of International Paper to issue, any capital stock,
voting securities or securities convertible into or
exchangeable for International Paper Stock.
(c) The shares of International Paper Stock to
be issued in payment of the Purchase Price hereof have been
duly authorized and, when issued pursuant to this Agreement,
will be validly issued, fully paid and non-assessable, with no
personal liability attaching thereto. Such shares will not be
subject to any preemptive rights.
3.10. General Representation and Warranty. No
representation or warranty made in this Agreement, and no
statement made in any certificate or schedule furnished in
connection with the transaction herein contemplated, contains,
or would if made at the Closing, contain, any untrue statement
of a material fact or omits or will omit to state any material
fact necessary to make such representation or warranty or any
such statement not misleading to a prospective substantial
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investor in the stock of International Paper who is seeking
full information as to International Paper and its affairs.
ARTICLE IV
CONDUCT PRIOR TO CLOSING
4.1. Actions by Carpenter. From the date hereof
through the Closing, Carpenter shall use its best efforts to
assure that Carpenter shall not (except as permitted by this
Agreement) suffer or permit any event to occur which, had it
occurred prior to the date hereof, would cause any of the
representations and warranties set forth in this Asset Purchase
Agreement to become false.
4.2. Actions by International Paper. From the date
hereof through the Closing, International Paper shall use its
best efforts to assure that International Paper shall not
(except as permitted by this Agreement) suffer or permit any
event to occur which, had it occurred prior to the date hereof,
cause any of the representations and warranties set forth in
this Asset Purchase Agreement to become false.
4.3. Access. Carpenter shall allow International
Paper and its representatives reasonable access to the
facilities, books, records and employees of Carpenter for
purposes of conducting due diligence and for planning the
transition of Carpenter to International Paper's ownership.
4.4. Public Announcement. Except as otherwise
required by law, no public disclosure concerning the subject
matter hereof will be made without the joint approval of
Carpenter and International Paper, and neither Carpenter nor
International Paper shall make any such public disclosure
without first giving the other reasonable opportunity to review
and comment on it. It is tentatively agreed to by both parties
that announcements will be made to the public upon execution by
both parties of this Agreement.
4.5. Best Efforts. Subject to the terms and
conditions herein provided, each of the parties hereto agrees
to use its best efforts to take, or cause to be taken, all
action, and to do, or cause to be done, all things necessary,
proper or advisable under applicable laws and regulations to
consummate and make effective the transactions contemplated by
this Agreement. Carpenter agrees not to suffer or permit any
event to occur which has the effect of diminishing the goodwill
of Carpenter or adversely affecting the reputation of Carpenter
with its customers and suppliers.
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4.6. Exclusivity. Carpenter shall deal exclusively
with International Paper in the sale of the Assets through the
Closing, or until Termination consistent with Article VII of
this Agreement.
ARTICLE V
CONDITIONS TO OBLIGATIONS TO EFFECT THE TRANSACTION
5.1. Conditions to Each Party's Obligation to Effect
the Transaction. The respective obligations of each party to
effect the transactions contemplated by this Agreement shall be
subject to the following conditions:
(a) No Injunctions. No preliminary or permanent
injunction shall have been issued by any Court which would
prevent the consummation of the transactions contemplated by
this Agreement;
(b) Any applicable waiting period under the
Hart-Scott-Rodino Act shall have expired;
5.2. Additional Conditions to Obligation of
International Paper to Effect the Transaction. The obligations
of International Paper to effect the transactions contemplated
in this Agreement shall be subject to Carpenter's delivery at
the Closing of the documents described in Paragraph 6.2 hereof
and to the occurrence of the following additional conditions:
(a) Accuracy of Representations and Warranties.
The representations and warranties of Carpenter set forth in
Article II hereof: (i) shall not be demonstrated to have been
materially incorrect in a manner and to an extent which, taken
in the aggregate, materially adversely affects the business of
Carpenter; and (ii) shall at the Closing continue to be true
and correct in all material respects.
(b) Performance of Covenants. Carpenter shall
not have failed to perform any material obligations or comply
with any material covenant of Carpenter as set forth in this
Agreement to be performed or complied with by Carpenter prior
to the Closing.
(c) Employment Agreements. International Paper
shall receive at Closing from James R. Holtsclaw a signed
employment agreement substantially in the form attached as
Exhibit 5.2(c).
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(d) Non-competition Agreements. International
Paper shall have received from Carpenter shareholders, signed
non-competition agreements substantially in the form attached
as Exhibit 5.2(d). The term shall be three years for holders
of 10% or more of Carpenter's stock, and two years for all
others, except as otherwise agreed.
(e) Computer Software. Carpenter shall obtain
consent (formal or informal, satisfactory to International
Paper) to assignments by Carpenter of its rights and
liabilities under all material use, license and service
agreements for computer software.
(f) Due Diligence. Satisfactory completion by
International Paper, in its opinion, of due diligence,
including, but not limited to, satisfactory review of the
Schedules to this Agreement that are to be furnished by
Carpenter.
(g) Closing Balance Sheet. International Paper
shall have completed the audit of the Closing Balance Sheet, of
which both parties shall have access to the working papers of
the audit, and shall participate in the audit.
5.3. Additional Conditions to Obligation of Carpenter
to Effect the Transaction. The obligations of Carpenter to
effect the transactions contemplated by this Agreement shall be
subject to International Paper's delivery at the Closing of the
documents described in Paragraph 6.3 hereof and to occurrence
of the following additional conditions:
(a) Accuracy of Representations. The
representations of International Paper set forth in Article III
hereof: (i) shall not be demonstrated to have been materially
incorrect; and (ii) shall at the Closing continue to be true
and correct in all material respects.
(b) Performance of Covenants. International
Paper shall not have failed to perform any material obligation
or comply with any material covenant of International Paper as
set forth in this Agreement to be performed or complied with by
International Paper prior to the Closing.
(c) Employments Agreements. James R. Holtsclaw
shall receive at Closing from International Paper a signed
employment agreement as contemplated by Section 5.2(c).
(d) Non-competition Agreements. The Carpenter
shareholders shall have received from International Paper
non-competition agreements as contemplated by Section 5.2(d).
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(e) Tax Treatment. The transaction contemplated
by this Agreement shall qualify for federal tax purposes as a
tax-free reorganization.
(f) Seaman-Patrick Transaction. The transaction
contemplated under an Asset Purchase Agreement between
Seaman-Patrick Holding Company and Seaman-Patrick Paper Company
and International Paper dated December 1, 1994 shall be
consummated simultaneously with the Closing under this
Agreement, at the same time and place.
ARTICLE VI
6.1. Closing. The transfer of ownership of the Assets
to International Paper and the payment of the Purchase Price to
Carpenter (the "Closing") shall occur as soon as is practicable
after completion of the Closing Balance Sheet and completion by
International Paper of its due diligence, which the parties
will attempt to have occur on or before January 31, 1995, at
such time and place as agreed upon by the parties (the "Closing
Date"). The Closing shall be effective and the transfer of
ownership of the Assets shall be deemed to have occurred as of
12:01 a.m. on the day of Closing. At the Closing, all
transactions shall be conducted substantially concurrently and
no transaction shall be deemed to be completed until all are
completed.
6.2. Carpenter's Deliveries. At the Closing,
Carpenter shall deliver or cause to be delivered to
International Paper the following:
(a) A certificate of Carpenter, dated the
Closing Date, warranting to International Paper the continued
accuracy as of the Closing Date of its representations
contained in Article II hereof and its compliance with the
conditions set forth in this Agreement.
(b) A certificate signed by the President and
the Chairman of Carpenter, warranting to International Paper
that since the date of this Agreement Carpenter has complied
with the provisions of Paragraph 4.1 herein;
(c) Transfer of motor vehicle titles for any
vehicles set forth in Schedule 1.2(a)2;
(d) A written opinion, dated on the Closing, of
Dykema Gossett PLLC, counsel representing Carpenter, in the
form set forth on Schedule 6.2(d) of this Agreement.
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(e) A Bill of Sale, in form satisfactory to
International Paper, for all tangible personal property to be
sold to International Paper pursuant to Article I of this
Agreement.
(f) Bulk Sales Act compliance/waiver certificate
from each state in which Carpenter is qualified to do business,
unless waived by International Paper pursuant to Section 2.26.
(g) Assignment of agreements and licenses, as
provided in Article I of this Agreement.
(h) Executed non-compete agreements, as provided
in Article V of this Agreement.
(i) Executed employment agreement with James R.
Holtsclaw as provided in Article V of this Agreement.
6.3. International Paper's Deliveries. At the
Closing, International Paper shall deliver or cause to be
delivered to Carpenter the following:
(a) the Purchase Price, payable in Buyer's
Stock, as determined in Article I of this Agreement.
(b) a certificate of International Paper, dated
the Closing Date, warranting to Carpenter the continued
accuracy as of the Closing Date of its representations
contained in Article III hereof and its compliance with the
conditions set forth in this Agreement.
(c) a certificate signed by an officer of
International Paper, warranting to Carpenter that since the
date of this Agreement, International Paper has complied with
the provisions of Paragraph 4.2 herein.
(d) an Assumption Agreement whereby Subsidiary
duly assumes and agrees to satisfy all Liabilities to be
assumed by Subsidiary under this Agreement.
(e) executed non-compete agreements as provided
in Article V of this Agreement.
(f) executed employment agreement with James R.
Holtsclaw as provided in Article V of this Agreement.
(g) opinion of James W. Guedry, Associate
General Counsel of International Paper, in the form set forth
in Schedule 6.3(g) to this Agreement.
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(h) an Escrow Agreement and receipt from
Comerica Bank-Detroit confirming the Escrow contemplated by
Article XII.
6.4 Costs.
Each of the parties hereto shall be responsible for
all legal, accounting and other costs incurred by it related to
the transactions contemplated hereby, except that the costs of
the Closing Balance Sheet audit shall be borne by Subsidiary.
All sales taxes incurred in connection with this
Agreement and the transaction contemplated hereby will be borne
by International Paper. Carpenter and International Paper
shall file or cause to be filed all necessary documentation
with respect to such taxes.
All personal property, real property and other taxes
applicable to all or any part of 1994 or 1995, as the case may
be, depending in which calendar year the Closing occurs, shall
be prorated as of the Closing, based on that portion of the
applicable fiscal year of the taxing authority, that has
elapsed as of the Closing. All taxes that are unpaid as of the
Closing should be reflected on the Closing Balance Sheet in
accordance with GAAP.
6.5. Possession.
Possession of all Assets shall be transferred to
International Paper effective at 12:01 a.m. on the Closing Date.
ARTICLE VII
TERMINATION
7.1. Termination of Agreement. This Agreement and
the transactions contemplated hereby may be terminated at any
time prior to the Closing, as follows:
(a) by mutual written consent of Carpenter and
International Paper;
(b) by either Carpenter or International Paper
by reason of the occurrence of any of the events specified in
Paragraph 5.1; provided, however, that in the case of such
occurrence, such termination may only be made by written notice
to the other party within ten (10) days of each such occurrence;
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(c) by International Paper by reason of the
non-satisfaction of any of the conditions specified in
Paragraph 5.2; or
(d) by Carpenter by reason of the
non-satisfaction of any of the conditions specified in
Paragraph 5.3.
7.2. Effect of Termination. In the event of
termination of this Agreement by either Carpenter or
International Paper, this Agreement shall forthwith become void
and there shall be no liability on the part of Carpenter or
International Paper (or their respective officers or
directors), except based upon obligations as set forth in
Paragraph 6.4 hereof, and except that International Paper shall
thereupon promptly return to Carpenter or destroy (and cause
its agents and representatives to return or destroy) all
documents (and copies thereof furnished to International Paper
by Carpenter, and International Paper shall continue to adhere
to the confidentiality agreement previously entered into with
Carpenter. Notwithstanding the foregoing, termination of this
Agreement pursuant to this Article VII shall not in any way
limit or restrict the rights and remedies of any party hereto
against any other party hereto which has violated or breached
any of the representations, warranties, agreements or other
provisions of this Agreement prior to termination hereof.
ARTICLE VIII
SURVIVAL
8.1. Survival. The covenants, agreements,
representations and warranties herein or hereunder shall
survive the Closing pursuant to Article XI and Article XIV
herein.
ARTICLE IX
COVENANTS
9.1. Further Actions. Carpenter and International
Paper will, when required at any time after the Closing, sign,
execute and deliver, or cause others within their control to do
so, all such powers of attorney, documents and instrument and
do, or cause to be done, all such other acts and things as may
be necessary to carry out the provisions of this Agreement or
any part thereof.
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9.2. Confidentiality. Neither party may communicate
to anyone, other than attorneys, auditors or other advisors
under obligation of confidentiality, the substance or existence
of this Agreement, nor the transaction contemplated hereby,
without written consent of the other party.
9.3. Carpenter Dissolution. International Paper
consents to the dissolution and liquidation of Carpenter and
the distribution of Carpenter's remaining assets to CPC
Liquidating L.L.C., a Michigan limited liability company, at
any time after the Closing; provided, that CPC Liquidating
L.L.C. shall have delivered to International Paper an
Undertaking satisfactory to International Paper whereby the
assets so distributed shall remain subject to the claims of
International Paper under this Agreement to the same extent as
though such assets had remained in Carpenter.
9.4. Books and Records; Cooperation.
(a) Carpenter agrees that any of its books and
records which are not delivered to International Paper at the
Closing shall be maintained and made available to International
Paper for a period of seven (7) years following the Closing,
and thereafter Carpenter agrees to provide International Paper
with 90 days' advance notice of any destruction of such books
and records and an opportunity to remove or copy those to be
destroyed. Likewise, Carpenter shall have reasonable access to
its books and records delivered to International Paper for the
same period of seven (7) years, and shall be provided with 90
days' advance notice of any destruction of such books and
records and an opportunity to remove or copy those to be
destroyed. Each party shall make its staff reasonably
available to answer questions and provide information regarding
the books and records in its possession.
(b) For a period of one year after the Closing,
International Paper will permit F. Geary (or another
representative of Carpenter approved by International Paper) to
have reasonable access to its accounting systems for the
purpose of maintaining Carpenter's general ledger and handling
any payables or miscellaneous items which are not assumed by
International Paper but which require processing after the
Closing.
(c) International Paper will obtain Carpenter's
approval before accepting customer returns on behalf of
Carpenter, and International Paper will process any approved
returns.
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ARTICLE X
NOTICES
Any notice, request or other communication to be given
by any party hereunder, shall be in writing and shall be
sufficient if sent by registered or certified mail, postage
prepaid, addressed (until another address is supplied to the
other parties by the addressee in the manner provided) as
follows:
If given to International Paper, to:
Thomas E. Costello, Vice President
International Paper Company
50 East RiverCenter Boulevard
Suite 700
Covington, Kentucky 41011
with a copy to:
John P. Fonzo, Esq.
International Paper Company
50 East RiverCenter Boulevard
Suite 700
Covington, Kentucky 41011
If given to Carpenter:
Mr. James R. Holtsclaw
Carpenter Paper Company
3710 Roger B. Chaffee Memorial Blvd. S.E.
Grand Rapids, Michigan 49548
with a copy to:
Raynold A. Schick, Esq.
Dykema Gossett PLLC
315 E. Eisenhower, Suite 100
Ann Arbor, Michigan 48108
ARTICLE XI
INDEMNIFICATION
11.1. (a) By Carpenter. For a period of three
hundred forty-five (345) days from the Closing, Carpenter
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agrees to indemnify and hold harmless International Paper from
and against any and all demands, claims, actions, assessments,
damages, liabilities, losses, costs and assessments (including
but not limited to attorneys' fees, interest and penalties)
with respect to, or arising out of, any misrepresentation,
breach of warranty or nonfulfillment of any covenant by
Carpenter under this Agreement, including, without limitation,
any misrepresentation in, or omission from, any schedule,
exhibit, statement, certificate, report or other document
furnished or to be furnished pursuant to this Agreement. In
addition to and not in limitation of the foregoing, Carpenter
further agrees to indemnify and hold harmless International
Paper from and against any demands, claims, actions, damages,
liabilities, losses, costs, and expenses (including but not
limited to attorneys' fees, interest and penalties): (a) for
taxes including sales, use, property, franchise, employment,
income and all other taxes of any provincial, federal, state,
local or foreign governmental body, together with all interest
and penalties with respect thereto, assessed at any time
against Carpenter with respect to any period through the
Closing, (b) for personal injury, death or property or
environmental damage to any person or entity to the extent
arising out of or relating to the operations conducted by
Carpenter at any time prior to the Closing; (c) for personal
injury, death or property damage to any person or entity, to
the extent resulting from or caused by, any product
manufactured or sold by Carpenter at any time prior to the
Closing; (d) for personal injury or death to any employee,
agent or consultant of Carpenter for any work place injury
occurring prior to the Closing; (e) with respect to any
employee benefit plans described in this Agreement and the
Schedules hereto accruing or arising or relating to any action,
event or omission prior to the Closing; (f) for any brokerage,
agent or finder's fees; (g) with respect to Accounts Receivable
acquired by International Paper in accordance with and subject
to Paragraph 11.6 hereof; and (h) with respect to any fees,
expenses or penalties associated with the assumption and or
payment by International Paper of Carpenter's Long-term Debt.
(b) By International Paper. For a period of
three hundred forty-five (345) days from the Closing,
International Paper agrees to indemnify and hold harmless
Carpenter from and against any and all demands, claims,
actions, assessments, damages, liabilities, losses, costs and
assessments (including but not limited to attorneys' fees,
interest and penalties) with respect to, or arising out of, any
misrepresentation, breach of warranty or nonfulfillment of any
covenant by International Paper under this Agreement,
including, without limitation, any misrepresentation in, or
omission from, any document furnished or to be furnished
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pursuant to this Agreement. In addition to and not in
limitation of the foregoing, International Paper further agrees
to indemnify and hold harmless Carpenter from and against any
demands, claims, actions, damages, liabilities, losses, costs,
and expenses (including but not limited to attorneys' fees,
interest and penalties): (a) arising from any Liabilities
assumed by International Paper hereunder; (b) for personal
injury, death or property or environmental damage to any person
or entity, to the extent arising out of or relating to the
operations conducted by International Paper at any time after
the Closing; (c) for personal injury, death or property damage
to any person or entity to the extent resulting from or caused
by, any product manufactured or sold by International Paper at
any time after the Closing; (d) for personal injury or death to
any employee, agent or consultant of International Paper for
any work place injury occurring after the Closing; and (e) with
respect to any employee benefit plans described in this
Agreement and the Schedules hereto accruing or arising or
relating to any action, event or omission after the Closing.
(c) Notwithstanding the provisions of Sections
11.1 (a) and (b), 11.2 and 11.3, each party's obligation to
indemnify the other with respect to third-party claims which
are unknown at the Closing Date shall be subject to an
aggregate threshhold of $35,000; each party agrees to absorb
costs, expenses and damages up to $35,000 with respect to such
claims in the aggregate; provided, that if the $35,000
threshhold is exceeded, the Indemnitee shall be entitled to
full ("first dollar") indemnification in accordance with
Sections 11.1 (a) and (b), 11.2 and 11.3.
11.2. If any claim is asserted against a party (the
"Indemnitee") that is claimed by it to be the basis for a right
of indemnification pursuant to Paragraph 11.1 hereof, the
Indemnitee shall promptly notify the other party (the
"Indemnitor") in writing of such claim and whether or not it
has elected to contest the same. The Indemnitee may, but shall
not be obligated to, contest the claim, but if the Indemnitee
elects to so contest the claim, the Indemnitor shall be
permitted to participate in the contest at its own expense. If
the Indemnitee elects not to contest the claim, and if within
thirty (30) days after the Indemnitee has given the Indemnitor
written notice of such claim the Indemnitor shall have failed
either to cause such claim so asserted to be discharged or to
notify the Indemnitee of the Indemnitor's election to contest
such claim, then the full amount of such claim shall forthwith
be conclusively held to be covered by the indemnity provided in
Paragraph ll.l(a) or ll.l(b) hereof, as the case may be.
However, if the Indemnitor notifies the Indemnitee in writing
within such thirty (30) day period that it disputes the
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Indemnitee's assertion that such claim is the basis for
indemnification, then the amount of such claim shall not be
payable, except when, after, and to the extent, it is
determined by the final judgment, unappealed and unappealable
by failure to appeal or otherwise, of a court of competent
jurisdiction, or by the agreement of the parties hereto, that
such claim is the basis for indemnification. If the Indemnitor
elects to contest any such claim and give proper notice
thereof, the Indemnitor shall contest the claim at its own
expense, shall indemnify and hold harmless the Indemnitee from
and against any liability, loss, damage, cost or expense
(including attorneys' fees) in connection with such contest,
including, without limitation, any loss by reason of any
attachment, execution, distraint, judgment, lien or other legal
process. Indemnity shall be deferred until thirty (30) days
after the final determination of any such contest by a final
judgment, unappealed and unappealable by failure to appeal or
otherwise, of a court of competent jurisdiction, or by the
agreement of the parties hereto.
11.3. At any time after the commencement of the
defense by the Indemnitee of any claim referred to in Paragraph
11.2 hereof, the Indemnitor may request the Indemnitee in
writing to abandon such contest or agree to the payment or
compromise by the Indemnitor of the asserted claim, whereupon
such action shall be taken unless the Indemnitee determines to
continue the contest and so notifies the Indemnitor in writing
within thirty (30) days following such written request. In
such case, the Indemnitor shall not be liable under the
provisions of Paragraph ll.l(a) or ll.l(b) hereof, as the case
may be, for any excess of such claim over and above the amount
which the other party to the contest shall have agreed in
writing to accept in payment or compromise as of the time the
Indemnitor made its request therefor to the Indemnitee.
11.4. In no event shall the provisions of this
Article XI restrict or impair in any respect the rights or
remedies otherwise available to International Paper against
Carpenter at law or in equity which rights and remedies shall
be cumulative and in addition to any other available remedies;
provided, that except for indemnification with respect to
uncollected Accounts Receivable and unsold Slow-Moving
Inventory (which shall be unlimited), Carpenter's aggregate
liability under any and all provisions of this Agreement shall
in no event exceed the deposit of Two Million Five Hundred
Thousand Dollars ($2,500,000) of Buyer's Stock placed in the
Escrow established pursuant to Article XII. Except for their
pro-rata interests in the Escrow deposit, which shall be fully
subject to the claims of International Paper pursuant to this
Agreement, the Shareholders of Carpenter shall have no personal
liability for the representations,
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warranties, covenants or agreements of Carpenter under this
Agreement.
11.5. The time period in this Article XI pertaining
to indemnification notwithstanding, the indemnification by
Carpenter of International Paper for tax audits, liens and
liabilities shall be the longer of the applicable statute of
limitations or two (2) years.
11.6. Accounts Receivable.
(a) The following provisions of this Section
11.6 shall exclusively govern the parties' responsibilities
with respect to Accounts Receivable. Any Accounts Receivable
remaining unpaid for a period of one hundred twenty (120) days
after Closing ("Collection Period"), at International Paper's
option, shall be paid for by Carpenter to International Paper,
but only to the extent that the allowance for doubtful
accounts, as set forth on the Purchase Price Balance Sheet, is
inadequate to cover such uncollected Accounts Receivable. Such
option must be exercised, if at all, within thirty (30) days
after the expiration of the Collection Period. In the event
that actual collections during the Collection Period exceed the
amounts reflected on the Purchase Price Balance Sheet (because
the allowance for doubtful accounts was too large), Carpenter
shall be entitled to delivery of additional shares of Buyer's
Stock, valued at the price per share of Buyer's Stock as
determined at the Closing, in the amount of such excess. For
convenience, the delivery of any such additional shares may be
deferred until termination of the Escrow as provided in Article
XII.
(b) During the Collection Period, International
Paper shall use reasonable efforts, consistent with Carpenter's
historical practices, to collect the Accounts Receivable. This
provision shall not require International Paper to commence
litigation or take other extraordinary action.
(c) International Paper agrees that during the
Collection Period, unless International Paper ceases with
respect to any customer as to which an Account Receivable is
reflected on the Purchase Price Balance Sheet ("Customer") to
do business with the Customer on an open account basis, all
payments on account shall be applied first to Carpenter's
oldest receivable from that Customer, provided that such
receivable is not disputed or that the Customer has not
specifically designated the manner in which payment is to be
applied (in which latter case the Customer's designation shall
be followed and International Paper will use reasonable efforts
to inquire from the Customer as to the reason for such
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designation and will report such reason to Carpenter). In the
event International Paper declines or ceases to do business
with a Customer on an open account basis during the Collection
Period, while any Account Receivable which arose prior to the
Closing is outstanding, Buyer shall place the Customer on
C.O.D. plus at least 10% of the C.O.D. amount, which additional
amount shall be applied to the oldest receivable in the manner
described above (which arrangement shall continue until the
pre-Closing receivable is retired, or until International Paper
ceases doing business with that Customer). Upon request by
Carpenter, International Paper will provide Carpenter with
International Paper's account receivable detail for specified
Customers.
(d) Payment Erroneously Received. Any payments
on Carpenter's Accounts Receivable (including amounts payable
to Carpenter under subsection (c) above), or payments on
previously written-off accounts receivable which are not being
assigned hereunder, or other payments belonging to Carpenter
received by International Paper shall be promptly (at least
weekly) delivered to Carpenter along with the remittance
advice. Likewise, Carpenter will promptly deliver to
International Paper any payments received by Carpenter but
actually belonging to International Paper.
(e) International Paper's exercise of its option
to obtain payment from Carpenter with respect to Accounts
Receivable not collected (in excess of cash discounts and the
allowance for doubtful accounts) during the Collection Period
shall be in writing, shall be delivered to Carpenter within
thirty (30) days after the close of the Collection Period and
shall include an itemized listing by Customer and amount of all
unpaid Accounts Receivable and shall be supported by a detail
of each unpaid Account Receivable which shows the open
invoices, dates and amounts.
(f) Within seven (7) business days of receipt of
International Paper's notice under subsection (e), Carpenter
shall tender the required amount in cash, in exchange for
reassignment by International Paper (without recourse) to
Carpenter of all unpaid Accounts Receivable (except for any
unpaid Accounts Receivable which International Paper chooses to
retain without seeking indemnity).
(g) The Escrow provided for in Article XII may
be utilized for Carpenter's payment to International Paper of
amounts due for uncollected Accounts Receivable, but only upon
the mutual consent of both parties.
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ARTICLE XII
ESCROW
The provisions of this Agreement inconsistent herewith
notwithstanding (including Article I pertaining to payment of
the Purchase Price), at the Closing there shall be delivered
into escrow with Comerica Bank-Detroit that number of shares of
Buyer's Stock having a value as of the Closing Date of Two
Million Five Hundred Thousand Dollars ($2,500,000) (the
"Escrow"), as an Escrow or retention against the matters which
are subject to Carpenter's representations and warranties, as
set forth in Article II and the indemnification provisions of
Article XI of this Agreement. The shares of Buyer's Stock
placed in the Escrow shall be issued in the respective names of
Carpenter's Shareholders, and shall be endorsed in blank by
such Shareholders; such shares shall be registered shares (or
shall promptly be replaced with registered shares pursuant to
Paragraph 1.2(c)). All additions or removals of shares from the
Escrow shall be effected pro-rata among the shareholdings of
the respective Carpenter Shareholders. The respective
Carpenter Shareholders shall have all voting power and dividend
rights pertaining to such shares during the period of the
Escrow. Cash dividends shall be distributed out of the Escrow
when received.
The Escrow shall be held as the exclusive means of
satisfying any claims other than with respect to uncollected
Accounts Receivable and unsold Slow-Moving Inventory, against
Carpenter, arising out of the matters addressed in Articles II
and XI. The Escrow shall be held and disbursed as follows:
During the twelfth month (and not later than 345 days)
after the Closing, the shares in the Escrow shall be payable to
the respective Shareholders of Carpenter, less the amount of
any claims against the Escrow at that time agreed to by
International Paper and Carpenter, or that International Paper
has, at that time, notified Carpenter of, in the manner
provided in Article XI. For purposes of indemnification of
International Paper, shares of Buyer's Stock in the Escrow
shall be credited against claims at the price per share as
determined at Closing pursuant to Article I.
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ARTICLE XIII
CARPENTER EMPLOYEES
13.1. Employees of Carpenter. After the Closing,
International Paper intends to employ certain employees of
Carpenter. However, this statement of intention shall not
require that International Paper hire any particular employee
and does not restrict or alter International Paper's right to
terminate the employment of any person, with or without cause,
at any time. To the extent Subsidiary assumes Carpenter's
accrued obligation for vacation pay owed to Carpenter employees
after the Closing, Subsidiary shall satisfy such liability by
providing vacation time or a cash payment to the employees and
shall hold Carpenter harmless from the employees' claims to
such vacation benefits.
13.2. For a period of one year after the Closing or
until International Paper implements uniform employee benefit
plans throughout its distribution business, whichever period is
shorter, International Paper agrees to maintain Carpenter's
existing Welfare Plans and Pension Plans or Other Plans in
substantially their present form and without material adverse
change in benefits or costs to Carpenter employees hired by
International Paper. In the event that thereafter
International Paper decides to terminate any existing Welfare
Plan or Pension Plan or Other Plan and to provide a replacement
plan, the employees' prior service with Carpenter shall be
taken into account for vesting purposes (only) in the case of a
retirement plan, and otherwise reasonably taken into account in
the case of other types of benefit plans. Subject to the
foregoing, International Paper shall have the right to amend,
suspend, modify or terminate any benefit plan, including the
Welfare Plans and the Pension Plans and Other Plans at any
time, including, but not limited to, changes in coverages,
deductibles, required contributions by employees, and other
terms and conditions of such plans, at its expense consistent
with the terms of such plans and applicable law. International
Paper shall have no liability with regard to Carpenter's
employees hired by International Paper relating to any period
prior to the Closing, except as specifically agreed to herein,
and shall have no liability to employees of Carpenter not
hired; provided, that International Paper shall properly honor
benefits accrued prior to Closing by any such employees
pursuant to the terms of the Welfare Plans and Pension Plans
and Other Plans assumed by International Paper. International
Paper shall have the right to hire, or not to hire, in its sole
and unfettered discretion, Carpenter employees.
13.3. Employee Benefits. International Paper shall
assume the rights and obligations of the plan sponsor after the
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Closing for the qualified retirement, health and welfare
benefit plans for the employees of Carpenter set forth in
Schedule 2.16.
13.4. Union Agreements. As of the Closing,
International Paper shall assume the rights and obligations of
the "Employer" under the collective bargaining agreement listed
in Schedule 2.16(C).
13.5. Severed or Retiring Carpenter Employees.
International Paper shall have no obligation whatsoever to pay
severance or any other consideration respecting retired
Carpenter employees, Carpenter employees on long-term
disability, or employees of Carpenter.
13.6. Compensations and Related Accruals. Carpenter
shall pay (or accrue for, consistent with past practice and
GAAP) vacations, bonus and all other income earned by Carpenter
employees, but not taken through Closing. Vacations will be
accrued on the basis of 1/12 of the annual benefit for each
month during ownership by Carpenter. International Paper shall
assume the accrued liability for these items as provided in
Paragraph 1.3 and as set forth in Schedule 1.3(2).
13.7. Withdrawal Liability. Pursuant to the
collective bargaining agreement described in Schedule 13.3(c),
Carpenter contributes to the Central States Southeast and
Southwest Areas Pension Fund ("Union Plant") on account of each
member of the bargaining unit. As of the Closing, the
administrator for the Union Plan is unable to determine whether
Carpenter will incur a withdrawal liability as a result of
stopping contributions to the Union Plan. If a withdrawal
liability results from the sale of Carpenter, Carpenter shall
have the option to elect coverage under Section 4202 of ERISA.
Within thirty (30) days of receiving written notice from the
administrator for the Union Plan that Carpenter complete
withdrawal from the Union Plan resulted in a withdrawal
liability, Carpenter shall advise International Paper in
writing whether Section 4204 of ERISA shall apply. Failure to
timely make such election shall be deemed a waiver by Carpenter
of Section 4204 of ERISA.
If Carpenter elects to have Section 4204 of ERISA
apply:
(a) International Paper shall be obligated to
contribute to the Union Plan with respect to the
operations of Carpenter for substantially the same
number of contribution base units for which Carpenter
had an obligation to contribute to the Union Plan.
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(b) Unless Carpenter obtains a waiver in
accordance with PBGC regulations, International Paper
shall provide to the administrator of the Union Plan
for a period of five (5) plan years commencing with
the first plan year beginning after the sale of
assets, a bond issued by a corporate surety company
that is an acceptable surety for purposes of Section
412 of ERISA in an amount equal to the greater of
(1) the average annual contribution required
to be made by Carpenter with respect to Carpenter
operations under the Union Plan for the three (3)
plan years preceding the plan year in which the
Closing occurs, or
(2) the annual contribution that Carpenter
was required to make with respect to the
operations under the Union Plan for the last plan
year before the plan year in which the Closing
occurs,
which bond shall be payable to the administrator
of the Union Plan if International Paper
withdraws from the Union Plan or fails to make a
contribution to the Union Plan when due, at any
time during the first five (5) plan years
beginning after the Closing;
(c) Carpenter shall be responsible for the cost
of the bond up to $750, and International Paper shall
pay any amount in excess of $750; and
(d) If International Paper withdraws in a
complete withdrawal or a partial withdrawal with
respect to the Carpenter operations, during such first
five (5) plan years, International Paper will pay any
withdrawal liability for which it is responsible and
Carpenter will be secondarily liable for any
withdrawal liability Carpenter would have had to the
Union Plan with respect to the Carpenter operations
(but for this section) if the liability of
International Paper is not paid.
The foregoing shall be construed consistently
with ERISA and applicable regulations.
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ARTICLE XIV
SPECIAL COVENANT
14.1. Tax Status. The parties intend that this
transaction shall qualify as a tax-free reorganization under
Section 368(a)(1)(c) of the Internal Revenue Code of 1986, as
amended. International Paper agrees that it will cooperate
with Carpenter in consummating this transaction in accordance
with the requirements of a tax-free reorganization, and will
take no actions (before, during or after the Closing)
inconsistent with the status of this transaction as a tax-free
reorganization. The obligations of International Paper under
this covenant shall survive the Closing and extend until
expiration of the applicable statute of limitations.
ARTICLE XV
MISCELLANEOUS
15.1. Prior Agreements. All prior negotiations and
agreements between the parties hereto are superseded by this
Agreement, and there are no representations, warranties,
understandings, or agreements other than those expressly set
forth herein, except as modified in writing concurrently
herewith or subsequent hereto.
15.2. Binding Effect; Assignment. This Agreement
shall bind and inure to the benefit of the parties hereto and
their respective legal representatives and successors;
provided, however, that neither this Agreement nor any
commitments hereunder shall be assignable.
15.3. Proration of Taxes. Current real and
personal property taxes shall be prorated as of the Closing
Date based on the fiscal year of the taxing authority.
15.4. Governing Law. This Agreement is made
pursuant to, and shall be governed by the laws of the State of
Michigan without regard to its conflicts of laws rules.
15.5. Arbitration. Except in cases where a
specific procedure for dispute resolution is set forth in this
Agreement, any dispute between the parties which cannot be
resolved by negotiation shall be submitted to binding
arbitration at Detroit, Michigan, pursuant to the Commercial
Arbitration Rules of the American Arbitration Association;
provided, that the hearing shall be held within thirty (30)
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days of the selection of the arbitrator, the hearing shall be
limited to a maximum of one day, and the decision of the
arbitrator shall be handed down within thirty (30) days after
the hearing.
15.6. Benefit of the Agreement. This Agreement is
made solely for the benefit of the parties hereto, their
successors and assigns, and no other person shall acquire or
have any right under or by virtue of this Agreement.
15.7. Counterparts. This Agreement may be executed
in one or more counterpart copies; each of such fully executed
copies shall be considered as an original, but together shall
constitute one agreement.
15.8. Severability. In case it be determined by a
court of competent jurisdiction that any provision herein
contained is illegal or unenforceable, such determination shall
solely affect such provision and not impair the remaining
provisions of this Agreement.
15.9. Timing. Time is of the essence of this
Agreement.
15.10. Headings. The headings used in this Agreement
are for convenience only and shall not constitute a part hereof.
15.11. Schedules. All Schedules referenced herein
are incorporated herein as if set forth at length herein.
IN WITNESS WHEREOF, the parties hereto have executed,
or caused this Agreement to be executed on the day and year
first above written.
ATTEST: INTERNATIONAL PAPER COMPANY
/s/ J.P. Fonzo By: /s/ Richard D. Childers
J.P. Fonzo Attorney-in-Fact
Assistant Secretary T. E. Costello,
Vice President
ATTEST: CARPENTER PAPER COMPANY
/s/ Raynold A. Schmick By: /s/ James Holtsclaw
Its: President
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EXHIBIT 2(c)
<PAGE>
EXHIBIT 2(c)
AMENDED AND RESTATED
ASSET PURCHASE AGREEMENT
THIS AGREEMENT is made and entered into as of the 1st
day of December, 1994, by and between INTERNATIONAL PAPER
COMPANY, a New York corporation, with a principal place of
business at Two Manhattanville Road, Purchase, New York 10577,
on behalf of itself and its subsidiary IPS Acquisition Corp.
(the "Subsidiary") (International Paper Company and Subsidiary
being collectively referred to as "International Paper"), and
SEAMAN-PATRICK HOLDING COMPANY ("Holding"), and SEAMAN-PATRICK
PAPER COMPANY ("Paper") both Michigan corporations with their
principal place of business at 2000 Howard Street, Detroit,
Michigan 48216.
WHEREAS, Paper is the 100%-owned subsidiary of
Holding; Paper will be merged into Holding at or before Closing
(the merged entity being referred to herein as
"Seaman-Patrick").
WHEREAS, Seaman-Patrick desires to sell to
International Paper and International Paper desires to purchase
from Seaman-Patrick, upon the terms and conditions set forth
herein, certain assets of Seaman-Patrick.
NOW, THEREFORE, in consideration of the premises
and promises herein set forth, the parties agree as follows:
ARTICLE I
THE TRANSACTION
1.1. Purchase of Certain Assets and Assumption of
Certain Liabilities. At the Closing, Seaman-Patrick will sell,
convey, transfer, assign and deliver to Subsidiary, upon the
terms and conditions set forth herein, all of its right, title
and interest in and to the "Assets" as defined in Paragraph
1.1(a) of this Agreement, and Subsidiary will, upon the terms
and conditions set forth herein, purchase and accept
Seaman-Patrick's right, title and interest in and to the
"Assets," and Subsidiary agrees to pay therefore the Purchase
Price specified in Paragraph 1.2 of this Agreement. Subsidiary
shall also assume certain liabilities of Seaman-Patrick, as set
forth in Paragraph 1.1(b). All references to "Assets" and
"Liabilities" in this Agreement are to Holding and Paper, and
to no other subsidiary of Holding.
(a) As used herein, the term "Assets" shall
include the "Inventory," "Accounts Receivable" (subject
to limitations and indemnifications as set forth in
Paragraphs 1.2(a)(4) and 11.1 of this
<PAGE>
Agreement), certain "Tangible Personal Property,"
"Intangible Property," and certain "Other Assets" (all
as hereinafter defined) of Seaman-Patrick, and shall
exclude only the assets of Seaman-Patrick listed on
Schedule 1.1(a).
(b) Subsidiary will also assume certain liabilities
(the "Liabilities") of Seaman-Patrick, consisting of
"Trade Accounts Payable," "Accrued Liabilities,"
"Long-term Debt" and other specific contractual
liabilities of Seaman-Patrick, all as hereinafter
defined or specified in Paragraph 1.3 herein.
1.2. Purchase Price. The Purchase Price and full
consideration, to be paid for in shares of common stock of
International Paper Company ("Buyer's Stock") (the number of
which to be determined as provided in Paragraph 1.2(b)), shall
be the aggregate of the value of the Assets less the
Liabilities, as determined from an audited balance sheet of
Seaman-Patrick as of December 31, 1994 (the "Closing Balance
Sheet"), although the date of Closing (the "Closing Date") will
be after said date, or at such other time to be agreed to by
the parties, plus the sum of Thirteen Million Five Hundred
Thousand and 00/100 Dollars ($13,500,000.00).
(a) Asset Value Determination. For purposes of
determining the Purchase Price, the value of the Assets shall
be determined as follows:
1. Inventory. A physical inventory shall be taken
prior to the Closing Date, and will be valued at FIFO
cost (replacement cost, consistent with Seaman-Patrick's
past practice), and adjusted for obsolete, slow-moving
and damaged inventory, based on the Closing Balance
Sheet, which shall reflect criteria to be furnished by
International Paper and approved by Seaman-Patrick;
provided, that customer-specific inventory with a fixed
sales price will be valued at cost (also consistent
with Seaman-Patrick's past practice). The inventory
amount in the Closing Balance Sheet will be expressed
at LIFO value plus LIFO reserve.
1.A. Obsolete and Slow-Moving Inventory. The
parties shall agree upon a list of slow-moving and
obsolete inventory (the "Slow-Moving Inventory") as of
January 24, 1995 which shall be attached hereto as
Schedule 1.2(a)1.A. For purposes of the Closing Balance
Sheet, Slow-Moving Inventory shall be valued
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at 50% of cost; for purposes of the Purchase Price
Balance Sheet, such amount shall be updated to reflect
transactions through January 31, 1995 ("Estimated
Recovery"). From February 1, 1995 through July 31,
1995, International Paper shall use reasonable efforts
to attempt to sell the Slow-Moving Inventory and shall
be entitled to a handling charge of 10% of the cost (as
shown on the updated list of Slow-Moving Inventory) of
all Slow-Moving Inventory sold during such period. If
the net recovery (sales price less inside or outside
commission less the 10% handling charge) from all such
sales of Slow-Moving Inventory during such period is
less than the Estimated Recovery, International Paper
shall have a claim in the amount of the shortfall
pursuant to the indemnification and escrow provisions
hereof; in the event such net recovery exceeds the
Estimated Recovery, International Paper shall deliver
additional shares of Buyer's Stock, valued at the Price
per share of Buyer's Stock as determined at the
Closing, in the amount of such excess. For convenience,
the delivery of any such additional shares may be
deferred until termination of the escrow provided for
in Article XII. Any Slow-Moving Inventory not sold
during the period ending July 31, 1995 shall be
reassigned to, and removed from the premises by,
Seaman-Patrick.
2. Tangible Personal Property as set forth in
Schedule 1.2(a)2 to this Agreement.
3. Intangible Property consisting of trademarks,
logos, trade names, customer list, trade name and
non-compete agreements from Seaman-Patrick Shareholders
(as hereinafter set forth in Paragraph 5.2(d)); but
excluding the stock of Seaman-Patrick's subsidiary
Litho Photo Supply, Inc. and all rights associated with
the business name "Wyndstone Heat Transfer Papers" and
the registered U.S. trademark "Photo-Trans".
4. Accounts and Notes Receivable, in the aggregate
amount as shown on the Closing Balance Sheet and at
Schedule 1.2(a)(4) to this Agreement, less allowance
for doubtful accounts. At Paragraph 2.24 of this
Agreement, Seaman-Patrick represents and warrants the
collectibility of Accounts and Notes Receivable, and at
Paragraph 11.6, agrees to indemnify International Paper
for uncollected Accounts and Notes Receivable.
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5. Accrued and Prepaid Expenses, in the amounts
set forth on the books of Seaman-Patrick.
6. Other Assets, as set forth on Schedule 1.2(a)6.
7. Discounts. In the ordinary course of
Seaman-Patrick's business, discounts for prompt payment
are offered to customers by Seaman-Patrick ("Customer
Discounts"), and similarly discounts for prompt payment
are available to Seaman-Patrick from trade vendors
("Vendor Discounts"). For purposes of the Closing
Balance Sheet and the Purchase Price Balance Sheet,
Accounts Receivable and Accounts Payable will be stated
at their gross amounts (disregarding both Customer
Discounts and Vendor Discounts).
(b) Purchase Price Determination. The purchase
price shall be the aggregate of Assets, less Liabilities, plus
$13.5 million (the "Purchase Price"), and shall be payable in
the form of shares of International Paper Company common stock
("Buyer's Stock"). The number of shares of Buyer's Stock to be
delivered at Closing as the "Price," shall be determined by
dividing the Purchase Price by the average closing price of
Buyer's Stock on the New York Stock Exchange for a twenty (20)
day trading period ending three (3) trading days prior to the
Closing (the "Closing Price"). By way of example, if the
Purchase Price is $35 million and the Closing Price is $70, the
Price shall be 500,000 shares of Buyer's Stock. For purposes
of this paragraph, the shares of Buyer's Stock placed in
"Escrow" as set forth in Article XII shall be deemed delivered
at Closing.
Notwithstanding the preceding paragraph, if the
Closing Price is less than $70, the Price will be determined by
dividing the Purchase Price by $70 so that, in the example
provided above, regardless of the Closing Price, the Price
would never be more than 500,000 shares of Buyer's Stock.
Fractional shares shall not be exchanged, and any amount of the
Purchase Price not divisible evenly by the Closing Price shall
be paid in an additional share of Buyer's Stock.
(c) International Paper shall exchange for the
Assets registered shares of its common stock on the latter of
the Closing on the sale of the Assets or as soon thereafter as
is practical after SEC approval of the share registration.
Unregistered shares (transfer restricted) shall be tendered if
registered shares are not available at the Closing, and shall
be exchanged for registered shares as soon as registered shares
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are available, as set forth in the preceding sentence.
International Paper shall file for registration of shares to be
tendered promptly upon execution of this Agreement, and shall
take all actions necessary for the expeditious effectiveness of
the registration. In International Paper's discretion, the
filing may be deferred until no later than March 15, 1995 in
order to coordinate with other SEC filings of International
Paper. All cost of registering Buyer's Stock shall be borne by
International Paper.
1.3. Assumption of Certain Liabilities. At the
Closing, Subsidiary will assume Seaman-Patrick's Trade Accounts
Payable, as set forth in Schedule 1.3(1), in the amount set
forth on the Closing Balance Sheet, certain Accrued
Liabilities, as set forth in Schedule 1.3(2), also as shown on
the Closing Balance Sheet, and Long-term Debt, as shown on the
Closing Balance Sheet and as set forth in Schedule 1.3(3), and
the specified liabilities as set forth in Schedule 1.3(4). The
Purchase Price shall be reduced by the aggregate of the
Liabilities assumed by Subsidiary. Subsidiary's assumption of
Liabilities shall be updated through the Closing Date to
reflect the Liabilities shown on the Purchase Price Balance
Sheet as defined in Paragraph 1.4.
1.4. Purchase Price Payment. Notwithstanding
Paragraph 1.2 hereof, as it will be impossible to determine the
exact amount of the Purchase Price on the Closing Date, a
preliminary determination of the Purchase Price ("Preliminary
Purchase Price") will be made, based on the Closing Balance
Sheet. Ninety-five percent (95%) of the Closing Balance Sheet,
plus the $13.5 million, shall be tendered in Buyer's Stock (as
determined pursuant to Paragraph 1.2) at the Closing. The
parties shall determine the actual Purchase Price based on an
unaudited balance sheet representative of activities and
financial operations of Seaman-Patrick for the period
January 1, 1995 to the Closing Date, prepared on a basis
consistent with the Closing Balance Sheet and this Agreement.
The unaudited balance sheet, for purposes of determining the
Purchase Price (the "Purchase Price Balance Sheet") shall be
made available as soon after the Closing Date as is practicable
and, in no event, later than thirty (30) days after the Closing
Date. If the Purchase Price, as finally determined from the
Purchase Price Balance Sheet, is more than the Preliminary
Purchase Price, International Paper shall immediately pay, in
shares of Buyer's Stock, the difference between the Preliminary
Purchase Price and the Purchase Price. If the Purchase Price
is less than the Preliminary Purchase Price, International
Paper shall withhold from the remainder of the Preliminary
Purchase Price not paid on the Closing Date, the difference
between the Preliminary Purchase Price and the Purchase Price.
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In the event that the difference exceeds the portion of the
Preliminary Purchase Price retained by International Paper on
the Closing Date, Seaman-Patrick shall tender to International
Paper the number of shares of Buyer's Stock equal to the
difference. In the event of any disagreement regarding the
Purchase Price Balance Sheet, the matter shall be referred to
the firm of Ernst & Young, whose determination shall be
conclusive.
1.5. Open Orders. Subsidiary shall assume all
unfilled vendor purchase orders (including purchase orders for
goods in transit on the Closing Date), and all unfilled
customer sales orders, entered into by Seaman-Patrick in the
ordinary course of business prior to the Closing. Such
assumption of open orders will not affect the Purchase Price
hereunder, to the extent not reflected in the Closing Balance
Sheet.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SEAMAN-PATRICK
To induce International Paper to enter into and
perform its obligations under this Agreement, Seaman-Patrick
represents and warrants to International Paper as follows: each
of which representations and warranties Seaman-Patrick
covenants shall be true at the Closing:
2.1. Organization. Seaman-Patrick is a corporation
duly organized, validly existing and in good standing under the
laws of Michigan and has all requisite corporate power and
authority to own, operate and lease its properties and to carry
on its business substantially as it is being conducted on the
date hereof. Seaman-Patrick is qualified to do business as a
corporation in the states of California, Illinois, Michigan and
Ohio, and there are no other jurisdictions in which
Seaman-Patrick is required to be so qualified. The certified
copies of the Certificate of Incorporation and the Bylaws of
Seaman-Patrick, as amended to the date hereof, and which have
been furnished International Paper, are true and correct. The
Articles of Incorporation and Bylaws of Seaman-Patrick are in
full force and effect, unamended since the respective dates of
such certifications. The minute books of Seaman-Patrick
contain complete and accurate records of all corporate actions,
including a resolution of the Board of Directors of
Seaman-Patrick authorizing the transactions contemplated by
this Agreement, including actions taken at meetings, or by
written consents in lieu of meetings, by the Board of Directors
and any committee of the Board of Directors purporting to take
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formal corporate action in lieu of action by the Board of
Directors and of the shareholders of Seaman-Patrick, and
accurately reflect all transactions which are required by law
to be passed upon by the Board of Directors, any committees
thereof or the shareholders of Seaman-Patrick.
2.2. Validity. This Agreement constitutes the legal,
valid and binding obligation of Seaman-Patrick and is
enforceable against Seaman-Patrick in accordance with its
terms. All corporate action on the part of Seaman-Patrick
necessary for the execution and delivery of this Agreement and
consummation of all transactions contemplated hereunder has
been effected. No approvals, filings or notifications are
required under any statutes, governmental regulations or
agreements (except loan agreements as to which consents will
have been received prior to Closing) to which Seaman-Patrick is
a party in order to and as a condition to closing on the
transaction contemplated by this Agreement, except as acquired
by the Hart-Scott-Rodino Premerger Notification Act.
2.3. Tangible Personal Property. The schedule of
Tangible Personal Property attached hereto as Schedule 1.2(a)2
generally describes the items of tangible personal property to
be acquired by International Paper. Schedule 1.2(a)2 describes
the material items of tangible personal property (except
Inventory held for sale) and its location, owned, rented,
leased or used by Seaman-Patrick. With respect to each item of
Tangible Personal Property owned or leased by Seaman-Patrick,
whether material to Seaman-Patrick's business or not, Schedule
2.3 to this Agreement lists each lien, encumbrance, or security
arrangement, the holder thereof and the amount and repayment
terms of any debt or obligation which such lien, encumbrance,
title retention or security arrangement secures. With respect
to each item of Tangible Personal Property leased or rented by
Seaman-Patrick, Schedule 2.3 lists the type and quantity, of
such property, the lessor, the date and term of the lease or
rental agreement, the amount of rent payable (including
escalations) and renewal and purchase options, if any. Each
lease or other instrument referred to on Schedule 2.3 is in
full force and effect and constitutes a legal, valid and
binding obligation of Seaman-Patrick and the other parties
thereto, enforceable in accordance with its terms. Each item
of Tangible Personal Property owned or leased by Seaman-Patrick
is presently in operating condition, except as disclosed in
Schedule 2.3. Subject to the foregoing sentence, all Tangible
Personal Property will be delivered at the Closing in its
present condition "AS-IS", WHERE IS".
2.4 Inventory. All Inventory of Seaman-Patrick,
except for such items of Inventory identified in Schedule
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1.2(a)1.A. as slow-moving, obsolete, outdated or damaged, are
of good and merchantable quality. Seaman-Patrick further
represents that as of the Closing, all Inventory of
Seaman-Patrick shall be free and clear of any encumbrances,
and, except as so identified on Schedule 1.2(a)1.A. shall be
saleable in the ordinary course of business by International
Paper subsequent to the Closing. The Inventory shall be
accurate and complete as of the Closing Balance Sheet. The
quantities and each type of Inventory are not excessive, but
are at reasonable levels in the present circumstances of
Seaman-Patrick, and are consistent with relevant past practices.
2.5. Real Property. The schedule of Real Property
attached hereto as Schedule 2.5 and incorporated herein by
reference, sets forth a complete list and summary description,
including location, of all buildings and real property occupied
by Seaman-Patrick. With respect to each such property owned by
Seaman-Patrick, Schedule 2.5 lists each lien, encumbrance,
title retention or security arrangement, the holder thereof and
the amount and repayment terms of any debt or obligation which
such lien, encumbrance, title retention or security arrangement
secures, if any, except for liens for current taxes not yet due
and payable. Except as disclosed in Schedule 2.5, there are no
notices or claims made by governmental authorities of any
violations relating to any building occupied or used by
Seaman-Patrick, or the operations of Seaman-Patrick, of any
applicable law, ordinance, code or regulation. Seaman-Patrick
is not in default of any of the provisions of the leases which
are set forth in Schedule 2.5.
2.6. Financial Information. Seaman-Patrick has
delivered or will deliver to International Paper or its agents
the following documents and information which constitute true
and correct statements as of such dates of the financial
condition of Seaman-Patrick and of its Assets, Liabilities and
income:
(a) Audited financial statements for the years
ended December 31, 1991, 1992 and 1993, copies of which are
attached hereto as Schedule 2.6(a) and incorporated herein by
reference;
(b) Unaudited financial statements for the
period ending September 30, 1994, copies of which are attached
as Schedule 2.6(b) and incorporated herein by reference;
(c) The Closing Balance Sheet, prepared in
accordance with the requirements of this Agreement, will be
furnished as soon as the same is completed, and prior to
January 23, 1995;
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(d) An unaudited balance sheet as of the Closing
Date (the "Purchase Price Balance Sheet");
The financial statements of Seaman-Patrick
included in such documents have been prepared in accordance
with generally accepted accounting principles ("GAAP") applied
on a consistent basis (except for Inventory which shall be
represented as set forth in Paragraph 1.2(a)1), and represent
fairly the financial position of Seaman-Patrick as of the dates
thereof and the results of its operations for the periods then
ended. The Closing Balance Sheet and the Purchase Price
Balance Sheet shall be prepared on a basis consistent with such
Seaman-Patrick financial statements.
2.7. Conduct of Seaman-Patrick Since Date of Last
Audited Annual Financial Statement. Except as disclosed in
Schedule 2.7 attached hereto and incorporated herein by
reference, Seaman-Patrick has not since December 31, 1993:
(a) Mortgaged, pledged or subjected to lien or
encumbrance any of its properties or assets beyond that
disclosed in Schedules hereto:
(b) Sold or transferred any of its assets,
tangible or intangible, except in each case in the ordinary and
usual course of business, and except the prospective
disposition of its Wyndstone Papers business and the business
of Litho Photo Supply, Inc.;
(c) Incurred any extraordinary losses or
incurred or become liable for any obligations or liabilities
except current liabilities incurred in the ordinary and usual
course of business, or made any extraordinary expenditures
other than for additions and betterments to existing plant,
equipment, and facilities;
(d) Incurred any material adverse change in the
condition (financial or otherwise), of its assets, equity,
liabilities, earnings or business, taken as a whole;
(e) Incurred any damages to, or destruction or
loss of, any of its properties to the extent of more than
$50,000 (whether or not covered by insurance);
(f) Experienced any labor interruption or labor
dispute;
(g) Given to any person or organization for any
purpose any power of attorney which is currently in effect,
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except for purposes of submission of retirement plans for IRS
approval;
(h) Conducted its business in other than the
ordinary and usual course, consistent with past practices;
(i) made any change in, or applied for approval
of any change in, any method of accounting or accounting
practice or policy used by it;
(j) Written down or written up the value of any
Inventory, or written off as uncollectible any Account
Receivable, except for write-downs, write-ups and write-offs in
the ordinary course of business, consistent with past practice;
nor
(k) Disposed of or permitted to lapse any item
of Intangible Property used by Seaman-Patrick or in which
Seaman-Patrick has any rights, except in the ordinary course of
business, consistent with past practice.
2.8. Liabilities. Seaman-Patrick has no liabilities,
contingent or otherwise, beyond those reflected in Schedule
1.3(4), and the financial statements attached as Schedules
2.6(a) or 2.6(b), other than current liabilities incurred in
the ordinary and usual course of business since December 31,
1993.
There is no liability associated with the Long-term
Debt of Seaman-Patrick that International Paper is agreeing to
assume in Article I of this Agreement, in the nature of
prepayment penalties, fees or expenses, upon assumption or
payment.
2.9. No Defaults. There is no material default
under, and no event has occurred which, to the knowledge of
Seaman-Patrick, with notice or lapse of time or both, would
give rise to a default under, any material instrument binding
upon, or other agreement or obligation of Seaman-Patrick. All
material agreements to which Seaman-Patrick is a party are in
full force and effect, without material default by
Seaman-Patrick.
2.10. No Breach. The execution of this Agreement and
consummation of the transactions contemplated hereby will not
result in the breach of any of the unwaived terms, conditions
or provisions of, nor constitute a default under, any
indenture, agreement or other instrument to which
Seaman-Patrick is a party or by which Seaman-Patrick may be
bound or affected, which default or breach will restrict the
ability of Seaman-Patrick to consummate the transactions
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contemplated hereby, adversely affect the business of
Seaman-Patrick, nor give any person the right to declare a
default or exercise any remedy under, or to accelerate the
maturity or performance of, or cancel, eliminate or modify, any
written contract (or oral contract disclosed in writing to
International Paper) to be assigned to International Paper at
the Closing, nor result in a violation by Seaman-Patrick of any
state, local or other law, regulation, judgment, order or rule.
2.11. Absence of Proceedings. No action or
proceeding has been instituted against Seaman-Patrick or any of
the shareholders of Seaman-Patrick (the "Shareholders") before
any court or other governmental body by any person or public
authority seeking to restrain or prohibit the execution and
delivery of this Agreement or the consummation of the
transactions contemplated hereby.
2.12. Brokers Fee. Seaman-Patrick represents and
warrants to International Paper that any fee or commission in
the nature of a finder's or originator's fee incurred by
Seaman-Patrick in connection with the transaction described
herein shall be for the account of Seaman-Patrick, but shall
not be reflected in the Closing Balance Sheet. Seaman-Patrick
has dealt with only two (2) representatives, R. A. Reeves and
The Robinson-Humphrey Company, Inc., and shall be solely
responsible for payment of any fees or expenses incurred in
connection with the transaction which is the subject of this
Agreement. Seaman-Patrick disputes any claim by The
Robinson-Humphrey Company, Inc. and shall indemnify
International Paper against any liability therefor.
2.13. Intangible Property. The schedule of
Intangible Property attached hereto as Schedule 2.13 lists all
trademarks, service marks, trade names, copyrights and patents
and computer system(s) which are owned, held, claimed or used
by Seaman-Patrick and each registration, application license,
grant or other right or agreement to which Seaman-Patrick is a
party with respect to the use of any trademark, trade name,
service mark, copyright or patent pertaining to
Seaman-Patrick. As to each such item of Intangible Property,
Schedule 2.13 also describes any license or other agreement
with respect to such property to which Seaman-Patrick is a
party, the identity of any other party to such license or
agreement, the term (including renewal options), and license
fees, royalties and all other periodic and non-periodic
payments due thereunder (including any escalations and
variations in such fees, royalties or other payments). Except
as disclosed in Schedule 2.13, Seaman-Patrick: (i) has received
no notice whereby any third party claims any rights in any
trademarks, service marks, trade names, copyrights, patents,
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trade secrets, and unpatented technology (the "Intangible
Property") owned, held, claimed or used by Seaman-Patrick; (ii)
does not use any Intangible Property by consent of any other
person; (iii) is not required to, and does not, make any
payments to others with respect thereto; (iv) to the best of
Seaman-Patrick's knowledge, owns or possesses adequate licenses
or other rights to use all Intangible Property used in the
conduct of its business as now operated; and (v) has not been
notified, advised of or threatened with any claim of any other
person relating to any Intangible Property or any process or
confidential information of Seaman-Patrick. Seaman-Patrick has
no knowledge of any basis for any charge or claim that would
adversely affect its right to use any Intangible Property.
2.14. Agreement and Contracts. The schedule of
Agreements and Contracts attached hereto as Schedule 2.14 sets
forth a list of each contract, agreement, lease, option,
instrument, obligation or commitment to which Seaman-Patrick is
a party (the "Agreements"), other than: (i) contracts for the
purchase of inventory or services, the aggregate purchase price
under any one of which does not exceed $250,000, and under all
of which do not exceed $1,000,000 per vendor; and (ii)
contracts for the sale of inventory or services, the aggregate
sales price under any one of which does not exceed $250,000,
and under all of which do not exceed $1,000,000 per customer;
and (iii) real estate leases, which are listed on Schedule
2.5. Schedule 2.14 specifies the type of Agreement, the name
and address of each party to such Agreement, a detailed
description of the subject matter, the effective date and term,
dollar value and renewal options, if any. Each Agreement
listed in Schedule 2.14 is in full force and effect,
constitutes a legal, valid and binding obligation of
Seaman-Patrick and of the other parties thereto, enforceable in
accordance with its terms. Seaman-Patrick is not in default
and, to the best of its knowledge, no other party is in default
under any such Agreement, and no party to any such Agreement
has given notice to any other party thereto that the latter is
in default thereunder.
2.15. Customers and Suppliers. The schedule of
Customers and Suppliers attached hereto as Schedule 2.15 sets
forth, for the period ended December 31, 1993: (i) the name,
address and aggregate revenues from each customer of
Seaman-Patrick that accounted for revenues from the sale of
products or the lease or rental of equipment exceeding $250,000
per annum, and (ii) the name, address and aggregate purchases
from each supplier of goods or services to Seaman-Patrick from
which aggregate purchases exceeded $1,000,000 per annum.
Except as set forth in Schedule 2.15, revenues from each such
customer and purchases from each such supplier are consistent
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with Seaman-Patrick's prior year, and Seaman-Patrick has not
received notice of intent to terminate any contracts or orders
with any customer or supplier listed on Schedule 2.15.
2.16. Employer Benefits. The schedule of employee
pension plans and employee welfare plans and other plans
attached as Schedule 2.16 is a true, correct and complete
listing of:
(a) All "employee pension benefit plans," as
such term is defined in Section 3 of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA") ("Pension
Plans"), maintained by Seaman-Patrick, or in which employees of
Seaman-Patrick participate, including any such plans as have
been terminated or with respect to which an application
regarding termination is pending. With respect to such plans:
(i) Current copies of all such plan documents,
summary plan descriptions thereof and related trust
agreements have been furnished to International Paper;
(ii) Such plans and trusts are qualified under
Section 401(a) of the Internal Revenue Code of 1986,
as amended (the "Code"), and nothing has occurred
which would adversely affect the qualified status of
the Pension Plans. A copy of the most recent Internal
Revenue Service ("IRS") determination letter issued
for each such plan and trust has been furnished to
International Paper;
(iii) All government reporting requirements with
respect to such plans have been satisfied and are
current;
(iv) A copy of the two most recent Forms 5500
(which state such plans' assets and liabilities and
current actuarial valuations), as filed with the IRS,
together with all attachments thereto for each plan,
has been furnished to International Paper.
(v) All Pension Plans are fully funded on an
ongoing basis in accordance with their respective
terms, as of the date of Closing. There has been no
misstatement of pension liabilities that would result
in the imposition of tax under law or code.
Seaman-Patrick is not aware of any claim that any
representations, oral or written, with respect to
participation, eligibility for benefits, vesting,
benefit accrual or coverage under any Plan have been
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made to employees of Seaman-Patrick which are not in
accordance with the terms and conditions of such Plan.
(vi) Neither any of the plans or trusts, nor any
trustee or administrator thereof, has engaged in a
transaction which might subject any of the plans,
trusts, or any trustee or administrator thereof, or
any party dealing with the plans or trusts, to a tax
penalty on prohibited transactions imposed by Section
4975 of the Code or to a civil penalty imposed by
Section 502 of ERISA;
(vii) All plans which have been completely or
partially terminated since September 2, 1974 are
listed in Schedule 2.16;
(viii) None of the plans or trusts referred to
or included in Schedule 2.16 has incurred any
"accumulated funding deficiency," as such term is
defined in Section 412 of the Code, whether or not
waived; and
(ix) Seaman-Patrick has not contributed to a
"Multiemployer Plan," as defined in Section 3(37) of
ERISA.
(b) All "employee welfare benefit plans," as
such term is defined in Section 3 of ERISA ("Welfare Plans"),
whether insured or otherwise. All such Plans are in material
compliance with the provisions of ERISA, and current copies of
such Plans have been furnished to International Paper, together
with copies of the two most recent Forms 5500 for each Plan.
(c) All vacation and other employee benefit
plans or policies not subject to ERISA (the "Other Plans")
maintained by Seaman-Patrick, whether or not formally
designated as a plan.
Seaman-Patrick further represents as to Employee
benefits:
(A) There are no pending, anticipated or
threatened claims against or otherwise involving any
of Seaman-Patrick's Welfare Plans or Pension Plans or
Other Plans, or any fiduciary thereof, by or on behalf
of the Welfare Plans or Pension Plans or Other Plans
by any employee or beneficiary covered under the
Welfare Plans or Pension Plans or Other Plans, or
otherwise involving the Welfare Plans or Pension Plans
or Other Plans (other than routine claims for
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benefits). There is no judgment, decree, injunction,
rule or order of any court, governmental body,
commission, agency or arbitrator outstanding against
or in favor of any Welfare Plan or Pension Plan or
Other Plans or any fiduciary thereof.
(B) Welfare Benefits. Seaman-Patrick shall be
responsible for any medical, dental, or
hospitalization benefits, life insurance, disability,
workers compensation and other claims (collectively
"Welfare Claims") incurred by former or present
employees of Seaman-Patrick, whether or not hereafter
employed by International Paper, arising from events
(injury or occurrence) prior to the effective time of
the Closing; provided, that International Paper shall
administer (for the account of Seaman-Patrick) legally
required COBRA benefits with respect to the
Seaman-Patrick Employee Health Plan for any former
employees of Seaman-Patrick, and for a limited number
of former employees of Seaman-Patrick operations other
than Paper whose employment shall have terminated at
or prior to Closing and who shall be identified in
writing at Closing; and provided, further, that in the
case of illness of an employee hired by International
Paper (or a dependent of such employee) which spans
the Closing Date, Seaman-Patrick shall be responsible
for costs incurred up to the Closing Date and
International Paper shall be responsible for costs
incurred on and after the Closing Date.
Seaman-Patrick shall maintain its current medical,
dental, hospitalization, survivor benefit, life
insurance, disability and workers' compensation plans
through the Closing.
(C) Collective Bargaining Agreements.
Seaman-Patrick represents that, except as otherwise
disclosed to International Paper in Schedule 2.16(C)
attached hereto and incorporated herein, it is not a
party to any collective bargaining agreement and that
its employees are not covered by any such agreement.
Since January 1, 1992, there has not been, and there
is not presently pending or existing, any strike,
slowdown, picketing, work stoppage, labor arbitration
or proceeding (other than routine matters in the
ordinary course of business) in respect of the
grievance of any employee, an application or complaint
filed by an employee or union with the National Labor
Relations Board or comparable government body,
organizational activity or other labor dispute against
or affecting Seaman-Patrick, and no application for
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certification of collective bargaining agent is
pending or threatened. No facts or circumstances exist
which could provide the basis for any work stoppage or
other labor dispute. There is no lockout of any
employees by Seaman-Patrick, or is any such action
contemplated. Seaman-Patrick has complied in all
material respects with all legal requirements relating
to employment, equal employment opportunity,
nondiscrimination, immigration, wages, hours,
benefits, collective bargaining, the payment of
occupational and similar taxes, social security taxes,
occupational safety and health, profit sharings and
plant closing laws.
(D) Former, Severed or Retiring Seaman-Patrick
Employees. Seaman-Patrick has made full disclosure to
International Paper of the nature and extent of any
medical expenses it currently anticipates incurring
for its employees, or their dependents.
Seaman-Patrick does not provide and has not provided
benefits, including, without limitation, death or
medical benefits (whether or not insured), with
respect to current or former employees of
Seaman-Patrick, beyond retirement or other termination
of service, other than retirement benefits,
COBRA-mandated health continuation benefits, and
continued medical benefits on a retiree-paid basis
under the Welfare Plans or Pension Plans. Retiree
medical coverage is provided on the basis of
retiree-paid premiums considered sufficient to fund
the program. International Paper shall continue this
program for at least six months after the Closing, but
at such premium level as International Paper
reasonably determines. International Paper shall
provide the participating retirees with at least three
months' notice of termination of this program.
International Paper shall have no obligation to pay
severance or any other consideration respecting
retired Seaman-Patrick employees, Seaman-Patrick
employees on long-term disability, or employees of
Seaman-Patrick.
(E) Seaman-Patrick does not maintain for
Seaman-Patrick employees any pension plan or similar
retirement plan outside the United States.
(F) Employees. Schedule 2.16(F) contains a
current list setting forth the following information
for each employee of Seaman-Patrick including, without
limitation, each employee on leave of absence or
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layoff status: name; job title; current compensation
paid or payable and showing any change in compensation
since December 31, 1993; vacation accrued and service
credited for purposes of vesting and eligibility to
participate under Seaman-Patrick's pension,
retirement, profit sharing, thrift-savings, cash
bonus, employee stock ownership, insurance, medical,
welfare and vacation plans. There is no "employee
benefit plan", as defined in Section 3(3) of ERISA
which (i) is subject to any provision of ERISA, and
(ii) is maintained, administered or contributed to by
Seaman-Patrick and covers any employee or former
employee of Seaman-Patrick or under which
Seaman-Patrick has any liability which has not, as of
the date hereof, been disclosed to International Paper.
(G) Seaman-Patrick has or will have, prior to
Closing, contributed or accrued all amounts required to be
contributed to the Plans and Pension Plans, for periods up to
the Closing. International Paper shall assume such accrued
liability as provided in Paragraph 1.3 and as set forth in
Schedule 1.3(2).
2.17. Litigation. Except as disclosed in Schedule
2.17, no suit, action or legal, administrative, arbitration or
other proceeding, or investigation by any governmental agency,
pertaining to the business and assets of Seaman-Patrick
including, but not limited to, matters involving safety, or
health standards, or products liability or product safety, or
any change in the zoning or building ordinances affecting the
properties or leasehold interest of Seaman-Patrick is pending
or threatened against Seaman-Patrick which would materially and
adversely affect the financial condition or business of
Seaman-Patrick, its properties and assets, or the conduct of
Seaman-Patrick's business; Seaman-Patrick is not, to its
knowledge, in violation of any federal, state or local
statutes, ordinances or regulations, including, but not limited
to, those relating to safety, building, product safety or
health standards, the violation of which would have a material
adverse effect on the financial condition or assets of
Seaman-Patrick.
2.18. Taxes. Seaman-Patrick has duly filed, caused
to be filed or will file when due, all income, ad valorem,
property, sales and use, and all other tax returns and tax
reports required by law to be filed by it when due and has duly
paid all taxes reflected as payable on such returns and
reports. No proceeding or other action is pending or
threatened for the assessment or collection of additional
taxes. No deficiency for any tax has been asserted or assessed
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against Seaman-Patrick. Seaman-Patrick is not currently
subject to any outstanding federal, state or local tax audit or
investigation, and Seaman-Patrick has no notice of any such
assessment, audit or investigation of Seaman-Patrick. All
taxes and other assessments and levies which Seaman-Patrick is
required by law to withhold or collect have been duly withheld
and collected, and have been paid over to the proper
governmental authorities or are held by Seaman-Patrick for such
payment, and all such withholdings and collections and all
other payments due in connection therewith as of September 30,
1994, are duly reflected in the financial statements of
Seaman-Patrick as of September 30, 1994, to the extent required
to be reflected therein, pursuant to GAAP. Seaman-Patrick has
not received any notice of any tax deficiency outstanding,
proposed or assessed against it, nor has Seaman-Patrick
executed any waiver of any statute of limitations on the
assessment or collection of any tax. All tax liabilities of
Seaman-Patrick for any period after September 30, 1994 have
been provided for on the books of Seaman-Patrick consistent
with past practices. Seaman-Patrick shall accurately accrue
for payroll taxes through the Closing.
Except as disclosed on Schedule 2.18:
(i) Seaman-Patrick has no interest in real property in the
State of New York;
(ii) none of the property owned or used by Seaman-Patrick is
subject to a tax benefit transfer lease executed in accordance
with Section 168(b) of the Internal Revenue Code of 1986, as
amended (the "Code");
(iii) none of the property owned by or used by Seaman-Patrick
constitutes "tax-exempt use property" within the meaning of
Section 168(h) of the Code;
(iv) Seaman-Patrick is not currently under any contractual
obligation to indemnify any other person with respect to any
and all taxes;
(v) Seaman-Patrick will not be required (a) as a result of a
change in method of accounting for any period prior to the
Closing, to include any adjustment under Section 481(c) of the
code in taxable income for any period after the Closing; or
(b) as a result of any closing agreement as defined in Section
7121 of the Code to include any item of income or exclude any
item of deduction from any taxable period after the Closing.
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(vi) Seaman-Patrick has not entered into a
transaction that requires an effective protective carryover
basis election pursuant to Section 338 of the Code with
respect to all transactions where an affirmative action
carryover Section 338 election could be applicable; and
(vii) Seaman-Patrick is not subject to
withholding under Section 1445 of the Code with respect to any
transfer of any "United States real property interest."
(viii) No property of Seaman-Patrick is subject
to any arrangements (including, but not limited to, a lease)
whereby ownership of such property has been transferred, for
tax purposes, to another person, under provisions of any
applicable law.
Notwithstanding the duration of the indemnification
set forth in Article XI hereof, the representations and
warranties set forth in Section 2.17 shall survive for the
longer of the statute of limitations applicable to the subject
matter of the representation and warranty, or for two (2) years.
2.19. Trade Names of Seaman-Patrick Paper Company.
Seaman-Patrick has, and shall have at Closing, the legal right
to conduct business as "Seaman-Patrick Paper Company" and any
other name by which it currently does business (other than
Wyndstone Heat Transfer Papers, which name is an Excluded Asset
under this Agreement), and is not aware of the right of any
other entity to operate under those designations, styles, or
names, and represents that International Paper shall at Closing
obtain all of Seaman-Patrick's rights to use said names; and
further warrant and represent that neither Seaman-Patrick nor
its Shareholders shall, after the date of Closing use, attempt
to use, or do business under, the name "Seaman-Patrick Paper
Company," or any other name under which it presently does, or
within three (3) years prior to this Agreement, did business,
and shall, prior to or at Closing, assign the name to
International Paper.
2.20. Seaman-Patrick Logo and Trademarks.
Seaman-Patrick has the legal right to use the Seaman-Patrick
Paper Company "logo," and the same is an Asset to be acquired
by International Paper pursuant to this Agreement, and
Seaman-Patrick further warrants and represents that neither
Seaman-Patrick, nor its shareholders shall, after the date of
Closing, use, or attempt to use, the Seaman-Patrick Paper
Company "logo."
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2.21. Environmental Compliance.
(a) To the best of its knowledge after
reasonable inquiry, Seaman-Patrick has complied with and is
currently in compliance with, and has not been charged with,
has not received any notice of and is not under investigation
for its failure to comply with, any statute, law, ordinance,
rule, regulation, order or directive of any governmental agency
with respect to the use, generation, dumping, releasing,
burying, disposing, or emitting of any particles, materials,
substances or emissions that are determined by any governmental
agency to be of a hazardous, toxic, pollutive or ecologically
or environmentally damaging nature ("Hazardous Materials")
pertaining to its businesses, its assets, its real (owned or
leased) or personal property, or the operation or conduct
thereof. Seaman-Patrick has not and, to the best of its
knowledge after reasonable inquiry, no other person ever has,
disposed of any Hazardous Materials at any of the real property
owned or leased by it regardless of whether such material or
substances constituted Hazardous Materials at such time of
disposal.
(b) For purposes of this Agreement, the term
"Hazardous Materials" shall include those materials or
substances defined as "hazardous substances", "hazardous
materials," "hazardous waste," "toxic substances" or other
similar designations under the environmental laws and
regulations of the United States.
(c) Each hazardous waste transporter and
disposal facility that has transported and disposed of any
Hazardous Materials on behalf of Seaman-Patrick is listed on
Schedule 2.21, attached hereto and incorporated herein by
reference and, to the best of the knowledge of Seaman-Patrick
was properly licensed at such time of transportation or
disposal and properly transported or disposed of such Hazardous
Materials at a licensed facility. All manifests required by
any and all of the statutes, laws, ordinances, rules,
regulations, orders and directives of any governmental agency
to be completed and retained by Seaman-Patrick in connection
with each such instance of transportation were so completed and
retained, and copies thereof are provided in Schedule 2.22.
(d) To the best of the knowledge of
Seaman-Patrick after reasonable inquiry, none of the real
property owned or leased by Seaman-Patrick is or has ever been
listed on any federal or state registry, list or report of
active or inactive hazardous waste disposal sites.
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2.22. Insurance. Attached hereto as Schedule 2.22
and incorporated herein by reference is a list, complete and
correct in all material respects, of all insurance policies and
fidelity bonds covering the assets, business, equipment,
properties, operations, employees, officers and directors of
Seaman-Patrick. Except as set forth on Schedule 2.22, there
are no material claims pending under any such policies or
material disputes with underwriters, and all premiums due and
payable have been paid. There are no pending or threatened
terminations with respect to any such policies and
Seaman-Patrick is in compliance in all material respects with
all conditions contained therein. All such policies are in
full force and effect.
2.23. Accounts and Notes Receivable. All of the
Accounts and Notes Receivable to be reflected in the Closing
Balance Sheet, or that have arisen since such date, arose in
the ordinary and usual course of business, will represent valid
obligations to Seaman-Patrick, and have been collected or are
or will be collectible in each case in the aggregate amounts
thereof recorded on the books of Seaman-Patrick, except to the
extent of the allowance for doubtful accounts included in the
Closing Balance Sheet. There is no valid defense or setoff to
Seaman-Patrick's rights to collect such Accounts and Notes
Receivable in the full recorded amounts thereof, less such
reserves, and none of such Accounts or Notes Receivable are
payable or will be paid by credits, except for credits which
are duly reflected in Seaman-Patrick's accounts receivable
records (and netted against accounts receivable). With respect
to Accounts and Notes Receivable of Seaman-Patrick, whether
listed on Schedule 1.2(a)(4) or not, none of such Accounts and
Notes Receivable of Seaman-Patrick is subject to counterclaims
or setoffs, and all of such Accounts and Notes Receivable are
good and collectible at the aggregate thereof (net of cash
discounts taken) recorded on Seaman-Patrick's books. Any
Accounts and Notes Receivable not collected by International
Paper within one hundred twenty (120) days of Closing (after
giving effect to the allowance for doubtful accounts), shall be
paid by Seaman-Patrick, upon demand, pursuant to the
indemnification provisions of Paragraph 11.6.
2.24. General Representation and Warranty. No
representation or warranty made in this Agreement, and no
statement made in any certificate or schedule furnished in
connection with the transaction herein contemplated, contains,
or would if made at the Closing, contain, any untrue statement
of a material fact or omits or will omit to state any material
fact necessary to make such representation or warranty or any
such statement not misleading to a prospective purchaser of all
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of the stock or Assets of Seaman-Patrick who is seeking full
information as to Seaman-Patrick and its affairs.
2.25. Bulk Sales Compliance. Seaman-Patrick will
comply in all material respects with any applicable Bulk Sale
Act or law of the states where Seaman-Patrick is licensed to do
and is doing business, and will either provide a certificate of
compliance or certificate of exemption from the sale of Assets
as contemplated by this Agreement. Alternatively,
International Paper may waive such compliance and be entitled
to indemnification against any claims under any applicable Bulk
Sales Act.
ARTICLE III
REPRESENTATIONS OF INTERNATIONAL PAPER
To induce Seaman-Patrick to enter into and perform its
obligations under this Agreement, International Paper
represents to Seaman-Patrick as follows:
3.1. Organization. International Paper Company and
Subsidiary are both corporations organized and duly existing
under the laws of the State of New York.
3.2. Validity. This Agreement constitutes the legal,
valid and binding obligation of International Paper and is
enforceable against International Paper in accordance with its
terms. All corporate action on the part of International Paper
necessary for the execution and delivery of this Agreement and
consummation of all transactions contemplated hereunder has
been effected. No approvals, filings or notifications are
required under any statutes, governmental regulations or
agreements to which International Paper is a party in order to
and as a condition to closing on the transaction contemplated
by this Agreement, except as required by the Hart-Scott-Rodino
Premerger Notification Act.
3.3. Brokers Fee. Neither International Paper nor
anyone acting on its behalf has any liability to any broker,
finder or agent or has agreed to pay any brokerage commission
with respect to the transactions contemplated by this Agreement.
3.4. Litigation. There are no actions, suits or
proceedings pending or, to the knowledge of International
Paper, threatened against International Paper that would
prevent or hinder the consummation of the transaction
contemplated by this Agreement or which may reasonably be
expected to have a material adverse effect on the condition
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(financial or otherwise), business, assets, liabilities,
capitalization, financial position or results of operations of
International Paper taken as a whole.
3.5. Registration Statement.
(a) The registration statement contemplated by
Paragraph 1.2(c) (the "Registration Statement") will, at the
time it and all pre-effective and post-effective amendments
thereto are filed with the SEC and at the time it is declared
effective by the SEC, comply as to form in all material
respects with the applicable requirements of the Securities Act
of 1933, as amended, and all applicable rules and regulations
promulgated thereunder.
(b) The Registration Statement will not at the
time it becomes effective, at the time of Closing and at the
time of delivery of registered shares of Buyer's Stock in
payment of the Purchase Price, contain any untrue statement of
a material fact or omit to state any material fact necessary in
order to make the statements made therein not misleading.
3.6 SEC Filings.
(a) International Paper has delivered to the
Company (i) its annual report on Form 10-K for its fiscal year
ended December 31, 1993 ("l993 10-K"), (ii) its quarterly
reports on Form 10-Q for its fiscal quarters ended March 31,
1994, June 30, 1994 and September 30, 1994 ("1994 10-Q's"),
(iii) its proxy statement relating to its 1994 annual
shareholder meeting, and (iv) all of its other reports or
registration statements filed with the SEC since December 31,
1993 (all such documents referred to in clauses (i)-(iv) being
referred to herein as "SEC Reports").
(b) As of its filing date, each such report or
statement filed pursuant to the Securities Exchange Act of
1934, as amended (the "1934 Act") did not contain any untrue
statement of a material fact or omit to state any material fact
necessary in order to make the statements made therein, in the
light of the circumstances under which they were made, not
misleading.
(c) Each such registration statement as amended
or supplemented, if applicable, filed pursuant to the 1933 Act
when such statement or amendment became effective did not
contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or
necessary to make the statements therein not misleading.
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3.7. Financial Information. The consolidated
financial statements (including any related notes or schedules)
in International Paper's 10-K and 10-Qs fairly present, in
conformity with generally accepted accounting principles
consistently applied (except as disclosed in the notes
thereto), the consolidated financial position of International
Paper and its consolidated subsidiaries as of such date and
their consolidated results of operations and changes in
financial position for the periods then ended (subject to
normal year-end adjustments in the case of the unaudited
interim financial statements contained in the 10-Qs).
3.8. Undisclosed Liabilities. Except for (i)
liabilities reflected in the 10-K and the 10-Qs and the
financial statements contained therein and (ii) liabilities
incurred in the ordinary course of business of International
Paper and its subsidiaries subsequent to September 30, 1994,
International Paper and its subsidiaries have no liabilities
that are material to the business, financial condition or
results of operations of International Paper or any of its
subsidiaries and there is no existing condition, situation or
set of circumstances which could reasonably be expected to
result in such a liability.
3.9. Capitalization.
(a) As of September 30, 1994 the authorized and
outstanding capital stock of International Paper is as
described in International Paper's 10-Q of that date.
(b) All outstanding shares of capital stock of
International Paper have been duly authorized and validly
issued and are fully paid and nonassessable. Except as set
forth in this Section 3.9 and except for non-material changes
since September 30, 1994, there are outstanding (i) no shares
of capital stock or other voting securities of International
Paper, (ii) no securities of International Paper convertible
into or exchangeable for shares of capital stock or voting
securities of International Paper, and (iii) no options or
other rights to acquire from International Paper, and no
obligation of International Paper to issue, any capital stock,
voting securities or securities convertible into or
exchangeable for International Paper Stock.
(c) The shares of International Paper Stock to
be issued in payment of the Purchase Price hereof have been
duly authorized and, when issued pursuant to this Agreement,
will be validly issued, fully paid and non-assessable, with no
personal liability attaching thereto. Such shares will not be
subject to any preemptive rights.
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3.10. General Representation and Warranty. No
representation or warranty made in this Agreement, and no
statement made in any certificate or schedule furnished in
connection with the transaction herein contemplated, contains,
or would if made at the Closing, contain, any untrue statement
of a material fact or omits or will omit to state any material
fact necessary to make such representation or warranty or any
such statement not misleading to a prospective substantial
investor in the stock of International Paper who is seeking
full information as to International Paper and its affairs.
ARTICLE IV
CONDUCT PRIOR TO CLOSING
4.1. Actions by Seaman-Patrick. From the date hereof
through the Closing, Seaman-Patrick shall use its best efforts
to assure that Seaman-Patrick shall not (except as permitted by
this Agreement) suffer or permit any event to occur which, had
it occurred prior to the date hereof, would cause any of the
representations and warranties set forth in this Asset Purchase
Agreement to become false.
4.2. Actions by International Paper. From the date
hereof through the Closing, International Paper shall use its
best efforts to assure that International Paper shall not
(except as permitted by this Agreement) suffer or permit any
event to occur which, had it occurred prior to the date hereof,
cause any of the representations and warranties set forth in
this Asset Purchase Agreement to become false.
4.3. Access. Seaman-Patrick shall allow
International Paper and its representatives reasonable access
to the facilities, books, records and employees of
Seaman-Patrick for purposes of conducting due diligence and for
planning the transition of Seaman-Patrick to International
Paper's ownership.
4.4. Public Announcement. Except as otherwise
required by law, no public disclosure concerning the subject
matter hereof will be made without the joint approval of
Seaman-Patrick and International Paper, and neither
Seaman-Patrick nor International Paper shall make any such
public disclosure without first giving the other reasonable
opportunity to review and comment on it. It is tentatively
agreed to by both parties that announcements will be made to
the public upon execution by both parties of this Agreement.
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4.5. Best Efforts. Subject to the terms and
conditions herein provided, each of the parties hereto agrees
to use its best efforts to take, or cause to be taken, all
action, and to do, or cause to be done, all things necessary,
proper or advisable under applicable laws and regulations to
consummate and make effective the transactions contemplated by
this Agreement. Seaman-Patrick agrees not to suffer or permit
any event to occur which has the effect of diminishing the
goodwill of Seaman-Patrick or adversely affecting the
reputation of Seaman-Patrick with its customers and suppliers.
4.6. Exclusivity. Seaman-Patrick shall deal
exclusively with International Paper in the sale of the Assets
through the Closing, or until Termination consistent with
Article VII of this Agreement.
ARTICLE V
CONDITIONS TO OBLIGATIONS TO EFFECT THE TRANSACTION
5.1. Conditions to Each Party's Obligation to Effect
the Transaction. The respective obligations of each party to
effect the transactions contemplated by this Agreement shall be
subject to the following conditions:
(a) No Injunctions. No preliminary or permanent
injunction shall have been issued by any Court which would
prevent the consummation of the transactions contemplated by
this Agreement;
(b) Any applicable waiting period under the
Hart-Scott-Rodino Act shall have expired;
(c) Real Estate Leases. Execution by both
parties of real estate leases for premises owned by
Seaman-Patrick at 2000 Howard Street and 2065 W. Fort Street in
Detroit, Michigan, for terms of three (3) years each, triple
net (at no cost or expense to Seaman-Patrick), at an aggregate
base rental rate of $247,500 per year payable in monthly
installments in advance.
5.2. Additional Conditions to Obligation of
International Paper to Effect the Transaction. The obligations
of International Paper to effect the transactions contemplated
in this Agreement shall be subject to Seaman-Patrick's delivery
at the Closing of the documents described in Paragraph 6.2
hereof and to the occurrence of the following additional
conditions:
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(a) Accuracy of Representations and Warranties.
The representations and warranties of Seaman-Patrick set forth
in Article II hereof: (i) shall not be demonstrated to have
been materially incorrect in a manner and to an extent which,
taken in the aggregate, materially adversely affects the
business of Seaman-Patrick; and (ii) shall at the Closing
continue to be true and correct in all material respects.
(b) Performance of Covenants. Seaman-Patrick
shall not have failed to perform any material obligations or
comply with any material covenant of Seaman-Patrick as set
forth in this Agreement to be performed or complied with by
Seaman-Patrick prior to the Closing.
(c) Employment Agreements. International Paper
shall receive at Closing from W. John Wickett, Jr. and F.
Michael Starling a signed employment agreement substantially in
the form attached as Exhibit 5.2(c).
(d) Non-competition Agreements. International
Paper shall have received from Seaman-Patrick shareholders,
signed non-competition agreements substantially in the form
attached as Exhibit 5.2(d). The term shall be three years for
holders of 10% or more of Seaman-Patrick's stock and G. H.
Ashley, and two years for all others, except as otherwise
agreed.
(e) Computer Software. Seaman-Patrick shall
obtain consent (formal or informal, satisfactory to
International Paper) to assignments by Seaman-Patrick of its
rights and liabilities under all material use, license and
service agreements for computer software.
(f) Due Diligence. Satisfactory completion by
International Paper, in its opinion, of due diligence,
including, but not limited to, satisfactory review of the
Schedules to this Agreement that are to be furnished by
Seaman-Patrick.
(g) Closing Balance Sheet. International Paper
shall have completed the audit of the Closing Balance Sheet, of
which both parties shall have access to the working papers of
the audit, and shall participate in the audit.
5.3. Additional Conditions to Obligation of
Seaman-Patrick to Effect the Transaction. The obligations of
Seaman-Patrick to effect the transactions contemplated by this
Agreement shall be subject to International Paper's delivery at
the Closing of the documents described in Paragraph 6.3 hereof
and to occurrence of the following additional conditions:
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(a) Accuracy of Representations. The
representations of International Paper set forth in Article III
hereof: (i) shall not be demonstrated to have been materially
incorrect; and (ii) shall at the Closing continue to be true
and correct in all material respects.
(b) Performance of Covenants. International
Paper shall not have failed to perform any material obligation
or comply with any material covenant of International Paper as
set forth in this Agreement to be performed or complied with by
International Paper prior to the Closing.
(c) Employment Agreements. W. John Wickett, Jr.
and F. Michael Starling shall each receive at Closing from
International Paper a signed employment agreement as
contemplated by Section 5.2(c).
(d) Non-competition Agreements. The
Seaman-Patrick shareholders shall have received from
International Paper non-competition agreements as contemplated
by Section 5.2(d).
(e) Tax Treatment. The transaction contemplated
by this Agreement shall qualify for federal tax purposes as a
tax-free reorganization.
(f) Fairness Opinion. Seaman-Patrick shall have
received an opinion of a qualified business appraisal firm
selected by it to the effect that this transaction is fair to
the Seaman-Patrick shareholders, including without limitation
the Seaman-Patrick ESOP.
(g) Carpenter Paper Transaction. The
transaction contemplated under an Asset Purchase Agreement
between Carpenter Paper Company and International Paper dated
December 1, 1994 shall be consummated simultaneously with the
Closing under this Agreement, at the same time and place.
ARTICLE VI
6.1. Closing. The transfer of ownership of the Assets
to International Paper and the payment of the Purchase Price to
Seaman-Patrick (the "Closing") shall occur as soon as is
practicable after completion of the Closing Balance Sheet and
completion by International Paper of its due diligence, which
the parties will attempt to have occur on or before January 31,
1995, at such time and place as agreed upon by the parties (the
"Closing Date"). The Closing shall be effective and the
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transfer of ownership of the Assets shall be deemed to have
occurred as of 12:01 a.m. on the day of Closing; provided, that
for financial and accounting purposes, the Closing shall be
deemed effective as of the close of business on January 31,
1995. At the Closing, all transactions shall be conducted
substantially concurrently and no transaction shall be deemed
to be completed until all are completed.
6.2. Seaman-Patrick's Deliveries. At the Closing,
Seaman-Patrick shall deliver or cause to be delivered to
International Paper the following:
(a) a certificate of Seaman-Patrick, dated the
Closing Date, warranting to International Paper the continued
accuracy as of the Closing Date of its representations
contained in Article II hereof and its compliance with the
conditions set forth in this Agreement.
(b) a certificate signed by the President and
the Chairman of Seaman-Patrick, warranting to International
Paper that since the date of this Agreement Seaman-Patrick has
complied with the provisions of Paragraph 4.1 herein;
(c) transfer of motor vehicle titles for any
vehicles set forth in Schedule 1.2(a)2;
(d) a written opinion, dated on the Closing, of
Dykema Gossett PLLC, counsel representing Seaman-Patrick, in
the form set forth on Schedule 6.2(d) of this Agreement.
(e) A Bill of Sale, in form satisfactory to
International Paper, for all tangible personal property to be
sold to International Paper pursuant to Article I of this
Agreement.
(f) Bulk Sales Act compliance/waiver certificate
from each state in which Seaman-Patrick is qualified to do
business, unless waived by International Paper pursuant to
Section 2.26.
(g) Assignment of agreements and licenses, as
provided in Article I of this Agreement
(h) Executed non-compete agreements, as provided
in Article V of this Agreement.
(i) Executed employment agreements with W. John
Wickett, Jr. and F. Michael Starling as provided in Article V
of this Agreement.
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(j) The real estate leases, as provided in
Article V of this Agreement.
6.3. International Paper's Deliveries. At the
Closing, International Paper shall deliver or cause to be
delivered to Seaman-Patrick the following:
(a) the Purchase Price, payable in Buyer's
Stock, as determined in Article I of this Agreement.
(b) a certificate of International Paper, dated
the Closing Date, warranting to Seaman-Patrick the continued
accuracy as of the Closing Date of its representations
contained in Article III hereof and its compliance with the
conditions set forth in this Agreement.
(c) a certificate signed by an officer of
International Paper, warranting to Seaman-Patrick that since
the date of this Agreement, International Paper has complied
with the provisions of Paragraph 4.2 herein.
(d) an Assumption Agreement whereby Subsidiary
duly assumes and agrees to satisfy all Liabilities to be
assumed by Subsidiary under this Agreement.
(e) executed non-compete agreements as provided
in Article V of this Agreement.
(f) executed employment agreements with W. John
Wickett, Jr. and F. Michael Starling as provided in Article V
of this Agreement.
(g) opinion of James W. Guedry, Associate General
Counsel of International Paper, in the form set forth in Schedule
6.3(g) to this Agreement.
(h) the real estate leases, as provided in Article V
of this Agreement.
(i) an Escrow Agreement and receipt from Comerica
Bank-Detroit confirming the Escrow contemplated by Article XII.
6.4 Costs.
Each of the parties hereto shall be responsible for
all legal, accounting and other costs incurred by it related to
the transactions contemplated hereby, except: (i) the costs of
the Closing Balance Sheet audit shall be borne by Subsidiary;
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and (ii) Subsidiary will pay directly to Dykema Gossett PLLC
the sum of $15,000 to be applied toward Seaman-Patrick's
attorney fees related to the tax-free reorganization
contemplated by this Agreement.
All sales taxes incurred in connection with this
Agreement and the transaction contemplated hereby will be borne
by International Paper. Seaman-Patrick and International Paper
shall file or cause to be filed all necessary documentation
with respect to such taxes.
All personal property, real property and other taxes
applicable to all or any part of 1994 or 1995, as the case may be,
depending in which calendar year the Closing occurs, shall be
prorated as of the Closing, based on that portion of the applicable
fiscal year of the taxing authority, that has elapsed as of the
Closing. All taxes that are unpaid as of the Closing should be
reflected on the Closing Balance Sheet in accordance with GAAP.
6.5. Possession.
Possession of all Assets shall be transferred to
International Paper effective at 12:01 a.m. on the Closing Date.
ARTICLE VII
TERMINATION
7.1. Termination of Agreement. This Agreement and
the transactions contemplated hereby may be terminated at any
time prior to the Closing, as follows:
(a) by mutual written consent of Seaman-Patrick
and International Paper;
(b) by either Seaman-Patrick or International
Paper by reason of the occurrence of any of the events
specified in Paragraph 5.1; provided, however, that in the case
of such occurrence, such termination may only be made by
written notice to the other party within ten (10) days of each
such occurrence;
(c) by International Paper by reason of the
non-satisfaction of any of the conditions specified in
Paragraph 5.2; or
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(d) by Seaman-Patrick by reason of the
non-satisfaction of any of the conditions specified in
Paragraph 5.3.
7.2. Effect of Termination. In the event of
termination of this Agreement by either Seaman-Patrick or
International Paper, this Agreement shall forthwith become void
and there shall be no liability on the part of Seaman-Patrick
or International Paper (or their respective officers or
directors), except based upon obligations as set forth in
Paragraph 6.4 hereof, and except that International Paper shall
thereupon promptly return to Seaman-Patrick or destroy (and
cause its agents and representatives to return or destroy) all
documents (and copies thereof furnished to International Paper
by Seaman-Patrick, and International Paper shall continue to
adhere to the confidentiality agreement previously entered into
with Seaman-Patrick. Notwithstanding the foregoing,
termination of this Agreement pursuant to this Article VII
shall not in any way limit or restrict the rights and remedies
of any party hereto against any other party hereto which has
violated or breached any of the representations, warranties,
agreements or other provisions of this Agreement prior to
termination hereof.
ARTICLE VIII
SURVIVAL
8.1. Survival. The covenants, agreements,
representations and warranties herein or hereunder shall
survive the Closing pursuant to Article XI and Article XIV
herein.
ARTICLE IX
COVENANTS
9.1. Further Actions. Seaman-Patrick and
International Paper will, when required at any time after the
Closing, sign, execute and deliver, or cause others within
their control to do so, all such powers of attorney, documents
and instrument and do, or cause to be done, all such other acts
and things as may be necessary to carry out the provisions of
this Agreement or any part thereof.
9.2. Confidentiality. Neither party may communicate
to anyone, other than attorneys, auditors or other advisors
under obligation of confidentiality, the substance or existence
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of this Agreement, nor the transaction contemplated hereby,
without written consent of the other party.
9.3. Seaman-Patrick Survival. Seaman-Patrick shall
not liquidate, dissolve, or otherwise be terminated as a legal
entity for a period of 355 days after the Closing, except with
the prior written consent of International Paper and after
Seaman-Patrick has made provisions satisfactory to
International Paper for performance of any remaining
obligations of Seaman-Patrick to International Paper.
9.4. Books and Records; Cooperation.
(a) Seaman-Patrick agrees that any of its books
and records which are not delivered to International Paper at
the Closing shall be maintained and made available to
International Paper for a period of seven (7) years following
the Closing, and thereafter Seaman-Patrick agrees to provide
International Paper with 90 days' advance notice of any
destruction of such books and records and an opportunity to
remove or copy those to be destroyed. Likewise, Seaman-Patrick
shall have reasonable access to its books and records delivered
to International Paper for the same period of seven (7) years,
and shall be provided with 90 days' advance notice of any
destruction of such books and records and an opportunity to
remove or copy those to be destroyed. Each party shall make
its staff reasonably available to answer questions and provide
information regarding the books and records in its possession.
(b) For a period of one year after the Closing,
International Paper will permit G. H. Ashley (or another
representative of Seaman-Patrick approved by International
Paper) to have reasonable access to its accounting systems for
the purpose of maintaining Seaman-Patrick's general ledger and
handling any payables or miscellaneous items which are not
assumed by International Paper but which require processing
after the Closing.
(c) International Paper will obtain
Seaman-Patrick's approval before accepting customer returns on
behalf of Seaman-Patrick, and International Paper will process
any approved returns.
ARTICLE X
NOTICES
Any notice, request or other communication to be given
by any party hereunder, shall be in writing and shall be
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sufficient if sent by registered or certified mail, postage
prepaid, addressed (until another address is supplied to the
other parties by the addressee in the manner provided) as
follows:
If given to International Paper, to:
Thomas E. Costello, Vice President
International Paper Company
50 East RiverCenter Boulevard
Suite 700
Covington, Kentucky 41011
with a copy to:
John P. Fonzo, Esq.
International Paper Company
50 East RiverCenter Boulevard
Suite 700
Covington, Kentucky 41011
If given to Seaman-Patrick:
Mr. W. John Wickett, Jr.
Seaman-Patrick Paper Company
2000 Howard Street
Detroit, MI 48216
with a copy to:
Raynold A. Schmick, Esq.
Dykema Gossett PLLC
315 E. Eisenhower, Suite 100
Ann Arbor, Michigan 48108
ARTICLE XI
INDEMNIFICATION
11.1. (a) By Seaman-Patrick. For a period of three
hundred forty-five (345) days from the Closing, Seaman-Patrick
agrees to indemnify and hold harmless International Paper from
and against any and all demands, claims, actions, assessments,
damages, liabilities, losses, costs and assessments (including
but not limited to attorneys' fees, interest and penalties)
with respect to, or arising out of, any misrepresentation,
breach of warranty or nonfulfillment of any covenant by
Seaman-Patrick under this Agreement, including, without
limitation, any misrepresentation in, or omission from, any
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schedule, exhibit, statement, certificate, report or other
document furnished or to be furnished pursuant to this
Agreement. In addition to and not in limitation of the
foregoing, Seaman-Patrick further agrees to indemnify and hold
harmless International Paper from and against any demands,
claims, actions, damages, liabilities, losses, costs, and
expenses (including but not limited to attorneys' fees,
interest and penalties): (a) for taxes including sales, use,
property, franchise, employment, income and all other taxes of
any provincial, federal, state, local or foreign governmental
body, together with all interest and penalties with respect
thereto, assessed at any time against Seaman-Patrick with
respect to any period through the Closing, (b) for personal
injury, death or property or environmental damage to any person
or entity to the extent arising out of or relating to the
operations conducted by Seaman-Patrick at any time prior to the
Closing; (c) for personal injury, death or property damage to
any person or entity, to the extent resulting from or caused
by, any product manufactured or sold by Seaman-Patrick at any
time prior to the Closing; (d) for personal injury or death to
any employee, agent or consultant of Seaman-Patrick for any
work place injury occurring prior to the Closing; (e) with
respect to any employee benefit plans described in this
Agreement and the Schedules hereto accruing or arising or
relating to any action, event or omission prior to the Closing;
(f) for any brokerage, agent or finder's fees; (g) with respect
to Accounts Receivable acquired by International Paper in
accordance with and subject to Paragraph 11.6 hereof; and (h)
with respect to any fees, expenses or penalties associated with
the assumption and/or payment by International Paper of
Seaman-Patrick's Long-term Debt.
(b) By International Paper. For a period of
three hundred forty-five (345) days from the Closing,
International Paper agrees to indemnify and hold harmless
Seaman-Patrick from and against any and all demands, claims,
actions, assessments, damages, liabilities, losses, costs and
assessments (including but not limited to attorneys' fees,
interest and penalties) with respect to, or arising out of, any
misrepresentation, breach of warranty or nonfulfillment of any
covenant by International Paper under this Agreement,
including, without limitation, any misrepresentation in, or
omission from, any document furnished or to be furnished
pursuant to this Agreement. In addition to and not in
limitation of the foregoing, International Paper further agrees
to indemnify and hold harmless Seaman-Patrick from and against
any demands, claims, actions, damages, liabilities, losses,
costs, and expenses (including but not limited to attorneys'
fees, interest and penalties): (a) arising from any
Liabilities assumed by International Paper hereunder; (b) for
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personal injury, death or property or environmental damage to
any person or entity, to the extent arising out of or relating
to the operations conducted by International Paper at any time
after the Closing; (c) for personal injury, death or property
damage to any person or entity to the extent resulting from or
caused by, any product manufactured or sold by International
Paper at any time after the Closing; (d) for personal injury or
death to any employee, agent or consultant of International
Paper for any work place injury occurring after the Closing;
and (e) with respect to any employee benefit plans described in
this Agreement and the Schedules hereto accruing or arising or
relating to any action, event or omission after the Closing.
(c) Notwithstanding the provisions of Sections
11.1 (a) and (b), 11.2 and 11.3, each party's obligation to
indemnify the other with respect to third-party claims which
are unknown at the Closing Date shall be subject to an
aggregate threshhold of $50,000; each party agrees to absorb
costs, expenses and damages up to $50,000 with respect to such
claims in the aggregate; provided, that if the $50,000
threshhold is exceeded, the Indemnitee shall be entitled to
full ("first dollars") indemnification in accordance with
Sections 11.1 (a) and (b), 11.2 and 11.3.
11.2. If any claim is asserted against a party (the
"Indemnitee") that is claimed by it to be the basis for a right
of indemnification pursuant to Paragraph 11.1 hereof, the
Indemnitee shall promptly notify the other party (the
"Indemnitor") in writing of such claim and whether or not it
has elected to contest the same. The Indemnitee may, but shall
not be obligated to, contest the claim, but if the Indemnitee
elects to so contest the claim, the Indemnitor shall be
permitted to participate in the contest at its own expense. If
the Indemnitee elects not to contest the claim, and if within
thirty (30) days after the Indemnitee has given the Indemnitor
written notice of such claim the Indemnitor shall have failed
either to cause such claim so asserted to be discharged or to
notify the Indemnitee of the Indemnitor's election to contest
such claim, then the full amount of such claim shall forthwith
be conclusively held to be covered by the indemnity provided in
Paragraph 11.1(a) or 11.1(b) hereof, as the case may be.
However, if the Indemnitor notifies the Indemnitee in writing
within such thirty (30) day period that it disputes the
Indemnitee's assertion that such claim is the basis for
indemnification, then the amount of such claim shall not be
payable, except when, after, and to the extent, it is
determined by the final judgment, unappealed and unappealable
by failure to appeal or otherwise, of a court of competent
jurisdiction, or by the agreement of the parties hereto, that
such claim is the basis for indemnification. If the Indemnitor
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<PAGE>
elects to contest any such claim and give proper notice
thereof, the Indemnitor shall contest the claim at its own
expense, shall indemnify and hold harmless the Indemnitee from
and against any liability, loss, damage, cost or expense
(including attorneys' fees) in connection with such contest,
including, without limitation, any loss by reason of any
attachment, execution, distraint, judgment, lien or other legal
process. Indemnity shall be deferred until thirty (30) days
after the final determination of any such contest by a final
judgment, unappealed and unappealable by failure to appeal or
otherwise, of a court of competent jurisdiction, or by the
agreement of the parties hereto.
11.3. At any time after the commencement of the
defense by the Indemnitee of any claim referred to in Paragraph
11.2 hereof, the Indemnitor may request the Indemnitee in
writing to abandon such contest or agree to the payment or
compromise by the Indemnitor of the asserted claim, whereupon
such action shall be taken unless the Indemnitee determines to
continue the contest and so notifies the Indemnitor in writing
within thirty (30) days following such written request. In
such case, the Indemnitor shall not be liable under the
provisions of Paragraph 11.1(a) or 11.1(b) hereof, as the case
may be, for any excess of such claim over and above the amount
which the other party to the contest shall have agreed in
writing to accept in payment or compromise as of the time the
Indemnitor made its request therefor to the Indemnitee.
11.4. In no event shall the provisions of this
Article XI restrict or impair in any respect the rights or
remedies otherwise available to International Paper against
Seaman-Patrick at law or in equity which rights and remedies
shall be cumulative and in addition to any other available
remedies; provided, that except for indemnification with
respect to uncollected Accounts Receivable and unsold
Slow-Moving Inventory (which shall be unlimited),
Seaman-Patrick's aggregate liability under any and all
provisions of this Agreement shall in no event exceed the
deposit of Ten Million Dollars ($10,000,000) of Buyer's Stock
placed in the Escrow established pursuant to Article XII.
Except for their pro-rata interests in the Escrow deposit,
which shall be fully subject to the claims of International
Paper pursuant to this Agreement, the Shareholders of
Seaman-Patrick shall have no personal liability for the
representations, warranties, covenants or agreements of
Seaman-Patrick under this Agreement.
11.5. The time period in this Article XI pertaining
to indemnification notwithstanding, the indemnification by
Seaman-Patrick of International Paper for tax audits, liens and
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<PAGE>
liabilities shall be the longer of the applicable statute of
limitations or two (2) years.
11.6. Accounts Receivable.
(a) The following provisions of this Section
11.6 shall exclusively govern the parties' responsibilities
with respect to Accounts Receivable. Any Accounts Receivable
remaining unpaid for a period of one hundred twenty (120) days
after Closing ("Collection Period), at International Paper's
option, shall be paid for by Seaman-Patrick to International
Paper, but only to the extent that the allowance for doubtful
accounts, as set forth on the Purchase Price Balance Sheet, is
inadequate to cover such uncollected Accounts Receivable. Such
option must be exercised, if at all, within thirty (30) days
after the expiration of the Collection Period. In the event
that actual collections during the Collection Period exceed the
amounts reflected on the Purchase Price Balance Sheet (because
the allowance for doubtful accounts was too large),
Seaman-Patrick shall be entitled to delivery of additional
shares of Buyer's Stock, valued at the price per share of
Buyer's Stock as determined at the Closing, in the amount of
such excess. For convenience, the delivery of any such
additional shares may be deferred until termination of the
Escrow as provided in Article XII.
(b) During the Collection Period, International
Paper shall use reasonable efforts, consistent with
Seaman-Patrick's historical practices, to collect the Accounts
Receivable. This provision shall not require International
Paper to commence litigation or take other extraordinary action.
(c) International Paper agrees that during the
Collection Period, unless International Paper ceases with
respect to any customer as to which an Account Receivable is
reflected on the Purchase Price Balance Sheet ("Customer") to
do business with the Customer on an open account basis, all
payments on account shall be applied first to Seaman-Patrick's
oldest receivable from that Customer, provided that such
receivable is not disputed or that the Customer has not
specifically designated the manner in which payment is to be
applied (in which latter case the Customer's designation shall
be followed and International Paper will use reasonable efforts
to inquire from the Customer as to the reason for such
designation and will report such reason to Seaman-Patrick). In
the event International Paper declines or ceases to do business
with a Customer on an open account basis during the Collection
Period, while any Account Receivable which arose prior to the
Closing is outstanding, Buyer shall place the Customer on
C.O.D. plus at least 10% of the C.O.D. amount, which additional
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<PAGE>
amount shall be applied to the oldest receivable in the manner
described above (which arrangement shall continue until the
pre-Closing receivable is retired, or until International Paper
ceases doing business with that Customer). Upon request by
Seaman-Patrick, International Paper will provide Seaman-Patrick
with International Paper's account receivable detail for
specified Customers.
(d) Payments Erroneously Received. Any payments
on Seaman-Patrick's Accounts Receivable (including amounts
payable to Seaman-Patrick under subsection (c) above), or
payments on previously written-off accounts receivable which
are not being assigned hereunder, or other payments belonging
to Seaman-Patrick received by International Paper shall be
promptly (at least weekly) delivered to Seaman-Patrick along
with the remittance advice. Likewise, Seaman-Patrick will
promptly deliver to International Paper any payments received
by Seaman-Patrick but actually belonging to International Paper.
(e) International Paper's exercise of its option
to obtain payment from Seaman-Patrick with respect to Accounts
Receivable not collected (in excess of the allowance for
doubtful accounts plus cash discounts taken) during the
Collection Period shall be in writing, shall be delivered to
Seaman-Patrick within thirty (30) days after the close of the
Collection Period and shall include an itemized listing by
Customer and amount of all unpaid Accounts Receivable and shall
be supported by a detail of each unpaid Account Receivable
which shows the open invoices, dates and amounts.
(f) Within seven (7) business days of receipt of
International Paper's notice under subsection (e),
Seaman-Patrick shall tender the required amount in cash, in
exchange for reassignment by International Paper (without
recourse) to Seaman-Patrick of all unpaid Accounts Receivable
(except for any unpaid Accounts Receivable which International
Paper chooses to retain without seeking indemnity).
(g) The Escrow provided for in Article XII may
be utilized for Seaman-Patrick's payment to International Paper
of amounts due for uncollected Accounts Receivable, but only
upon the mutual consent of both parties.
ARTICLE XII
ESCROW
The provisions of this Agreement inconsistent herewith
notwithstanding (including Article I pertaining to payment of
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<PAGE>
the Purchase Price), at the Closing there shall be delivered
into escrow with Comerica Bank-Detroit that number of shares of
Buyer's Stock having a value as of the Closing Date of Ten
Million Dollars ($10,000,000) (the "Escrow"), as an Escrow or
retention against the matters which are subject to
Seaman-Patrick's representations and warranties, as set forth
in Article II and the indemnification provisions of Article XI
of this Agreement. The shares of Buyer's Stock placed in the
Escrow shall be issued in the respective names of
Seaman-Patrick's Shareholders, and shall be endorsed in blank
by such Shareholders; such shares shall be registered shares
(or shall promptly be replaced with registered shares pursuant
to Paragraph 1.2(c)). All additions or removals of shares from
the Escrow shall be effected pro-rata among the shareholdings
of the respective Seaman-Patrick Shareholders. The respective
Seaman-Patrick Shareholders shall have all voting power and
dividend rights pertaining to such shares during the period of
the Escrow. Cash dividends shall be distributed out of the
Escrow when received.
The Escrow shall be held as the exclusive means of
satisfying any claims other than with respect to uncollected
Accounts Receivable and unsold Slow-Moving Inventory, against
Seaman-Patrick, arising out of the matters addressed in
Articles II and XI. The Escrow shall be held and disbursed as
follows:
During the twelfth month (and not later than 345 days)
after the Closing, the shares in the Escrow shall be payable to
the respective Shareholders of Seaman-Patrick, less the amount
of any claims against the Escrow at that time agreed to by
International Paper and Seaman-Patrick, or that International
Paper has, at that time, notified Seaman-Patrick of, in the
manner provided in Article XI. For purposes of indemnification
of International Paper, shares of Buyer's Stock in the Escrow
shall be credited against claims at the price per share as
determined at Closing pursuant to Article I.
ARTICLE XIII
SEAMAN-PATRICK EMPLOYEES
13.1. Employees of Seaman-Patrick. After the
Closing, International Paper intends to employ certain
employees of Seaman-Patrick. However, this statement of
intention shall not require that International Paper hire any
particular employee and does not restrict or alter
International Paper's right to terminate the employment of any
person, with or without cause, at any time. To the extent
Subsidiary assumes Seaman-Patrick's accrued obligation for
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<PAGE>
vacation pay owed to Seaman-Patrick employees after the
Closing, Subsidiary shall satisfy such liability by providing
vacation time or a cash payment to the employees and shall hold
Seaman-Patrick harmless from the employees' claims to such
vacation benefits.
13.2. For a period of one year after the Closing or
until International Paper implements uniform employee benefit
plans throughout its distribution business, whichever period is
shorter, International Paper agrees to maintain
Seaman-Patrick's existing Welfare Plans and Pension Plans or
Other Plans in substantially their present form and without
material adverse change in benefits or costs to Seaman-Patrick
employees hired by International Paper. In the event that
thereafter International Paper decides to terminate any
existing Welfare Plan or Pension Plan or Other Plan and to
provide a replacement plan, the employees' prior service with
Seaman-Patrick shall be taken into account for vesting purposes
(only) in the case of a retirement plan, and otherwise
reasonably taken into account in the case of other types of
benefit plans. Subject to the foregoing, International Paper
shall have the right to amend, suspend, modify or terminate any
benefit plan, including the Welfare Plans and the Pension Plans
and Other Plans at any time, including, but not limited to,
changes in coverages, deductibles, required contributions by
employees, and other terms and conditions of such plans, at its
expense consistent with the terms of such plans and applicable
law. International Paper shall have no liability with regard
to Seaman-Patrick's employees hired by International Paper
relating to any period prior to the Closing, except as
specifically agreed to herein, and shall have no liability to
employees of Seaman-Patrick not hired; provided, that
International Paper shall properly honor benefits accrued prior
to Closing by any such employees pursuant to the terms of the
Welfare Plans and Pension Plans and Other Plans assumed by
International Paper. International Paper shall have the right
to hire, or not to hire, in its sole and unfettered discretion,
Seaman-Patrick employees.
13.3. Employee Benefits. International Paper shall
assume the rights and obligations of the plan sponsor after the
Closing for the qualified retirement, health and welfare
benefit plans for the employees of Seaman-Patrick set forth in
Schedule 2.16.
13.4. Union Agreements. As of the Closing,
International Paper shall assume the rights and obligations of
the "Employer" under the collective bargaining agreement listed
in Schedule 2.16(C).
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<PAGE>
13.5. Severed or Retiring Seaman-Patrick Employees.
International Paper shall have no obligation whatsoever to pay
severance or any other consideration respecting retired
Seaman-Patrick employees, Seaman-Patrick employees on long-term
disability, or employees of Seaman-Patrick.
13.6. Compensation and Related Accruals.
Seaman-Patrick shall pay (or accrue for, consistent with past
practice and GAAP) vacations, bonus and all other income earned
by Seaman-Patrick employees, but not taken through Closing.
Vacations will be accrued on the basis of 1/12 of the annual
benefit for each month during ownership by Seaman-Patrick.
International Paper shall assume the accrued liability for
these items as provided in Paragraph 1.3 and as set forth in
Schedule 1.3(2).
ARTICLE XIV
SPECIAL COVENANT
14.1. Tax Status. The parties intend that this
transaction shall qualify as a tax-free reorganization under
Section 368(a)(1)(c) of the Internal Revenue Code of 1986, as
amended. International Paper agrees that it will cooperate
with Seaman-Patrick in consummating this transaction in
accordance with the requirements of a tax-free reorganization,
and will take no actions (before, during or after the Closing)
inconsistent with the status of this transaction as a tax-free
reorganization. The obligations of International Paper under
this covenant shall survive the Closing and extend until
expiration of the applicable statute of limitations.
ARTICLE XV
MISCELLANEOUS
15.1. Prior Agreements. All prior negotiations and
agreements between the parties hereto are superseded by this
Agreement, and there are no representations, warranties,
understandings, or agreements other than those expressly set
forth herein, except as modified in writing concurrently
herewith or subsequent hereto.
15.2. Binding Effect; Assignment. This Agreement
shall bind and inure to the benefit of the parties hereto and
their respective legal representatives and successors;
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<PAGE>
provided, however, that neither this Agreement nor any
commitments hereunder shall be assignable.
15.3. Proration of Taxes. Current real and
personal property taxes shall be prorated as of the Closing
Date based on the fiscal year of the taxing authority.
15.4. Governing Law. This Agreement is made
pursuant to, and shall be governed by the laws of the State of
Michigan without regard to its conflicts of laws rules.
15.5. Arbitration. Except in cases where a
specific procedure for dispute resolution is set forth in this
Agreement, any dispute between the parties which cannot be
resolved by negotiation shall be submitted to binding
arbitration at Detroit, Michigan, pursuant to the Commercial
Arbitration Rules of the American Arbitration Association;
provided, that the hearing shall be held within thirty (30)
days of the selection of the arbitrator, the hearing shall be
limited to a maximum of one day, and the decision of the
arbitrator shall be handed down within thirty (30) days after
the hearing.
15.6. Benefit of the Agreement. This Agreement is
made solely for the benefit of the parties hereto, their
successors and assigns, and no other person shall acquire or
have any right under or by virtue of this Agreement.
15.7. Counterparts. This Agreement may be executed
in one or more counterpart copies; each of such fully executed
copies shall be considered as an original, but together shall
constitute one agreement.
15.8. Severability. In case it be determined by a
court of competent jurisdiction that any provision herein
contained is illegal or unenforceable, such determination shall
solely affect such provision and not impair the remaining
provisions of this Agreement.
15.9. Timing. Time is of the essence of this
Agreement.
15.10. Headings. The headings used in this Agreement
are for convenience only and shall not constitute a part hereof.
15.11. Schedules. All Schedules referenced herein
are incorporated herein as if set forth at length herein.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed,
or caused this Agreement to be executed on the day and year
first above written.
ATTEST: INTERNATIONAL PAPER COMPANY
/s/ J.P. Fonzo By: /s/ Richard D. Childers
J.P. Fonzo Attorney-in-fact
Assistance Secretary T.E. Costello,
Vice President
ATTEST: SEAMAN-PATRICK HOLDING COMPANY
/s/ G.H. Ashley By: /s/ W. John Wickett
VP-Finance Its: President
ATTEST: SEAMAN-PATRICK PAPER COMPANY
/s/ G.H. Ashley By: /s/ W. John Wickett
VP-Finance Its: President
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<PAGE>
EXHIBIT 5
<PAGE>
EXHIBIT 5
INTERNATIONAL [LOGO] PAPER
JAMES W. GUEDRY TWO MANHATTANVILLE ROAD
SECRETARY AND PURCHASE NY 10577-2196
ASSOCIATE GENERAL COUNSEL PHONE 914 397 1532
FAX 914 397 1505
March 15, 1995
Securities and Exchange Commission
Judiciary Plaza
450 Fifth Street, N.W.
Washington, DC 20549
Re: International Paper Company
Registration Statement on Form S-3
Dear Sirs:
This opinion is furnished by me as counsel for International Paper Company,
a New York corporation (the "Company"), in connection with the Company's
Registration Statement on Form S-3 filed this day by the Company with the
Securities and Exchange Commission under the Securities Act of 1933, as
amended. The Registration Statement relates to the offering by the Company
of a maximum of 1,441,000 shares of Common Stock of the Company ($1.00 par
value), together with a like number of Common Share Purchase Rights under
the Rights Agreement dated as of December 19, 1985, as amended, between the
Company and Chemical Bank, N.A., as successor in interest to Manufacturers
Hanover Trust Company, as amended, which attach to such shares (the
"Securities").
I have examined and am familiar with originals or copies of such documents,
corporate records and other instruments as I have deemed necessary or
appropriate in connection with this opinion, including (a) the Restated
Certificate of Incorporation and By-Laws of the Company as in effect on the
date hereof; (b) records of the corporate proceedings of the Board of Directors
of the Company taken on October 11, 1994 and December 13, 1994; and (c) the
Registration Statement on Form S-3 of the Company relating to the Securities
filed herewith under the Securities Act of 1933, as amended.
Based on the foregoing I am of the opinion that:
<PAGE>
1. The Company has been duly incorporated and is a validly existing
corporation in good standing under the laws of the State of New York;
and
2. The Securities have been duly authorized by the Company and when
duly issued by the Company and the Company has received the
consideration upon the terms and conditions set forth in the
Registration Statement, including the prospectus forming a part thereof
(the "Prospectus") and any amended Prospectus relating to the
Securities, the Securities will be validly issued, fully paid and non-
assessable.
I hereby consent to the filing of this opinion as Exhibit 5 to the above-
mentioned Registration Statement and to the reference to me under the
caption "Legal Opinion" in the Prospectus.
Yours very truly,
/s/ James W. Guedry
JWG/mc
cc: Charles C. Leber
Branch Chief
Division of Corporate Finance
<PAGE>
EXHIBIT 23(a)
<PAGE>
Exhibit 23(a)
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this Registration Statement of our report dated February 9, 1995
included in International Paper Company's Form 8-K filed March 6, 1995 and to
all references to our Firm included in this Registration Statement.
ARTHUR ANDERSEN LLP
New York, N.Y.,
March 13, 1995
<PAGE>
EXHIBIT 24
<PAGE>
EXHIBIT 24
POWER OF ATTORNEY
Know All Men By These Presents, that the undersigned hereby constitutes
and appoints ROBERT C. BUTLER, JAMES W. GUEDRY and JAMES P. MELICAN,
and each of them (with full power to each of them to act alone) their
true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for them on their behalf and in their
name, place and stead, in any and all capacities, to sign, execute and
affix their seal thereto and file, with respect to the registration of
International Paper Company common stock in the exchange of stock for
the assets of Carpenter Paper Co. and Seaman-Patrick Paper Co. and the
exchange of common stock for the stock of Kirk Paper Corporation, any
and all Form S-3 Registration Statements on behalf of International
Paper Company, under the Securities Act of 1933, as amended, together
with any and all amendments (including post-effective amendments) to
such Form S-3 Registration Statements and to file the same, with all
exhibits and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said
attorneys-in-fact, and each of them, full power and authority to do and
perform each and every act and thing requisite and necessary to be done
in and about the premises in order to effectuate the same, for all
intents and purposes, and that the undersigned hereby ratify and
confirm all that said attorneys-in-fact and agents, or any of them, may
lawfully do or cause to be done by virtue hereof.
<PAGE>
Executed on the 13th day of December, 1994 by the following persons in
the capacities indicated.
Name Title
- ---- -----
/s/ JOHN T. DILLON Executive Vice
- ------------------------ President and Director
(John T. Dillon)
/s/ WILLARD C. BUTCHER Director
- ------------------------
(Willard C. Butcher)
/s/ STANLEY C. GAULT Director
- ------------------------
(Stanley C. Gault)
/s/ THOMAS C. GRAHAM Director
- ------------------------
(Thomas C. Graham)
Director
- ------------------------
(Arthur G. Hansen)
/s/ DONALD F. McHENRY Director
- ------------------------
(Donald F. McHenry)
/s/ PATRICK F. NOONAN Director
- ------------------------
(Patrick F. Noonan)
/s/ JANE C. PFEIFFER Director
- ------------------------
(Jane C. Pfeiffer)
<PAGE>
/s/ EDMUND T. PRATT, JR. Director
- ------------------------
(Edmund T. Pratt, Jr.)
/s/ CHARLES R. SHOEMATE Director
- ------------------------
(Charles R. Shoemate)
/s/ ROGER B. SMITH Director
- ------------------------
(Roger B. Smith)
