Griffin Paper Corporation - Page 8

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          mill was an intangible asset that GNN wanted KKO to bring into a            
          joint venture with GNN.                                                     
               On December 31, 1981, GNN, LRC, KKO, Griffin, and LRFP                 
          entered into the Stockholders' Agreement (the Stockholders'                 
          Agreement) and the LRFP Stock Issuance Agreement (the Stock                 
          Issuance Agreement), and KKO and LRFP entered into the Pulp Sales           
          Agreement.  On the same day, Griffin transferred property to LRFP           
          valued at approximately $31.5 million in exchange for 5 percent             
          of LRFP's common stock and 32.8 percent of LRFP's preferred                 
          stock, and LRFP assumed KKO's $10 million debt owed to Aetna.               
          GNN transferred $56.7 million to LRFP in exchange for 95 percent            
          of LRFP's common stock and a promise to pay $40 million in                  
          exchange for 67.2 percent of LRFP's preferred stock.                        
               The relevant parts of the Stockholders' Agreement provide as           
          follows:                                                                    
                    1.  At the Closing * * * [Griffin] shall sell,                    
               assign and transfer to GNN all of its shares of common                 
               stock of LRC for the amount of $200.                                   
                    2.  (a) Prior to the Closing KKO and [Griffin]                    
               shall cause a recapitalization of LRFP to take effect                  
               so that immediately prior to the Closing LRFP shall                    
               have an authorized capital consisting of 7,700 shares                  
               of preferred stock, without par value (the "Preferred                  
               Stock") and 4,500 shares of common stock, par value                    
               $1.00 per share (the "Common Stock"), of which 1,940                   
               shares of the Preferred Stock and 208 shares of the                    
               Common Stock shall be issued and outstanding and owned                 
               of record and beneficially by [Griffin].                               
                         (b)  At the Closing LRFP shall issue and                     
                    sell to LRC, 3,952 shares of the Common Stock                     
                    for the amount of $56,700,000 and                                 
                    simultaneously therewith LRC shall subscribe                      




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Last modified: May 25, 2011