<PAGE>
Exhibit 10
DATED MARCH 8 2006
J R CROMPTON LIMITED
NICHOLAS JAMES DARGAN AND WILLIAM KENNETH DAWSON
GLATFELTER-UK LIMITED
P.H. GLATFELTER COMPANY
----------
AGREEMENT
FOR THE SALE OF ASSETS
(LYDNEY)
----------
(ADDLESHAW GODDARD LOGO)
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CONTENTS
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PAGE
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CLAUSE
1
Definitions.............................................................
1
2
Interpretation..........................................................
5
3 Sale and
Purchase.......................................................
5
4 The
Consideration.......................................................
6
5
VAT.....................................................................
6
6
Completion..............................................................
6
7 Excluded
Assets.........................................................
7
8 Excluded
Liabilities....................................................
8
9 Third Party Items and
Claims............................................ 9
10
Intellectual Property
Licence........................................... 10
11
Continuing the
Business.................................................
10
12
Accounting for the
Debts................................................ 11
13
Records.................................................................
11
14
Exclusion of
Warranties.................................................
12
15
Exclusion of Personal
Liability......................................... 13
16
Employees...............................................................
13
17
Apportionments..........................................................
14
18 Data
Protection.........................................................
14
19
Publicity...............................................................
14
20
Guarantee...............................................................
14
21
Notices.................................................................
15
22
General.................................................................
15
23
Governing Law and
Jurisdiction.......................................... 16
SCHEDULE
1 The Lydney
Property.....................................................
18
Part I -
The Lydney Property............................................
18
Part II -
Special Conditions - The Lydney Property......................
19
Part III -
The Transfers - Lydney Property..............................
22
Part IV -
Details of the Charges to be Released - The Lydney Property...
23
2 The Registered
Trademarks...............................................
24
3 The
Patents.............................................................
25
4 The
Plant...............................................................
26
5 The Third Party
Items...................................................
27
6 The German
Contracts....................................................
28
7 Sales Agency
Agreements.................................................
29
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THIS AGREEMENT is made on March 8, 2006
BETWEEN
(1) J R CROMPTON
LIMITED (No. 58810) whose registered office is at 12th Floor,
Sunlight House, Quay Street, Manchester M3 3JZ (SELLER) acting by
the
Administrators (defined below);
(2) NICHOLAS JAMES
DARGAN and WILLIAM KENNETH DAWSON both of Deloitte & Touche
LLP,
66 Shoe Lane, London EC4A 3BQ (together the ADMINISTRATORS);
(3) GLATFELTER-UK
LIMITED (No. 5734921) whose registered office is care of
Jordans Limited 20-22 Bedford Row London WC/R4dS (BUYER); and
(4) P.H. GLATFELTER
COMPANY a United States Corporation incorporated and
validly subsisting under the laws of the State of Pennsylvania
whose
principal executive offices are at 96 George Street, Suite 400,
York
Pennsylvania 17401 (GUARANTOR).
WHEREAS
(A) The Administrators
were appointed Joint Administrators of the Seller by an
Administration Order made in the High Court of Justice Chancery
Division
Manchester District Registry on 7 February 2006 in proceedings the
short
title and reference to the record of which is AO No. 1146 of 2006
In the
Matter of J R Crompton Limited.
(B) The Seller has
agreed to sell to the Buyer and the Buyer has agreed to
purchase the Lydney Assets (defined below) which relate to the
Lydney
Business (defined below) on the terms of this Agreement.
(C) The Guarantor is
the ultimate parent company of the Buyer and has agreed to
guarantee the Buyer's obligations under this Agreement.
IT IS AGREED:
1
DEFINITIONS
In
this Agreement, unless the context otherwise requires:
ADMINISTRATORS' SOLICITORS means Addleshaw Goddard of 100
Barbirolli
Square, Manchester M2 3AB Ref: SWM\103370-11491
APPOINTMENT means the appointment of the Joint Administrators
BUSINESS NAME means J R Crompton
BUSINESS RIGHTS means any service marks database rights utility
models
topography rights inventions trade secrets know-how get up or other
rights
in
respect of any other intellectual property (registerable or not)
and
wherever existing in the world (including all renewals extensions
and
revivals and all rights to apply for any of the foregoing) owned by
the
Seller and used by it exclusively in connection with the Lydney
Business
COMPLETION means the completion of the sale and purchase hereby
agreed
COMPLETION DATE means the date of this Agreement
DEBTS means the book and other debts and monetary claims owing to
the
Seller and/or the Administrators as at the Transfer Date whether or
not yet
due
or payable or invoiced.
1
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DEVON VALLEY PROPERTY means the property occupied by the Seller at
Hele
Road, Exeter
EXCLUDED ASSETS means the property rights and assets of or used by
the
Seller which are not expressly sold pursuant to this Agreement
including
but
not limited to those set out in clause 7 (Excluded Assets) and,
without
limitation, the assets of the Retained Business and of the Simpson
Clough
Business
EXCLUDED LIABILITIES means (save to the extent to which the Buyer
agrees
under this Agreement to discharge the same) all liabilities or
obligations
relating to the Lydney Business the Simpson Clough Business or the
Retained
Business outstanding on, or accrued or referable to the period up
to and
including the Transfer Date and including, for the avoidance of
doubt, the
items set out in clause 8 (Excluded Liabilities)
GERMAN BUSINESS means any and all contracts, supply agreements,
engagements
or
orders entered into on or before the Transfer Date with
customers,
suppliers, agents or representatives which in any way, in whole or
part
relate to the manufacture, supply or sale of goods into Germany and
any
contracts, engagements or orders entered into on or before the
Transfer
Date
for the supply or sale of goods or services to the Seller by
any
supplier or contracting party based in Germany including without
limitation
the
contracts details of which are set out in schedule 6 hereto, the
German
Business further includes all business secrets, Goodwill, Goods in
Transit,
Stock, Records and Third Party Items related to the manufacture,
supply or
sale
of goods in Germany or to customers having their principal place
of
business in Germany and related to the supply of goods or services
to the
Seller out of Germany or by a company having its principal place
of
business in Germany
GOODS IN TRANSIT means all and any items which were ordered by the
Seller
and/or the Administrators prior to the Transfer Date for delivery
to the
Lydney Property but which have not been delivered as at the
Transfer Date
whether or not the same have been paid for
GOODWILL means the goodwill of the Seller exclusively in connection
with
the
Lydney Business comprising:
(a)
exclusive liberty for
the Buyer to represent itself as carrying on the
Lydney Business in succession to the Seller
(b)
liberty to negotiate
to take up all orders and enquiries relating
exclusively to the Lydney Business (other than those which relate
to
the German Business) which have not been accepted by the Seller as
at
the date hereof
(c)
liberty to use all
customer lists and (in so far as not referring to
the Seller and not referring to the rights or property of any
other
person) any technical literature and any technical drawings used
by
the Seller exclusively in connection with the Lydney Business (save
in
so far as the same relate to the German Business)
HEAD
OFFICE means the head office function of the Seller called on
from
Sunlight House, Quay Street, Manchester
INTELLECTUAL PROPERTY means such trade marks patents design
rights
registered designs copyright database rights or domain names
(wherever
existing in the world and whether registered or not and including
all
renewals extensions and revivals) and all rights to apply for any
for the
foregoing as may be owned by the Seller and used exclusively in
connection
with
the Lydney Business as at the Transfer Date and including
(without
limitation) those
2
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registered trademarks (REGISTERED TRADEMARKS) listed in Schedule 2
and the
Patent listed in schedule 3 but in every case subject to all
licences and
other rights of and obligations to third parties to which the
Seller may be
subject in relation to the same
JRC
USA means J R Crompton (USA) Limited
LYDNEY ASSETS means the Business Rights, the Lydney Customer
Contracts, the
Goodwill, the Intellectual Property, the Plant, the Stock, the
Transferred
Records (as defined herein) and all contracts relating to the Third
Party
Items and relating exclusively to the Lydney Business but for the
avoidance
of
doubt excludes the German business
LYDNEY BUSINESS means the business of the manufacture of
specialist
beverage papers and related products carried on by the Seller at
the Lydney
Property prior to the Transfer Date but for the avoidance of doubt
excludes
the
German Business, the Simpson Clough Business and the Retained
Business
LYDNEY CUSTOMER CONTRACTS means the benefit and burden of all
contracts and
engagements entered into and of all orders placed with the Seller
or the
Administrators on behalf of the Seller by customers exclusively in
relation
to
the Lydney Business which are subsisting but uncompleted on the
Transfer
Date
other than those relating to the German Business
LYDNEY PROPERTY means the freehold property at Lydney,
Gloucestershire as
more
particularly described in part 1 of schedule 1
PLANT means such plant, machinery, vehicles, office furniture
fittings and
equipment relating exclusively to the Lydney Business as is listed
in
schedule 4 and is in the ownership of the Seller and situate at the
Lydney
Property on the Transfer Date but excluding any ROT Chattels
RECORDS means the Transferred Records and the Retained Records
REGULATIONS means the Transfer of Undertakings (Protection of
Employment)
Regulations 1981
RETAINED BUSINESS means the business carried on by the Seller in
respect of
the
manufacture of specialist beverage papers and related products at
the
Devon Valley Property and any retained business rights (including
the right
to
use the Business Name), customer contracts relating to the Devon
Valley
Property any rights in respect of the Marla joint venture referred
to in
clause 8.1(d), and all other rights relating thereto together with
such
part
of the Seller's business as is operated from Head Office or from or
by
JRC
USA
RETAINED RECORDS means all invoicing financial tax and other
accounting
records of the Seller but excludes the VAT Records
RETURNS means all and any goods supplied by the Seller or the
Administrators on behalf of the Seller prior to the Transfer Date
but
returned (whether as defective or for any other reason) at any time
whether
prior to or after the Transfer Date and any other claims by
customers
relating to defective or allegedly defective goods but excludes for
the
avoidance of doubt any Returns related to the German Business
ROT
CHATTELS means all and any chattels now or hereafter the subject of
any
ROT
Claims
3
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ROT
CLAIMS means all and any existing or future claims by or on behalf
of
any
third party to have retained title in or to any chattels included
in
the
Lydney Assets and/or which at the time of the Appointment were
and/or
which at the date hereof are in the possession or control of the
Seller
SIMPSON CLOUGH BUSINESS means the business of the manufacture of
specialist
beverage products carried on by the Seller from premises occupied
by the
Seller at Simpson Clough Mill, Heywood, Lancashire (SIMPSON
CLOUGH
PROPERTY)
STANDARD CONDITIONS means the Standard Conditions of Sale (Third
Edition)
STOCK means the Goods In Transit and such raw materials parts and
other
stock and work-in-progress (both finished and unfinished)
relating
exclusively to the Lydney Business as is in the ownership of the
Seller and
situate at the Lydney Property on the Transfer Date but excluding
any ROT
Chattels
SUPPLY CONTRACTS means the benefit and burden of all contracts
commitments
and/or orders entered into or placed by or on behalf of the Seller
or the
Administrators on behalf of the Seller between the time of
Appointment and
the
date of this Agreement for the supply to the Seller of goods,
materials
and/or services in connection with the Lydney Business (save
insofar as
delivered or rendered on or prior to the Transfer Date)
THIRD PARTY ITEMS means any items which are the subject of hire
purchase
lease purchase credit sale or leasing agreements or on loan or
otherwise in
the
ownership of third parties and which are situate at the Lydney
Property
on
or which are otherwise put into the possession of the Buyer at any
time
after the Transfer Date including but not limited to the items
listed in
schedule 5 (but excluding any ROT Chattels)
TOWN
AND COUNTRY PLANNING ACTS means all enactments from time to time
in
force relating to town and country planning
TRANSFER DATE means 5.00 pm on the date of this Agreement
TRANSFERRED RECORDS means all sales literature and publicity
material
production data quality data formulae and recipes correspondence
books and
documents and other similar or like materials (including customer
and
supplier lists and records, the Lydney Customer Contracts and
related
documents) in whatever medium relating exclusively to the Lydney
Business
and/or the Lydney Assets or used or intended for use exclusively in
the
Lydney Business other than the Retained Records and the VAT Records
but for
the
avoidance of doubt the Transferred Records do not include
records
relating to the German Business
TRANSITIONAL SERVICES AGREEMENT means the agreement of even date
with this
Agreement between the parties to this Agreement which sets out the
terms on
which for a period of one month post Completion the Buyer shall be
entitled
to
access certain head office services including payroll systems,
computer
software and support functions in connection with the transfer of
the
Lydney Business
VAT
means Value Added Tax
VATA
means the Value Added Tax Act 1994
VAT
RECORDS means the records relating to the Business as at the
Transfer
Date
which are referred to in section 49(1)(b) VATA.
4
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2
INTERPRETATION
2.1 In this Agreement
unless the context otherwise requires:
(a)
the recitals and
schedules form part of this Agreement and references
to this Agreement include them;
(b)
references to
recitals, clauses and schedules are to recitals and
clauses of, and schedules to, this Agreement and references in
a
schedule or part of a schedule to paragraphs are to paragraphs of
that
schedule or that part of the schedule;
(c)
references to this
Agreement or any other document are to this
Agreement or that document as in force for the time being and
as
amended from time to time in accordance with this Agreement or
that
document (as the case may be);
(d)
a reference to a
statute or statutory provision shall be construed as
including a reference to any subordinate legislation (as defined
by
section 21(1) Interpretation Act 1978) made from time to time
under
that statute or provision (whether before or after the date of
this
Agreement);
(e)
a reference to a
statute, statutory provision or subordinate
legislation (as so defined) shall be construed as including a
reference to:
(i) that statute,
provision or subordinate legislation as in force at
the date of this Agreement and as from time to time modified or
consolidated, superseded, re-enacted or replaced (whether with
or
without modification and whether before or after the date of
this
Agreement);
(ii) any statute, statutory provision or subordinate legislation
(as
so defined) which it consolidates, supersedes, re-enacts or
replaces (whether with or without modification);
(f)
the headings and
contents table are for convenience only and do not
affect its interpretation;
(g)
the words "other",
"including" and "in particular" do not limit the
generality of any preceding words and any words which follow
them
shall not be construed as being limited in scope to the same class
as
the preceding words where a wider construction is possible.
3 SALE AND
PURCHASE
3.1 The Seller shall
sell and the Buyer shall buy whatever right, title and
interest (if any) the Seller has in or to the Lydney Assets on the
terms
and
for the consideration set out in this Agreement to the intent that
the
Buyer shall from the Transfer Date carry on the Lydney Business as
a going
concern.
3.2 Such (if any)
right title and interest in or to the Lydney Assets and the
Lydney Property shall pass to the Buyer at Completion.
3.3 For the
consideration set out in this Agreement and subject to the
conditions hereinafter set out (including the special conditions
set out in
part
II of schedule 1) the Seller shall sell (without title guarantee)
and
the
Buyer shall buy the Lydney Property subject to all liens
obligations
licences and encumbrances relating thereto. In the event of any
conflict
between
5
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the
conditions set out in the main body of this Agreement and the
said
special conditions set out in part II of schedule 1 the former
conditions
shall prevail.
3.4 The provisions of
part V of schedule 1 shall more particularly apply in
respect of the Lydney Leasehold Property.
4 THE
CONSIDERATION
4.1 The aggregate
monetary consideration for the sale of the Lydney Property
and
the Lydney Assets shall be L37,500,000 (Thirty Seven Million
Five
Hundred Thousand Pounds Sterling), payable on Completion which
shall be
payable as follows:
(a)
for the Business
Rights - L1
(b)
for the Lydney
Customer Contracts - L1
(c)
for the Goodwill -
L
(d)
for the Intellectual
Property - L1
(e)
for the Plant - L
(f)
for the Stock - L
(g)
for the Transferred
Records - L1
(h)
for the Lydney
Property - L
5 VAT
5.1 All payments to be
made under this Agreement shall be deemed to be
exclusive of VAT unless otherwise provided.
5.2 Subject to clauses
5.3 and 5.4 the Buyer shall not pay any VAT upon the
consideration referred to in clause 4 (The Consideration) the
parties being
of
the view that this is a transaction which by virtue of Article 5
Value
Added Tax (Special Provisions) Order 1995 S.I. No.1995/1268 is not
to be
treated as either a supply of goods or a supply of services.
5.3 If and to the
extent to which all or any of the Lydney Assets or the Lydney
Property are for any reason subject to VAT then the Buyer shall
against
receipt of a VAT invoice pay to the Administrators on behalf of the
Seller
forthwith on demand the VAT due relative to such sale together with
all
interest and penalties which may be payable thereon.
5.4 The Buyer warrants
that it is registered or will as a result of this
transaction become registerable for VAT purposes and that it
intends to use
the
Lydney Assets and the Lydney Property to carry on with effect from
the
Transfer Date the same kind of business as the Lydney Business.
6
COMPLETION
6.1 Completion shall
take place in respect of the purchase of the Lydney Assets
and
the Lydney Property at the offices of the Administrators'
Solicitors on
the
Completion Date when:
6
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(a)
The Buyer shall pay to
the Administrators on behalf of the Seller the
sum of L37,500,000 being the aggregate consideration for the sale
and
purchase of the Lydney Property and Lydney Assets.
(b)
The Seller shall leave
at the Lydney Property or otherwise wherever
the same may be situate all such items of the Lydney Assets as
are
transferable by delivery.
(c)
The Seller shall
deliver to the Buyer assignments in favour of the
Buyer of:
(i) Goodwill
(ii) Intellectual Property.
(d)
Neither the Seller nor
the Administrators shall have any obligation to
the Buyer to identify or deliver any such items of the Lydney
Assets
to the Buyer or to take any positive steps whatsoever (including
but
not limited to seeking or obtaining any requisite consent of
any
person not party hereto) relating thereto to enable the Buyer
to
obtain the same.
(e)
The parties hereto
shall enter into the Transitional Services
Agreement.
7 EXCLUDED
ASSETS
All
assets and items owned by or in the possession of the Seller other
than
the
Lydney Assets and the Lydney Property are excluded from the sale
under
this
Agreement. In particular but without prejudice to the generality
of
the
foregoing the following assets or items are excluded:
7.1 The Retained
Business and any assets owned or used in connection with it.
7.2 The Simpson Clough
Business and any assets owned or used in connection with
it.
7.3 All deposits,
prepayments, cheques, bills, notes or securities received by
the
Seller or the Administrators on behalf of the Seller on or before
the
Transfer Date and any cash in hand and at bank or in the banking
system.
7.4 Any claim or
potential claim under any insurance arising from any act
occurring on or before the date hereof.
7.5 The Debts and all
guarantees, indemnities, securities, rights of retention
of
title and liens for the same.
7.6 The Retained
Records.
7.7 The ROT
Chattels.
7.8 The interest of
the Seller in any vehicles other than those forming part of
the
Plant.
7.9 The benefit of all
agreements which are not assignable or of which a
purported assignment would be a breach or would constitute an event
of
default or termination.
7.10 The German Business.
7.11 All investments in shares or securities of the Seller
(including shares and
securities and other rights of whatsoever nature of the Seller
in
subsidiaries (if any) and all moneys from time to time owing to the
Seller
from
such subsidiaries).
7
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7.12 Any interest of the Seller in any freehold or leasehold
properties other
than
the Lydney Property.
7.13 Any interest the Seller may have in or to any pension
fund(s).
7.14 All computer software (if any) used by the Seller the
copyright in which is
not owned by the
Seller.
7.15 The Third Party Items.
7.16 Any of the Lydney Assets which have been distrained upon.
7.17 The Business Name.
7.18 Any assets located in or upon the Simpson Clough Property or
the Devon
Valley Property at the Transfer Date.
7.19 All other items or assets of the Seller not specifically
mentioned in
clause 3 (Sale and Purchase).
8 EXCLUDED
LIABILITIES
8.1 Without limiting
the meaning of Excluded Liabilities, the following
liabilities relating to the Lydney Business, the Simpson Clough
Business
and/or the Retained Business and/or the Lydney Assets are
expressly
excluded from the sale to the Buyer contemplated hereunder:
(a)
any liability (accrued
or outstanding) in respect of the defined
benefit pension scheme, or any other pension scheme operated in
connection with the Lydney Business, the Simpson Clough Business
or
the Retained Business prior to the Transfer Date;
(b)
any liability of the
Lydney Business, the Simpson Clough Business or
the Retained Business relating to any claim, writ or action,
pending
or threatened in the Courts of the United Kingdom or any claim
or
action accrued or outstanding as at the Transfer Date by any
statutory
authority;
(c)
to the extent not
otherwise assumed under statute, any liability
relating to environmental matters relating to the operation of
the
Lydney Business and the Simpson Clough Business at the Lydney
Property
or the Simpson Clough Property which may have accrued prior to
the
Transfer Date;
(d)
any interest in or
relating to the Joint Venture between (1) Dynamic
Products Limited (2) the Seller (3) Marla Innovations Limited
(4)
Peter Ashby and any licence or agreement relating thereto to which
the
Seller is a party; and
(e)
any agreements
relating to the appointment of a sales agent to which
the Seller is a party and details of which are set out in schedule
7
hereto.
8.2 The Buyer
understands that the Administrators will not discharge all or
any
of
the Excluded Liabilities and that to the extent to which any
such
liabilities are and remain liabilities of the Seller they will at
most rank
only
as ordinary unsecured liabilities of the Seller. The Buyer also
understands that the Seller and the Administrators cannot and do
not nor
give
any assurances that the Buyer will not, by operation of law or
otherwise, become responsible for some or all of the Excluded
Liabilities
and
to the extent to which the Buyer is or becomes so responsible,
the
Buyer will have no recourse to the Seller or the Administrators.
The
8
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exclusion of the Excluded Liabilities is not intended to have the
effect of
altering any extent to which by operation of law liabilities may
pass to
the
Buyer as a result of its acquiring the Lydney Business under
this
Agreement.
9 THIRD
PARTY ITEMS AND CLAIMS
9.1 Unless otherwise
agreed, the Buyer shall be entitled to assume possession
of
the Third Party Items relating
