EXHIBIT 10.31
--------------------------------------------------------------------------------
STOCK PURCHASE AGREEMENT
dated as of November 27, 1996
among
DLJ MERCHANT BANKING PARTNERS, L.P.,
DLJ INTERNATIONAL PARTNERS, C.V.,
DLJ OFFSHORE PARTNERS, C.V.,
DLJ MERCHANT BANKING FUNDING, INC.,
DLJ FIRST ESC L.L.C.,
UBS CAPITAL LLC,
SDW HOLDINGS CORPORATION
and
SAPPI LIMITED
--------------------------------------------------------------------------------
TABLE OF CONTENTS
Page
----
1. Definitions ..............................................................1
2. Purchase and Sale ........................................................5
3. Closing ..................................................................5
4. Placement; Back-Up Financing .............................................6
5. Conditions to Closing ....................................................9
6. Representations and Warranties of Holders ...............................13
7. Covenants of Holders ....................................................16
8. Representations and Warranties of Sappi ................................19
9. Covenants of Sappi ......................................................21
10. Mutual Covenants ........................................................21
11. Indemnification .........................................................22
12. Further Assurances ......................................................23
13. Legends .................................................................24
14. Assignment ..............................................................24
15. Termination .............................................................25
16. Expenses ................................................................25
17. Attorney Fees ...........................................................25
18. Severability ............................................................26
19. Consent to Jurisdiction .................................................26
20. Counterparts ............................................................26
(i)
21. Interpretation ..........................................................26
22. Existing Documents ......................................................26
23. Entire Agreement ........................................................27
24. Amendment; Waiver .......................................................27
25. Binding Effect; Benefit; Action by DLJMB ................................27
26. Notices .................................................................27
27. Applicable Law ..........................................................28
28. Waiver of Jury Trial ....................................................28
29. Specific Enforcement ....................................................28
30. Press Release ...........................................................28
30. Press Release ...........................................................30
Schedule A Holders' Shares, Warrants and Warrant Shares
Schedule 6(b) Holders' Consents
Schedule 8(b) Sappi's Consents
Exhibit A Form of Press Release
(ii)
STOCK PURCHASE AGREEMENT dated as of November 27, 1996, (the
"Execution Date") among DLJ MERCHANT BANKING PARTNERS, L.P., a
---------------
Delaware limited partnership ("DLJMB"), DLJ INTERNATIONAL PARTNERS,
-----
C.V., a Netherlands Antilles limited partnership ("DLJIP"), DLJ
-----
OFFSHORE PARTNERS, C.V., a Netherlands Antilles limited partnership
("DLJOP"), DLJ MERCHANT BANKING FUNDING, INC., a Delaware corporation,
-------
DLJ FIRST ESC L.L.C., a Delaware limited liability company, (each of
the foregoing, a "DLJ Entity" and collectively, the "DLJ Entities"),
---------- ------------
UBS CAPITAL LLC, a Delaware limited liability company formerly known
as UBS Capital Corporation ("UBS", together with each DLJ Entity, a
---
"Holder" and collectively, the "Holders"), SDW HOLDINGS CORPORATION, a
------- -------
Delaware corporation (the "Company"), and SAPPI LIMITED, a corporation
-------
organized under the laws of the Republic of South Africa (including
where the context requires any designee pursuant to Section 2,
"Sappi").
-----
WHEREAS the DLJ Entities currently own an aggregate of 3,125,000 shares of
common stock, par value $0.01 per share (the "Shares"), of the Company and
------
3,468,749 Class B Warrants of the Company (the "Class B Warrants") to purchase
3,468,749 Shares.
WHEREAS UBS currently owns 625,000 Shares, 693,750 Class B Warrants to
purchase 693,750 Shares and 300,000 Class A Warrants of the Company (the "Class
A Warrants", together with the Class B Warrants, the ("Warrants") to purchase
89,844 Shares.
WHEREAS Sappi desires to acquire from each Holder, and each Holder desires
to transfer to Sappi (a) all the issued and outstanding Shares held by such
Holder (including any Shares issued upon exercise of Warrants) and (b) all the
Warrants held by such Holder (all Shares and Warrants held by the Holders being
referred to collectively as the "Securities").
----------
WHEREAS Sappi desires to acquire all the remaining issued and outstanding
Shares not owned by the Holders (including any Shares issued upon exercise of
Warrants) and to either acquire all outstanding Warrants not owned by the
Holders or convert such Warrants into a right to receive cash pursuant to a
merger involving the company (the "Merger").
NOW, THEREFORE, in consideration of the premises, and the mutual
representations, warranties, covenants and agreements herein set forth and for
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto hereby agree as follows:
1. Definitions. For purposes of this Agreement, the following terms
-----------
shall have the following meanings:
"Affiliate Transfer" shall have the meaning set forth in Section 7(c)(i).
------------------
"Agreement" shall mean this Stock Purchase Agreement dated as of November
---------
21, 1996 among the parties hereto.
"Back-Up Financing" shall have the meaning set forth in Section 4(d).
-----------------
"Back-Up Financing Agreement" shall have the meaning set forth in Section
---------------------------
4(d)(i).
"Back-Up Purchaser" shall have the meaning set forth in Section 4(d).
-----------------
"Business Day" shall mean any day on which commercial Banks are open for
------------
business in New York, London and the Republic of South Africa.
"Class A Warrants" shall have the meaning set forth in the recitals to this
----------------
Agreement.
"Class B Warrants" shall have the meaning set forth in the recitals to this
----------------
Agreement.
"Closing" shall have the meaning set forth in Section 3.
-------
"Closing Date" shall have the meaning set forth in Section 3.
------------
"Company" shall have the meaning set forth in the preamble to this
-------
Agreement.
"Confidential Information" shall mean (i) this Agreement, the contents
------------------------
hereof and the parties' activities pursuant or related hereto, (ii) the fact
that any preparations, discussions or negotiations are taking place concerning
the Placement, Back-Up Financing or any related transactions, and (iii) any
information concerning the Company, ▇▇▇▇▇▇ or Sappi, their financial condition,
business, operations or prospects in the possession of or to be furnished to any
Holder in its capacity as a shareholder of the Company or by virtue of its
present or former right to designate a director of the Company or in connection
with the Placement or the transactions contemplated hereby or related hereto;
provided, however, that the term "Confidential Information" does not include
-------- -------
information which at the time of disclosure is generally available to the public
other than as a result of a disclosure by a Holder or its Representatives in
violation of Section 7(a) or Section 6.1 of the Shareholders Agreement or was or
becomes available to such Holder on a non-confidential basis from a source other
than the company, ▇▇▇▇▇▇, Sappi, any of their affiliates or any of their
Representatives, provided that such source is or was (at the time of receipt of
--------
the relevant information) not, to the best of such Holder's knowledge, bound by
a confidentiality agreement with (or other confidentiality obligation to) the
Company, ▇▇▇▇▇▇, Sappi or another person.
"Consents" shall have the meaning set forth in Section 5 (a)(iv)(A).
--------
"DLJ Directors" shall have the meaning set forth in Section 7(b).
-------------
"DLJ Entity" shall have the meaning set forth in the preamble to this
----------
Agreement.
2
"DLJTP" shall have the meaning set forth in the preamble to this Agreement.
-----
"DLJMB" shall have the meaning set forth in the preamble to this Agreement.
-----
"DLJOP" shall have the meaning set forth in the preamble to this Agreement.
-----
"Dollars" or "$" shall mean lawful currency of the United States of
------- -
America.
"Execution Date" shall have the meaning set forth in the preamble to this
--------------
Agreement.
"Governmental Entity" shall have the meaning set forth in Section 5(i)(ii),
-------------------
"Gross Proceeds Placement" shall have the meaning set forth in Section 2.
------------------------
"Holder" shall have the Meaning set forth in the preamble to this
------
Agreement.
"Holder Indemnified Parties" shall have the meaning set forth in Section
--------------------------
11(c).
"Indemnified Party" shall have the meaning set forth in Section 11(d).
-----------------
"Indemnifying Party" shall have the meaning set forth in Section 11(d).
------------------
"Initial Purchasers" shall have the meaning set forth in Section 4(a)(iii).
------------------
"Liens" shall have the meaning set forth in Section 5(a)(iii).
-----
"Losses" shall have the meaning set forth in Section 11(b).
------
"Managers" shall have the meaning set forth in Section 4(a)(iii).
--------
"Merger" shall have the meaning set forth in the recitals to this
------
Agreement.
"Minority Acquisition" shall have the meaning set forth in Section 7(a).
--------------------
"Net Proceeds Placement" shall have the meaning set forth in Section 2.
----------------------
"Offering" shall have the meaning set forth in Section 4(b)(i).
--------
"Payment Date" shall have the meaning set forth in Section 3.
------------
"Person" shall mean any individual, corporation, partnership limited
------
liability company, firm, group (as such term is used under Section 13(d)(3) of
the Securities Exchange Act of 1934, as amended), joint venture, association,
joint stock company, estate, trust,
3
unincorporated organization, governmental or regulatory body or other entity
(including any division of any such person).
"Placement" shall have the meaning set forth in Section 4 (a) (i).
---------
"Placement Agreement" shall have the meaning set forth in Section 4 (a)(i).
-------------------
"Placement Documentation" shall have the meaning set forth in Section 7(g).
-----------------------
"Placement Price" shall have the meaning set forth in Section 2.
---------------
"Purchase Consideration" shall have the meaning set forth in Section 2.
----------------------
"Rand" or "R" shall mean lawful currency of the Republic of South Africa.
---- -
"Representatives" shall mean the partners, directors, officers, employees,
---------------
agents, counsel, accountants, investment advisors or representatives of any
person.
"Sappi" shall have the meaning set forth in the preamble to this Agreement
-----
and shall include any designee pursuant to Section 2.
"Sappi Indemnified Parties" shall have the meaning set forth in Section
-------------------------
11(c).
"Sappi Shares" shall have the meaning set forth in Section 2.
------------
"Securities" shall have the meaning set forth in the recitals to this
----------
Agreement.
"Securities Act" shall have the meaning set forth in Section 6(e).
--------------
"Shareholders Agreement" shall have the meaning set forth in Section 6(g).
----------------------
"Shares" shall have the meaning set forth in the recitals to this
------
Agreement.
"UBS" shall have the meaning set forth in the preamble to this Agreement.
---
"UBS Directors" shall have the meaning set forth in Section 7(b).
-------------
"Warrant Agreements" stall have the meaning set forth in Section 6(g).
------------------
"Warrant Shares" shall mean Shares issued or issuable upon the exercise of
--------------
its Warrants.
"Warrants" shall have the meaning set forth in the recitals to this
--------
Agreement.
4
"▇▇▇▇▇▇" shall have the meaning set forth in Section 6(g).
------
2. Purchase and Sale. On the terms and subject to the conditions of this
-----------------
Agreement, each Holder severally agrees to sell, transfer and deliver or cause
to be sold, Transferred and delivered to Sappi or any one or more of its
affiliates designated by Sappi, and Sappi agrees to purchase or cause any one or
more of its affiliates designated by Sappi to purchase from such Holder, all
Securities held by such Holder; provided, however that Sappi shall not be
-------- -------
obligated to buy more than the total number of Securities set forth on Schedule
A. For each Share or each Warrant acquired by or as designated by Sappi from a
Holder, such Holder shall receive (the "Purchase Consideration"): (a) for each
----------------------
Share $17.25 and (b) for each Warrant Share into which one or more Warrants to
be purchased is convertible an amount equal to the remainder of (i) $17.25 less
(ii) the exercise price for such Warrant Share as of the time of the Closing
(such exercise price being $0.01 per Share as of the Execution Date). The
Purchase Consideration shall be payable in Dollars or, at Sappi's sole election,
in whole or in part in Ordinary Shares, par value R1.00, of Sappi ("Sappi
-----
Shares"). If Sappi elects to deliver Sappi Shares, the number of Sappi Shares
------
deliverable to each Holder shall be determined at the election of Sappi, in its
sole discretion, in accordance with either of the two following formulas:
(x) by dividing the aggregate Purchase Consideration being paid to
such Holder in Sappi Shares by the proceeds from the Placement per Sappi
Share payable to the Holders before deduction of any underwriting
commissions or discounts or other placement fees payable in respect of the
Placement (the "Placement Price") (and rounding up to the next whole number
---------------
of Sappi Shares) (a "Net Proceeds Placement"); or
----------------------
(y) by dividing the aggregate Purchase Consideration being paid to
such Holder in Sappi Shares by the proceeds from the Placement per Sappi
Share payable to the Holders after deduction of any underwriting
commissions or discounts or other placement fees payable in respect of the
Placement (and rounding up to the next whole number of Sappi Shares) (a
"Gross Proceeds Placement").
-------------------------
Sappi may revoke in whole or in part its election to pay the Purchase
Consideration in whole or in part in Sappi Shares or change the portion of the
Purchase Consideration payable in Sappi Shares in its sole discretion at any
time, and from time to time, prior to the Closing. The total number of Shares
and warrants held by each respective Holder as of the Execution Date is set
forth on Schedule A.
3. Closing. The closing (the "Closing") of the purchase and sale of the
------- -------
Securities shall be held at the offices of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ or at such other place as Sappi and the Holders shall
agree on the earlier of the following dates (the "Closing Date"): (a) the date
------------
that is 180 days after the Execution Date (the "Payment Date") or (b) two
------------
Business Days after the day on which Sappi in its sole discretion gives notice
to the Holders of the Closing or, in each case, if the applicable conditions to
the
5
Closing set forth in Section 5 shall not have been satisfied by such date,
as soon as practicable after such conditions shall have been satisfied. At the
Closing (i) Sappi shall deliver or cause to be delivered to or as directed by
each Holder, as appropriate, the Purchase Consideration in the form of (A) a
wire transfer to a bank account previously designated by such Holder of
immediately available funds in Dollars in respect of any portion of the Purchase
Consideration which Sappi has not finally elected, in its sole discretion, to
pay in Sappi Shares and (B) certificates representing Sappi Shares (legended in
accordance with Section 13) in respect of any portion of the Purchase
Consideration which Sappi, in its sole discretion, finally elects to pay in
Sappi Shares, and (ii) such Holder shall deliver or cause to be delivered to or
as directed by Sappi certificates representing its respective Securities,
(including Securities in addition to those set forth on Schedule A which Sappi
elects to purchase) duly endorsed in blank or accompanied by stock powers duly
endorsed in blank in proper form for transfer.
4. Placement; Back-Up Financing. (a) (i) If Sappi elects to pay in
----------------------------
whole or in part the Purchase Consideration in Sappi Shares, then, subject to
Section 4(d), Sappi shall arrange the sale of such Sappi Shares by the Holders
for cash through an underwritten offering or other placement (the "Placement")
---------
and, in connection therewith, the Holders, Sappi and one or more third parties
designated by Sappi shall, prior to or contemporaneously with the Closing, enter
into definitive documentation (the "Placement Agreement") with respect co the
-------------------
Placement. The Placement Agreement shall be customary or otherwise reasonably
satisfactory in form and substance to the Holders.
(ii) The Placement Agreement shall provide for the proceeds from
the Placement co be paid to the Holders in one or more of the following manners,
at the election of Sappi in its sole discretion: (A) in Dollars in the United
States, (2) in Dollars outside of the United States but only to the extent that
such Dollars are free from any exchange rate controls or restrictions with
respect to their transfer to the United States at the time of payment of such
proceeds; provided, however, that Sappi may, in its sole discretion, arrange a
-------- -------
Placement in a currency other than Dollars so long as the proceeds from such
Placement are converted into Dollars prior to payment to the Holders.
(iii) Without limiting the foregoing, Sappi and the Holders shall
agree in the Placement Agreement to provide the managers, underwriters or other
placement agents for the Placement (collectively, the "Managers") or any other
initial purchaser or purchasers of the Sappi Shares in the Placement
(collectively, the "Initial Purchasers") and related persons with indemnities
------------------
that are customary or otherwise reasonable for a transaction of the nature and
form of the Placement on the part of (A) the issuer in the case of Sappi and (B)
a selling stockholder in the case of each of the Holders; provided, however,
-------- -------
that (i) the Holders shall not be obligated hereunder to provide indemnification
that extends to any information regarding the business of Sappi and (ii) Sappi
shall not be obligated hereunder to provide indemnification that extends to any
information supplied by the Holders; provided further, that Sappi, in its sole
-------- -------
discretion, and the Holders, in their sole discretion, may elect to agree to
provide such indemnification under the Placement Agreement. Any indemnification
provided by Sappi or the Holders to the Managers or any other Initial Purchasers
under the Placement
6
Agreement with respect to information in any Placement offering document shall
also be provided by Sappi to the Holders and by the Holders to Sappi in the
Placement Agreement (subject in all cases to the limitations of the first
proviso to the preceding sentence).
(iv) If Sappi elects to pay all or a part of the Purchase
Consideration in Sappi Shares, the Holders shall be obligated to sell such Sappi
Shares in the Placement at the price and on the terms and conditions arranged by
Sappi (provided that the terms and conditions of the Placement Agreement shall
be customary or otherwise reasonably satisfactory to the Holders), unless Sappi
in its sole discretion elects otherwise. Scheduling of the closing of the
Placement shall take place in accordance with customary terms and conditions for
transactions such as the Placement, but in any event the Placement Agreement
shall provide for such closing within five Business Days after the Closing
unless otherwise agreed by the Holders. Sappi and the Holders will use all
reasonable efforts to cause the closing of the Placement to occur as soon as
reasonably practicable after the Closing.
(b) Form, Timing and Management of-the Placement. (i) The Managers
--------------------------------------------
shall be selected by Sappi; provided, however, that if Sappi elects to effect
-------- -------
the Placement by means of a public offering or a private offering that is
extended to a large number of investors (collectively, an "Offering") by or on
--------
behalf of the Holders, then it shall offer to appoint an affiliate of the DLJ
Entities and an affiliate of UBS as joint lead Managers for the Placement. If
such offers are not accepted, then Sappi shall not appoint lead Managers on
Terms materially more favorable to such Managers than those offered to the
affiliates of the Holders without first offering such terms to the affiliates of
the Holders. If such offers are accepted, Sappi shall have the right in
connection with any Offering to appoint up to two co-lead Managers for the
Placement, one of which may be appointed by Sappi as an independent pricing
agent (with full access to the ▇▇▇▇ throughout the book-building process). The
foregoing obligation to offer to appoint affiliates of the Holders as Managers
of any Offering shall not apply to any underwritten offering or other subsequent
placement that may be undertaken following the closing of the Placement by or on
behalf of the purchasers in the Placement (including any Back-Up Purchaser).
Sappi shall have the right to revoke any election to structure the Placement as,
or include in the Placement, an Offering at any time, and from time to time,
prior to the Closing.
(ii) Except as specified in Section 4(b)(i) with respect to a
Placement that includes an Offering, the form, terms, timing and management of
the Placement shall be wholly at the discretion of Sappi and may be changed by
Sappi at any time and from time to time; provided, however, that the terms of
-------- -------
the Placement Agreement (other than the Placement Price and the amount of any
underwriting commissions and discounts or other placement fees payable in
respect of any Placement) shall be customary or otherwise reasonably
satisfactory to the Holders. Without limiting the generality of the foregoing,
Sappi may elect, in its sole discretion, to include in the Placement additional
Sappi Shares or any other securities in addition to the Sappi Shares which it
may elect, in its sole discretion, to include in the Purchase Consideration;
provided, however, that all Sappi Shares included in the Purchase Consideration
-------- -------
at the Closing shall be included in the Placement.
7
(c) Placement Expenses. (i) Sappi will pay for or reimburse all
------------------
expenses incident to Sappi's performance of or compliance with this Section 4,
including (A) in the case of any Net Proceeds Placement, any underwriting
commissions and discounts or other placement fees payable in respect of such Net
Proceeds Placement pursuant to the terms arranged by Sappi, (B) all registration
and filing fees and expenses in connection with the Placement, (C) if
applicable, all other fees and expenses of compliance with U.S. Federal
securities and state "blue sky" or securities laws (including all reasonable
fees and expenses of counsel to the Managers, if any, in connection with
compliance with state "blue sky" or securities laws), (D) all expenses of
printing (including printing certificates for the Sappi Shares included in any
Placement and printing of prospectuses or offering memoranda), (E) all fees and
disbursements of independent certified public accountants of Sappi (including
the expenses of any special audit and comfort letters required by the Managers,
if any, or incident to such performance) and (F) Sappi's internal expenses
(including all salaries and expenses of its officers and employees performing
legal or accounting duties), the expenses of any annual audit, rating agency
fees and the fees and expenses of any person, including special experts,
retained by Sappi. Sappi will also pay or reimburse (i) the reasonable out-of-
pocket expenses of the Holders incurred after the Execution Date solely in
connection with the Placement (including all reasonable fees and disbursements
of not more than one joint counsel for all the Holders, who shall be ▇▇▇▇▇▇ &
▇▇▇▇▇▇▇ or other counsel reasonably satisfactory to Sappi), and (ii) any
transfer taxes that may be imposed in connection with a sale or transfer of any
Sappi Shares which Sappi may elect, in its sole discretion, to include in the
Purchase Consideration.
(ii) Notwithstanding the foregoing, (A) any underwriting
commissions and discounts or other placement fees payable in respect of any
Gross Proceeds Placement shall be paid by the Holders from the proceeds of such
Gross Proceeds Placement and Sappi shall have no responsibility for such
underwriting commissions and discounts or other placement fees, (B) Sappi will
not be responsible for any expenses of the Holders related to any due diligence
examination of Sappi that the Holders may elect to conduct, except to the extent
that such due diligence examination (I) is reasonable and customary on behalf of
a selling stockholder in a transaction such as the Placement and (II) in any
event, involves no more than participation in (and, with respect to the
involvement of counsel or other advisors, reliance upon) the Managers' due
diligence examination of Sappi and (C) unless otherwise agreed in the Placement
Agreement, Sappi will not be responsible for any out-of-pocket or other expenses
and fees of the Managers (if any) or other initial Purchasers (other than (x) in
the case of any Net Proceeds Placement, any underwriting commissions and
discounts or other placement fees in connection with the Placement payable
pursuant to Section 4(c)(i)(A) and (y) all reasonable fees and expenses of
counsel to the Managers, if any, in connection with compliance with state "blue
sky" or securities laws payable pursuant to Section 4(c)(i)(C)).
(d) Back-Up Financing. (i) If Sappi elects in its sole discretion to
-----------------
pay at the Closing in whole or in part the Purchase Consideration in Sappi
Shares (and has not revoked such election in its sole discretion prior to the
consummation of the Closing) and the closing of the Placement does not take
place contemporaneously with the Closing, then Sappi shall
8
arrange prior to or at the Closing for a third party bank or other financial
institution, reasonably satisfactory no the Holders (the "Back-Up Purchaser"),
-----------------
to provide to the Holders an irrevocable guarantee, letter of credit or other
legally binding undertaking (the "Back-Up Financing") with respect to the
-----------------
obligations under the Placement agreement of the Managers (if any) or other
Initial Purchasers to purchase the Sappi Shares (or in the event that no
Placement Agreement has been entered into, an irrevocable undertaking to
purchase the Sappi Shares on the terms arranged by Sappi in accordance with this
Section 4) and such other customary documentation with respect to the Back-Up
Financing as the Holders may reasonably request. The Holders, Sappi and the
Back-Up Purchaser shall enter into definitive documentation with respect to the
Back-Up Financing (the "Back-Up Financing Agreement") which shall be customary
---------------------------
or otherwise reasonablely satisfactory to the Holders. It is understood and
agreed that Sappi may elect, in its sole discretion, to arrange a Back-up
Financing in the absence of any Placement or if a Placement is scheduled to
take place contemporaneously with the Closing. In the event that Sappi elects
in its sole discretion to arrange a Back-Up Financing without arranging a
Placement, then, unless the context requires otherwise, references in this
Agreement to the Placement, the Placement Agreement and the Initial Purchasers
shall be references to such Back-Up Financing, the documentation related to such
Back-Up Financing and the Back-Up Purchaser, respectively, as if such Back-Up
Financing were the Placement for purposes of such references, it is further
Understood and agreed chat if the Back-Up Financing is an Offering, section 4(b)
stall be applicable to such Back-Up Financing.
(ii) If for any reason the closing of the Placement does not take
place when five business days of the Closing (including as a result: of any
failure by Sappi to arrange a Placement or any failure to satisfy or waive any
condition to the closing of the Placement Agreement, except where such failure
results from a breach or default under the Placement Agreement by any Holder or
any affiliate of a Holder), then the Back-Up Purchaser shall be unconditionally
required to pay the Holders all amounts payable to the Holders with respect to
the Sappi Shares to be purchased by the Managers (if any) or other Initial
Purchasers (or Back-Up Purchaser, if no Placement Agreement has been entered
into) in exchange for the transfer to the Back-Up Purchaser (free and clear of
all Liens created by or resulting from any action of the Holders or their
affiliates) of all Sappi Shares included in the Purchase Consideration and
delivered by Sappi to the Holders at the Closing. Section 4(a)(ii) shall apply
to any Back-Up Financing.
5. Conditions to Closing.
---------------------
(a) Sappi's Obligation Prior to the Payment Date. In the case of any
--------------------------------------------
Closing to be held on any date prior to the Payment Date, the obligation of
Sappi to purchase and pay for the Securities held by each Holder is subject to
the satisfaction (or waiver by Sappi) as of the closing of the following
conditions:
(i) The representations and warranties of each Holder made in
this Agreement that are not qualified with respect to materiality
shall be true and correct in all material respects, and the
representations and warranties of each
9
Holder made in this Agreement that are qualified with respect to
materiality shall be true and correct in all respects in each case as
of the date hereof and as of the time of the Closing as though made as
of such time, except to the extent such representations and warranties
expressly relate to an earlier date (in which case such
representations and warranties shall be true and correct in all
material respects or true and correct in all respects, respectively,
on and as of such earlier date). Each Holder shall have performed or
complied in all material respects with all obligations and covenants
required by this Agreement to be performed or complied with by such
Holder by the time of the Closing. Each Holder shall have delivered to
Sappi a certificate of such Holder dated the Closing Date and signed
on its behalf by an authorized officer of such Holder confirming the
foregoing.
(ii) No statute, role, regulation, executive order, decree,
temporary restraining order, preliminary or permanent injunction or
other order enacted, entered, promulgated or issued by any Federal,
state, local or foreign government or any court of competent
jurisdiction, administrative agency or commission or other
governmental or regulatory authority or instrumentality, domestic or
foreign (a "Governmental Entity") preventing in any material respect
-------------------
(A) the purchase and sale of the Securities or (3) if Sappi has
elected in its sole discretion to include any Sappi Shares in the
Purchase Consideration (and has not revoked such election), the
Placement or the Back-Up Financing shall be in effect.
(iii) Each Holder shall have transferred to Sappi or its designee
the number of Shares and warrants set forth opposite such Holder's
name in Schedule A hereto (together with any additional Shares and
Warrants held by such Holder that Sappi has elected to acquire) and
assuming Sappi or any one or more designees of Sappi has the requisite
power and authority to be the lawful owner of the Securities upon
delivery to Sappi or any such designee at the Closing of certificates
representing the Securities held by such Holder, duly endorsed by such
Holder for transfer to Sappi or such designee, and upon such Holder's
receipt of the Purchase Consideration for such Holder's Securities,
good and valid title to the Securities held by such Holder shall have
been transferred to Sappi or such designee, free and clear of all
liens, claims, encumbrances, security interests, options, charges and
restrictions of any kind ("Liens"), arising out of, resulting from,
based upon or in connection with any action or omission of, or
otherwise relating to, such Holder or any of its affiliates or
representatives.
(iv) (A) All authorizations, consents, approvals, licenses,
permits, orders or waivers of, or notices or declarations to, or
filings or registrations with, Governmental Entities or securities
exchanges (collectively, "Consents") required by, on behalf of or with
--------
respect to the Holders and their affiliates in
10
connection with (I) the execution and delivery of this Agreement, (II)
the purchase and sale of the Securities as contemplated hereby and
(III) if Sappi has elected in its sole discretion to include any Sappi
Shares in the Purchase Consideration (and has not revoked such
election), consummation of the Placement or the Back-Up Financing and
(B) all Consents set forth on Schedule 8(b) shall; have been chained
or effected and be in full force and effect.
(v) If Sappi elects, in its sole discretion, to include any Sappi
Shares in the Purchase Consideration (and has not revoked such
election), then (A) the Placement Agreement shall have been executed
by all the parties thereto other than Sappi and its affiliates and (B)
the Back-Up Financing Agreement shall have been executed by all the
parties hereto other than Sappi and its affiliates.
(b) Sappi's Obligation on the Payment Date. If the Closing has not
--------------------------------------
occurred prior to the Payment Date, the obligation of Sappi to purchase and pay
for the Securities held by each Holder on the Payment Date is subject to the
satisfaction (or waiver by Sappi) as of the Closing of the following conditions:
(i) The representations and warranties of each Holder made in
this Agreement that are not qualified with respect to materiality
shall be true and correct in all material respects, and the
representations and warranties of each Holder made in this Agreement
that are qualified with respect to materiality shall be true and
correct in all respects, in each case as of the date hereof and as of
the time of the Closing as though made as of such time, except to the
extent such representations and warranties expressly relate to an
earlier date (in which case such representations and warranties shall
be true and correct in all material respects or true and correct in
all respects, respectively, on and as of, such earlier date). Each
Holder shall have performed or complied in all material respects with
all obligations and covenants required by this Agreement to be
performed or complied with by such Holder by the time of the Closing.
Each Holder shall have delivered to Sappi a certificate of such Holder
dated the Closing Date and signed on its behalf by an authorized
officer of such Holder confirming the foregoing.
(ii) No statute, rule, regulation, executive order, decree,
temporary restraining order, preliminary or permanent injunction or
other order enacted, entered, promulgated or issued by any
Governmental Entity preventing in any material respect the purchase
and sale of the Securities for cash shall be in effect.
(iii) Each Holder shall have transferred to Sappi or its designee
the number of Shares and Warrants set forth opposite such Holder's
name in Schedule A hereto (together with any additional Shares and
Warrants held by such Holder that Sappi has elected to acquirer and
assuming Sappi or any one or
11
more designees of Sappi has the requisite power and authority to be
the lawful owner of the Securities upon delivery to Sappi or any such
designee at the Closing of certificates representing the Securities
held by such Holder, duly endorsed by such Holder for transfer to
Sappi or such designee, and upon such Holder's receipt of the Purchase
Consideration for such Holder's Securities, good and valid title to
the Securities held by such Holder shall have been transferred to
Sappi or such designee, free and clear of all Liens, arising out of,
resulting from, based upon or in connection with any action or
omission of, or otherwise relating to, such Holder or any of its
affiliates or Representatives.
(iv) All Consents set forth on Schedule 6(b) and all Consents set
forth on Schedule 6(b)(i) shall have been obtained or effected and be
in full force and effect.
(c) Holder's Obligation. The obligation of each Holder to sell and
-------------------
deliver the Securities held by such Holder to Sappi is subject to the
satisfaction (or waiver by each of DLJMB and USS) as of the Closing of the
following conditions:
(i) The representations and warranties of Sappi made in this
Agreement that are not qualified as to materiality shall be true and
correct in all material respects, and the representations and
warranties of Sappi made in this Agreement that are qualified with
respect to materiality shall be true and correct in all respects, in
each case as of the date hereof and as of the time of the Closing as
though made as of such time, except to the extent such representations
and warranties expressly relate to an earlier date (in which case such
representations and warranties shall be true and correct in all
material respects or true and correct in all respects, respectively,
on and as of such earlier date). Sappi shall have performed or
complied in all material respects with all obligations and covenants
required by this Agreement to be performed or complied with by Sappi
by the time of the Closing. Sappi shall have delivered to each Holder
a certificate of Sappi dated the Closing Date and signed on its behalf
by an authorized officer of Sappi confirming the foregoing.
(ii) No statute, rule, regulation, executive order, decree,
temporary restraining order, preliminary or permanent injunction or
other order enacted, entered, promulgated or issued by any
Governmental Entity preventing in any material respect (A) the
purchase and sale of the Securities, (E) if Sappi Shares are being
included in the Purchase Consideration and the Closing of the
Placement is taking place contemporaneously with the Closing, the
Placement or (C) if Sappi Shares are being included in the Purchase
Consideration and the closing of the Placement is not taking place
contemporaneously with the Closing, the Back-Up Financing shall be in
effect.
12
(iii) Sappi shall have transferred to such Holder or its designee
the Purchase Consideration and if the Purchase Consideration includes
Sappi Shares assuming such Holder has the requisite power and
authority to be the lawful owner of the Sappi Shares upon delivery to
such Holder at the Closing of certificates representing the Sappi
Shares to be delivered to such Holder and upon Sappi's receipt of the
Securities in exchange for the Purchase Consideration, good and valid
title to the Sappi Shares to be delivered to such Holder shall have
been transferred to such Holder, free and clear of all liens, arising
out of, resulting from, based upon or in connection with any action or
omission of, or otherwise relating to, Sappi or any of its affiliates
or Representatives.
(iv) (A) All Consents required by, on behalf of or with respect
to Sappi and its affiliates in connection with (I) the execution and
delivery of this Agreement by such Holder and Sappi, (II) the purchase
and sale of the Securities as contemplated hereby, (III) if Sappi
Shares are being included in the Purchase Consideration and the
closing of the Placement is taking place contemporaneously with the
Closing, consummation of the Placement and (IV) if Sappi Shares are
being included in the Purchase Consideration and the closing of the
Placement is not taking place contemporaneously with the Closing,
consummation of the Back-Up Financing and (B) all Consents set forth
on Schedule 6(b) shall have been obtained or effected and be in full
force and effect.
(v) (A) If Sappi Shares are being included in the Purchase
Consideration and the closing of the Placement is taking place
contemporaneously with the Closing, then the Placement Agreement shall
have been executed by all the parties thereto other than the Holders
or their affiliates and (B) if Sappi Shares are being included in the
Purchase Consideration and the closing of the Placement is not taking
place contemporaneously with the Closing, then the Back-Up Financing
Agreement shall have been executed by all the parties thereto other
than the Holders or their affiliates.
6. Representations and Warranties of Holders. Each Holder hereby
-----------------------------------------
severally represents and warrants to Sappi as follows solely in connection with
this Agreement, except that no representation or warranty is made with respect
to any transaction (e.g. any Placement) that is at the option of Sappi unless
and until Sappi elects to proceed with such transaction and identifies to the
Holders such transaction at which time such representations and warranties shall
be made (provided that the foregoing shall in no way limit the representations
and warranties set forth in Section 6(a)):
(a) Authority. Such Holder is a corporation, limited liability
---------
company or limited partnership duly organized, validly existing and in good
standing under the laws of its jurisdiction of organization. The execution,
delivery and performance by such Holder of this
13
Agreement are within the corporate, limited liability company or partnership
powers, as applicable, of such Holder and have been duly authorized by all
necessary action on the part of such Holder. This Agreement has been duly
executed and delivered by such Holder and is the legally valid and binding
obligation of such Holder, enforceable against such Holder in accordance with
its terms, except as the enforceability hereof may be limited (i) by the effect
of bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or
other similar laws now or hereafter in effect relating to or affecting the
rights and remedies of creditors, (ii) by the effect of general principles of
equity, whether enforcement is considered in a proceeding in equity or at law,
and the discretion of the court before which any proceeding therefor may be
brought and (iii) to the extent the rights, if any, to indemnification and
contribution hereunder may be limited by Federal or state securities laws or
public policy relating thereto.
(b) Consents. The execution, delivery and performance by such Holder
--------
of this Agreement require no action or consent by or in respect of, or filing
with, any governmental body, agency or official except (i) such as are listed on
Schedule 6(b), (ii) actions, consents and filings that, if not obtained or made,
would not reasonably be expected, either individually or in the aggregate, to
(A) materially interfere with or adversely affect (x) the purchase and sale of
the Securities or the consummation of this Agreement or (y) the performance by
each of the Holders and SAPPI of its respective agreements and obligations under
this Agreement or the consummation of the transactions contemplated hereby or
(5) in any manner draw into question the validity of any of the transactions
contemplated by this Agreement, (iii) filings and registrations under Federal
and state securities laws and (iv) filings not required to be made on or before
or substantial contemporaneously with the Closing.
(c) No Conflicts. The execution, delivery and performance by such
------------
Holder of this Agreement do not (i) violate the certificate of incorporation,
by-laws or other governing documents, as applicable, of such Holder or (ii)
violate any applicable law, rule, regulation, judgment, injunction, order or
decree binding upon or applicable to such Holder or (iii) except for consents
and approvals referred to in Section 6(b) hereof, require any material consent
or approval of any other person that will not be obtained prior to the Closing.
(d) Litigation. There is no action, suit or proceeding pending
----------
against, or to the knowledge of such Holder threatened against or affecting,
such Holder before any court or arbitrator or any governmental body, agency or
official which in any manner challenges or seeks to, or could reasonably be
expected to, prevent, enjoin, alter or materially delay the Transactions
contemplated by this Agreement.
(e) Registration. Neither such Holder nor any agent acting on behalf
------------
of such Holder, directly or indirectly, has taken or will take any action that,
solely as a result of such actions, would require the registration of any Sappi
Shares which Sappi may elect, in its sole discretion, to include in the Purchase
Consideration, under the provisions of the United States Securities Act of 1933
(the "Securities Act") or under the provisions of any securities or
--------------
14
"blue sky" law of any state of the United States in connection with their sale
to such Holder hereunder.
(f) Private Offering. (i) Such Holder has been advised that any
----------------
Sappi Shares which Sappi may elect, in its sole discretion, to include in the
Purchase Consideration, have not been registered under the securities Act or any
state securities laws and, therefore, that such Sappi Shares (and all securities
issued in exchange therefor or in substitution thereof) cannot be resold unless
sold are registered under the Securities Act and applicable state securities
laws or unless sold pursuant to an exemption from, or in a transaction not
subject to, such registration requirement. Such Holder is aware that Sappi is
under no obligation to effect any such registration with respect to such Sappi
Shares or any securities issued in exchange therefor or in substitution thereof
or to file for or comply with any exemption from such registration provided,
--------
however, that Sappi may elect, in its sole discretion, to effect such
-------
registration or to file or comply with any exemption from such registration in
connection with the Placement.
(ii) Such Holder is an accredited investor as that term is
defined in Regulation D under the Securities Act, with such knowledge
and experience in financial and business matters as are necessary in
order to evaluate the merits and risks of an investment in any Sappi
Shares which Sappi may elect, in its sole discretion, to include in
the Purchase Consideration. Such Holder is able to incur a complete
loss of such investment and is able to bear the economic risk of such
investment for an indefinite period of time.
(iii) Such Holder will acquire any Sappi Shares which Sappi may
elect, in its sole discretion, to include in the Purchase
Consideration, for its own account and not with a view to any
distribution thereof or with any present intention of offering or
selling any of the such Sappi Shares, except in connection with the
Placement or in a transaction that would not violate the Securities
Act or the securities laws of any State of the United States or any
other applicable jurisdiction. Notwithstanding the foregoing, such
Holder shall have, subject to Section 7(c) and any other contractual
restrictions entered into by such Holder, the right at all times to
sell or otherwise dispose of all or any part of such Sappi Shares
pursuant to a registration under, or in a transaction exempt from or
not subject to the registration requirements of, the Securities Act.
(g) Title. Such Holder has good and valid title to the Securities
-----
held by such Holder, free and clear of any Liens (other than (i) this Agreement,
(ii) the Second Amendment and Restatement dated as of July 6, 1995 of the
Shareholders Agreement dated as of December 20, 1994 (the "Shareholders
------------
Agreement"), among Sappi, Sappi Deutschland GmbH, the DLJ Entities, UB5, the
---------
Company and S.D. ▇▇▇▇▇▇ Company ("▇▇▇▇▇▇") and (iii) the Amended and Restated
------
Class B Warrant Agreement dated as of July 6, 199S, between the Company and the
Bank of New York and the Warrant Agreement dated as of December 23,
15
1994, between the Company and The Bank of New York (collectively, the "Warrant
-------
Agreements"). Assuming Sappi or any one or more designees of Sappi has the
----------
requisite power and authority to be the lawful owner of the Securities upon
delivery to Sappi or any such designee at the Closing of Certificates
representing the Securities held by such Holder, duly endorsed by such Holder
for transfer to Sappi or such designee, and upon such Holder's receipt of the
Purchase Consideration for such Holder's Securities good and valid title to the
Securities held by such Holder will pass to Sappi or such designee, free and
clear of any Liens, arising out of, resulting from, Based upon or in connection
with any action or omission of, or otherwise relating to, such Holder or any of
its affiliates or Representatives. Other than this Agreement, the Shareholders
Agreement and the Warrant Agreements, the Securities held by such Holder are not
subject to any voting trust agreement or other contract, agreement, arrangement,
commitment or understanding, including any such agreement, arrangement
commitment or understanding restricting or otherwise relating to the voting,
dividend rights or disposition of such Securities.
(h) No Other Interest. Such Holder has no direct or indirect interest
-----------------
in any Securities which are not listed on Schedule A other than interests
arising after the Execution Date and notified to Sappi in accordance with
Section 7(c).
7. Covenants of Holders. Each Holder severally covenants and agrees as
--------------------
follows:
(a) Confidentiality. Such Holder hereby acknowledges that Confidential
---------------
Information has been and may continue to be furnished to it in connection with
such Holder's investment in the Company and the transactions contemplated by
this Agreement. Such Holder agrees that it shall not use the Confidential
Information in any way that is reasonably likely to result in a material
detriment to the business of ▇▇▇▇▇▇, the Company or Sappi or any of Sappi's
other affiliates. Such Holder further acknowledges and agrees that it shall not
disclose (except, in each case, as provided in Section 30), any Confidential
Information to any person; provided, however, that Confidential Information may
-------- -------
be disclosed (i) to such Holder's Representatives in the normal course of the
performance of their duties, (ii) required disclosures to the limited partners
and shareholders of the Holders or (iii) to the extent required by applicable
statute law rule or regulation (including complying with any oral or written
questions, interrogatories, requests for information or documents, subpoena,
civil investigative demand or similar process to which a Holder is subject) or
by applicable generally accepted accounting principles in the United States of
America and The Netherlands Antilles. Nothing contained herein shall prevent
the use of Confidential Information in connection with the assertion or defense
of any claim by or against any party hereto.
(b) Resignations. On the Closing Date, the DLJ Designee (as defined
------------ -------------------
in the Shareholders Agreement) and the USS Designee (as defined in the
Shareholders Agreement) shall cause to be delivered to the Company duly signed
resignations (from the applicable directors (and including resignations of any
------------
offices held with the Company), effective immediately after the Closing, of all
directors of the Company designated under the Shareholders Agreement by or
affiliated with the DLJ Entities or USS, respectively ("DLJ
16
Directors" and "USS Directors", respectively), and each Holder shall take all
--------- -------------
such ocher action as is necessary to accomplish the removal of such directors
from the Board of Directors of the Company.
(c) Transfers; Lock-Up; Exclusivity. (i) During the period beginning
-------------------------------
from the date hereof and continuing to the earlier of (x) the Closing or (y) the
termination of this Agreement in accordance with Section 15, such Holder agrees
not to sell, assign, transfer, hypothecate, pledge, encumber or otherwise
dispose of (which shall include any agreement to do any of the foregoing),
directly or indirectly (collectively, "Transfer"), any Securities or any
interest therein held by such Holder (other than as contemplated by this
Agreement); provided, however, that such Holder may Transfer any Securities to
-------- -------
one or more of its affiliates (an "Affiliate Transfer") if such Transfer is
------------------
otherwise permitted by, and made in compliance with, the Shareholders Agreement
and such affiliate agrees to be bound, by all terms of, and is able to make all
of the representations and warranties contained in, this Agreement applicable to
the Holders and executes an instrument to such effect in form and substance
reasonably satisfactory to Sappi. Such Holder shall promptly give Sappi written
notice of any Affiliate Transfer and of any acquisition by such Holder (or
successor of such Holder pursuant to an Affiliate Transfer) of any Securities in
addition to those held by such Holder as of the Execution Date as set forth on
Schedule A.
(ii) Each Holder agrees not to Transfer any Sappi Shares except in
connection win the Placement or the Back-Up Financing or in the event that the
closing of the Placement does not occur and che Back-Up Purchaser defaults on
its payment obligations under the Back-Up Financing Agreement.
(iii) Prior to the earlier of (x) the Closing or (y) the
termination of this Agreement, each Holder and their respective affiliates and
Representatives shall not (A) initiate, negotiate or hold any discussions or
enter into any understanding or agreement with any other party other than Sappi
or its designees with respect to any Transfer of the securities or (B) take any
other action which is inconsistent with the implementation of this Agreement and
the closing of the purchase and sale of the Securities and the subsequent
Placement of Sappi Shares, if any, contemplated hereunder.
(d) Termination of Shareholders Agreemenc. Such Holder agrees to the
-------------------------------------
termination of the Shareholders Agreement upon consummation of the Closing and
--------------------------------
will execute all necessary ocuments required in connection with the termination
of the Shareholders Agreement; provided, however, that Sappi shall have the
-------- -------
right to designate provisions of the Shareholders Agreement that will survive
such termination with respect to parties other than the Holders, including
-------
Article V and Section 6.4 of the Shareholders Agreement (in which case the
Shareholders Agreement shall be appropriately amended rather than terminated).
Following such termination (or amendment) of the Shareholders Agreement, the
Holders will be released as parties from the Shareholders Agreement. The
termination of the Shareholders Agreement (or any such amendment) will be
effective as of the Closing Date. Such Holder hereby waives any rights under
the Shareholders Agreement with respect to any Transfer (as
17
defined therein) of interests in the Company proposed or agreed to by Sappi
prior to the Closing; provided, however, that no such Transfer (other than as
permitted by Section 14) is consummated prior to the Closing.
(e) Minority Acquisition. Such Holder recognizes that Sappi or its
--------------------
designee desires to acquire all remaining third party interests in the Shares
and the Warrants (the "Minority Acguisition") and acknowledges that such Holder
has not received, and will not receive, directly or indirectly, any
consideration for the sale of the Securities other than the Purchase
Consideration. Such Holder agrees to cooperate fully in effecting the Minority
Acquisition, including by approving any action in connection with the Minority
Acquisition, to the extent that (i) such Holder's approval or vote, in its
capacities as a shareholder of the Company (to the extent the Closing has not
already occurred) and a party to the Shareholders Agreement (to the extent it
has not yet been terminated), or (ii) the approval or vote of the DLJ Directors
(in the case of the DLJ Entities) and the UBS Directors (in the case of UBS (to
the extent that they have not already resigned, is required to effect such
action; provided, however, that (A) the obligations of the DLJ Directors in the
-------- -------
case of the DLJ Entities and the UBS Directors in the case of UBS to approve any
action in connection with the Minority Acquisition shall be subject to such
director's fiduciary duty as a director of the Company, (B) any transaction
approved as a result of such actions shall only be consummated following the
-------------------------
Closing, (C) all outstanding Shares (other than those held by Sappi or its
-------
affiliates should Sappi so elect) are converted in such transaction into a right
to receive an amount in cash that is equal to or greater than the Purchase
Consideration (without interest) and (D) such Holder shall not be required to
take such action if such Holder has reasonably concluded that such action is
materially adverse to its interests; provided, further, that if (1) any holder
-------- -------
refuses or fails to take any such action because in has reasonably concluded
that such action is materially adverse to its interests and (2) such action is
customary or reasonable, then Sappi shall have no further obligation pursuant to
Section 9(b) to use all reasonable efforts to consummate, or cause a designee to
consummate, the Minority Acquisition.
(f) Redemption of Preferred Stock. At the request of Sappi, such
-----------------------------
Holder shall approve any proposed redemption of the 15% Senior Exchangeable
Preferred Stock of the Company to the extent that (i) such Holder's approval or
vote, in its capacities as a shareholder of the Company (to the extent the
Closing has not already occurred) and a party to the Shareholders Agreement (to
the extent it has not yet been terminated), or (ii) the approval or vote of the
DLJ Directors (in the case of the DLJ Entities) and the UBS Directors (in the
case of UBS) (to the extent that they have not already resigned), is required to
effect such redemption; provided, however, that (A) the obligations of the DLJ
--------
Directors in the case of the DLJ Entities and the UBS Directors in the case of
UBS to approve any action in connection with such a redemption shall be subject
to such director's fiduciary duty as a director of the Company, (B) any
redemption approved as a result of such actions shall only be consummated
following the Closing and (C) such Holder shall not be required to take such
action if such Holder has reasonably concluded that such action is materially
adverse to its interests; provided, further, that if (1) any Holder refuses or
-------- -------
fails to take any such action because it has reasonably concluded that such
action is materially adverse to its interests and
18
(2) such action is customary or reasonable, then Sappi shall have no further
obligation pursuant to Section 9(b) to use all reasonable efforts to consummate,
or cause a designee to consummate, the Minority Acquisition.
(g) Cooperation with Placement. Such Holder shall cooperate fully
--------------------------
with Sappi and the Managers (if any) to facilitate the Placement and any Back-Up
Financing, including by completing and executing all customary agreements or
documents (including questionnaire, powers of attorney, indemnities,
underwriting or other placement agreements and other documents and any filings,
declarations or other documents in connection with exchange controls or
restrictions) reasonably required under the terms, and given the form, of the
Placement and any Back-Up Financing and furnishing to the Company and Sappi such
necessary information and assistance as may be requested in connection with the
preparation of any offering documents and other documents incident to the
Placement (the "Placement Documentation"). Such Holder agrees to comply with
--------- -------------
the Placement Agreement and the terms of all other agreements entered into in
connection with the Placement and any Back-Up Financing to which such Holder or
its affiliates are parties. Such Holder shall furnish to Sappi and shall
consent to the inclusion in the Placement Documentation of all disclosure
regarding such Holder which counsel to Sappi, the Holders and the Managers, if
any, believes to be necessary or desirable.
8. Representations and Warranties of Sappi. Sappi hereby represents and
---------------------------------------
warrants to each Holder as follows, except that no representation or warranty is
made with respect to any transaction (e.g., the inclusion of any Sappi Shares in
the Purchase Consideration or any Placement) that is at the option of Sappi
unless and until Sappi elects to proceed with such transaction and such election
becomes irrevocable:
(a) Authority. Sappi is a corporation duly organized, validly
---------
existing and in good standing under the laws of the Republic of South Africa.
The execution, delivery and performance by Sappi of this Agreement are within
the corporate powers of Sappi and have been duly authorized by all necessary
action on the part of Sappi. This Agreement has been duly executed and
delivered by Sappi and is the legally valid and binding obligation of Sappi,
enforceable against Sappi in accordance with its terms, except as the
enforceability thereof may be limited (i) by the effect of bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium ir other similar
laws now or hereafter in effect relating to or affecting the rights and remedies
of creditors, (ii) by the effect of general principles of equity, whether
enforcement is considered in a proceeding in equity or at law, and the
discretion of the court before which any proceeding therefor may be brought and
(iii) to the extent the rights, if any, to indemnification and contribution
hereunder may be limited by Federal or state securities laws or public policy
relating thereto.
(b) Consents. The execution, delivery and performance by Sappi of
--------
this Agreement require no action or consent by or in respect of, or filing with,
any governmental body, agency or official except (i) such as are listed on
Schedule 8(b), (ii) actions, consents and filings that, if not obtained or made,
would not reasonably be expected, either individually
19
or in the aggregate, to (A) materially interfere with or adversely affect (x)
the purchase and sale of the Securities or the consummation of this Agreement or
(y) the performance by each of the Holders and Sappi of its respective
agreements and obligations under this Agreement or the consummation of the
transactions contemplated hereby or (B) in any manner draw into question the
validity of any of the transactions contemplated by this Agreement, (iii)
filings and registrations under Federal and state securities laws, (iv) filings
riot required to be made on or before or substantially contemporaneously with
the Closing and (v) any actions or consents by or in respect of, or filings
with, any governmental body, agency or official with respect to the Minority
Acquisition or the Merger.
(c) No Conflicts. The execution, delivery and performance by Sappi of
------------
this Agreement do not (i) violate the memorandum and articles of association of
Sappi or (ii) violate any applicable law, rule, regulation, judgment,
injunction, order or decree binding upon on applicable to Sappi or (iii) except
for consents and approvals referred to in Section 8(b) hereof, require any
material consent or approval of any other person that will not be obtained prior
to the Closing.
(d) Litigation. There is no action, suit or proceeding pending
----------
against, or to the knowledge of Sappi threatened against or affecting, Sappi
before any court or arbitrator or any governmental body, agency or official
which in any manner challenges or seeks to, or could reasonably be expected to,
prevent, enjoin, alter or materially delay the transactions contemplated by this
Agreement.
(e) Registration. Neither Sappi nor any agent acting on behalf of
------------
Sappi, directly or indirectly, has taken or will take any action that, solely as
a result of such actions, would require the registration of any Securities under
the provisions of the Securities Act or under the provisions of any securities
or "blue sky" law of any state of the United States in connection will their
sale to Sappi hereunder.
(f) Private Offering. (i) Sappi has been advised that the Securities
----------------
have not been registered under the Securities Act or any state securities laws
and, therefore, the Securities (and all securities issued in exchange therefor,
in substitution thereof or upon exercise thereof) cannot be resold unless they
are registered under the Securities Act and applicable state securities laws or
unless sold pursuant to an exemption from, or in a transaction not subject to,
such registration requirements. Sappi is aware that the Company is under no
obligation to effect any such registration with respect to the Securities or any
securities issued in exchange therefor, in substitution thereof or upon exercise
thereof (except to the extent provided in the Shareholders Agreement and the
Warrant Agreements) or to file for or comply with any exemption from such
registration.
(ii) Sappi is an accredited investor, as that term is defined in
Regulation D under the Securities Act, with such knowledge and
experience in financial and business matters as are necessary in order
to evaluate the merits and risks of an investment in the Securities.
Sappi is able to incur a complete
20
loss of such investment and is able to bear the economic risk of such
investment for an indefinite period of time.
(iii) Sappi is acquiring the Securities for its own account and
not with a view to any distribution thereof or with any present
intention of offering or selling any of the Securities in a
transaction that would violate the Securities Act or the securities
laws of any State of the United States or any other applicable
jurisdiction. Notwithstanding the foregoing, Sappi shall have the
right, subject to any contractual restrictions entered into by Sappi,
at all times to sell or otherwise dispose of all or any part of the
Securities pursuant to a registration under, or in a transaction
exempt from or not subject to the registration requirements of, the
Securities Act.
(g) Sappi Shares. Any Sappi Shares which Sappi includes in the
------------
Purchase Consideration, when issued and delivered to the Holders in exchange for
the Securities in accordance with the terms of this Agreement, shall be duly and
validly authorized and issued, fully paid and non-assessable and will not have
been issued in violation of, and the issuance thereof will not be subject to,
any preemptive rights (other than any preemptive rights that have been validly
waived).
9. Covenants of Sappi. (a) Structure of Placement. Sappi covenants and
------------------ ----------------------
agrees that any Placement which it arranges in connection with any election, in
it sole discretion, to include any Sappi Shares in the Purchase Consideration
(which has no: been revoked at or prior to the Closing) shall be structured, at
Sappi's sole discretion, as either (i) an offering registered under the
Securities Act or (ii) an offering or placement exempt from, or not subject to,
registration under the Securities Act.
(b) Minority Acquisition. Sappi agrees to use all reasonable efforts
--------------------
to consummate, or cause a designee to consummate, the Minority Acquisition
within 120 days of the Closing; provided, however, that such period shall be
------------------------------ -------- -------
extended to the extent that Sappi is delayed by any SEC or other regulatory or
judicial filings or proceedings in connection with the Minority Acquisition.
10. Mutual Covenants. (a) Cooperation. Subject to the terms and
---------------- -----------
conditions of this Agreement, each Holder and Sappi covenants and agrees to use
its reasonable best efforts to cause the Closing to occur on or prior to the
Payment Date.
(b) Consents. Sappi will use all reasonable efforts to obtain prior
--------
to a scheduled Closing Date any Consents from Governmental Entities required in
connection with the consummation of the transactions contemplated by this
Agreement, including in the event that Sappi elects, in its sole discretion, to
include any Sappi Shares in the Purchase Consideration, the Placement and the
Back-Up Financing, and each Holder will cooperate with Sappi in connection
therewith.
21
(c) Brokers. Each Holder and Sappi covenants to pay the fees and
-------
expenses of any broker, finder, financial advisor or other intermediary (if any)
retained by such Holder or Sappi, as the case may be, in connection with any of
the transactions contemplated by this Agreement. Sappi shall indemnify each
Holder in accordance with the provisions of Section 11 with respect to any
liability in any way based upon, resulting from or arising out of any assertion
or claim by any broker, finder, financial advisor or other intermediary of Sappi
for any fees or expenses with respect to Sappi's participation in the
transactions contemplated by this Agreement and each Holder shall indemnify
Sappi in accordance with the provisions of Section 11 with respect to any
liability in any way based upon, resulting from or arising out of any assertion
or claim by any broker, finder, financial advisor or other intermediary of such
Holder for any fees or expenses with respect to such Holder's participation in
the transactions contemplated by this Agreement.
11. Indemnification. (a) Survival of Representations and Warranties.
--------------- ------------------------------------------
The representations and warranties contained in this Agreement, and in any
agreements, certificates or other instruments delivered pursuant co this
Agreement, shall survive the Closing and shall remain in full force and effect,
regardless of any investigation made by or on behalf of any party; provided,
--------
however, that all such representations and warranties (other than the
-------
representations and warranties contained in Sections 6(g) and 6(g)), shall
terminate at 11:59 p.m., New York City time, on the second anniversary of the
Closing Date.
(b) Indemnification by Sappi. Sappi agrees to indemnify and hold
------------------------
harmless each Holder and the respective Representatives of each Holder
(collectively, the "Holder Indemnified Parties") against any and all losses,
--------------------------
liabilities, damages and claims (including taxes), and all costs and expenses
related thereto (including any and all reasonable attorneys' fees and costs of
investigation, litigation, settlement, judgment, interest and penalties)
(collectively, "Losses"), which may be imposed on or incurred by any of the
------
Holder Indemnified Parties constituting, or in any way based upon, resulting
from or arising out of any breach by Sappi of any representation, warranty,
covenant or agreement of Sappi contained in this Agreement.
(c) Indemnification by Holders. Each Holder agrees, severally and not
--------------------------
jointly, to indemnify and hold harmless Sappi and any designee of Sappi pursuant
to Section 14 and their respective Representatives (collectively, the "Sappi
-----
Indemnified Parties") against any and all Losses which may be imposed on or
-------------------
incurred by any of the Sappi Indemnified Parties constituting, or in any way
based upon, resulting from or arising out of any breach by such Holder of any
representation, warranty, covenant or agreement of such Holder contained in this
Agreement.
(d) Conduct of Indemnification Proceedings. The Sappi Indemnified
--------------------------------------
Party or the Holder Indemnified Party seeking indemnification under this Section
11 (the "Indemnified Party") shall promptly notify the party against whom such
-----------------
indemnity is sought (the "Indemnifying Party") in writing of the assertion by
------------------
any third party of any claim or the commencement by any third party of any suit,
action or proceeding in respect of which
22
indemnity may be sought under this Section II. The Indemnifying Party may, at
its option, and shall, at the request of the Indemnified Party, assume the
defense of any such suit, action or proceeding. The Indemnified Party shall have
the right to employ separate counsel in any such action and to participate in
the defense thereof, but the fees and expenses of such counsel shall be at the
expense of the Indemnified Party unless (i) the Indemnifying Party has agreed in
writing to pay such fees and expenses or (ii) the named parties to any such
suit, action or proceeding (including any impleaded parties) include both such
Indemnified Party and the Indemnifying Party, and such Indemnified Party shall
have been advised by its counsel that there may be one or more legal defenses
available to such Indemnified Party that are different from or additional to
those available to the Indemnifying Party. The Indemnifying Party shall not be
liable for any settlement of any such suit, action or proceeding effected
without its written consent, but if settled with its written consent (which
shall not be unreasonably withheld), or if consent is withheld and there be a
final judgment for the plaintiff in any, such suit, action or proceeding, the
Indemnifying Party agrees to indemnify and hold harmless such Indemnified
Parties from and against any and all Losses by reason of such settlement or
judgment. No Indemnifying Party shall, without the prior written consent of the
Indemnified Party, effect any settlement of any pending or threatened proceeding
in respect of which any Indemnified Party is or could have been a parry and
indemnity could have been sought hereunder by such indemnified Party, unless
such settlement includes an unconditional release of such Indemnified Party from
all liability arising out of such proceeding.
(e) Time Limitations. Notwithstanding anything to the contrary
----------------
contained herein, the obligation of each Holder to indemnify or otherwise hold
harmless the Sappi Indemnified Parties for any Loss arising out of, based upon
or caused by the breach by such Holder of any representation, warranty, covenant
or agreement of such Holder shall, except as otherwise provided below, terminate
at 11:59 p.m., New York City time, on the second anniversary of the Closing
Date. The obligation of each Holder to indemnify or otherwise hold harmless the
Sappi Indemnified Parties for any Loss based upon or caused by the breach of any
representation or warranty contained in Section 6(g) shall not terminate but
shall survive indefinitely. The obligation of Sappi to indemnify or otherwise
hold harmless the Holder Indemnified Parties for any Loss arising out of, based
upon or caused by the breach of any representation, warranty, covenant or
agreement of Sappi shall, except as otherwise provided below, terminate at 11:59
p.m., New York City time, on the second anniversary of the Closing Date. The
obligation of Sappi to indemnify or otherwise hold harmless the Holder
Indemnified Parties for any Loss based upon or caused by the breach of any
representation or warranty contained in Section 5(g) shall not terminate but
shall survive indefinitely. Notwithstanding the termination ,of any obligations
to indemnify, it is understood and agreed that claims asserted and not withdrawn
prior to, the expiration of any time period specified above may continue to be
asserted and shall be indemnified against.
12. Further Assurances. Subject to the conditions hereof, each party
------------------
hereto shall make, execute, acknowledge and deliver such other instruments and
documents, and take all such other actions, as may be reasonably required in
order to effectuate the purposes of this Agreement and to consummate the
transactions contemplated hereby.
23
13. Legends. (a) Each certificate representing the Sappi Shares (and all
-------
securities issued in exchange therefor or in substitution thereof) shall bear a
legend in substantially the following form:
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"). NEITHER THIS SECURITY NOR
ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED,
TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION UNLESS AN EXEMPTION FROM SUCH
REGISTRATION IS AVAILABLE. IN THE CASE OF CERTAIN TRANSFERS OR OTHER
DISPOSITIONS MADE OTHERWISE THAN PURSUANT To AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT, THE HOLDER HEREOF SHALL BE
REQUIRED TO PROVIDE TO THE ISSUER HEREOF AN OPINION OF COUNSEL, ALL IN
ACCORDANCE WITH THE PROVISIONS OF THE AGREEMENT PURSUANT TO WHICH THIS
SECURITY WAS ORIGINALLY OFFERED AND SOLD BY THE ISSUER HEREOF."
(b) Sappi shall, upon the written request of a Holder with respect to
Sappi Shares (or securities issued in exchange therefor or in substitution
thereof) and delivery by such Holder of an opinion of counsel to such Holder in
form and substance reasonably satisfactory to counsel to Sappi stating that the
legend set forth in Section 13(a) is no longer required on the certificate or
certificates evidencing such securities under the applicable requirements of the
Securities Act or applicable state securities or "blue sky" laws unless delivery
of such opinion of counsel is waived by Sappi in its sole discretion, issue to
such Holder a new certificate or certificates evidencing such Sappi Shares (or
securities issued in exchange therefor or in substitution thereof) without the
Legend set forth in Section 13(a) endorsed thereon.
14. Assignment. Neither this Agreement nor any rights and obligations
----------
hereunder shall be assignable or otherwise transferable by Sappi or any Holder
(except by operation of law in connection with a merger), without the prior
written consent of Sappi, in the case of an assignment or transfer by a Holder,
or the Holders, in the case of an assignment or transfer by Sappi; provided,
--------
however, that Sappi may assign its right to purchase the Securities hereunder to
-------
any one or more affiliates of Sappi without the prior written consent of any
Holder and a Holder may assign its rights hereunder with respect to Securities
transferred in an Affiliate Transfer without the prior written consent of Sappi;
provided further, however, that no assignment shall limit or affect the
---------------- -------
assignor's obligations hereunder. Any attempted assignment in violation of this
Section 14 shall be null and void and have no force or effect.
24
15. Termination. (a) Anything contained herein to the contrary
-----------
notwithstanding, this Agreement may be terminated and the transactions
contemplated hereby abandoned at any time prior to the Closing Date:
(i) by mutual written consent of the Holders and Sappi;
(ii) by DLJMB and UBS, acting jointly, if any of the conditions
set forth in Section 5(c) was not, or cannot reasonably be, satisfied
in all material respects on or prior to the Payment Date and shall not
have been waived by the Holders, unless the failure of such condition
is the result of a material breach of this Agreement by any DLJ Entity
or UBS;
(iii) by Sappi it any of the conditions set forth in Section 5(b)
was not, or cannot reasonably be, satisfied in all material respects
on or prior to the Payment Date and shall not have been waived by
Sappi, unless the failure of such condition is the result of a
material breach of this Agreement by Sappi; or
(iv) by any party hereto, if the Closing does not occur on or
prior to the Payment Date for any reason other than a breach of this
Agreement by the terminating party or any of its affiliates.
(b) In the event of termination by DLJMB, UBS or Sappi pursuant to
this Seccicn 15, written notice thereof shall forthwith be given to the other
parties and the transactions contemplated by this Agreement shall be terminated,
without further action by any party.
(c) If this Agreement is terminated and the transactions contemplated
hereby are abandoned as described in this Section 15, this Agreement shall
become void and of no further force or effect, except for the provisions of (i)
Section 7(a) relating to confidentiality, (ii) Section 11 relating to
indemnification, (iii) Section 16 relating to certain expenses, (iv) Section 17
relating to attorney fees and expenses and (v) this Section 15. Nothing in this
Section 15 shall be deemed to release any party from any liability for any
breach by such party of the terms and provisions of this Agreement or to impair
the right of any party to compel specific performance by any other party of such
party's obligations under this Agreement.
16. Expenses. Whether or not the transactions contemplated hereby are
--------
consummated, and except as otherwise specifically provided in this Agreement,
all costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid by the party incurring such costs
or expenses.
17. Attorney Fees. A party found to be in breach of this Agreement by a
-------------
final, non-appealable judgment of a court of competent jurisdiction shall, on
demand, indemnify and hold harmless each other party for and against all
reasonable out-of-pocket expenses, including legal fees, incurred by such other
party by reason of the enforcement and protection of its
25
rights under this Agreement. The payment of such expenses is in addition to any
other relief to which such other parties may be entitled.
18. Severability. If any provision of this Agreement (or any portion
------------
thereof) or the application of any such provision (or any portion thereof) to
any person or circumstance shall be held invalid, illegal or unenforceable in
any respect by a court of competent jurisdiction, such invalidity, illegality or
unenforceability shall not affect any other provision hereof (or the remaining
portion thereof) or the application of such provision to any other persons or
circumstances. Upon such determination that any provision is invalid, illegal
or unenforceable, the parties hereto shall use their reasonable best efforts to
find and employ an alternative means to achieve the same or substantially the
same result as that contemplated by such provision.
19. Consent to Jurisdiction. Any suit, action or proceeding seeking to
-----------------------
enforce any provision of, or based on any matter arising out of or in connection
with, this Agreement or the transactions contemplated hereby shall only be
brought in the United States District Court for the Southern District of New
York or any other New York State Court sitting in New York City, and each of the
parties hereby consents to the jurisdiction of such courts (and of the
appropriate appellate courts therefrom in any such suit, action or proceeding
and irrevocably waives, to the fullest extent permitted by law, any objection
which it may now or hereafter have to the laying of the venue of any such suit,
action or proceeding in any such court that any such suit, action or proceeding
which is brought in any such court has been brought in an inconvenient form.
Process in any such suit, action or proceeding may be served on any party
anywhere in the world, whether within or without the jurisdiction of any such
court. Without limiting the foregoing, each party agrees that service of
process on such party as provided in Section 23 shall be deemed effective
service of process on such party.
20. Counterparts. This Agreement may be signed in any number of
------------
counterparts, each of which shall constitute an original but all of which when
taken together shall constitute but one contract; provided, however, that no
-----------------
party shall have any rights or obligations under this Agreement until it has
been executed by all parties specified an the signature pages. Delivery of an
executed counterpart of a signature page by facsimile transmission shall be
effective as delivery of a manually executed counterpart of this Agreement.
21. Interpretation. As used in this Agreement, the term "including" shall
-------------- ---------
mean including without limitation and, unless the context otherwise requires,
the word "or" is not exclusive. The section headings and table of contents
contained in this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement.
22. Existing Documents. Except as expressly set forth herein, this
------------------
Agreement shall not by implication or otherwise limit, constitute a waiver of,
or otherwise affect the rights and remedies of the parties hereto under any
existing document, nor shall this Agreement alter,
26
modify, amend or in any way affect any of the terms, conditions, obligations,
covenants or agreements contained in any existing document,
23. Entire Agreement. This Agreement constitutes the entire agreement
----------------
between one parties hereto with respect to the subject matter hereof and
supersedes all prior agreements and understandings, both oral and written
between the parties with respect to the subject matter hereof. The parties have
not made, and are not making, any representations or warranties in connection
with this Agreement and the transactions contemplated hereby, other than the
representations and warranties expressly set forth in this Agreement, and this
Agreement does not contain any implied representation or warranty, it being the
intention of the parties to exclude all implied representations and warranties
from this Agreement.
24. Amendment; Waiver. No provision of this Agreement may be waived
-----------------
except by an instrument in writing executed by the party against whom the waiver
is to be effective. No provision of this Agreement (including the Exhibits and
Schedules hereto) may be amended or otherwise modified except by an instrument
in writing executed by or on behalf of each of the parties hereto.
25. Binding Effect; Benefit; Action by DLJMB. This Agreement shall inure
----------------------------------------
to the benefit of and be binding upon the parties hereto and their respective
permitted assigns. Except as provided in Sections 11 and 14, nothing in this
Agreement, expressed or implied, is intended to confer on any person other than
the parties hereto, and their respective permitted assigns, any rights, remedies
obligations or liabilities under or by reason of this Agreement. Each DLJ Entity
agrees that any amendment, waiver, consent or notice that may or shall be given,
and any right that may be exercised, hereunder by such DLJ Entity may be given
or exercised on behalf of such DLJ Entity by DLJMB and that any action taken
hereunder on behalf of such DLJ Entity by DLJMB shall be binding, upon such DLJ
Entity as though taken by such DLJ Entity itself.
26. Notices. All notices and other communications given or made pursuant
-------
hereto, unless otherwise specified, shall be in writing and shall be deemed to
have been duly given or made if sent by telecopy (with confirmation in writing),
delivered personally or by overnight courier or sent by registered or certified
mail (postage pre-paid, return receipt requested): (i) if to Sappi, to the
telecopy numbers or addresses set forth in the Shareholders Agreement; (ii) if
to any DLJ Entity other than DLJIP or DLJOP, to DLJMB, at the addresses or
telecopy numbers set forth in the Shareholders Agreement; (iii) if to DLJIP or
DLJOP to such party c/o DLJ Offshore Management N.V., ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ ▇,
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ Antilles, Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
MeesPierson Trust (Curacao) N.V., Telecopy: ▇▇▇-▇▇▇-▇▇▇-▇▇▇▇; (iv) if to UBS, to
the telecopy numbers and addresses set forth in the Shareholders Agreement; and
(v) if to the Company, to the telecopy numbers and addresses set forth in the
Shareholders Agreement; and such notice or communication shall be deemed to have
been given or made upon receipt if received an a Business Day or upon the next
succeeding Business Day if received on a day which is not a Business Day or if
received after the close of business on a Business Day.
27
27. Applicable Law. This Agreement shall be governed by, and construed in
--------------
accordance with, the laws of the State of New York (without regard to applicable
principles governing conflicts of laws to the extent that application of the
laws of another jurisdiction would be required thereby).
28. Waiver of Jury Trial. Each party hereto hereby irrevocably waives all
--------------------
right to a trial by jury in any action, proceeding or counterclaim arising out
of or relating to this Agreement or the transactions contemplated hereby.
29. Specific Enforcement. Each party hereto acknowledges that the
--------------------
remedies at law of the other parties for a breach or threatened breach of this
Agreement would be inadequate and, in recognition of his fact, any party to this
Agreement, without posting any bond, and in addition to all other remedies which
may be available, shall be entitled to obtain equitable relief in the form of
specific performance, a temporary restraining order, a temporary or permanent
injunction or any other equitable remedy which may then be available.
28
30. Press Release. Following execution of this Agreement, a press release
-------------
announcing the transactions contemplated by this Agreement shall be made by the
Company in the form attached hereto as Exhibit A. In addition, Sappi may
announce such Transactions by including substantially similar information in its
earnings press release; provided, however, that Sappi may also include in such
-------- -------
information statements indicating (a) that Sappi has the option to pay the
Holders the Purchase Consideration in Sappi Shares or (in whole or in part; in
cash and (b) that if Sappi elects, in its sole discretion, to pay the Purchase
Consideration in Sappi Shares, in whole or in part, Sappi will arrange a
Placement.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly
executed as of the date first written above by a duly authorized officer,
general partner or managing member, as appropriate.
SAPPI LIMITED,
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Name: W.E. ▇▇▇▇▇▇
Title:Executive Director - Finance
DLJ MERCHANT BANKING PARTNERS, L.P.,
by DLJ MERCHANT BANKING, INC.,
Managing General Partner,
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Name:
Title:
DLJ INTERNATIONAL PARTNERS, C.V.,
by DLJ MERCHANT BANKING, INC.,
Advisory General Partner
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Name:
Title:
30
DLJ OFFSHORE PARTNERS, C.V.,
by DLJ MERCHANT BANKING, INC.,
Advisory General Partner
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Name:
Title:
DLJ MERCHANT BANKING FUNDING, INC.
By /s/ [illegible]
------------------------------------
Name:
Title:
DLJ FIRST ESC L.L.C.,
by DLC LBO PLANS MANAGEMENT CORPORATION,
by /s/ [illegible]
------------------------------------
Name:
Title:
UBS CAPITAL LLC,
by /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President
by /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Managing Director
SDW HOLDINGS CORPORATION,
by /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Name: W.E. ▇▇▇▇▇▇
Title: Vice President
31
SCHEDULE A
Shares and
Warrant Warrant
Holders Spares Warranties Shares Shares Total
------------------------------------- ---------- ---------- --------- ------------
DLJ Merchant Banking Partners, L.P. 1,489,057 2,630,652 1,630,652 3,099,709
DLJ International Partners, C.V. 659,407 731,942 731,942 1,391,349
DLJ Offshore Partners, C.V. 38,232 42,437 42,437 80,669
DLJ Merchant Banking Funding, Inc. 609,206 676,949 876,349 1,295,555
DLJ First ESC L.L.C. 349,098 337,369 387,369 736,467
--------- --------- --------- ---------
Total DLJ Entities 3,125,O00 3,468,749 3,469,749 8,993,749
UBS Capital LLC 825,000 993,750 783,594 1,408,994
--------- --------- --------- ---------
Total 3,750,000 4,462,449 4,252,343 8,002,343
32
SCHEDULE 6(b)
None.
33
SCHEDULE 8(b)
Schedule 8(b)(i)
1. All filings with, and the consent, approval or waiver of, the South
African Reserve Bank.
2. All authorizations, clearances or other forms of approval from any
Governmental Entity under the competition laws of any European Union country
which are necessary in order to consummate the purchase and sale of the
Securities, including, in particular, in Belgium, Germany, Greece and the United
Kingdom.
Schedule 8(b)(ii)
1. Notice to the South African registrar of companies regarding the
issuance of any Sappi Shares included in the Purchase Consideration.
2. Filing of listing applications with the Johannesburg, Frankfurt, Paris
and London stock exchanges with respect to any Sappi Shares included in the
Purchase Consideration.
3. Publication of an advertisement in a South African newspaper of
general circulation regarding the issuance of any Sappi Shares included in the
Purchase Consideration.
4. All filings and registrations under any applicable securities laws in
connection with any Placement.
34
EXHIBIT A
Form of SDW Holdings Press Release
----------------------------------
December __, 1996
Sappi Limited has agreed to acquire the minority common equity interests in
SDW Holdings Corporation held by DLJ Merchant Banking Partners, L.P., certain of
its affiliates and UBS Capital LLC, subject to certain customary conditions.
Jointly, these interests represent approximately 22% of the common equity of SDW
Holdings (on a fully-diluted basis). SDW Holdings is the parent of S.D. ▇▇▇▇▇▇
Company.
Under the terms of the agreement, Sappi has agreed to purchase the
interests at a price of $17.25 per share of common stock within 180 days of the
date of execution of the agreement.
Following this acquisition, Sappi will own over 97% of the common equity of
SDW Holdings (on a fully-diluted basis). Sappi has agreed to use reasonable
efforts to acquire the remaining common equity interests in SDW Holdings within
120 days following the closing of the above acquisition. Based upon current
circumstances, it is expected that the acquisition of such minority interests
will be made for cash at a substantially similar price.
1/24/97
35