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EXHIBIT 2.4
MILL ASSET
PURCHASE AND SALE AGREEMENT
BY AND BETWEEN
PLUM CREEK MANUFACTURING, L.P.
AS SELLER,
AND
▇▇▇▇▇▇▇ LUMBER COMPANY
AS PURCHASER
DATED AS OF SEPTEMBER 27, 1996
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MILL ASSET
PURCHASE AND SALE AGREEMENT
THIS MILL ASSET PURCHASE AND SALE AGREEMENT is made and entered into
this 27th day of September, 1996, by and between PLUM CREEK MANUFACTURING, L.P.,
a Delaware limited partnership ("Seller"), and ▇▇▇▇▇▇▇ LUMBER COMPANY, an Oregon
corporation ("Purchaser").
RECITALS
A. Purchaser desires to purchase from Seller and Seller desires to sell
to Purchaser substantially all of the assets of Seller's Arden, Washington
sawmill operations commonly known as the Arden Sawmill.
B. This transaction is conditioned, among other things, upon the
simultaneous closing of a transaction which involves the sale of some of
Seller's Washington and Idaho timberlands as described in the Timberland
Purchase and Sale Agreement of even date by and between Purchaser and Plum Creek
Timber Company, L.P. ("Timberland Agreement").
AGREEMENTS
For good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties agree:
1. DEFINITIONS. As used in this Agreement, the following terms shall
have the following meanings:
(a) "Closing" shall mean the consummation of the transactions
contemplated by this Agreement on the Closing Date.
(b) "Closing Date" shall mean October 1, 1996 unless such date
is extended pursuant to Paragraph 13.3 or 9 or otherwise by agreement of the
parties, but in no event later than December 31, 1996.
(c) "Mill Manager" shall mean ▇▇▇ ▇▇▇▇▇▇, currently employed
by Seller as the Manager of the Mill.
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(d) "Environmental Laws" shall mean all applicable federal,
state or local laws, rules, regulations, governmental permits or other binding
determinations of any governmental authority relating to or addressing the
environment, including, without limitation, the Comprehensive Environmental
Response, Compensation and Liability Act, as amended ("CERCLA"), the Resource
Conservation and Recovery Act, as amended ("RCRA"), the Toxic Substances Control
Act, as amended ("TSCA"), the Clean Water Act, as amended ("CWA"), the Clean Air
Act, as amended ("CAA"), and the Oil Pollution Act of 1990, as amended ("OPA").
(e) "Environmental Liabilities" shall mean all loss and
expense related to, associated with, or arising out of the occupancy, ownership,
operation, use or control of the Mill Assets incurred or imposed as a
requirement of, or arising out of the violation of, any Environmental Law.
(f) "Excluded Assets" shall mean all assets listed on SCHEDULE
1(F).
(g) "Knowledge" as used in this Agreement shall mean actual
current knowledge (as opposed to constructive or imputed knowledge) of the fact
or matter in question by ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇, the Mill Manager or by the
superiors of the Mill Manager which are employed by Seller.
(h) "Material" or "materiality" or "materially" as used in
this Agreement shall mean a claim, encumbrance or occurrence (including without
limitation a breach of warranty or violation by Seller) that could lessen the
value of the Mill Assets by, or cause damages of, at least $100,000.
(i) "Mill" shall mean the sawmill and all related wood
products manufacturing operations of Seller located in Arden, ▇▇▇▇▇▇▇ County,
Washington.
(j) "Mill Assets" shall mean all of the assets of the Mill,
including without limitation,
(i) the Mill Personal Property;
(ii) the Mill Contracts;
(iii) the Mill Real Property;
(iv) the Mill Books and Records;
(v) the Mill Leases;
(vi) the Mill Access Rights and Easements; and
(vii) the Mill Inventory
but shall not include Excluded Assets or the assets that are the subject of the
Timberland Agreement.
(k) "Mill Access Rights and Easements" shall mean all rights
of Seller in and
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to the access rights and easements associated with the Mill, to the extent
assignable, including but not limited to access rights and easements as listed
in SCHEDULE 1(K), and those additional rights and easements which are obtained
in the ordinary course of Seller's business between the date of this Agreement
and the Closing Date.
(l) "Mill Books and Records" shall mean all of Seller's books
and records relating to the operation of the Mill, including without limitation
all books and records relating to the purchase of materials, supplies and
services, sale of products, customer lists, dealings with customers and invoices
and records relating to employees of the Mill, and all data relating to or used
in connection with the Mill, including without limitation data relating to
Software.
(m) "Mill Contracts" shall mean all the contracts, agreements,
licenses, and service, maintenance, utility and operating contracts and permits
and warranties relating to the Mill, including but not limited to those
documents described in SCHEDULE 1(M), excluding those which will expire or be
terminated in the ordinary course of Seller's business of the Mill prior to the
Closing Date, and those additional contracts of the Mill which are entered into
in the ordinary course of Seller's business between the date of this Agreement
and the Closing Date and of which Purchaser has been advised pursuant to
Paragraph 8.2.
(n) "Mill Leases" shall mean the leases of the Mill, including
leasehold improvements, listed in SCHEDULE 1(N) excluding those which will
expire or be terminated in the ordinary course of the Mill prior to the Closing
Date, and those additional leases which are entered into in the ordinary course
of Seller's business between the date of this Agreement and the Closing Date and
of which Purchaser has been advised pursuant to Paragraph 8.2.
(o) "Mill Personal Property" shall mean all of the personal
property and assets owned by Seller at the Closing and used primarily in the
business of the Mill including but not limited to the property and assets
reflected in SCHEDULE 1(O) including all rights arising out of the Mill
Contracts and Mill Leases and, to the extent transferable by Seller, all
Software, technologies, methods, formulations and data bases used primarily in
the Mill or under development for use in the Mill, equipment, tools, furniture,
fixtures, motor vehicles, licenses, leasehold improvements, and right to apply
for tax incentives, plus all items of a nature customarily carried as assets in
the accounts of the Mill in accordance with generally accepted accounting
principles, less any items disposed of prior to Closing in the ordinary course
of Seller's business.
(p) "Mill Inventory" shall mean all logs, work-in-process,
supplies, and inventories located on the Mill Real Property at the Closing Date,
including those items listed in SCHEDULE 1(P), less any such items disposed of
prior to Closing in the ordinary course of Seller's business.
(q) "Mill Real Property" shall mean the real property of the
Mill listed in SCHEDULE 1(Q), including any structures or improvements thereon.
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(r) "Permitted Exceptions" shall include those printed and
typewritten exceptions set forth in the preliminary title report for the Mill
Real Property which are agreed to prior to Closing by Purchaser and Seller.
(s) "Schedules" shall mean the documents specifically marked
as schedules and delivered pursuant to this Agreement.
(t) "Software" means all administrative, non-proprietary
software solely concerning the Mill that operates independent of Seller's
mainframe and relates to various administrative functions of the Mill; and all
software that is integral and solely related to the operation of production
equipment included in the Mill Personal Property and Mill Real Property.
"Software" does not include any software program to the extent Seller is
prohibited from licensing such program to Purchaser or proprietary software of a
type used by or which may be used by Seller in its other timber, forestry or
mill operations. Notwithstanding anything herein to the contrary, Seller shall
transfer to Purchaser its hand-held lumber inventory devices to permit Purchaser
to interface inventory bar code information with Purchaser's inventory software.
2. SALE AND PURCHASE; PURCHASE PRICE.
2.1 BASE PRICE. At the Closing, Seller will sell and Purchaser
will purchase the Mill Assets, and Purchaser will assume the Mill Contracts, the
Mill Access Rights and Easements, and the Mill Leases. The base purchase price
for the Mill Assets, excluding the Mill Inventory discussed in Paragraph 2.2,
shall be FIVE MILLION DOLLARS ($5,000,000) less $110,000 for hog fuel boiler ESP
plate replacement ("Base Price"). Except for the Mill Leases, Mill Access Rights
and Easements and Mill Contracts, and except as otherwise provided in this
Agreement, Purchaser shall not assume or be responsible for any liabilities or
obligations of the Mill or Seller, which have accrued prior to the Closing Date.
2.2 MILL INVENTORY. At the Closing, the Base Price shall be
increased by an estimate equal to the total value of the Mill Inventory existing
on the last day of the month immediately preceding the Closing Date, determined
by Seller's book value. Log and lumber volumes shall be based on inventories as
of the end of September 1996. Log valuations shall be based on actual cost for
September 1996 deliveries. Lumber valuations shall be based on September
weighted average cost for the month as consistently applied in Seller's general
ledger.
2.3 CLOSING PAYMENTS; POST-CLOSING ADJUSTMENT.
(a) Closing Payments. On the Closing Date, and
subject to the prorations and adjustments as herein described, Purchaser shall
pay to Seller the Base Price and the amount payable for the estimated Mill
Inventory value as determined pursuant to Paragraph 2.2 in cash, by wire
transfer in immediately available federal funds, to the escrow established at
Transnation Title Insurance Company, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, or at
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such other place as Seller may direct.
(b) Post-Closing Adjustment. Upon Closing, Seller
shall conduct a physical count of the Inventory which count shall be observed by
Purchaser or its outside accountants. Within fifteen (15) days following
Closing, Purchaser and Seller shall confirm the value of the Mill Inventory as
of the Closing Date ("Closing Date Inventory") based upon the physical count, an
analysis of the Mill Books and Records, consistently applied, and in accordance
with the Inventory Valuation Procedures as set forth in Schedule 2.3(b). To the
extent an adjustment is mutually determined necessary, the appropriate party
shall remit to the other the agreed upon amount. In the event of a dispute
regarding the quantity or value of the Closing Date Inventory, the determination
thereof shall be made by an independent auditor mutually acceptable to both
parties, whose decision shall be final and binding. Seller and Purchaser shall
share equally the costs of the audit.
2.4 PURCHASE PRICE ALLOCATION. The parties shall allocate the
Purchase Price among the Mill Assets in accordance with Section 1060 of the
Internal Revenue Code and shall cooperate with each other and provide such
information as may be requested in connection with the preparation of the
allocation. The parties shall report the federal, state and local tax
consequences of the purchase and sale contemplated hereby (including the filing
of IRS Form 8594) in a manner consistent with such allocation.
3. REPRESENTATIONS AND WARRANTIES OF SELLER. Seller represents and
warrants to Purchaser that except as disclosed in a Schedule:
3.1 ORGANIZATION. Seller is a limited partnership duly
organized and validly existing under the laws of the State of Delaware.
3.2 GOOD STANDING. Seller is qualified to do business in the
State of Washington.
3.3 POWER AND AUTHORITY FOR TRANSACTION. Seller has the power
and authority to execute, deliver and perform this Agreement and the
transactions contemplated herein in accordance with the terms hereof.
3.4 AUTHORIZATION. Subject to obtaining the consents,
approvals and authorizations described in Paragraph 13.2, the execution and
delivery by Seller of this Agreement and the due consummation of the
transactions contemplated herein have been duly and validly authorized by all
necessary partnership action on the part of Seller and this Agreement
constitutes a valid and legally binding agreement of Seller.
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3.5 NO VIOLATION OR CONFLICTS. Subject to obtaining the
consents and approvals described in Paragraph 13.2, neither the execution and
delivery of this Agreement by Seller nor the consummation by Seller of the
transactions contemplated herein (i) constitute a violation of Seller's
certificate of limited partnership or limited partnership agreement; or (ii)
result in the breach of or the imposition of any lien on any Mill Assets
pursuant to, or constitute a default under, any indenture or bank loan or credit
agreement or other agreement or instrument to which Seller is a party or by
which it or its property may be bound or affected. Except for consents or
approvals which will have been obtained or actions which will have been taken on
or prior to the Closing Date, and except for consents, approvals, authorizations
or actions described in Paragraphs 9, 13.2 or 15.3, no consent, approval,
authorization or action by any governmental authority, or any person having
legal rights against or jurisdiction over Seller, is required in connection with
the execution and delivery by Seller of this Agreement or the consummation by
Seller of the transactions contemplated herein, except as set forth on SCHEDULE
3.5.
3.6 MARKETABLE TITLE. Subject to Permitted Exceptions and the
provisions of Paragraph 15.3, Seller has good and marketable title to the Mill
Assets, and at Closing such assets will be free and clear of all liens, security
interests, charges and encumbrances.
3.7 DELIVERY OF SCHEDULES. Seller has delivered to Purchaser
herewith, or will deliver as soon as practicable, the following Schedules (as
well as the other Schedules referred to in this Agreement):
(a) SCHEDULE 3.7(A), which contains the names,
current annual salary rates and 1995 bonuses of all present employees of the
Mill who received during the year 1995 $60,000 or more in aggregate
compensation, whether in salary, bonus or otherwise;
(b) SCHEDULE 3.7(B), which contains a complete list
of all employee benefit plans, whether formal or informal, and whether covering
one person or more than one person, sponsored, maintained or contributed to by
Seller for the Mill employees; and
(c) SCHEDULE 3.7(C), which lists all insurance
policies in force with respect to the Mill.
3.8 NO DEFAULTS. To the knowledge of Seller, the Mill
Contracts, Mill Access Rights and Easements, and Mill Leases are valid and in
full force and effect. Neither Seller nor, to Seller's knowledge, any other
party thereto has breached any material provision of, or is in default in any
material respect under, the terms of any of the Mill Contracts, Mill Access
Rights and Easements or Mill Leases.
3.9 CONDEMNATION PROCEEDINGS. Subject to Paragraph 12.6, no
condemnation proceeding is pending or, to the knowledge of Seller, threatened
which would materially preclude or impair the use of the Mill Real Property for
the purposes for which such
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property is currently used.
3.10 ENVIRONMENTAL MATTERS. To Seller's knowledge, except as
set forth on SCHEDULE 3.10 and in the environmental reports identified on
SCHEDULE 3.10:
(a) Seller has obtained and maintained or has
applications pending for all permits, licenses and other authorizations required
under Environmental Laws necessary for the operation of the Mill where such
failure to obtain, maintain or have applications pending for such permits,
licenses and other authorizations would have a material adverse effect;
(b) Seller is currently conducting the operation of
the Mill in compliance in all material respects with all applicable
Environmental Laws and the terms or conditions of any permits, licenses or
authorizations issued under any Environmental Law applicable to the conduct of
the Mill by the Seller;
(c) There are no material pending or threatened civil
or criminal actions, notices of violation or administrative proceedings relating
to or arising under any Environmental Laws relating to the Mill; and
(d) There are no underground storage tanks on the
Mill Real Property. Subject to Seller's warranty set forth in this Paragraph
3.10, the liability for which Seller remains responsible pursuant to the terms
of this Agreement, Purchaser releases Seller from all costs, losses,
liabilities, obligations and claims, of any nature whatsoever, known and
unknown, that Purchaser may have against Seller or that may arise after the date
of Closing based in whole or in part upon (i) Seller's failure to comply with
Environmental Laws applicable to the Mill Real Property; or (ii) the presence,
release or disposal of any hazardous substance, solid waste, or any other
environmental contamination on, within, or from the Mill Real Property before,
as of, or after the date of Closing. The above-referenced release does not cover
or apply to any statutory or common law claim for contribution or indemnity that
may arise to the extent Purchaser suffers any liabilities or obligations from
future claims of any governmental agency arising out of (i) or (ii) above. As
used herein, the terms "hazardous substance" and "release" (as it relates to the
release of hazardous substances as opposed to the release of claims) have the
meanings specified in CERCLA and the terms "solid waste" and "disposal" (or
"disposed") have the meanings specified in RCRA. If either CERCLA or RCRA is
amended to broaden the meaning of any term defined thereby, the broader meaning
shall apply to this Paragraph 3.10 after the effective date of the amendment.
Moreover, to the extent that Washington law establishes a meaning for "hazardous
substance," "release," "solid waste," or "disposal" that is broader than that
specified in either CERCLA or RCRA, the broader meaning shall apply.
3.11 LICENSES, FRANCHISES, PERMITS, ETC. To the knowledge of
Seller and except as may be set forth on SCHEDULE 3.11, and excepting
environmental permits and licenses which are disclosed pursuant to Paragraph
3.10 hereof, Seller owns, holds, or possesses all governmental licenses,
franchises, permits, privileges, immunities, approvals, and other authorizations
that are necessary to entitle it to carry on and conduct the business of the
Mill as
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currently conducted (herein collectively called "Governmental Permits"), except
for such Governmental Permits as to which the failure to so own, hold, or
possess would not have a material effect on the operation or the business of the
Mill. To the knowledge of Seller, and except as may be set forth on SCHEDULE
3.11, (a) Seller has fulfilled and performed in all material respects its
obligations under each of such Governmental Permits; and (b) no event has
occurred or condition or state of facts exists that constitutes or, after notice
or lapse of time or both, would constitute a material breach or default under
any such Governmental Permit. To the knowledge of Seller, no written notice of
cancellation, of default, or of any material dispute concerning any such
Governmental Permit, or of any event, condition, or state of facts described in
clause (b) of the preceding sentence, has been received by Seller, and, to the
knowledge of Seller, there is no proceeding pending or threatened to revoke,
modify, or otherwise deny renewal of any such Governmental Permit. To the
knowledge of Seller, except as set forth in SCHEDULE 3.11, each of such
Governmental Permits is valid and in full force and effect.
3.12 SUITS, ACTIONS OR PROCEEDINGS. Except as disclosed in
SCHEDULE 3.12, to the knowledge of Seller, there is (i) no court or
administrative judgment or order which materially affects the business or
operations of the Mill; and (ii) no legal, administrative or other suit, action,
proceeding or arbitration, or governmental investigation pending or threatened
which would reasonably be expected to materially affect the business or
operations of the Mill. Except as set forth in Paragraph 9, Seller has no
knowledge of any suit, action, arbitration or other proceeding pending before
any court or governmental agency, which may result in the restraint or
prohibition of the consummation of the transactions contemplated by this
Agreement.
3.13 OPERATION OF MILL. Since July 1, 1996, the Mill has been
operated only in the ordinary course of Seller's business.
3.14 BROKER FEES. Seller has not employed any broker, agent or
finder, or incurred any liability for any brokerage fees, agents' commissions or
finders' fees, in connection with the transactions contemplated herein.
3.15 COMPLIANCE. Except as disclosed on SCHEDULE 3.15, to
Seller's knowledge, Seller has not received notification from any third party,
including but not limited to any governmental agency alleging that the Mill Real
Property is not in compliance with applicable laws (other than Environmental
Laws which are covered in Paragraph 3.10). Seller has no knowledge of any such
violations relating to the Mill Real Property or its operation thereof.
3.16 INVENTORY. To Seller's knowledge, all Closing Date
Inventory (other than work in process) will be of good and merchantable quality
and will consist substantially of a quality, quantity and condition usable or
salable in the ordinary course of Seller's business.
3.17 MILL PERSONAL PROPERTY. There have been no deletions of
Mill personal property from the Schedule dated December 31, 1995 previously
provided to Purchaser except in
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the ordinary course of Seller's business.
4. REPRESENTATIONS AND WARRANTIES OF PURCHASER. Purchaser represents
and warrants to Seller that:
4.1 INCORPORATION AND CORPORATE POWER. Purchaser is a
corporation duly incorporated, and validly existing under the laws of the State
of Oregon, and has the corporate power to enter into this Agreement and to carry
out the transactions contemplated herein in accordance with the terms hereof.
4.2. AUTHORIZATION; NO VIOLATION OR CONFLICTS. The execution
and delivery of this Agreement by Purchaser and the due consummation of the
transactions contemplated herein, subject to obtaining the approval described in
Paragraph 12.7, have been duly and validly authorized by all necessary corporate
action on the part of Purchaser, and this Agreement constitutes a valid and
legally binding agreement of Purchaser. Neither the execution and delivery of
this Agreement by Purchaser nor the consummation by Purchaser of the
transactions contemplated herein constitute a violation of Purchaser's
Certificate of Incorporation or Bylaws, or result in the breach of, or the
imposition of any lien on any assets of Purchaser pursuant to, or constitute a
default under, any indenture or bank loan or credit agreement, or other
agreement or instrument to which Purchaser is a party or by which it or any of
its properties may be bound or affected. Except for the approvals described in
Paragraphs 9 and 12.7 and except for consents, approvals, or authorizations
which will have been obtained or actions which will have been taken on or prior
to the Closing Date, no consent, approval, authorization or action by any
governmental authority or any person having legal rights against or jurisdiction
over Purchaser is required in connection with the execution and delivery by
Purchaser of this Agreement or for consummation by Purchaser of the transactions
contemplated herein, except as may be set forth ON SCHEDULE 4.2 hereto.
4.3 BROKER FEES. Purchaser has not employed any broker, agent
or finder, or incurred any liability for any brokerage fees, agents' commissions
or finders' fees, in connection with the transactions contemplated herein.
4.4 FINANCING. Purchaser has access to the funds or financing
necessary to consummate the transactions contemplated by this Agreement.
4.5 SUITS, ACTIONS OR PROCEEDINGS. Except as set forth in
▇▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇▇▇ has no knowledge of any suit, action, arbitration or
other proceeding pending before any court or governmental agency, which may
result in the restraint or prohibition of the consummation of the transactions
contemplated by this Agreement.
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5. SURVIVAL; CUSHION AGAINST CLAIMS.
5.1 SURVIVAL. The respective representations and warranties of
Seller and of Purchaser contained herein or in any Schedule, certificate or
other instrument delivered by or on behalf of such party pursuant to this
Agreement, including the environmental matters set forth in Paragraph 3.10,
shall survive the Closing for a period of eighteen (18) months and thereafter
shall expire and terminate, and each party shall be forever released from
liability to the other except as to matters for which notice has been given by a
party of the inaccuracy or breach of any representation or warranty on or prior
to such termination date.
5.2 CUSHION AGAINST CLAIMS. In the event of any claim by
Purchaser against Seller under Paragraph 3 or 11.1 (a)(i) or (a)(ii) of this
Agreement, no amount shall be owing by Seller unless and until the amount of
damage, loss or expense incurred by Purchaser exceeds $100,000 in the aggregate
for all claims ("Cushion"), and Seller shall be obligated only with respect to
such excess. The aggregate amount paid or payable by the Seller pursuant to
claims made under Paragraph 3 or Paragraph 11.1(a)(i) or (ii) of this Agreement
shall not exceed $3,000,000. Notwithstanding anything herein to the contrary,
the Cushion shall not apply to (i) any representations or warranties described
in Paragraph 3 which are qualified by a "materiality," "materially," or
"material" threshold, or (ii) Paragraph 11.1(a)(ii)(w), (x), (y) or (z).
6. LIMITATION OF WARRANTIES - AS IS CLAUSE. Except for the express
warranties made in ▇▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇▇▇ accepts the Mill Assets "AS IS, WHERE
IS" and "WITH ALL FAULTS" in their present condition based solely upon
Purchaser's own inspection and determination as to value and not based upon any
expressed or implied representation or warranty by Seller, and Seller makes no
warranty regarding the suitability of the Mill Assets for Purchaser's intended
use and expressly disclaims any warranties of merchantability or fitness for a
particular purpose with respect to the Mill Assets. In addition, with respect to
the Mill Real Property, Seller makes no warranty with regard to the quantity,
quality, acreage, value or zoning of such assets or any part or portion thereof.
7. ACCESS AND CONFIDENTIALITY.
7.1 ACCESS. Purchaser may, prior to the Closing Date, through
its employees, agents and representatives, including Purchaser's lenders, make
or cause to be made such investigation of the business of the Mill and the Mill
Assets as it deems necessary or advisable. Seller agrees to permit Purchaser and
its employees, agents and representatives to have full access, on reasonable
notice, to the books and records and premises of the Mill, and the officers of
Seller will make available such financial and operating data and other
information with respect to the business and properties of the Mill as Purchaser
shall from time to time reasonably request. Purchaser shall conduct its review
in a manner which does not interfere with the operations of Seller's business.
Seller shall provide to Purchaser copies of a preliminary title commitment
covering the Mill Real Property, copies of all exception documents referred to
in such title
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commitment, schedules and copies of all contracts, leases and permits relating
to the Mill which are to be assumed by Purchaser, a schedule of all easement and
access rights, all environmental site assessments or other documents related to
the environmental condition of the Mill and all other materials reasonably
requested by Purchaser within the Seller's possession.
7.2 CONFIDENTIALITY; PUBLIC ANNOUNCEMENTS; RETURN OF
INFORMATION.
(a) Neither Seller nor Purchaser shall disclose the
content or substance of this Agreement to any individual, firm, partnership,
corporation, entity, governmental authority, or other party except advisors,
agents, lenders, and representatives assisting each respective party in
connection with this transaction, until such disclosure is agreed upon in
writing and then only to accomplish the consents and approvals required
hereunder;
(b) No press releases or other public statements
concerning this Agreement or the transactions contemplated hereby shall be made
by either party without the prior written approval of the other;
(c) Each party hereto, its representatives, agents
and employees shall hold in strict confidence and shall not use or disclose to
any person or organization any information or data concerning this Agreement or
the transaction contemplated hereby except to the extent that (i) said
information has been published or constitutes a matter of public knowledge or
record; (ii) such disclosure is reasonably necessary for communications with and
reporting to the Board of Directors or other governing body of either party or
reasonably appears to be required by a governmental agency having jurisdiction
over the parties; (iii) such information is necessary in connection with any
suit brought to enforce the obligations of any party hereunder; or (iv) if based
upon the legal opinion of counsel for the disclosing party, that such counsel
reasonably believes that disclosure is necessary or desirable to avoid conflict
with or violation of any applicable law, rule, or regulation; and
(d) In the event of termination of this Agreement for
whatever reason, Purchaser will return all originals and copies of documents,
work papers and other material obtained hereunder, whether obtained before or
after the execution hereof (subject to retention of true copies for litigation
purposes as applicable), and Purchaser agrees that it will not disclose or
divulge any such information to any other person without Seller's written
consent, and will use its best efforts to keep any information so obtained
confidential; provided, however (i) that Purchaser may disclose this information
to its employees, attorneys, accountants and prospective lenders who need to
know such information in connection with this transaction and who have been
informed of Purchaser's obligation to maintain the information as confidential;
and (ii) that Purchaser shall not be obligated to treat as confidential any
information which was known to it at the time of disclosure or which becomes
publicly known or available thereafter or is rightfully received by Purchaser
from a third party.
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8. CONDUCT OF PARTIES PENDING THE CLOSING.
8.1 OPERATIONS PENDING CLOSING. Seller agrees that from the
date hereof to the Closing Date:
(a) It will maintain all of the Mill Assets in
customary repair, order and condition, reasonable wear, tear and use and damage
by fire or unavoidable casualty excepted.
(b) It will not:
(i) grant any salary increase to any
employee of the Mill; or
(ii) enter into or amend or alter materially
any bonus, incentive compensation, deferred compensation, retirement, pension,
savings, group insurance, death benefit or other fringe benefit plan, trust
agreement or arrangement affecting employees of the Mill generally.
(c) Except for taxes contested in good faith, it will
pay all ad valorem and other taxes upon the properties and business of the Mill
as they become due.
(d) It will not enter into or assume any material
contract, agreement, obligation, lease, license or commitment relating to the
Mill, except in the ordinary course of Seller's business or as contemplated by
this Agreement.
(e) It will not knowingly do, or omit to do, any act
which will cause a material breach of any material contract, governmental
permit, commitment or obligation of the Mill.
(f) It will not amend, terminate or waive any
material right of substantial value relating to the Mill except in the ordinary
course of Seller's business.
(g) It will maintain insurance on the Mill Assets in
the same manner and to the same extent as such insurance has been maintained
with respect to the Mill Assets prior to the date hereof.
(h) It will comply, in all material respects, with
all applicable laws and will diligently work on compliance as to those laws
under which the Mill business is not in compliance and which have been disclosed
to Purchaser under or pursuant to this Agreement.
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8.2 DISCLOSURE BY SELLER. Prior to Closing, Seller will have
disclosed to Purchaser all material Mill Contracts and Mill Leases known to it,
which Mill Contracts and Mill Leases will be assumed by Purchaser.
9. ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ FILING. Prior to the date of this Agreement,
Purchaser and Seller have made appropriate filings under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇
Antitrust Improvements Act of 1976, as amended (the "HSR Act"), and have sought
and will continue to seek expedited review by the examining agency. Seller and
Purchaser shall expeditiously attempt to resolve any issues that may arise in
connection therewith. The Closing Date as provided in Paragraph 1(b) shall be
extended, if necessary not more than ten (10) days after all applicable waiting
periods or extensions under the HSR Act shall have expired without any
indication by the Department of Justice or the Federal Trade Commission that
either of them intends to challenge the sale contemplated hereby. If all such
waiting periods shall not have expired on or before December 31, 1996, then
either party shall be entitled to terminate this Agreement without any further
liability to the other. Each party shall pay its requisite filing fee, if any,
and all costs and expenses relating to such party's compliance with the terms of
this paragraph.
10. EMPLOYEES AND BENEFIT PLANS.
10.1 TERMINATION AND REHIRING OF EMPLOYEES.
(a) On and as of the Closing Date, Seller will take
all action necessary to terminate its Mill employees and shall pay such
employees all accrued employment related financial obligations due to them
through the close of business on the Closing Date except as otherwise provided
in this Paragraph 10. Seller has delivered to Purchaser a list of all employees
who are currently on Seller's employment roll employed in the operation of the
Mill, other than those employees who are on long-term disability (the "Business
Employees"), as of the most recent date for which such information is reasonably
available. Purchaser may (i) submit employment applications to Business
Employees any time after mutual execution of the Agreement; and (ii) conduct
drug testing of Business Employees no sooner than five (5) days prior to
Closing; provided that such drug testing shall not unreasonably interfere with
Seller's operations at the Mill. Purchaser shall extend written offers of
employment to all Business Employees conditioned upon reasonable satisfaction of
Purchaser's standard drug testing procedure, other than those Business Employees
identified to Seller by Purchaser in writing within five (5) days of the date
hereof (such Business Employees to whom Purchaser is to extend such conditional
offers of employment are referred to as the "Current Employees," and such
Business Employees to whom Purchaser will not extend such conditional offers of
employment are referred to as the "Excluded Employees"). The number of Excluded
Employees identified by Purchaser pursuant to this Paragraph 10.1 and pursuant
to Paragraph 12.1 of the Timberland Agreement shall not exceed 10 in the
aggregate; provided that Purchaser shall not be obligated to hire Current
Employees that fail to reasonably satisfy Purchaser's standard drug testing
procedure. Purchaser shall identify those Current Employees that failed to
satisfy drug tests and provide to Seller copies of any drug test results
requested by Seller. Notwithstanding anything
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herein to the contrary, the aggregate number of Excluded Employees and Current
Employees that are not hired as a result of drug test failure pursuant to this
Agreement or the Timberland Agreement shall not exceed 49. Each such offer of
employment by Purchaser to Current Employees shall (i) be effective subject to
and as of the first day following Closing; (ii) provide for employment at the
location of the Mill; (iii) be at a salary or hourly wage rate, as applicable,
that is at least equal to the salary or hourly wage rate of similarly situated
employees of Purchaser at its ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ operations; (iv) provide for
employee benefits that are equivalent to the employee benefits of similarly
situated employees of Purchaser at its ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ operations; and (v)
be for a position that is substantially similar to the Current Employee's
present position with Seller. Those Current Employees who accept such offers of
employment with Purchaser are referred to herein as the "Transitioning
Employees," and those Current Employees who do not accept such offers of
employment, together with the Excluded Employees, are referred to herein as the
"Nontransitioning Employees."
(b) Effective the first day after the Closing,
Purchaser shall assume and become solely responsible for any and all liabilities
in respect to the Transitioning Employees relating to or arising in connection
with any actual or constructive termination of any such Transitioning Employee's
employment with Purchaser after the Closing, including, without limitation, any
and all such liabilities relating to the claims of any such Transitioning
Employees for any severance compensation or benefits. Purchaser agrees that in
the event Purchaser terminates any Transitioning Employee without cause within
twelve months from Closing, Purchaser shall pay to such Transitioning Employee
any and all benefits payable to such Transitioning Employee pursuant to Seller's
severance policies in existence as of Closing. Any and all liabilities for
accrued but unpaid vacation days for services rendered by the Transitioning
Employees prior to and as of Closing shall be allocated between Seller and
Purchaser in an equitable manner prior to Closing. Each Transitioning Employee
will be credited with his or her years of employment service with Seller for
purposes of determining the number of vacation days available to him or her as
an employee of Purchaser.
(c) From and after the Closing, Seller shall remain
solely responsible for any and all liabilities with respect to the
Nontransitioning Employees for all claims arising (whether made on or after
Closing) on or before the Closing, including but not limited to liabilities
arising under the Worker Adjustment and Retraining Notification Act of 1990 or
COBRA. From and after the Closing, Seller shall remain solely responsible for
(i) disability benefits payable under any plan that is a disability benefit plan
in respect of those employees of Seller employed in the operation of the Mill
who, on the Closing Date, are on long term disability status and entitled to
benefits under such plans and (ii) post-retirement health and life insurance
benefits payable under the terms of any plan that provides such post-retirement
benefits in respect of those former employees of Seller who, on the Closing
Date, are receiving such post-retirement benefits under such plan.
10.2 EMPLOYEE ERISA AND 401 PLANS GENERALLY. Effective as of
the first day after the Closing Date, Purchaser shall amend any existing plan
established pursuant to the
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Employee Retirement Income Security Act of 1974 or Section 401 of the Internal
Revenue Code, including but not limited to the Timber Operators' Council
Retirement Plan, defined contribution plans and "401-k" plans, to provide for
(i) the immediate participation of the Transitioning Employees in each such plan
on the same basis as Purchaser's similarly situated employees at Purchaser's
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ operations are then eligible to participate; and (ii) to
the extent permissible under applicable law and within the control of Purchaser,
the recognition under each such plan of all service of the Transitioning
Employees with Seller completed prior to and as of the Closing, for purposes of
eligibility to participate, vesting and credited service (excluding the Timber
Operators' Council Retirement Plan).
10.3 WELFARE PLANS. Effective from and after the first day
after Closing, Purchaser shall cause each Transitioning Employee and his or her
eligible dependents to become eligible to participate immediately in each
employee welfare benefit plan (as such term is defined in Section 3(1) of the
Employee Retirement Income Security Act of 1974) maintained, as of the Closing
Date, by Purchaser and each other benefit arrangement maintained by Purchaser
for the benefit of similarly situated employees of Purchaser at Purchaser's
Forest Grove, Oregon operations ("Welfare Plans"). In connection therewith,
Purchaser shall cause each Welfare Plan to (i) recognize the 1996 co-payments
and deductible expenses of the Transitioning Employees and their eligible
dependents incurred under those plans that are health benefit plans and (ii)
waive all pre-existing condition exclusions and limitations of the Transitioning
Employees and their eligible dependents. From and after the Closing, Seller
shall remain solely responsible for liabilities for claims of the Transitioning
Employees and their eligible dependents incurred prior to the Closing Date under
those plans that are health, disability, accident or life insurance plans and
Purchaser shall be solely responsible for all such liabilities for claims
incurred by any Transitioning Employee and his or her eligible dependents after
the Closing Date. For the purposes of this Paragraph 10.3, a claim for health
benefits shall be deemed to have been incurred when the services that are the
subject of such claim are rendered and a claim for disability, accident or life
insurance shall be deemed to have been incurred when the last event giving rise
to such claim occurs. Purchaser and Seller shall cooperate in ensuring that
welfare benefit coverage for Transitioning Employees and their eligible
dependents on and prior to the Closing is coordinated with such coverage
provided after the Closing.
10.4 WORKER'S COMPENSATION. From and after the Closing, (i)
Seller shall remain solely responsible for all worker's compensation claims of
any Transitioning Employee that relate to any accident that occurred or injury
that was documented prior to the Closing, regardless of whether such claim is
filed by such Transitioning Employee before or after the Closing and (ii)
Purchaser shall assume and become solely responsible for all other worker's
compensation claims of any Transitioning Employee.
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11. INDEMNIFICATION.
11.1 INDEMNIFICATION BY SELLER.
(a) Subject to the provisions of Paragraphs 5.1, 5.2
and this paragraph 11.1, Seller shall indemnify Purchaser and hold it harmless
from any claim, damage, liability, loss, cost, deficiency, judgment or expense
(reference to "expense" shall include, without limitation, reasonable attorneys'
fees and other costs and expenses incident to any actions, suits, proceedings or
investigations or the defense of any claims, whether prior to or at trial or in
appellate proceedings), arising out of, resulting from or relating to the
following:
(i) any breach by Seller of any of its
representations, warranties, covenants or agreements made in or pursuant to this
Agreement or the attachments, exhibits or Schedules hereto; and
(ii) any claims by governmental entities or
any fines or penalties imposed by governmental entities against Purchaser for
Environmental Liabilities arising out of the operation or ownership of the Mill
Assets by Seller before the Closing Date, including but not limited to (w)
disposal of the three out of service PCB-containing capacitors currently at the
Mill; (x) bringing the discharge of industrial process water, from processes
occurring at or before the Closing Date, into compliance with the Clean Water
Act, including, but not limited to, obtaining an NPDES permit for such
discharges, and filtering and routing discharges from the sawmill compressor
room into the process water mixing chamber west of the boiler; (y) violations of
Paragraph S3.A of NPDES storm water permit No. S03-000194, which states
"Discharges to a storm sewer or surface water of process waste water, domestic
waste water or non-contact cooling water not covered by a NPDES permit are
prohibited"; or (z) paying any fines or penalties, if any, assessed by any
governmental agency as a result of Seller's operation of the hog fuel boiler
prior to the Closing Date which is not in compliance with the CAA or the Title V
Air Operating Permit No. DE96AQ-E1200. Seller's liability to Purchaser under
this Paragraph 11(a)(ii) for Environmental Liabilities arising out of the
operation or ownership of the Mill Assets by Seller before the Closing Date
shall continue for 36 months following the Closing Date. Notwithstanding
anything herein to the contrary, Seller shall not be obligated to make any
capital improvements, maintenance or repairs to or of the hog fuel boiler to
satisfy the CAA or the Title V Air Operating Permit No. DE96AQ-E1200 other than
to pay for the costs of replacement of the hog fuel boiler ESP plates as
described in Section 2.1. Purchaser shall be responsible for any fines or
penalties assessed by any governmental agency as a result of Purchaser's
operation of the hog fuel boiler after the Closing Date.
(b) During the period of the indemnity afforded
Purchaser under this Paragraph 11.1, Seller and its permitted assigns
("Assigns") may upon notice to Purchaser and obtaining Purchaser's permission,
which shall not unreasonably be withheld, inspect the Mill Real Property at
reasonable times and intervals and, at Seller's or its Assign's own expense, use
such qualified and reputable experts as either deems appropriate to conduct any
such inspections
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and tests which are deemed by such experts to be warranted. Purchaser will
promptly notify Seller or its Assigns within ten days of Purchaser's receipt of
written notice of any proposed, threatened or final determination by a
governmental entity that there exists the presence of any toxic, hazardous,
industrial or chemical waste, substance or contaminate (herein for the remainder
of this Paragraph 11.1 "Contaminate" or "Contamination") in, on or under any
part of the Mill Real Property at any time from and after the Closing Date.
Seller and its Assigns will provide Purchaser with copies of all reports
generated by its experts with respect to the Mill Real Property and Purchaser
will provide Seller with any written report it has received with respect to any
such Contamination and afford Seller and its Assigns and their chosen experts an
opportunity to meet and discuss the report or any findings with its author.
Purchaser will also afford Seller and its Assigns the opportunity, at Seller's
or its Assign's expense, to have Seller's or its Assign's experts conduct such
additional investigations or tests which are deemed by such experts to be
warranted and Purchaser will instruct any expert it has retained to meet with
Seller's or its Assign's expert and thereafter issue, in writing and to the
extent possible, a joint determination detailing the involved Contaminate, the
extent of the Contamination and the experts' opinions as to when the
Contamination occurred with specific reference to dates prior to or after the
Closing Date. Promptly after the issuance of such joint determination or upon
notice that the parties' experts cannot agree on the terms of such a joint
determination, Seller and its Assigns and Purchaser will meet and in good faith
and acting reasonably, attempt to determine the responsibility for the subject
Contamination.
(c) Seller and its Assigns shall retain the first
right to undertake the clean-up of any Contamination which is determined to be
the responsibility of Seller and not the responsibility of Purchaser. Any
clean-up activities so undertaken by Seller or its Assigns will be performed in
compliance with and as required by applicable law, with all reasonable efforts
to minimize or avoid any disruption of Purchaser's conduct of Mill business.
(d) Purchaser and Seller agree not to disclose to any
third party (other than legal counsel and expert consultants specifically
engaged to prepare or review such reports who shall be advised of and be bound
by the terms of this non-disclosure provision) any reports or any part thereof,
except with the prior written consent of the other party or pursuant to valid
legal process or as otherwise required by applicable law. Purchaser and Seller
agree immediately to notify each other in the event that a demand is made upon
such party for disclosure pursuant to legal process or as otherwise required by
applicable law. It is further agreed by the parties that each will be given the
opportunity to review and comment on the draft reports prepared by their
respective experts prior to finalization.
(e) Seller shall have the right and responsibility of
defending, remedying, compromising, and settling any Environmental Liability for
which it is responsible and shall have the right to employ and control its own
counsel, consultants, and contractors in connection therewith. Seller shall have
full control over any actions (including, without limitation, any remedial
action, negotiation or litigation) in connection with any such Environmental
Liability; provided, that (a) if a remedial or other action proposed to be taken
by
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Seller in settlement of the Environmental Liability would materially and
adversely affect Purchaser's operations at the Mill Real Property, such action
shall not be taken without the prior written consent of the Purchaser (which
consent shall not unreasonably be withheld); (b) Seller shall only settle or
compromise any such Environmental Liability if Seller has the consent of
Purchaser (which consent shall not unreasonably be withheld); and (c) in the
event Purchaser shall refuse to consent to the taking of any remedial or other
action in respect of, or the compromise or settlement of, any such Environmental
Liability, Purchaser may elect to take over the defense or remediation of such
Environmental Liability and, in such case, the liability of Seller for
indemnification with respect to such Environmental Liability shall not exceed
the amount for which the Environmental Liability could have been settled.
(f) Seller's obligations with respect to an
Environmental Liability for which it is responsible shall include the taking of
such reasonable actions as are necessary under the circumstances giving rise to
such Environmental Liability, including compliance with all laws applicable at
the ▇▇▇▇ ▇▇▇▇▇▇'▇ remedial actions are taken; and Seller shall not be liable for
any violations of Environmental Laws or obligations imposed as a requirement of
Environmental Laws, to the extent resulting from action taken or omitted by
Purchaser on or after the Closing Date.
11.2 INDEMNIFICATION BY PURCHASER. Subject to the provisions
of Paragraph 5.1 and this ▇▇▇▇▇▇▇▇▇ ▇▇.▇, ▇▇▇▇▇▇▇▇▇ shall indemnify Seller and
hold it harmless from any claim, damage, liability, loss, cost, deficiency,
judgment or expense (reference to "expense" shall include, without limitation,
reasonable attorneys' fees and other costs and expenses incident to any actions,
suits, proceedings or investigations or the defense of any claims, whether prior
to or at trial or in appellate proceedings), arising out of, resulting from or
relating to the following:
(a) any material breach by Purchaser of any of its
representations, warranties, covenants or agreements made in or pursuant to this
Agreement or the attachments, exhibits or Schedules hereto;
(b) any claims by third parties, including but not
limited to governmental entities, or any fines or penalties for violations of
law and obligations imposed by law, including but not limited to any
Environmental Laws and any Environmental Liabilities, arising out of the
operation or ownership of the Mill Assets by Purchaser after the Closing Date;
(c) any damage to Seller's property or claims by
third parties arising out of activities of Purchaser or its invitees, agents or
contractors in performing tests on or inspections of the Mill Assets prior to
Closing; and
(d) any acts, omissions, events or circumstances on
or in connection with the operation, condition or ownership of the Mill Assets
occurring on or after the Closing Date, including, without limitation, any
environmental condition first occurring after the Closing Date on or about the
Mill Real Property; provided, however, that such indemnification shall not
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apply to the extent that any such liability arises from any acts or omissions of
Seller.
12. CONDITIONS TO PURCHASER'S OBLIGATIONS. The obligations of Purchaser
to perform this Agreement are subject to the satisfaction, in all material
respects on or before the Closing Date, of each of the following conditions and
any other conditions to Purchaser's obligations hereunder specified elsewhere in
this Agreement, unless waived in writing by Purchaser in its sole discretion:
12.1 SIMULTANEOUS CLOSING. There being a simultaneous closing
under the Timberland Agreement.
12.2 MATERIAL INACCURACIES. Seller's representations and
warranties shall be true and correct in all material respects on and as of the
Closing Date as though made on and as of the Closing Date and Seller shall
deliver a certificate to that effect at Closing.
12.3 PERFORMANCE OF OBLIGATIONS. Seller shall have performed
all obligations required to be performed by it prior to the Closing Date under
this Agreement.
12.4 TITLE INSURANCE POLICY. At Seller's expense, Purchaser
shall have received a binding commitment from a recognized title insurance
company for the issuance of a standard coverage owner's policy or policies of
title insurance insuring Purchaser's fee simple title to the Mill Real Property
subject to the Permitted Exceptions.
12.5 SUITS, ACTIONS OR PROCEEDINGS. No suit, action,
arbitration or other proceeding shall be pending before any court or
governmental agency, which may result in the restraint or prohibition of the
consummation of the transactions contemplated by this Agreement, and all
governmental and regulatory approvals and clearances which are required to
consummate such transactions shall have been obtained.
12.6 CASUALTY, LOSS OR CONDEMNATION. The Mill Assets shall not
have become subject, subsequent to the date of this Agreement, to physical
damage by fire, flood, windstorm, earthquake or other similar occurrence, or to
any condemnation proceeding, which causes at least twenty-five percent (25%) of
the Mill to be inoperable. If Purchaser elects to waive the condition set forth
in this Paragraph 12.6, or if any casualty or condemnation loss is more than
$100,000, the amounts payable by Purchaser to Seller pursuant to Paragraph 2
shall be reduced to reflect the diminution in value resulting or expected to
result from the casualty or condemnation, in which event Seller shall be
entitled to retain any compensation, awards, insurance proceeds or other payment
or relief resulting from such casualty or condemnation. If the parties cannot
agree upon the extent of the diminution in value, the determination shall be
made by an independent expert mutually agreed upon by the parties. If Purchaser
elects to terminate this Agreement as a result of casualty, loss or condemnation
pursuant to this Paragraph 12.6, the Timberland Agreement shall automatically
terminate. If Purchaser elects to terminate the Timberland Agreement pursuant to
Paragraph 17.1 of the Timberland Agreement, this
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Agreement shall automatically terminate.
13. CONDITIONS TO SELLER'S OBLIGATIONS. The obligations of Seller to
perform this Agreement are subject to the satisfaction, in all material respects
on or before the Closing Date, of each of the following conditions and any other
conditions to Seller's obligations hereunder specified elsewhere in this
Agreement, unless waived in writing by Seller in its sole discretion:
13.1 SIMULTANEOUS CLOSING. There being a simultaneous closing
under the Timberland Agreement.
13.2 CONSENTS AND APPROVALS. Seller shall have received all
requisite consents to and approvals of the execution, delivery and performance
of this Agreement and the transactions contemplated hereby from Seller's and its
affiliates' lenders.
13.3 NOTICE OF INTENT TO CLOSE THIRD-PARTY TRANSACTION. Seller
shall have provided written notice to Purchaser of Seller's intent to close the
acquisition of timberlands and associated facilities (referred to as the
"Riverwood Acquisition") located in the southern United States; however, if
Seller has provided Purchaser such written notice and Closing has occurred
pursuant to this Agreement, and closing of the Riverwood Acquisition does not
actually occur, Seller may rescind any Closing hereunder. In the event the
closing of the Riverwood Acquisition does not occur on or before October 1,
1996, Seller may, in its discretion, extend this Agreement accordingly. In the
event the Riverwood Acquisition does not close by December 31, 1996, or in the
event Seller's contractual rights to close the Riverwood Acquisition terminate
for any reason, this Agreement shall terminate.
13.4 MATERIAL INACCURACIES. Purchaser's representations and
warranties shall be true and correct in all material respects on and as of the
Closing Date and Purchaser shall have delivered a certificate to that effect at
Closing.
13.5 PERFORMANCE OF OBLIGATIONS. Purchaser shall have
performed all obligations required to be performed by it prior to the Closing
Date under this Agreement.
13.6 SUITS, ACTIONS OR PROCEEDINGS. No suit, action,
arbitration or other proceedings, shall be pending before any court or
governmental agency which may result in the restraint or prohibition of the
consummation of the transactions contemplated by this Agreement, and all
governmental and regulatory approvals and clearances which are required to
consummate such transactions shall have been received.
14. CLOSING.
14.1 PLACE OF CLOSING. The Closing of the transaction provided
for in this Agreement shall be held at such time and place as the closing
pursuant to the Timberland Agreement.
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14.2 DELIVERIES AT CLOSING BY SELLER. At Closing, and upon
receipt of payment of the consideration described in paragraph 2.3(a), Seller
shall deliver to Purchaser the following executed and acknowledged documents:
(a) Deeds. Special warranty deed in substantially the
form attached hereto as SCHEDULE 14.2(A) conveying title to the Mill Real
Property, subject to the Permitted Exceptions.
(b) ▇▇▇▇ of Sale. A ▇▇▇▇ of Sale (and assignment, as
appropriate) to all Mill Personal Property being transferred, in substantially
the form attached hereto as SCHEDULE 14.2(B), together with executed
certificates of title to all motor vehicles.
(c) Assignment of Mill Contracts and Mill Leases. An
Assignment and Assumption Agreement in substantially the form of SCHEDULE
14.2(C), assigning and transferring to Purchaser the Mill Contracts and the Mill
Leases. Purchaser will execute such document at Closing.
(d) Assignment of Mill Access Rights and Easements.
An instrument assigning and transferring to Purchaser the Mill Access Rights and
Easements.
(e) Nonforeign Affidavit. An affidavit, in
substantially the form of SCHEDULE 14.2(E), to the effect that Seller is not a
foreign person as that term is used in section 1445 of the Internal Revenue
Code.
(f) Authorization. A certified resolution of the
Board of Directors of the General Partner of Seller approving this transaction.
14.3 DELIVERIES AT CLOSING BY PURCHASER. At Closing, Purchaser
shall deliver to Seller:
(a) Funds. Funds in the amount specified in Paragraph
2.3(a).
(b) Executed Counterparts. Executed counterparts of
the documents described in paragraph 14.2 which require Purchaser's signature.
(c) Authorization. A certified resolution of
Purchaser's Board of Directors approving this transaction.
(d) Documents. The documents required to be executed
by Purchaser pursuant to Paragraph 14.2.
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14.4 PRORATIONS AND CLOSING COSTS.
(a) Seller shall pay the following costs and expenses
associated with the closing of the transactions contemplated hereunder:
(i) Seller's portion of personal property
taxes and real property taxes, as prorated between the parties as of the Closing
Date based upon the most recent tax information available;
(ii) The cost of the standard owner's policy
or policies of title insurance;
(iii) One-half of escrow fees;
(iv) All transfer, excise, and recording
taxes or fees due on the conveyance; and
(v) Insurance, water, and other utilities
constituting a lien, prorated as of the Closing Date.
(b) Purchaser shall pay the following costs and
expenses associated with the closing of the transactions contemplated hereunder:
(i) Purchaser's portion of personal property
taxes and real property taxes, as prorated between the parties as of the Closing
Date based upon the most recent tax information available;
(ii) One-half of escrow fees; and
(iii) Title insurance premium attributable
to extended coverage, if any, or any endorsements.
Except as otherwise provided in this Agreement, each party shall be responsible
for the payment of costs incurred by said party in connection with the
transactions contemplated by this Agreement. Purchaser shall reimburse Seller
for all prepaid expenses of the Mill, including but not limited to loggers'
advances and payments on account of stumpage contracts at Closing.
14.5 APPROVAL OF DOCUMENTS. The form and substance of all
documents delivered hereunder by Seller shall be acceptable to counsel for
Purchaser and the form and substance of all documents delivered hereunder by
Purchaser shall be acceptable to counsel for Seller, both of whose acceptances
will not be unreasonably withheld.
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14.6 POST-CLOSING MATTERS.
(a) As soon as practicable following the Closing,
Purchaser shall deliver to Seller such information and data as Seller may
reasonably request, including that required by Seller's customary tax and
accounting questionnaires, in order to enable Seller to complete and file all
federal and state forms which may be required to be filed by it and to otherwise
enable Seller to satisfy its internal accounting, tax and other requirements.
(b) A clean cut-off of payroll and payroll tax
reporting with respect to the employees of the Mill will be made at the Closing
Date with Seller paying over to the federal, state and city governments those
amounts respectively withheld before the Closing Date. Seller also agrees to
issue, by the date prescribed by Internal Revenue Service regulations, Forms W-2
for wages paid on or before the Closing Date.
(c) Purchaser shall provide to Seller, on or before
March 15th of each year, such information as Seller shall reasonably request
(with due respect to the employees' right of confidentiality) regarding any
former employee of Seller hired by Purchaser who remains covered under any of
Seller's employee benefits.
15. ADDITIONAL POST-CLOSING MATTERS.
15.1 RECORDS RETENTION. After the Closing Date, Purchaser will
preserve and will make available its books and records relating to Mill
operations formerly conducted by Seller upon reasonable notice during normal
business hours. Seller shall have the right to make extracts from and copies of
any of such books and records, all on a confidential basis, provided however,
that Seller may disclose such records, where appropriate, to governmental
agencies. In addition, for a period of six (6) years after the Closing Date,
Purchaser shall not destroy any of such books and records without first
affording Seller a reasonable opportunity to make extracts from and copies of
any such books and records prior to destruction.
15.2 TAX APPEALS. If any tax appeals result in refunds of
taxes paid with respect to the Mill Assets for periods prior to Closing, those
refunds shall belong to Seller. If an appeal is made that results in a refund or
benefit to Purchaser, Purchaser shall pay for a portion of the appeal in the
proportion which the refund and/or benefit received by Purchaser bears to the
total tax refund and/or benefit resulting from the appeal. In no case shall
Purchaser's share of the cost exceed the amount of the refund or benefit it
receives. Seller shall continue to prosecute any pending property tax appeals
relating to 1996 assessments to conclusion at the current level of litigation.
15.3 THIRD PARTY CONSENTS. Notwithstanding anything to the
contrary in this Agreement, this Agreement shall not constitute an agreement to
assign or transfer any Mill Contracts, Mill Leases or Mill Access Rights and
Easements, if an assignment or transfer or an attempt to make such an assignment
or transfer without the consent or approval of a third party
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would constitute a breach or violation thereof or affect adversely the rights of
the Purchaser or Seller thereunder; and any transfer or assignment to the
Purchaser by Seller of any interest under any of such Mill Contracts, Mill
Leases, or Mill Access Rights and Easements that requires the consent or
approval of such third party shall be made subject to such consent or approval
being obtained. In the event any such consent or approval is not obtained on or
prior to the Closing Date, the Seller shall continue to cooperate in all
reasonable respects with the Purchaser in its efforts to obtain any such consent
or approval after the Closing Date until such time as such consent or approval
has been obtained, and the Seller will cooperate in all reasonable respects with
the Purchaser in any lawful and economically feasible arrangement to provide
that the Purchaser shall receive the interest of the Seller in the benefits
under any of such Mill Contracts, Mill Leases or Mill Access Rights and
Easements (except that any such arrangement shall not require performance by
Seller as agent); provided that the Purchaser shall undertake to and shall pay
or satisfy the corresponding liabilities for the enjoyment of such benefit to
the extent the Purchaser would have been responsible therefor if such consent or
approval had been obtained.
15.4 DOMESTIC PROCESSING. Following Closing, Purchaser shall
process logs at the Mill or delivered to the Mill pursuant to Mill Contracts
within the United States and shall not export unfinished raw logs for processing
outside of the United States.
15.5 HOME DEPOT AGREEMENT. Seller and Purchaser shall
cooperate in good faith to satisfy Plum Creek Marketing, Inc.'s obligations
under its various Consignment Agreements with Home Depot, Inc. utilizing lumber
product manufactured at the Mill following Closing.
16. MISCELLANEOUS.
16.1 FURTHER ASSURANCES. If, at any time after the Closing
Date, either party shall consider or be advised that any further instruments or
assurances or any other things are necessary or desirable to carry out the terms
of this Agreement, the other party shall execute and deliver all such
instruments and assurances and do all things reasonably necessary and proper to
carry out the terms of this Agreement.
16.2 INTEGRATION. Together with the Timberland Agreement, this
Agreement and the documents delivered pursuant hereto contain the entire
agreement among the parties with respect to the subject matter hereof and
supersede all prior negotiations. None of the parties shall be bound by nor
shall be deemed to have made any representations, warranties or commitments
except those required to be made by the terms of this Agreement, or those which
are contained herein or in the documents delivered pursuant hereto.
16.3 COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original
instrument, and all such counterparts together shall constitute one Agreement.
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16.4 SEVERABILITY. Any term or provision of this Agreement
that is invalid or unenforceable in any jurisdiction shall, as to that
jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the remaining terms
and provisions of this Agreement or affecting the validity or enforceability of
any of the terms or provisions of this Agreement in any other jurisdiction. If
any term or provision of this Agreement is so broad as to be invalid or
unenforceable, the provision shall be interpreted to be only so broad as is
valid or enforceable. Subject to the foregoing provisions of this paragraph
17.4, if any term or provision of this Agreement is invalid or unenforceable for
any reason, such circumstances shall not have the effect of rendering such term
or provision invalid or unenforceable in any other case or circumstance.
16.5 SUCCESSOR AND ASSIGNS. This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors and permitted assigns.
16.6 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of Washington.
16.7 ASSIGNMENT; EXCHANGE. Seller may determine to complete
this transaction as part of a Section 1031 tax-deferred exchange. Purchaser
agrees to cooperate with Seller in documenting and completing such exchange by
agreeing that Seller may transfer Seller's rights and obligations under this
Agreement to Seller's Qualified Intermediary, Exchange Facilitator Corporation.
Purchaser agrees to accept Exchange Facilitator Corporation as the assigned
Seller of the Property described in this Agreement. Purchaser shall incur no
additional expense or liability by such cooperation. Subject to the foregoing,
neither party may assign its rights hereunder prior to the Closing without the
prior written consent of the other, which may be withheld for any reason.
16.8 CAPTIONS AND PARAGRAPH HEADINGS. The headings used in
this Agreement are for convenience only and shall not affect the construction of
any of the terms of this Agreement.
16.9 NOTICES. Notices under this Agreement shall be in writing
and shall be effective when actually delivered or three business days after
being deposited in the United States' mails as certified mail return receipt
requested, directed to the other party at the address set forth below or to such
other address as the party may be given by telecopy or facsimile and shall be
effective when received.
If to Seller: Plum Creek Manufacturing, L.P.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇, President and CEO
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
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With Copy to: Cairncross & Hempelmann, P.S.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to Purchaser: ▇▇▇▇▇▇▇ Lumber Company
▇▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇ ▇. ▇▇▇▇▇▇, President and CEO
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
With Copy to: Tonkon, ▇▇▇▇, ▇▇▇▇▇, Marmaduke & Booth
▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇. ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
16.10 TIME IS OF THE ESSENCE. Time is of the essence of this
Agreement.
16.11 SCHEDULES INCORPORATED. The following schedules attached
or to be attached to this Agreement are incorporated herein by reference:
1(f) Excluded Assets
1(k) Mill Access rights and Easements
1(m) Mill Contracts
1(n) Mill Leases
1(o) Mill Personal Property
1(p) Mill Inventory
1(q) Mill Real Property
2.3(b) Inventory Valuation Procedures
3.5 Violations or Conflicts
3.7(a) Schedule of Employees Earning in Excess of $60,000.00
Per Year
3.7(b) Employee Benefit Plans
3.7(c) Insurance Policies
3.10 Exceptions to Environmental Matters
3.11 Exceptions to Licenses, Franchises, Permits
3.12 Litigation
3.15 Notifications
14.2(a) Form of Deed
14.2(b) Form of ▇▇▇▇ of Sale
14.2(c) Form of Assignment of Mill Contracts, Leases and
Permits and Assumption Agreement
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14.2(e) Nonforeign Affidavit
14.2(f) Certified Board Resolution of Seller's General
Partner
If all of such schedules have not been prepared, initialed by both parties and
attached hereto, at least five (5) days prior to Closing, either party hereto
shall have the right to terminate this Agreement and following any such
termination neither party shall have any further obligation under this
Agreement.
16.12 COSTS AND EXPENSES. Each party to this Agreement shall
pay its own costs and expenses (including, without limitation, the fees and
expenses of its agents, representatives, counsel and accountants) incurred in
connection with the closing of the transactions contemplated under this
Agreement.
16.13 ATTORNEYS' FEES AND OTHER COSTS. If either party
initiates any proceeding in law, equity or arbitration concerning this Agreement
or any of its provisions, the party that substantially prevails in such
proceeding shall be paid by the party not so prevailing therein all costs and
expenses incurred in such proceeding, including reasonable attorneys' fees at
the pretrial, trial and appellate levels as determined by the court or courts
considering the matter.
IN WITNESS WHEREOF, the parties have executed this instrument the day
and year first above written.
SELLER: PLUM CREEK MANUFACTURING, L.P.
By: Plum Creek Management Company, L.P.
Its General Partner
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Vice President and
Chief Financial Officer
Attest:
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
-----------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇, Manager Law and
Assistant Secretary
PURCHASER: ▇▇▇▇▇▇▇ LUMBER COMPANY
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
▇▇▇ ▇. ▇▇▇▇▇▇, President and CEO
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