Exhibit 10(o)
CONTRACT FOR THE PURCHASE AND
BARGAIN SALE OF PROPERTY
THIS AGREEMENT, made as of the 16th day of December, 2002, by and among
XXXXXXXXXX PULP XXXX COMPANY, formerly known as The Xxxxxxxxxx Pulp Wood
Company, a Maryland corporation (hereinafter referred to as "Seller"), THE
CONSERVATION FUND, A NON-PROFIT CORPORATION (hereinafter referred to as "TCF"),
and FIDELITY NATIONAL TITLE INSURANCE COMPANY (hereinafter referred to as
"Escrow Agent ").
W I T N E S S E T H:
WHEREAS, Seller is the owner of the Property (as hereinafter defined);
and has determined that it wishes to bargain sale same to TCF;
WHEREAS, TCF desires to purchase and Seller desires to bargain sell the
Property as an installment sale (the "Installment Sale");
NOW, THEREFORE, the parties have agreed and do hereby agree as follows:
1. Agreement of Purchase and Bargain Sale. Subject to the
provisions of this Agreement, and for the consideration herein stated, Seller
agrees to bargain sell to TCF and TCF agrees to buy from Seller all of the
following described property (collectively, the "Property"):
(a) fee simple interest in and to those certain tracts or parcels
of land in Charles, Caroline, Dorchester, Somerset, St. Mary's, Wicomico and
Worcester Counties, Maryland, containing approximately 25,568 acres, all of
which tracts or parcels are more fully described in Exhibit A attached hereto,
together with all buildings, structure and other improvements located thereon,
all tenements: hereditaments, easements, appurtenances and
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privileges thereto belonging, all trees, timber, sand, gravel and crops now
located thereon or thereunder (said land, together with said buildings,
structures, improvements, tenements, hereditaments, easements, appurtenances,
privileges, trees, timber, sand, gravel and crops being hereinafter referred to
as the "Real Property");
(b) to the extent Seller has the right to assign the same, all of
Seller's right, title and interest in and to the leases, subleases, contracts,
licenses and permits described on Exhibit B attached hereto and any renewals
thereof (collectively, the "Leases");
(c) all of Seller's non-proprietary files and records relating to
the Real Property (excluding any financial records) (the "Books and Records"),
The parties agree that if any portion of the Real Property is deleted
or taken pursuant to either of paragraphs 5(b)(iii), 7, 8(a) or 8(c) below, then
the term "Red Property" shall no longer include such deleted portion.
2. Purchase Price: Xxxxxxx Money.
(a) Subject to adjustment as provided in paragraphs 4, 5(b)(ii),
7, 8(b), 8(c) and 11 hereof, the purchase price for the Property (the "Purchase
Price") shall be Thirty-Seven Million Eight Hundred Fifty Thousand and No/100
Dollars ($37,850,000.00). The Purchase Price will be payable on the Closing Date
(as hereinafter defined) by delivery by TCF to Seller or its assignee of an
installment promissory note (the "Installment Note") for the Purchase Price
secured by a letter of credit and issued in conformity with the requirements of
and subject to the terms and provisions set forth on Exhibit D attached hereto
(the "Installment Sale Terms"). The forms of all documents to be executed by
Seller and/or TCF in connection with the Installment Sale, including, without
limitation, the Installment Note shall be in form reasonably acceptable to the
parties. Seller acknowledges and agrees that Seller shall be solely responsible
for all of TCF's additional fees, costs, and expenses incurred in connection
with the Installment Sale
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structure of this transaction including but not limited to costs incurred in
connection with obtaining the letter of credit, documenting the transaction as
an installment sale and preparing the installment promissory note. Seller
further acknowledges that TCF is making no representation or warranty concerning
the Seller's use of the Installment Sale structure, including but not limited to
the tax consequences thereof. TCF agrees to reasonably cooperate with Seller in
structuring and documenting the Installment Sale including, without limitation,
providing all reasonable information requested by Seller's structuring agent;
provided, however, TCF shall not be required to incur any additional cost or
assume any additional liabilities or obligations not expressly contemplated
under the Agreement.
(b) Within five (5) business days after the effective date of this
Agreement, TCF will deliver to Escrow Agent the sum of $200,000 (said sum,
together with all interest earned thereon, is referred to herein as the "Xxxxxxx
Money"), which sum shall be held by Escrow Agent in an interest bearing account
and shall be disbursed in accordance with the further provisions of this
Agreement. At Closing, Escrow Agent shall return the Xxxxxxx Money to TCF.
3. Closing.
(a) The execution and delivery of the documents and instruments
for the consummation of the purchase and sale of the Property pursuant hereto
(herein referred to as the "Closing") will take place at 1O:OO a.m. on or before
the date which is twenty (20) days after the expiration of the Inspection
Period, as that term is defined below in Section 5 (the "Closing Date") at the
offices of Seller's Title Company In Maryland, subject to extension as provided
in paragraphs 5(b), 6, 7, 8 and 29 hereof, or such other date and time, and/or
such other location, as may be mutually agreeable to Seller and TCF.
Notwithstanding the foregoing, the parties will use reasonable efforts to close
on or before January 15, 2003, provided that TCF is able to
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successfully complete all of its due diligence of the Real Property, as
contemplated herein, prior to January 15,2003 and Seller has sufficient time to
complete transaction documents required for the Closing. Seller may elect not to
attend the Closing so long as all documents to be executed by Seller in
connection with the consummation of the transactions contemplated herein are
delivered to Escrow Agent not later than two (2)days prior to Closing.
(b) At the Closing, Seller will execute and deliver to TCF (i)
seven or more special warranty deeds conveying the Real Property to TCF subject
only to the Permitted Encumbrances (as hereinafter defined), (ii) a xxxx of sale
with respect to the Books and Records, (iii) an affidavit as to the non-foreign
status of Seller (or, if Seller is a foreign person, Seller will deliver to TCF
a withholding exemption certificate pursuant to Section 1445 of the Internal
Revenue Code of 1954, as amended), (iv) an assignment of the applicable Leases
(as hereinafter defined) (the "Assignment of Leases"); if any, with rents to be
pro-rated at Closing (v) an owner's affidavit in form satisfactory to TCF's
title insurer, (vi) such assignments and other documents as are necessary to
assign unto TCF any Forest Management Conservation Agreements, and (vii) such
other deeds, assignments, certificates, affidavits and instruments as may be
reasonably necessary or desirable to consummate the purchase and sale
contemplated hereby and to obtain the issuance of the title insurance policy
insuring TCF's fee simple title to the Real Property as of the date of the
Closing. All of the foregoing documents shall be in form and content reasonably
satisfactory to Seller and TCF.
(c) At the Closing, TCF will execute and deliver to Seller (i) the
Assignment of Leases, and (ii) such other deeds, assignments, certificates,
affidavits and instruments as may be reasonably necessary or desirable to
consummate the purchase and sale contemplated hereby, including the Installment
Note, the TSA (as described below in Section 13) and such other instruments as
are required pursuant to Exhibit D hereof to consummate the installment sale in
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accordance therewith, which documents shall be in form reasonably satisfactory
to Seller and TCF.
(d) The parties agree to do such other acts and execute and
deliver such other documents and instruments as are reasonably necessary or
desirable for the consummation of the transactions contemplated hereby.
4. Acreage Verification. TCF shall have the right at any time
prior to Closing to independently verify the number of acres contained within
the Real Property. In the event TCF determines that the Real Property contains
less than 25,312 acres, the Purchase Price shall be reduced by an amount equal
to the product of (a) the difference between 25,312 minus the number of acres
contained within the Real Property as verified by TCF multiplied by (b)
$1,480.37. In the event TCF determines that the Real Property contains more than
25,823 acres, the Purchase Price shall be increased by an amount equal to the
product of the difference between the number of acres contained within the Real
Property, as verified by TCF, minus 25,823 multiplied by $1,480.37, provided
however, that if the Purchase Price is increased by more than $500,000 TCF may
elect to terminate this Agreement, in which event the Xxxxxxx Money shall be
returned to TCF and neither party shall have any further rights or obligations
hereunder. If Seller disputes the acreage verification, the dispute will be
resolved pursuant to Paragraph 29 hereof.
5. Title.
(a) Seller agrees to convey to TCF or a supporting organization
thereof qualifying for bargain sale treatment under the Internal Revenue Code
good and marketable fee simple title to the Real Property at the Closing by
special warranty deed.
(b) TCF shall have the right to obtain, at its sole cost and
expense, a commitment for an owner's policy of title insurance issued by
Fidelity National Title Insurance
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Company (the "Title Company") having an insured amount equal to the Purchase
Price (the "Title Commitment"). TCF will have from the date of this Agreement
until 5:00 p.m. EDT on January 31, 2003 (as the same may be extended pursuant to
paragraph 6 below, the "Inspection Period") to examine the title to the Real
Property and furnish to Seller written notice of any objections to Seller's
title to the Real Property, other than the matters set forth on Exhibit E
attached hereto (the "Permitted Encumbrances"). Upon full execution this
Agreement, Seller will make available to TCF, its contractors, agents and
representatives copies of all maps and surveys in Seller's possession that
relate to the Real Property. TCF shall also have the right to object to any
title exceptions created or suffered between the date of the Title Commitment
and the date of the Closing which do not constitute Permitted Encumbrances. Any
title objections raised by TCF shall be provided on or before the expiration of
the Inspection Period by written notice to Seller accompanied with a copy of
that portion of the Title Commitment and all supplemental title documents
evidencing and describing the nature of the title objection. Seller will have
the right, but not the obligation, to cure or remove at or prior to the Closing
all objections to Seller's title to the Real Property. In the event that TCF
fails to give notice to Seller on or before the expiration of the Inspection
Period of TCF's objection to any exception to Seller's title to the Real
Property, such exception will be deemed to be a Permitted Encumbrance. In the
event that TCF gives such notice of objection to any such exception and Seller
fails or elects not to cure or remove such exception at or prior to the Closing,
TCF, at its sole option, may elect either of the following:
(i) waive the objection and proceed to Closing; or
(ii) subject to the conditions set forth in Section 5(e)
below, delete the portion of the Real Property subject to any such
uncured or unremoved exception from the real property conveyed by
Seller to TCF at Closing, and the Purchase Price will be reduced by
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an amount equal to the product of the number of acres contained within
such deleted portion multiplied by the quotient of the Purchase Price
divided by the acreage contained in the Real Property as determined in
accordance with paragraph 4 above.
Notwithstanding the foregoing, in the event TCF timely delivers its notice of
objection to any matter pursuant to this paragraph 5(b), the Closing, at
Seller's election, shall be adjourned to the date which is twenty (20) days
after the scheduled Closing Date to allow the parties adequate time to properly
document the transactions contemplated hereunder.
(c) So long as this contract remains in force, Seller will not
enter into any new lease, modify or renew any existing lease or encumber or
convey all or part of the Real Property or any interest therein, or enter into
any agreement granting to any person any right with respect to the Real Property
or any portion thereof, without the prior written consent of TCF, which consent
shall not be unreasonably withheld or delayed so long as such action by Seller
does not materially impair the value or TCF's contemplated use of the Property.
(d) In the event the aggregate acres of those portions of the
Property, if any, deleted from the transactions pursuant to this paragraph 5 or
paragraph 7 below, together with the acres of the Property destroyed or damaged
prior to Closing, as determined in accordance with paragraph 8(b) below exceeds
256 acres, then either party may terminate this Agreement, whereupon Escrow
Agent shall return the Xxxxxxx Money to TCF and no party hereto will have any
further rights, duties or obligations hereunder, other than those which
expressly survive a termination hereof.
(e) The parties acknowledge that the deletion by TCF from the
transaction of any real property pursuant to Paragraphs 5(b) or 7 hereof (the
"Excluded Acres") may require a subdivision of such Excluded Acres from certain
other tracts TCF intends to acquire at Closing. Seller shall retain at Closing
such Excluded Acres and the least amount of acreage contiguous
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with such Excluded Acres as is necessary to create a legal parcel for which no
subdivision is required (the "Additional Acres") and subject to the provisions
of Paragraph 5(d), the Purchase Price will be reduced on account of Seller's
retention of the Additional Acres by an amount equal to the product of the
number of acres contained within the Additional Acres multiplied by the quotient
of the Purchase Price divided by the acreage contained in the Real Property as
determined in accordance with Paragraph 4 above.
6. Inspection. TCF will have from the date of this Agreement
until the expiration of the Inspection Period to inspect the Real Property and,
among other things, to perform timber cruises, environmental evaluations and
verify compliance with applicable laws, ordinances and regulations. TCF and its
agents, representatives, employees, engineers and contractors will have the
right to enter upon the Real Property to inspect, examine, survey and make test
borings, soil bearing tests, timber cruises and other engineering tests or
surveys which it may deem necessary or advisable. Prior to entering upon the
Property to conduct such activities, TCF shall deliver to Seller certificates of
commercial general liability insurance with coverage amounts not less than
$l,000,000 on an occurrence basis showing Seller as an additional insured
thereunder. TCF hereby agrees to return the Real Property to substantially the
same condition that existed prior to Purchaser's activities. TCF further agrees
to indemnify and hold Seller harmless for any and all cost and expense resulting
from claims or damages caused by said inspections, examinations and tests. Upon
full execution of this Agreement, Seller will make available to TCF, its agents,
contractors and representatives, at Seller's offices all non-privileged,
non-proprietary materials relating to the Real Property in the possession of
Seller or its agents or attorneys, including without limitation, all aerial
photographs, maps, charts, existing surveys, timber cruises, previous deeds,
leases, reports, timber type maps, timber inventories, soil maps, growth and
yield information, harvest schedules, and timber bid customer lists relating
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to the Real Property. In the event TCF, after using commercially reasonable
efforts, is not able to complete its due diligence inspections of the Property
prior to the expiration of the Inspection Period, TCF shall have the right, upon
written notice to Seller delivered prior to the expiration of the Inspection
Period to extend the Inspection Period for an additional ten (10) days. In such
event, the Closing Date shall be postponed to a mutually acceptable date not
later than the date which is twenty (20) days after the expiration of the
Inspection Period, as extended hereunder. In the event TCF in its sole and
absolute discretion is not satisfied for any reason whatsoever with the
Property, then TCF may terminate this Agreement by delivering written notice to
Seller at my time prior to the expiration of the Inspection Period, whereupon
Escrow Agent shall return the Xxxxxxx Money to TCF and no party will have any
further rights, duties or obligations under this Agreement other than those
which expressly survive a termination hereof. In such event, TCF shall promptly
deliver to Seller, without representation or warranty, all title materials,
environmental reports and other third party reports (other than any appraisal or
cruise results) obtained by TCF in connection with its inspections or
investigations of the Property.
7. Environmental Audit. TCF will have the right at any time
before the expiration of the Inspection Period to perform or cause to be
performed, at TCF's expense, a non-invasive environmental audit or assessment
of the Real Property. In the event that such audit or assessment reveals that
(i) any portion of the Real Property has ever been used as a landfill to receive
solid wastes; (ii) has been affected by or contains any underground storage tank
or storage facility; (iii) has ever been used for dumping, discharge, treatment,
storage of hazardous wastes or hazardous substances; (iv) is in violation of any
law, ordinance, notice requirement, rule or regulation because of its
environmental and/or ecological condition; or (v) is identified by TCF's
consultant as a "high risk" parcel or acre (in each instance, an "Environmental
Defect"), TCF shall promptly notify Seller and, subject to the provisions of
paragraph 5(d) and (e) above,
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TCF may delete the portion of the Real Property subject to such Environmental
Defect from the real property conveyed by Seller to TCF at the Closing, and the
Purchase Price will be reduced by an amount equal to the product of the number
of acres contained within such deleted portion multiplied by the quotient of the
Purchase Price divided by the acreage contained in the Real Property as
determined in accordance with paragraph 4 hereof. In the event TCF notifies
Seller of any Environmental Defect, Seller, at its election, may adjourn the
Closing until the date which is twenty (20) days after the scheduled Closing
Date to allow the parties adequate time to properly document the transactions
contemplated herein. In the event TCF objects to any Environmental Defect, TCF
shall provide Seller with a copy of any environmental audit, assessment or
report forming the basis for TCF's objection.
8. Condition of Property; Damage; Condemnation.
(a) Seller agrees that at the Closing the Property will be in
substantially the same condition as exists on the date hereof, subject to
condemnation and casualties beyond Seller's control and Seller's harvest of
timber in the ordinary course of business. During the pendency of this
Agreement, Seller shall not materially accelerate the volume of timber or the
species harvested relative to Seller's past practices. All risk of loss to the
Property or any part thereof prior to the Closing will be borne entirely by
Seller. Except for timber harvesting conducted in the ordinary course of
Seller's business, Seller will neither cut or remove nor permit the cutting or
removal of any timber or trees or the mining of any oil, gas, gravel or other
minerals located on the Real Property without the prior consent of TCF, which
consent shall not be unreasonably withheld or delayed so long as such action by
Seller does not materially impair the value or TCF's contemplated use of the
Property. Seller shall keep detailed records on a load by load basis by species
and category of the volume of timber harvested after the effective date of this
Agreement and prior to Closing. Five (5) days prior to Closing (the "Adjustment
Date"),
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an officer of Seller with knowledge of such matters shall deliver a certificate
setting forth the total volume by species harvested by Seller during the
pendency of this Agreement. The Purchase Price shall be reduced on account of
such harvested timber by an amount equal to the sum of the products of the
volume of each species and category of timber harvested multiplied by the
applicable unit value for such species and category set forth on Exhibit F
attached hereto and hereby made a part hereof. Within five (5) days after
Closing, the Seller shall deliver to TCF another certificate setting forth the
total volume by species harvested by Seller between the Adjustment Date and the
Closing date, and shall deliver to TCF, or its assignee a check for the value of
the timber harvested during such period, calculated in the same manner as
described above.
(b) If at my time prior to the Closing, the Property or any
material part thereof (including, but not limited to, any timber or trees which
are included as part of the Property) is destroyed or damaged by fire or other
casualty, then TCF, subject to the provisions of paragraph 5(d) above, shall
purchase the Property, whereupon the Purchase Price will be reduced as mutually
agreed by Seller and TCF, or, in the event such parties are unable to agree
within fifteen (15) days after TCF's receipt of notice of the occurrence of such
damage or destruction, the Purchase Price will be reduced by an mount determined
in accordance with the procedures set forth in paragraph 29 hereof. TCF's option
under this paragraph 8(b) will be exercisable at any time on or before fifteen
(15) days after TCF's receipt of notice of the occurrence of such damage or
destruction and the date of Closing will be extended to the extent necessary to
permit the exercise of such option by TCF and the determination of the Purchase
Price reduction. For purposes of this paragraph 8(b), a "material" part of the
Property shall mean damage to the Property prior to Closing having an aggregate
value, in TCF's good faith estimate, equal to or exceeding $50,000.
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(c) If at any time prior to the Closing, any action or proceeding
is filed or threatened under which the Real Property or any part thereof may be
taken pursuant to any law, ordinance or regulation by condemnation or the right
of eminent domain, then TCF shall purchase the Real Property pursuant to this
Agreement, notwithstanding such action or proceeding, and receive a credit
against the Purchase Price in the amount of all proceeds of any awards paid to
Seller with respect to the Real Property, or if such amounts have not been paid
to Seller as of the Closing, Seller shall assign all of its rights to any such
proceeds or awards.
9. Warranties and Representations.
(a) Seller hereby warrants and represents to TCF as follows:
(i) Seller owns good and marketable fee simple title to
the Real Property, and will convey such title at the Closing by special
warranty deed subject only to the Permitted Encumbrances.
(ii) Attached hereto as Exhibit B and hereby made a part
hereof is a true and accurate summary of all leases, timber service
agreements, licenses, permits, contracts and agreements affecting the
Real Property; the Leases remain in full force and effect, and have not
been modified or amended, and except as set forth on Exhibit B, no
consent is required to be obtained to assign Seller's right, title and
interest in, under and to the Leases to TCF and to Seller's actual
knowledge neither party thereto is in default in the observance or
performance of any of its duties or obligations thereunder.
(iii) There are no outstanding mineral leases affecting the
Real Property and, to Seller's actual knowledge there are no current
commercial mining activities occurring on the Red Property and no
mining permits are currently issued and outstanding with respect to the
Real Property or any portion thereof.
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(iv) There is no pending or, to Seller's actual knowledge,
threatened action or proceeding (including, but not limited to, any
condemnation or eminent domain action or proceeding) before any court,
governmental agency or arbitrator which may adversely affect Seller's
ability to perform this Agreement or which may affect the Real
Property.
(v) To Seller's actual knowledge, the Real Property is in
compliance with all statutes, ordinances, rules, regulations, orders
and requirements of all federal, state and local authorities and any
other governmental entity having jurisdiction over the Real Property;
and Seller has not received any notice from any such governmental
entity of any violation of any of the aforesaid statutes, ordinances,
rules, regulations, orders and requirements.
(vi) Seller has the full capacity, power and authority to
enter into this Agreement and fully perform its obligations hereunder,
subject however to the final approval by its Board of Directors at its
next regularly scheduled meeting currently planned to be held on
December 17, 2002, and the final approval of its parent corporation's
Board of Directors at its next regularly scheduled meeting, currently
planned to be held on December 18, 2002.
(vii) This Agreement and the performance hereof by Seller
will not contravene any law or contractual restriction binding on
Seller.
(viii) Subject to subparagraphs (vi) and (ix) herein, Seller
has the full right, power, and authority to enter into and perform this
Agreement; and no consent, approval, order or authorization of any
court or other governmental entity is required to be obtained by Seller
in connection with the execution and delivery of this Agreement or the
performance hereof by Seller.
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(ix) This Agreement has been duly executed and delivered
by Seller and is subject to approval by Seller's Board of Directors and
P. H. Glatfelter's Board of Directors, which, if granted; constitutes
the valid and binding obligation of Seller, enforceable against Seller
in accordance with its terms subject to applicable bankruptcy,
insolvency and other similar laws affecting the enforceability of
creditors' rights generally and the discretion of the courts with
respect to equitable remedies.
(x) No portion of the Real Property has ever been used by
Seller or by any third party with the affirmative consent of Seller as
a land fill or as a dump to receive garbage, refuse, or waste, whether
or not hazardous, and to Seller's actual knowledge there is and has
been no Hazardous Waste stored, handled, installed or disposed in, on
or about the Real Property. For purposes of this warranty, the term
"Hazardous Waste" means any such materials, waste, contaminates,
petroleum, crude oil or any fraction thereof or other substances as
defined by cumulative reference to the following sources as amended
from time to time: (i) the Resource Conservation and Recovery Act of
1976, 42 USC Section 6901 et. seq. (RCRA); (ii) the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, 42 USC
Section 9601 et. seq. (CERCLA); (iii) the Hazardous Materials
Transportation Act, 49 USC Section 1801, et. seq.; (iv) applicable laws
of the State of Maryland; and (v) any federal, state or local
regulations, rules or orders issued or promulgated under or pursuant to
any of the foregoing or otherwise by any department, agency or other
administrative, regulatory or judicial body. To Seller's actual
knowledge there are no underground storage tanks situated in the
Property nor have such tanks been previously situated thereon.
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(xi) To Seller's actual knowledge, the Real Property is in
substantially the same condition as existed on the date TCF inspected
the Real Property. Since such date, there has been no material
destruction or damage to the Real Property or any part thereof or any
improvements, timber or trees thereon by fire or other casualty.
(xii) The Property does not constitute an asset of an
employee benefit plan affiliated with Seller, as defined in Section
3(3) of ERISA.
(xiii) No party other than Seller has any right to conduct
timbering operations on the Real Property or any right, title or
interest in and to any timber located on the Real Property.
(xiv) To Seller's actual knowledge, the present use of the
Real Property for the purpose of harvesting timber or any related
purpose does not pose a danger to any Endangered Species, Critical
Habitat or Habitat that would expose TCF to any liability under any
applicable federal, state or local laws. For purposes of this warranty,
the terms "Endangered Species", "Critical Habitat" and "Habitat" mean
any such animal, vegetation, flora, fauna, other wildlife, ecosystem or
geographic region as defined by cumulative reference to the following
sources as amended from time to time: (i) the Endangered Species Act of
1973, 16 USC Section 1531, et. seq.; (ii) the applicable law of the
State of Maryland, and (iii) any federal, state or local regulations,
rules, or orders issued or promulgated under or pursuant to any of the
foregoing or otherwise by any department, agency or other
administrative, regulatory or judicial body.
(xv) Seller hereby certifies that the sale of the Property
does not represent a transfer of all or substantially all of the assets
of Seller.
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All warranties and representations will be true as of the date of this Agreement
and, as of the date of the Closing. As used herein, the term "Seller's actual
knowledge" means the actual knowledge of Xxxxx Xxxxxxxxx and Xxxxxx X. Xxxxx,
the individual officers or employees of Seller having day-to-day responsibility
for the oversight, management and operation of the Property. The foregoing
representations and warranties shall survive the Closing for a period of twelve
(12) months from and after the Closing Date.
(xvi) Except for the foregoing representations and
warranties, the Property is being conveyed hereunder as-is, where-is, without
any representations or warranties, express or implied.
(b) Seller hereby agrees to indemnify and hold harmless TCF from
and against any liability, cost, damage, loss, claim, expense or cause of action
(including but not limited to reasonable attorneys' fees and court costs)
incurred by or filed against TCF as a direct result of any breach of any of the
warranties or representations by Seller contained in this paragraph 9. The
foregoing indemnity shall survive the Closing for a period of twelve (12) months
after the Closing Date; provided, however, such indemnity shall continue with
respect to any breach of warranty or representation by Seller for which TCF has
brought a claim against Seller during such twelve (12) month period.
(c) TCF hereby warrants and represents to Seller as follows:
(i) TCF is a non-profit corporation organized in
accordance with Section 501(c)(3) of the Internal Revenue Code and is
existing and in good standing under the laws of the State of Maryland;
(ii) TCF has the full right, power and authority to enter
into this Agreement; and, with the exception of approval of this
transaction by TCF's Board of Directors, no consent, approval, order or
authorization is required to be
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obtained by TCF in connection with the execution and delivery of this
Agreement or the performance hereof by TCF; and
(iii) This Agreement has been duly executed by TCF and
constitutes the valid and binding obligation of TCF, enforceable
against TCF in accordance with its terms, subject to applicable
bankruptcy, insolvency and other similar laws affecting the
enforceability of creditors' rights generally and the discretion of the
courts with respect to equitable remedies.
10. Brokerage Commission. Seller and TCF each warrant and
represent to the other that neither has incurred any liability for any brokerage
fee or commission in connection with the execution and delivery of this
Agreement or the consummation of the transactions contemplated hereby. Seller
and TCF each agree to indemnify and hold harmless the other from any and all
damage, loss, liability, expense and claim (including but not limited to
attorneys' fees and court costs) arising with respect to any such fee or
commission which may be suffered by the indemnified party by reason of any
action or agreement of the indemnifying party.
11. Taxes: Expenses.
(a) Ad valorem real property taxes on the Real Property, special
assessments, utility charges (if any) and all rental payments with respect to
the Leases will be prorated as of the date of Closing. If actual tax bills for
the calendar year of Closing are not available, said taxes will be prorated
based on tax bills for the previous calendar year and the parties hereto agree
to cause a reproration of said taxes upon the receipt of tax bills for the
calendar year of Closing. Seller will pay all timber taxes, severance taxes and
any other taxes imposed with respect to timbering operations on the Real
Property prior to the date of Closing and all income and/or capital gains taxes
attributable to the sale of the Real Property, if any. Seller shall be
responsible for any "roll back" taxes or similar taxes that relate to periods
prior to the Closing
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and arise as a direct result of the consummation of the transactions
contemplated hereunder. TCF shall be responsible for any "roll back" taxes or
similar taxes imposed due to a change in the use of the Real Property by TCF
after the Closing.
(b) TCF will pay the cost of TCF's inspection of the Real
Property, the costs of the title examination and preparation of the Title
Commitment, the title insurance premium with respect to any owner's policy of
title insurance obtained by TCF and recording fees in connection with the
recordation of the deeds delivered at Closing. TCF will also pay one-half of all
transfer taxes and/or recordation taxes imposed in connection with the
recordation of the deeds delivered at Closing.
(c) Seller will provide for and pay the costs associated with the
preparation of Seller's special warranty deeds and will pay one-half of all
transfer taxes in connection with the transfer of the Property and/or
recordation taxes and the recordation of the deeds delivered at Closing. Seller
shall pay all other taxes assessed in connection with the transfer of the
Property. Seller shall pay all additional costs, fees and expenses incurred by
TCF that would not otherwise have arisen in connection with Seller's sale of the
Property to TCF on a non-installment sale basis, including reasonable attorneys
fees not to exceed $25,000, incurred by TCF in connection with the installment
sale structure of the transaction.
(d) Each party will pay its respective costs and expenses of legal
representation.
12. Conditions. Unless waived by TCF, the obligations of TCF under
this Agreement are expressly made subject to the fulfillment in all respects of
the following conditions precedent:
(i) the truth and accuracy in all material respects as of
the date of the Closing of each and every warranty and representation
herein made by Seller;
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(ii) Seller's timely performance of and compliance with
each and every term, condition, agreement, restriction and obligation
to be performed and complied with by Seller under this Agreement;
(iii) TCF's receipt at Closing of an owner's policy of
title insurance in the amount of the Purchase Price and otherwise in
form and substance reasonably satisfactory to TCF;
(iv) TCF shall have received prior to Closing the Maryland
Board of Public Works approval of the transactions contemplated herein
and public funds will be available at Closing; and
(v) TCF's Board of Directors will have approved the
transaction at its regularly scheduled meeting on December 16, 2002.
(vi) The approval of this transaction by Seller's Board of
Directors at its regularly scheduled meeting on December 17, 2002 and
the approval of this transaction by the Board of Directors of Seller's
parent, P. H. Xxxxxxxxxx, at its regularly scheduled meeting on
December 18, 2002.
[CONTINUED ON NEXT PAGE]
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In the event any of the above conditions are not satisfied on or before
Closing, TCF will have the right, exercisable at TCF's sole election, to cancel
this Agreement whereupon Escrow Agent shall return the Xxxxxxx Money to TCF and
neither party hereto will have any further rights or obligations hereunder.
Notwithstanding the foregoing, if the condition set forth in subparagraph (iv)
above is not satisfied, or if TCF is otherwise unable for any other reason to
raise by the Closing $37,850,000 for acquisition of the Real Property as
contemplated herein, this Agreement shall be terminated, the Xxxxxxx Money
Deposit shall be paid to the Seller and neither party hereto will have any
further rights or obligation hereunder.
13. Mutual Condition. Unless waived by Seller and TCF, the
obligations of Seller and TCF under this Agreement are expressly made subject to
Seller and TCF negotiating and agreeing to the terms of: 1) a timber supply
agreement ("TSA") to be granted to Seller at Closing and 2) completing Exhibit
B, Exhibit D and Exhibit E of this Agreement; and 3) favorable opinions from
both parties' tax advisors or counsel regarding the structuring of this
transaction as a bargain sale and installment sale. The TSA shall commence at
Closing and terminate on December 31, 2010. The TSA shall be subject and
subordinate to any conservation easement granted by TCF contemporaneously with
Closing, which conservation easement is subject to Seller's prior written
approval, which approval shall not be unreasonably withheld or delayed so long
as such conservation easement does not materially interfere with Seller's rights
to harvest timber pursuant to the TSA.
14. Default; Remedies; Escrow Agent.
(a) If the purchase and sale of the Real Property is not
consummated because of a breach by TCF in the performance or observance by TCF
of any of its material covenants or obligations under this Agreement, then
Escrow Agent shall pay the Xxxxxxx Money to Seller as full liquidated damages
(the parties hereto acknowledging that Seller's damages as a result of
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such default are not capable of exact ascertainment and that said liquidated
damages are fair and reasonable), said remedy being Seller's sole and exclusive
remedy hereunder on account of any default by TCF, whereupon this Agreement will
terminate and neither party will have any further rights, duties or obligations
hereunder, other than those which expressly survive a termination hereof.
(b) If the purchase and sale of the Property contemplated hereby
is not consummated because of a breach by Seller in the performance or
observance by Seller of any of its material covenants or obligations under this
Agreement, then TCF shall be entitled to damages in an amount equal to TCF's
actual out of pocket expenses incurred in connection with the transactions
contemplated by this Agreement, which amount shall not exceed $200,000.
(c) The duties of Escrow Agent will be as follows:
(i) During the term of this Agreement, Escrow Agent will
hold the Xxxxxxx Money, upon the delivery by TCF to Escrow Agent of the
same, in an interest bearing account approved by TCF and will deliver
the Xxxxxxx Money in accordance with the terms and provisions of this
Agreement.
(ii) If this Agreement is terminated without the mutual
written agreement of Seller and TCF, or if Escrow Agent is unable to
determine at any time to whom the Xxxxxxx Money should be delivered, or
if a dispute develops between Seller and TCF concerning to whom the
Xxxxxxx Money should be delivered, then in any such event, Escrow Agent
will request joint written instructions from Seller and TCF and will
deliver the Xxxxxxx Money in accordance with such joint written
instructions. In the event that such written instructions are not
received by Escrow Agent within ten (10) days after Escrow Agent has
served a written request for instructions upon Seller and TCF, Escrow
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Agent will have the right to pay the Xxxxxxx Money into a court of
competent jurisdiction and interplead Seller and TCF in respect
thereof, and thereafter Escrow Agent will be discharged of any
obligations in connection with this Agreement.
(iii) If costs or expenses are incurred by Escrow Agent
because of litigation or a dispute between Seller and TCF arising out
of the holding of the Xxxxxxx Money in escrow, Seller and TCF will each
pay Escrow Agent one-half of such reasonable and direct costs and
expenses. Except for such costs and expenses, no fee or charge will be
due or payable to Escrow Agent for its services as escrow holder.
(iv) By joining herein, Escrow Agent undertakes only to
perform the duties and obligations imposed upon it under the terms of
this contract and expressly does not undertake to perform any of the
other covenants, terms and provisions incumbent upon Seller and TCF
hereunder.
(v) TCF and Seller hereby agree and acknowledge that
Escrow Agent assumes no liability in connection herewith except for
gross negligence or willful misconduct; that Escrow Agent will never be
responsible for the validity, correctness or genuineness of any
document or notice referred to under this Agreement; and that Escrow
Agent may seek advice from its own counsel and will be fully protected
in any action taken by it in good faith in accordance with the opinion
of its counsel.
15. Assignment. Prior to Closing, TCF will have the right to
assign its rights under this Agreement, in whole or in part, but only to an
organization or entity which would allow Seller to claim bargain sale treatment
of this transaction under the Internal Revenue Code,
22
would not cause Seller to incur any "roll back" taxes or increased transfer
taxes, and is previously approved by Seller in its reasonable discretion. Upon
such assignment TCF will be relieved of liability hereunder. Contemporaneously
with the Closing, TCF shall have the right to assign the provisions of this
Agreement which survive the Closing, in whole or in part, to the ultimate title
holders of the Property including, without limitation, an entity of the State of
Maryland and The Forestland Group, LLC or an affiliate thereof, provided that
the ultimate title holders assume said provisions which survive Closing and such
assignment does not cause Seller to incur any "roll back" taxes or increased
transfer tax, nor adversely impact bargain or Installment Sale considerations
herein.
16. No Waiver. No action or failure to act by any party hereto
will constitute a waiver of any right or duty afforded to such party under this
Agreement, nor will any such action or failure to act constitute an approval of
or acquiescence in any breach of this Agreement except as may be specifically
agreed in writing.
17. Governing Law. This Agreement will be governed by the laws of
the State of Maryland.
18. Notice. Any and all notices, elections and communications
required or permitted by this Agreement will be made or given in writing and
will be delivered in person, sent by facsimile with confirmed electronic
receipt, sent by reputable overnight courier or sent by postage prepaid United
States mail, certified or registered, return receipt requested, to the other
parties at the addresses set forth below, or such other address or facsimile as
may be furnished by notice in accordance with this paragraph. The date of notice
given by personal delivery will be the date of such delivery. The effective date
of notice by overnight courier or mail will be the date such notice is mailed.
23
Seller: Xxxxxxxxxx Pulp Xxxx Company
Attn: Vice President and General Manager
000 X. Xxxx Xxxxxx
Xxxxxx Xxxxx, XX 00000
Fax: (000) 000-0000
With copies to:
Glatfelter
Attn: Legal Department
00 Xxxxx Xxxxxx Xxxxxx, Xxxxx 000
Xxxx, XX 00000-0000
Fax: (000) 000-0000
And:
Glatfelter
Attn: Xxxx X. Xxxx, Treasurer
00 Xxxxx Xxxxxx Xxxxxx, Xxxxx 000
Xxxx, XX 00000-0000
Fax: (000) 000-0000
TCF: The Conservation Fund
000 Xxxxxxxxx Xxxxx
Xxxxx 0-X
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxx X. O'Day
Fax: (000) 000-0000
with a copy to: The Conservation Fund
0000 Xxxxx Xxxx Xxxxxx
Xxxxx 0000
Xxxxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxxxx Xxxxxxx
Fax: (000) 000-0000
with a copy to: Xxxxxxxxxx Xxxxxx & Xxxxxxx LLP
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxx X. Xxxxx
Fax: (000) 000-0000
Escrow Agent: Fidelity National Title Insurance Company
000 Xxxxxxxx Xxxxxxx, Xxxxx 0000
00
Xxxxxxx, XX 00000
Attention: Xxxxx Xxxx
Fax: (000) 000-0000
19. Entire Agreement. This Agreement contains the entire agreement
among the parties hereto With respect to the subject matter hereof and cannot be
amended or supplemented except by a written agreement signed by all parties.
20. Captions, The captions of paragraphs in this Agreement are for
convenience and reference only and are not part of the substance hereof.
21. Severability. In the event that any one or more of the
provisions, paragraphs, words, clauses, phrases or sentences contained in this
Agreement, or the application thereof in any circumstance is held invalid,
illegal or unenforceable in any respect for any reason, the validity, legality
and enforceability of any such provision, paragraph, word, clause, phrase or
sentence in every other respect and of the remaining provisions, paragraphs,
words, clauses, phrases or sentences of this contract, will not be in any way
impaired, it being the intention of the parties that this contract will be
enforceable to the fullest extent permitted by 1aw.
22. Duplicate Originals. This Agreement shall be executed in
duplicate originals, both of which will be construed as original documents.
23. Binding Effect. This Agreement will bind the parties hereto
and their respective heirs, legal representatives, successors and assigns.
24. Time of Essence. Time is of the essence of this Agreement.
25. Bargain Sale. Purchaser acknowledges that it is Seller's
intent to effectuate a "bargain sale" of the Property, i.e., a sale to a
charitable organization at a price below fair market value wherein the
difference is considered a charitable contribution under applicable sections of
the Internal Revenue Code. Seller acknowledges that the substantiation of a
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charitable contribution deduction rests exclusively with Seller but for
Purchaser's execution of Internal Revenue Service Form 8283.
26. Survival. With the exception of the indemnity set forth in
paragraph 9(b), she indemnities set forth herein will survive the Closing or any
termination of this Agreement indefinitely. The warranties and representations
set forth herein will survive the Closing for a period of twelve (12) months.
27. Waivers of Application of Title 42 U.S.C.A. Section 4601
and/or Just Compensation Under Applicable State Statutes. Purchaser may assign
this Agreement and its rights as Purchaser hereunder including the Xxxxxxx Money
by written assignment to a governmental agency or entity which assumes the
obligations of Purchaser hereunder, provided such entity is a qualified entity
for purposes of ensuring that the transactions contemplated hereunder qualify
under the Internal Revenue Code for bargain and Installment sale treatment and
do not cause Seller to incur any "roll-back" taxes or increased transfer tax.
Seller hereby waives any right to demand fair market value for the Property. In
addition, recognizing that this Agreement is made in order to procure lands for
public ownership and that condemnation will not be used in any way as part of
this transaction or in securing the Property, Seller hereby knowingly waives any
potential right to receive compensation for the Property consistent with the
requirements of either (i) Title II and Title III of the Uniform Relocation
Assistance and Real Property Acquisition Policies Act of 1970, Title 42 U.S.C.A.
Section 4601, et seq. (Public Law 91-646, as amended) including those provisions
relating to incidental expenses incurred by Seller and/or (ii) applicable state
statutes and regulations. Seller makes this waiver knowing that a governmental
agency or entity may ultimately own the Property and/or that a governmental
agency or entity may be an assignee of this Agreement.
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28. Saturdays, Sundays, Holidays. If the final date of any time
period of limitation set out in any provision of this agreement falls on a
Saturday, Sunday or a legal holiday under the laws of the state in which the
Property is situated, then the time of such period shall be extended to the next
day which is not a Saturday, Sunday or legal holiday.
29. Resolution of Disputes. In the event Seller and TCF are unable
to agree as to the reduction of the Purchase Price set forth in paragraph 8(b)
hereof, Seller and TCF will each appoint an independent forestry consultant,
each of which may be a consultant previously engaged by the appointing party
with respect to the Real Property, and such two consultants will in turn select
a third independent forestry consultant to act with them in a panel to determine
the appropriate reduction of the Purchase Price. The panel of consultants will
reach a binding decision within thirty (30) days of the selection of the third
consultant, and the decision of the panel of consultants as to the reduction of
the Purchase Price will be final. Seller and TCF will each bear the cost of its
respective consultant and one-half (1/2) of the cost of the third consultant.
The date of Closing will be extended to the extent necessary to permit the final
decision of the panel of consultants.
30. Effective Date. The effective date of this Agreement will be
the date all parties hereto have executed this contract.
31. Incorporation of Exhibits. All exhibits referred to herein are
hereby incorporated in this Agreement by this reference.
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IN WITNESS WHEREOF, this contract has been duly executed, sealed and
delivered by the parties hereto the day and year first above written.
SELLER:
XXXXXXXXXX PULP XXXX COMPANY
By: /s/ X.X. Xxxxxxxx
---------------------------------------
Name: XXXXXX X. XXXXXXXX
Title: Vice President & Treasurer
TCF:
THE CONSERVATION FUND
By: /s/ Xxxx X. O'Day
---------------------------------------
Name: Xxxx X. O'Day
Title: Vice President & Regional Counsel
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