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EXHIBIT 2.3
TIMBERLAND
PURCHASE AND SALE AGREEMENT
FOR NEWPORT UNIT TIMBERLANDS
BY AND BETWEEN
PLUM CREEK TIMBER COMPANY, L.P.,
AS SELLER
AND
▇▇▇▇▇▇▇ LUMBER COMPANY,
AS PURCHASER
DATED AS OF SEPTEMBER 27, 1996
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TIMBERLAND
PURCHASE AND SALE AGREEMENT
FOR THE NEWPORT UNIT TIMBERLANDS IN
NORTHERN IDAHO AND NORTHEAST WASHINGTON
THIS AGREEMENT is made and entered into this 27th day of September,
1996, by and between PLUM CREEK TIMBER COMPANY, L.P., a Delaware limited
partnership, whose address is ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ("Seller"), and ▇▇▇▇▇▇▇ LUMBER COMPANY, an Oregon corporation whose
address is ▇▇▇ ▇.▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
("Purchaser").
RECITALS
A. Purchaser desires to purchase from Seller and Seller desires to sell
to Purchaser approximately 107,000 acres of timberland and associated real
property and assets located in Northeast Washington State and Northern Idaho,
known as the Newport Unit Timberlands.
B. This transaction is conditioned, among other things, upon the
simultaneous closing of a transaction which involves the sale of Seller's
sawmill and associated assets in Arden, Washington as described in the Mill
Asset Purchase and Sale Agreement of even date by and between Purchaser and Plum
Creek Manufacturing, L.P. ("Mill Asset Purchase Agreement").
AGREEMENTS
NOW, THEREFORE, in consideration of the mutual covenants set forth in
this Agreement, the receipt and sufficiency of which are acknowledged, and
subject to all terms of this Agreement, the parties agree as follows:
1. PURCHASE AND SALE OF ASSETS. Subject to the contingencies and other
terms and conditions contained herein, Seller agrees to sell and Purchaser
agrees to purchase the Assets (as defined in Paragraph 1.5), which shall not
include the Excluded Assets set forth on SCHEDULE 1 or the assets that are the
subject of the Mill Asset Purchase Agreement, as follows:
1.1 TIMBERLANDS. All of Seller's right, title and interest in
and to the Timberlands (defined below) and other rights related or appurtenant
thereto, including but not limited to all of Seller's right, title, and interest
(i) in and to the merchantable and unmerchantable timber, growing, lying,
standing or felled, timber interests and timber rights located on or appurtenant
to the Timberlands; (ii) in and to any cutting rights under public or private
timber deeds; (iii) in and to any mineral, sand, oil, gas, hydrocarbon
substances and gravel and other hard rock rights on and under the Timberlands;
and (iv) in and to all improvements, including without limitation the office
building and related improvements of Seller located in Newport, Washington (
"Building"). The "Timberlands" are defined as certain real property owned by
Seller in ▇▇▇▇▇▇▇, Pend Oreille and Ferry Counties, Washington and Kootenai,
Boundary and ▇▇▇▇▇▇ Counties, Idaho, as further described on EXHIBITS "A"
through "F" attached hereto and incorporated herein by this reference and timber
rights only with respect
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to the properties described on EXHIBIT "G" attached hereto and incorporated
herein by this reference ("Timber Rights"). The legal description of the
Building is contained on EXHIBIT "H" attached hereto and incorporated herein by
this reference.
1.2 CONTRACTS. All rights of Seller in and to any development
rights, air rights, water, water rights, ditch and ditch rights appurtenant to
the Timberlands, all contracts relating primarily to the Timberlands, including
without limitation operating contracts, stumpage contracts, leases, permits,
licenses, governmental consents and agreements, approvals and clearances, and
service, maintenance, utility and operating contracts and warranties, including
without limitation agreements for construction of roads or other improvements,
rights under any payment, performance, or bonds relating to or associated with
the Timberlands, to the extent assignable ("Contracts").
1.3 ACCESS RIGHTS AND EASEMENTS. All rights of Seller in and
to any access rights, rights-of-way and easements appurtenant to the
Timberlands, to the extent assignable ("Access Rights and Easements").
1.4 PERSONAL PROPERTY. Any and all personal property, tangible
and intangible, including without limitation all furniture, fixtures, equipment,
vehicles and tools, used primarily in connection with the Timberlands or the
Building, any and all of Seller's maps, seeds, property books, aerial photos,
plans, drawings, specifications, renderings, engineering studies, biological
studies, grading or drainage studies, environmental and hazardous waste studies
and reports and related data and materials in Seller's possession relating to
the Timberlands or the Building, and all administrative software solely
concerning the Timberlands or the Building, including the timber inventory and
computerized forest industry software program, data base software program and
mapping software program, that can operate independent of Seller's mainframe and
that Seller is permitted to license to Purchaser but excluding proprietary
software of a type used by or which may be used by Seller in its other timber,
forestry or mill operations ("Personal Property").
1.5 ASSETS. The Timberlands, the Building, Timber Rights,
Contracts, Access Rights and Easements and Personal Property are sometimes
collectively referred to as the "Assets," and the Contracts, Access Rights and
Easements and Personal Property are sometimes referred to as the "Associated
Assets."
2. PURCHASE PRICE AND TERMS.
2.1 BASE VALUE. The base value for the Assets is ONE HUNDRED
FORTY- FIVE MILLION DOLLARS ($145,000,000) ("Base Value"), based on Seller's
timber inventory as of January 1, 1996 ("Timber Inventory"). Seller and
Purchaser agree that Seller's Timber Inventory shall be deemed accurate for
purposes of determining the Base Value and Seller's Purchase Price Estimate
(defined below).
2.2 FINAL PURCHASE PRICE. The final purchase price ("Purchase
Price") for the Assets shall be the Base Value, less (i) the value of the timber
harvested from the Timberlands from January 1, 1996 to the date of Closing
(defined below), which volume shall be determined
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solely on the basis of Seller's books and records, plus (ii) the value of timber
growth on the Timberlands from January 1, 1996 to the date of Closing. The
Purchase Price shall be reduced further pursuant to the (iii) "Pulp Value
Adjustment" and the (iv) "Dead Value Adjustment" as defined below. In addition,
at Closing the Purchase Price will be reduced by the amount of Seller's Deferred
Obligations (as defined in Paragraph 19.2). In calculating the value of
harvested and grown timber for purposes of the adjustments in clauses (i) and
(ii) of the preceding sentence, the applicable volume, expressed in MBF, shall
be multiplied by the following value-per-volume factor, expressed in $/MBF
("Adjustment Factor"):
{[the Base Value]
--less--
[the value, as of January 1, 1996, of all Assets other
than the timber located on or appurtenant to the
Timberlands ("Other Asset Value")]}
equals the "Timberlands Stumpage Value"
--divided by--
[the volume, as of January 1, 1996, of all the timber
located on or appurtenant to the Timberlands]
("1/1/96 Timber Inventory")
For purposes of this Paragraph 2.2, the parties agree that the Other Asset Value
is $23,967,970, and that the Timberlands Stumpage Value is thus $121,032,030.
Because the 1/1/96 Timber Inventory equals 815,000 MBF, the Adjustment Factor is
$148.51/MBF.
Base Value: $145,000,000.00
Less Other Assets Value - 23,967,970.00
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Timberlands Stumpage Value $121,032,030.00
Divided by 1/1/96 Timber Inventory (815,000)= $148.51/MBF (Adjustment Factor)
LESS ADJUSTMENTS:
(i) Volume Harvested = 43,000 MBF x 148.51/MBF =$6,385,930
Since 1/1/96
Timber Inventory
PLUS ADJUSTMENT:
Growth of Unharvested Volume since 1/1/96 Timber Inventory
(ii) Growth Volume = 16,300 MBF x 148.51/MBF =$2,420,713
since 1/1/96
Timber Inventory
Net Adjustment for harvest and growth: $3,965,217
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LESS PULP VALUE ADJUSTMENT
(iii) 16,579 MBF Pulp per 1/1/96 Timber Inventory
Adjustment Factor: $148.51/MBF
Less discount: 36.64
Discounted adjustment: $111.87/MBF
Adjustment: 16,579 x $111.87 = $1,854,693
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LESS DEAD VALUE ADJUSTMENT
(iv) 43,631 MBF Dead per 1/1/96 Timber Inventory, including the following:
8,219 MBF Lodgepole Pine
3,941 MBF White Pine
1,177 MBF Ponderosa Pine
22 MBF Bull Pine
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13,459 MBF
Market value of dead pine is 20% less than green value:
$148.51 x .20 = $29.70 stumpage reduction
13,459 x $29.70 = 399,732
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Therefore, the Final Purchase Price shall be: $ 145,000,000.00
Less Net Adjustment for Harvest/Growth 3,965,217.00
Less Pulp Value Adjustment 1,854,693.00
Less Dead Value Adjustment 399,732.00
------------------
Total $ 138,780,358.00
The Final Purchase Price shall be further reduced at Closing based on Seller's
estimate of its Deferred Obligations as defined in Pargraph 19.2 hereof.
2.3 POST-CLOSING ADJUSTMENTS. Not less than five (5) business
days prior to Closing, Seller shall provide to Purchaser and the Escrow Agent
(described below) Seller's estimate of the Purchase Price and the supporting
calculations ("Seller's Purchase Price Estimate"). The Seller's Purchase Price
Estimate shall be used solely for purposes of Closing. Within thirty (30) days
after Closing, Purchaser, with the cooperation of Seller, shall verify Seller's
Purchase Price Estimate. If Seller and Purchaser agree that the Purchase Price
should be adjusted, the party owing to the other shall make such payment within
fifteen (15) days of such final determination. In the event Seller and Purchaser
cannot agree to the adjustments that either have been or should be made to the
Purchase Price, the parties shall select an independent auditor to perform an
analysis. Seller and Purchaser agree that they shall be bound by the final
determination of such auditor and shall share equally the costs of the audit.
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2.4 PAYMENT OF PURCHASE PRICE. At Closing, Purchaser shall pay
Seller the Seller's Purchase Price Estimate in cash, by wire transfer in
immediately available federal funds, to the Escrow Agent.
2.5 PURCHASE PRICE ALLOCATION. The parties shall allocate the
Purchase Price among the 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. CLOSING. Closing ("Closing") shall occur at the offices of
Transnation Title Insurance Company, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ("Escrow Agent") on October 1, 1996, unless such date is extended pursuant
to Paragraphs 14 or 17 or otherwise by agreement of the parties, but in no event
later than December 31, 1996 ("Closing Date").
4. REPRESENTATIONS AND WARRANTIES OF SELLER. Seller represents and
warrants to Purchaser that except as disclosed in a Schedule:
4.1 ORGANIZATION. Seller is a limited partnership duly
organized and validly existing under the laws of the State of Delaware.
4.2 GOOD STANDING. Seller is qualified to do business in the
States of Washington and Idaho.
4.3 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.
4.4 AUTHORIZATION. Subject to obtaining the consents,
approvals and authorizations described in Paragraph 17, 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.
4.5 NO VIOLATION OR CONFLICTS. Subject to obtaining the
consents and approvals described in Paragraph 17.2(b), 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 Assets pursuant to,
or constitute a material 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 14, 17.2 or 19.6, no consent, approval,
authorization or action by any governmental authority, or any person having
legal rights against or jurisdiction over Seller,
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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 4.5.
4.6 NO DEFAULTS. To Seller's knowledge, the Contracts and
Access Rights and Easements are valid and in full force and effect except as
would not materially and adversely affect the Assets. 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 Contract.
4.7 CONDEMNATION PROCEEDINGS. Subject to Paragraph 17.1(f), no
condemnation proceeding is pending or, to the knowledge of Seller, threatened
which would materially preclude or impair the use of the Timberlands or the
Building for the respective purposes for which such properties are currently
used.
4.8 ENVIRONMENTAL MATTERS. To Seller's knowledge, except as
set forth on SCHEDULE 4.8 and in the environmental reports identified on
SCHEDULE 4.8:
(a) neither the Timberlands nor the Building have at
any time been used for the generation, transportation, management, handling,
treatment, storage, manufacture, emission disposal, release or deposit of any
hazardous substances or fill or other material containing hazardous substances
in material violation of levels permitted under applicable laws;
(b) there are no underground storage tanks on the
Timberlands or the Building; and
(c) Seller has not received notification from any
third party, including but not limited to governmental agency alleging that the
Timberlands or the Building are not materially in compliance with applicable
environmental laws.
Subject to Seller's warranty set forth in this Paragraph 4.8, 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 any environmental laws applicable
to the Timberlands or the Building; or (ii) the presence, release or disposal of
any hazardous substance, solid waste, or any other environmental contamination
on, within, or from the Timberlands or the Building before, as of, or after the
Closing Date. 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
term "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"), and the Resource
Conservation and Recovery Act, as amended ("RCRA"), the Toxic Substances Control
Act, as amended ("TSCA"), the Clean Water
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Act, as amended ("CWA"), the Clean Air Act, as amended ("CAA"), and the Oil
Pollution Control Act of 1990, as amended ("OPA"). 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 4.8 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.
4.9 SUITS, ACTIONS OR PROCEEDINGS. Except as disclosed in
SCHEDULE 4.9, to the knowledge of Seller, there is (i) no court or
administrative judgment or order which adversely affects the Timberlands or
current operations thereon; 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 and adversely affect
the Timberlands or current operations thereon. Except as set forth in Paragraph
14, Seller has no knowledge of any suit, action, arbitration or other proceeding
threatened or 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.
4.10 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.
4.11 COMPLIANCE. Except as disclosed on SCHEDULE 4.11, to
Seller's knowledge, Seller has not received notification from any governmental
agency alleging that the Timberlands or the Building are not in compliance with
applicable laws (other than environmental laws which are covered in Paragraph
4.8) as would materially and adversely affect the Assets. Seller has no
knowledge of any such violations relating to the use of the Timberlands or the
Building.
4.12 SCHEDULES. Seller has delivered to Purchaser herewith, or
will deliver as soon as practicable, the Schedules referred to in this
Agreement.
4.13 MARKETABLE TITLE. Subject to the Permitted Exceptions
(defined below) and the provisions of Paragraph 19.6, Seller has good and
marketable title to the Assets and at Closing such Assets will be free and clear
of all liens, security interests, charges and encumbrances.
5. REPRESENTATIONS AND WARRANTIES OF PURCHASER. Purchaser represents
and warrants to Seller that:
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5.1 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.
5.2. 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 17, 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 14 and 17 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 5.2 hereto.
5.3 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.
5.4 FINANCING. Purchaser has access to the funds or financing
necessary to consummate the transactions contemplated by this Agreement.
5.5 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.
6. SURVIVAL; CUSHION AGAINST CLAIMS; KNOWLEDGE; MATERIALITY.
6.1 SURVIVAL. The respective representations and warranties of
Seller and 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 4.8, 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
based upon such representations and warranties 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.
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6.2 CUSHION AGAINST CLAIMS. In the event of any claim by
Purchaser against Seller under Paragraphs 4 or 18.1 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
Paragraphs 4 or 18.1 of this Agreement shall not exceed $3,000,000.
Notwithstanding anything herein to the contrary, the Cushion shall not apply to
any representations or warranties described in Paragraph 4 which are qualified
by a "materiality," "material," "materially" or "materially and adversely
affected" threshold.
6.3 SELLER'S KNOWLEDGE DEFINED. "Knowledge" as used in this
Agreement with respect to the Seller shall mean actual current knowledge (as
opposed to constructive or imputed knowledge) of the fact or matter in question
by ▇▇▇▇▇▇ ▇▇▇, the current Superintendent of Timberlands, or by the superiors of
▇▇. ▇▇▇ which are employed by Seller.
6.4 MATERIALITY DEFINED. "Material" or "materiality" or
"materially" or "materially and adversely affect" as used in this Agreement with
respect to Seller 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 Assets by, or cause damages of, at least $100,000 or
encumber or adversely affect more than 2,000 acres of Timberlands in the
aggregate.
7. CONDITION OF TITLE AND TITLE INSURANCE.
7.1 CONDITION OF TITLE. As of the Closing Date, title to the
Timberlands and the Building is to be free of all monetary encumbrances or
defects and other encumbrances or defects which appear in the preliminary
commitment for title insurance mutually deemed unacceptable by Seller and
Purchaser. Monetary encumbrances or defects to be discharged by Seller shall be
paid from Seller's funds at Closing or Seller shall indemnify Purchaser against
such monetary encumbrances or defects. In addition to any other permitted
exceptions agreed upon by the parties, the following shall not be deemed
unacceptable encumbrances or defects: rights reserved in federal patents or
state deeds; building or use restrictions consistent with current zoning;
easements not inconsistent with Purchaser's intended use; reserved rights for
minerals, metals and ores of every kind and nature, and all oil, gas and other
hydrocarbons, together with reserved rights of ingress and egress; and any other
non-monetary encumbrance or defect that does not affect more than 2,000 acres in
the aggregate or affect the value of the Timberlands by at least $100,000.
Following Closing, Seller shall use its reasonable efforts to assist Purchaser
in removing any encumbrances or defects that Purchaser and Seller deemed as
objectionable.
7.2 TITLE INSURANCE. Seller shall furnish to Purchaser at
Closing a standard form Owner's or Purchaser's Policy of Title Insurance for the
Timberlands and the Building in the amount of the Purchase Price. Seller shall
provide to Purchaser preliminary commitments for title insurance for all
properties located within the Timberlands and the Building as soon as practical
after execution hereof, including copies of all exception documents referred to
in such title commitments.
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8. CONDITION OF PROPERTY; SUBSEQUENT ACTS.
8.1 LIMITATION ON REPRESENTATIONS. Purchaser agrees that
neither Seller nor its agents, officers, employees or assigns shall be held to
any covenant or representation respecting the condition of the Timberlands or
any improvements thereon, or the Building, nor shall Purchaser or Seller or the
assigns of either be held to any covenant or agreement for alterations,
improvements or repairs unless the covenant or agreement relied on is contained
herein or is in writing and attached to and made a part of this Agreement.
8.2 LIMITATION OF WARRANTIES. Except for the warranties made
in ▇▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇▇▇ specifically acknowledges and agrees that (i) Seller
does not make any representations or warranties of any kind whatsoever, either
express or implied, with respect to the Timberlands or the Building; and (ii)
the Timberlands and the Building are sold to Purchaser in an "AS IS" and "WITH
ALL FAULTS" condition as of the Closing Date, including without limitation the
stability of soils, suitability for any construction or development,
encroachment or boundary questions, drainage, availability of utilities, zoning,
quantity, quality, acreage, access and similar matters. Purchaser assumes the
risk that adverse physical conditions may not have been revealed by its
investigation.
8.3 FORESTLAND OR TIMBERLAND TAX DESIGNATION. With respect to
the Timberlands located within the State of Washington, Purchaser agrees that it
shall continue the current real property tax designation as timberland or
forestland at Closing.
9. LIABILITIES NOT ASSUMED. Except for the Contracts and the Access
Rights and Easements, and as otherwise set forth in this Agreement, Purchaser
shall not assume or be responsible for any liabilities of Seller.
10. CONTRACTS; ACCESS RIGHTS AND EASEMENTS.
10.1 CONTRACTS. As soon as practicable following full
execution hereof, Seller shall provide to Purchaser a list of all Contracts.
Such list shall become SCHEDULE 10.1 to this Agreement and shall become a part
hereof. At Closing, Seller shall assign, to the extent assignable, and Purchaser
shall assume such Contracts pursuant to an executed Assignment and Assumption
Agreement in such form as is approved by the parties hereto. Subject to the
provisions of Paragraph 19.6, Seller will cooperate in obtaining any consents
necessary for the assignment of the Contracts.
10.2 ACCESS RIGHTS AND EASEMENTS. As soon as practicable
following full execution hereof, Seller shall provide to Purchaser a list of all
Access Rights and Easements. Such list shall become SCHEDULE 10.2 to this
Agreement and shall become a part hereof. At Closing, Seller shall assign, to
the extent assignable, and Purchaser shall assume such Access Rights and
Easements pursuant to executed blanket assignments in such form as is approved
by the parties hereto. Subject to the provisions of Paragraph 19.6, Seller will
cooperate in obtaining any consents necessary for the assignment of the Access
Rights and Easements.
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11. PERSONAL PROPERTY. As soon as practicable following full execution
hereof, Seller shall provide to Purchaser a list of all Personal Property which
shall become SCHEDULE 11 to this Agreement and shall become a part hereof. At
Closing, Seller shall transfer all of Seller's right, title and interest to such
Personal Property, free and clear of any monetary liens and encumbrances,
pursuant to a ▇▇▇▇ of sale or other conveyancing document in a form acceptable
to the parties.
12. EMPLOYEES AND BENEFIT PLANS.
12.1 TERMINATION AND REHIRING OF EMPLOYEES.
(a) On and as of the Closing Date, Seller will take
all action necessary to terminate its Newport Unit Timberlands and Building
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 12. Seller has delivered to Purchaser a
list of all employees who are currently on Seller's employment roll employed in
the operation of the Newport Unit Timberlands or the Building, other than those
employees who are on long-term disability ("Business Employees"), as of the most
recent date for which such information is reasonably available. Purchaser may
(i) submit employment applications to Business Employee 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 business operations. 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 offers of employment are referred to as the "Excluded Employees").
The number of Excluded Employees identified by Purchaser pursuant to this
Paragraph 12.1 and pursuant to Paragraph 10.1 of the Mill Asset Purchase
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
Excluded Employees that failed to satisfy drug tests and provide to Seller
copies of any drug test results requested by Seller. Notwithstanding anything
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 Mill Asset Purchase 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 Closing; (ii) provide for employment at the location of
the Building or the Timberlands, as the case may be; (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; (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
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"Nontransitioning Employees."
(b) Effective from and after the first day after
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 Closing shall be allocated between
Seller and Purchaser in an equitable manner prior to and as of 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 Newport
Unit Timberlands 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.
12.2 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 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' Current Retirement
Plan).
12.3 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
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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 12.3, 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.
12.4 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.
13. ACCESS TO INFORMATION. Upon full execution hereof, Seller will
permit Purchaser to have reasonable access to all records and information
regarding timber inventories, road agreements, title, environmental matters and
other matters relating to the Timberlands or the operation thereof or the
Building in Seller's possession. Seller shall provide to Purchaser schedules and
copies of all contracts, leases and permits relating to the Timberlands 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 any of the Timberlands or the Building, and all other
materials reasonably requested by Purchaser.
14. ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ 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 3 shall be
extended, if necessary, by 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.
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15. CONFIDENTIALITY; PUBLIC ANNOUNCEMENTS; RETURN OF INFORMATION.
Subject to the provisions of Paragraph 15.3 below:
15.1 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.
15.2 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.
15.3 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.
15.4 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, that (i) 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) 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.
16. EXCHANGE. Seller intends 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.
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17. CLOSING.
17.1 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:
(a) SIMULTANEOUS CLOSING. There being a simultaneous
closing under the Mill Asset Purchase Agreement.
(b) 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.
(c) PERFORMANCE OF OBLIGATIONS. Seller shall have
performed all obligations required to be performed by it prior to the Closing
Date under this Agreement.
(d) 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
Timberlands and the Building, subject to the Permitted Exceptions described in
Paragraph 7.1.
(e) 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.
(f) CASUALTY, LOSS OR CONDEMNATION. As a condition to
Purchaser's obligation to consummate the transactions set forth herein, the
Timberlands 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 or may
result in a loss affecting at least 2,000 acres in value to the Timberlands. If
Purchaser elects to waive the condition set forth in this Paragraph 17.1(f), or
if any material casualty or condemnation loss affects less than 2,000 acres, 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 based upon the formula described in Paragraph 2, 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 pursuant to
this Paragraph 17.1(f), the Mill Asset Purchase Agreement shall terminate. If
Purchaser terminates the Mill Asset Purchase Agreement pursuant to Paragraph
12.6 of the Mill Asset Purchase Agreement, this Agreement shall terminate.
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17.2. 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:
(a) SIMULTANEOUS CLOSING. There being a simultaneous
closing under the Mill Asset Purchase Agreement.
(b) 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.
(c) 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.
(d) 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.
(e) PERFORMANCE OF OBLIGATIONS. Purchaser shall have
performed all obligations required to be performed by it prior to the Closing
Date under this Agreement.
(f) 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.
(g) AMENDMENT TO LOG PURCHASE AND SALE AGREEMENT.
Seller and Purchaser shall have entered into an amendment to that certain Log
Purchase and Sale Agreement between Purchaser and Seller dated August 30, 1993,
as amended to provide for a prorated reduction in the amount of volume which
Seller is obligated to deliver to Purchaser's Montana ▇▇▇▇▇.
17.3 PRORATIONS. All personal property taxes, real property
taxes, forest patrol assessments, rents, water and other utilities constituting
liens shall be prorated to the Closing Date.
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17.4 CLOSING COSTS.
(a) Seller shall pay the following costs and expenses
associated with the closing of the transactions contemplated hereunder:
(i) The cost of the standard owner's policy or
policies of title insurance;
(ii) One-half of escrow fees; and
(iii) All transfer, excise, and recording taxes or
fees due on the conveyance.
(b) Purchaser shall pay:
(i) One-half of the escrow fees;
(ii) Title insurance premium attributable to extended
coverage, if any, or any endorsements;
(iii) Recording fees for deeds; and
(iv) Real estate compensation taxes or rollback taxes
and penalties, if any, as a result of a change in use or designation of the
Timberlands in Washington State, including but not limited to a change from open
space, agricultural, forestland or recreational status.
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
transaction contemplated by this Agreement.
17.5 CLOSING. At Closing:
(a) Seller shall deliver to Purchaser the following:
(i) Special Warranty Deed for each County in
which the Timberlands and Building are located in Washington State and a Bargain
and Sale Deed for each county in which the Timberlands are located in Idaho in
the forms attached as Schedule 17.5(a)(i)-1 and 17.5(a)(i)-2.
(ii) ▇▇▇▇ of Sale for the Personal Property,
in substantially the form attached hereto as SCHEDULE 17.5(A)(II);
(iii) Assignment and Assumption Agreement
for the Contracts, in substantially the form attached hereto as SCHEDULE
17.5(A)(III);
(iv) Nonforeign Affidavit to the effect that
Seller is not a
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foreign person as that term is used in Section 1445 of the Internal Revenue
Code;
(v) An Assignment and Assumption Agreement
for the Access Rights and Easements to be recorded in each county in which such
Access Rights and Easements are located, in substantially the form attached
hereto as SCHEDULE 17.5(A)(V);
(vi) A prepaid binding commitment for a
standard coverage Policy of Title Insurance;
(vii) The amendment to the Log Purchase and
Sale Agreement as described in Section 17.2(g); and
(viii) A Closing Memorandum in form
reasonably acceptable to Purchaser and Seller.
(b) Purchaser shall deliver to Seller the following:
(i) Executed copies of the Assignment and
Assumption Agreements described above;
(ii) Purchase Price (which may be available
to Seller prior to actual recording of all Special Warranty and Bargain and Sale
Deeds);
(iii) The amendment to the Log Purchase and
Sale Agreement as described in Section 17.2(g); and
(iv) A Closing Memorandum in form reasonably
acceptable to Purchaser and Seller.
18. INDEMNIFICATION.
18.1 INDEMNIFICATION BY SELLER.
(a) Subject to the provisions of Paragraphs 6.1, 6.2
and this Paragraph 18.1, 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 fines or penalties imposed by
governmental entities, 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
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penalties imposed by governmental entities against Purchaser for Environmental
Liabilities arising out of the operation or ownership of the Timberlands or the
Building by Seller before the Closing Date. For purposes of this Paragraph
18(a)(ii), "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 Timberlands or the Building incurred or imposed as a
requirement of, or arising out of the violation of, any environmental law.
Seller's liability to Purchaser under this Paragraph 18.1(a)(ii) for
Environmental Liabilities arising out of the operation or ownership of the
Timberlands or the Building by Seller before the Closing Date shall continue for
36 months following the Closing Date.
(b) During the period of the indemnity afforded
Purchaser under this Paragraph 18, Seller and its permitted assigns ("Assigns")
may upon notice to Purchaser and obtaining Purchaser's permission, which shall
not unreasonably be withheld, inspect the Timberlands or the Building 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 and tests which are deemed by such experts to be warranted.
Purchaser will promptly notify Seller or its Assigns within ten (10) 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 18 "Contaminate" or "Contamination") in, on
or under any part of the Timberlands or the Building 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 Timberlands and the
Building 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 business of the
Timberlands.
(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
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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 (i) if a remedial or other action proposed to be taken
by Seller in settlement of the Environmental Liability would materially and
adversely affect Purchaser's operations of the Timberlands, such action shall
not be taken without the prior written consent of the Purchaser (which consent
shall not unreasonably be withheld); (ii) 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 (iii) 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.
18.2 INDEMNIFICATION BY PURCHASER. Subject to the provisions
of Paragraph 6.1 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;
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(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 Timberlands or the Building 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 Timberlands or the
Building prior to Closing;
(d) any acts, omissions, events or circumstances on
or in connection with the operation, condition or ownership of the Timberlands
or the Building occurring on or after the Closing Date, including without
limitation any environmental condition first occurring after the Closing Date on
or about the Timberlands or the Building; provided, however, that such
indemnification shall not apply to the extent that any such liability arises
from any acts or omissions of Seller; and
(e) any expenses, compensating or rollback taxes
which become payable as the result of Purchaser's removal of the Timberlands
located within the State of Washington from the current forestland or timberland
tax designation at or after Closing.
19. POST-CLOSING ADJUSTMENTS AND POST-CLOSING MATTERS.
19.1 BONDS. The amount of any bonds, deposits, or other funds
posted or deposited by Seller which are or may with the passage of time or
otherwise become refundable shall be credited to the account of Seller at
Closing to the extent assigned and refundable to Purchaser.
19.2 DEFERRED OBLIGATIONS. At Closing, Purchaser shall assume
all of Seller's obligations relating to slash treatment, environmental
compliance, replanting and reforestation with respect to the Timberlands to be
acquired ("Deferred Obligations"). All Deferred Obligations shall be performed
or paid by Seller to the extent appropriate in the ordinary course of Seller's
business until Closing. Pursuant to Paragraph 2 hereof, Purchaser shall receive
a credit against the Purchase Price to be paid at Closing, in an amount equal to
Seller's then outstanding Deferred Obligations and thereafter performance of all
such outstanding Deferred Obligations shall become the responsibility of
Purchaser at Closing.
19.3 COST-SHARE BALANCES.
(a) EARNED BALANCES. Seller shall reasonably
determine the net amounts then owing by it to the U.S. Forest Service ("USFS")
and other third parties, if any, pursuant to earned outstanding balances under
cost-share or other USFS access or transportation programs for road construction
and maintenance work previously performed to benefit or provide access to, upon
or across the Timberlands ("Cost-Share Balances"). Seller shall attempt to
settle all accounts with the USFS prior to closing with respect to Cost Share
Balances. In any event, Seller shall remain responsible for any amounts then
owing to the USFS or other third parties for
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such Cost-Share Balances, and shall be entitled to collect from the owing party
all amounts owing to Seller by the USFS or other third parties with respect to
such Cost-Share Balances.
(b) COMMITMENTS FOR FUTURE WORK. Pursuant to the
terms of Road Rights-of-Way Construction and Use Agreements between Seller and
the USFS, there are certain road construction or reconstruction projects
committed to but not yet completed and/or accepted. Purchaser shall assume all
such commitments and shall be responsible for any payments to the USFS for such
work performed by the USFS and Purchaser shall be entitled to receive payments
from the USFS for any such work performed by Purchaser.
19.4 DEFERRED MAINTENANCE. At Closing, the performance of all
deferred road construction and maintenance obligations owing by Seller to the
USFS with respect to the Timberlands as of Closing ("Deferred Maintenance")
shall become the responsibility of Purchaser to perform. After Closing, Seller
and Purchaser shall negotiate with the USFS to determine the amount of Seller's
Deferred Maintenance obligation. Upon such agreement between the Seller, the
Purchaser and the USFS, and the release of Seller by the USFS pursuant to their
existing cost share agreements, Seller shall promptly pay to Purchaser the
amount of such Deferred Maintenance obligation. All Deferred Maintenance shall
be performed or paid by Seller to the extent appropriate in the ordinary course
of Seller's business until Closing.
19.5 CONSULTING. From and after the Closing Date, Seller
agrees to provide Purchaser with consulting services, on terms and conditions to
be agreed upon, with respect to the matters described on SCHEDULE 19.5.
19.6 THIRD PARTY CONSENTS. Notwithstanding anything to the
contrary in this Agreement, this Agreement shall not constitute an agreement to
assign or transfer any Contracts, Access Rights and Easements, or Timber Rights,
if an assignment or transfer or an attempt to make such an assignment or
transfer without the consent or approval of a third party 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 such Contracts, Access Rights and Easements, or Timber
Rights, 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 such Contracts, Access
Rights and Easements, or Timber Rights (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 Purchaser would have been responsible
therefor if such consent or approval had been obtained.
19.7 NURSERY SEEDLINGS. Following Closing, Seller shall sell
and Purchaser shall purchase nursery seedlings on terms and conditions
reasonably acceptable to Seller and Purchaser. The price for seedlings shall be
based upon a fair market value as agreed upon from
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time to time by Seller and Purchaser.
20. MISCELLANEOUS.
20.1 FURTHER ASSURANCES. If, at any time after the Closing
Date, either party shall consider or be advised that any further instruments or
assurance 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.
20.2 INTEGRATION. 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.
20.3 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.
20.4 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
20.4, 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.
20.5 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.
20.6 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of Washington.
20.7 ASSIGNMENT. Subject to Paragraph 16, 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.
20.8 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.
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20.9 NOTICES. Notices under this Agreement shall be in writing
and shall be effective when actually delivered or three (3) 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 Timber Company, L.P..
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇, President and CEO
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: Cairncross & Hempelmann, P.S.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to Purchaser: ▇▇▇▇▇▇▇ Lumber Company
▇▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇ ▇. ▇▇▇▇▇▇, President and CEO
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: Tonkon, ▇▇▇▇, ▇▇▇▇▇, Marmaduke & Booth
▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
20.10 TIME IS OF THE ESSENCE. Time is of the essence of this
Agreement.
20.11 SCHEDULES INCORPORATED. The schedules attached to or to
be attached to this Agreement are incorporated herein by reference:
SCHEDULE DESCRIPTION
-------- -----------
1 Excluded Assets
4.5 Exceptions to No Violations or conflicts
4.8 Environmental Matters
4.9 Listing of Suits, Actions, Proceedings
4.11 Compliance
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5.2 Purchaser's Schedule of Violations and consents
10.1 Listing of contracts
10.2 Schedule of Access Rights and Easements
11 Listing of Personal Property
17.5(a)(i)-1 Form of Deed for Washington
17.5(a)(i)-2 Form of Deed for Idaho
17.5(a)(ii) ▇▇▇▇ of Sale
17.5(a)(iii) Assignment and Assumption Agreement for Contracts,
Leases and Permits
17.5(a)(v) Assignment of Access Rights and Assumption Agreement
19.5 Consulting Matters
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
except as provided in Paragraph 15.4.
20.12 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.
20.13 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.
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IN WITNESS WHEREOF, the parties hereto have executed this instrument
the day and year first above written.
SELLER:
PLUM CREEK TIMBER COMPANY, L.P.
By Plum Creek Management Company, Attest:
L.P., General Partner
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
------------------------------- --------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Vice President ▇▇▇▇▇ ▇. ▇▇▇▇, Manager Law
and Chief Financial Officer and Assistant Secretary
PURCHASER:
▇▇▇▇▇▇▇ LUMBER COMPANY
By /s/ ▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------
▇▇▇ ▇. ▇▇▇▇▇▇, President and CEO
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