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PURCHASE AGREEMENT
BY AND BETWEEN
LOUISIANA-PACIFIC CORPORATION,
A DELAWARE CORPORATION,
LPS CORPORATION,
AN OREGON CORPORATION,
L-P REDWOOD, LLC,
A DELAWARE LIMITED LIABILITY COMPANY,
AND
SANSOME FOREST PARTNERS, L.P.,
A DELAWARE LIMITED PARTNERSHIP
DATED AS OF MAY 1, 1998
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PURCHASE AGREEMENT
TABLE OF CONTENTS
SECTION: PAGE:
RECITALS...........................................................................1
Article I DEFINITIONS........................................................................1
1.1 Certain Defined Terms..................................................................1
1.2 Other Defined Terms....................................................................6
Article II PURCHASE AND SALE OF ASSETS........................................................6
2.1 Sale of Certain Assets by Redwood, LLC.................................................6
2.2 Sale of Certain Other Assets...........................................................6
2.3 No Assignment in Certain Circumstances.................................................6
2.4 Assumed Liabilities....................................................................7
2.5 Retained Liabilities...................................................................8
2.6 Purchase Price and Payment; Deposit....................................................9
2.7 Note Arrangement......................................................................10
2.8 Liquidated Damages....................................................................10
2.9 Cash..................................................................................10
2.10 Disclaimer............................................................................11
Article III CLOSING...........................................................................11
3.1 Closing...............................................................................11
3.2 Louisiana-Pacific Obligations at Closing..............................................11
3.3 Buyer Obligations at Closing..........................................................13
Article IV REPRESENTATIONS AND WARRANTIES OF LOUISIANA-PACIFIC...............................14
4.1 Organization..........................................................................14
4.2 Authorization and Enforceability......................................................14
4.3 Consents and Approvals................................................................14
4.4 Non-Contravention.....................................................................15
4.5 Financial Statements..................................................................15
4.6 Absence of Certain Changes............................................................15
4.7 Title to the Personal Property........................................................16
4.8 Real Property.........................................................................17
4.9 Intellectual Property.................................................................18
4.10 Litigation............................................................................18
4.11 Employee Benefit Matters..............................................................18
4.12 Taxes.................................................................................19
4.13 Contracts and Commitments.............................................................19
4.14 Non-Environmental Permits and Other Operating Rights..................................19
4.15 Labor Matters.........................................................................20
4.16 No Brokers............................................................................20
4.17 Acquisition for Investment............................................................20
4.18 Use of the Assets.....................................................................20
Article V REPRESENTATIONS AND WARRANTIES OF BUYER...........................................20
5.1 Organization..........................................................................20
5.2 Authorization and Enforceability......................................................21
5.3 Consents and Approvals................................................................21
5.4 Non-Contravention.....................................................................21
5.5 Ability...............................................................................21
5.6 No Brokers............................................................................21
5.7 Net Worth.............................................................................22
5.8 Acquisition for Own Account...........................................................22
Article VI CERTAIN COVENANTS.................................................................22
6.1 Access to Information.................................................................22
6.2 Conduct of Business Pending Closing...................................................23
6.3 Authorizations........................................................................24
6.4 Books and Records.....................................................................25
6.5 Louisiana-Pacific Marks...............................................................26
6.6 Title Insurance.......................................................................26
6.7 Separation of Wood Treatment Facility.................................................26
6.8 Acknowledgements by Buyer.............................................................27
6.9 Public Announcements..................................................................28
6.10 Disclosure of Confidential Information................................................28
6.11 Right to Update Disclosure Schedule...................................................28
6.12 Assignment of Insurance Proceeds......................................................29
6.13 Revision to Disclosure Schedule.......................................................29
6.14 Certain Adjustments...................................................................29
6.15 No Shop...............................................................................30
6.16 Certain Update........................................................................30
Article VII CONDITIONS TO THE OBLIGATIONS OF BUYER............................................30
7.1 Accuracy of Representations and Warranties............................................30
7.2 Performance...........................................................................30
7.3 Termination of HSR Act Waiting Period.................................................30
7.4 Absence of Governmental Orders........................................................31
7.5 Timber Casualty.......................................................................31
7.6 Legal Opinion.........................................................................31
7.7 Joint Conditions......................................................................31
7.8 Consent to Assignment.................................................................31
7.9 Note..................................................................................31
7.10 Title.................................................................................31
Article VIII CONDITIONS TO THE OBLIGATIONS OF LOUISIANA-PACIFIC................................31
8.1 Accuracy of Representations and Warranties............................................31
8.2 Performance...........................................................................32
8.3 Termination of HSR Act Waiting Period.................................................32
8.4 Absence of Governmental Orders........................................................32
8.5 Legal Opinion.........................................................................32
8.6 Joint Conditions......................................................................32
8.7 Indemnity Obligation..................................................................32
8.8 Installment Sale Treatment............................................................32
Article IX INDEMNIFICATION...................................................................32
9.1 Survival of Representations and Warranties............................................32
9.2 Indemnification by Louisiana-Pacific..................................................32
9.3 Indemnification by Buyer..............................................................33
9.4 General Indemnification Provisions....................................................34
9.5 Limitations on Indemnification........................................................35
9.6 Waiver and Release....................................................................35
Article X TAX MATTERS.......................................................................36
10.1 Allocation of Purchase Price..........................................................36
10.2 Certain Taxes.........................................................................36
10.3 Buyer's Cooperation in a Section 1031 Exchange........................................37
Article XI EMPLOYEES AND EMPLOYEE BENEFIT PLANS..............................................37
11.1 Employment............................................................................37
11.2 Employee Transition Administration....................................................37
11.3 Vacation..............................................................................38
11.4 Vesting...............................................................................38
11.5 Cross-Indemnity for Certain Workers Compensation Claims...............................38
Article XII TERMINATION.......................................................................39
12.1 Termination...........................................................................39
12.2 Written Notice........................................................................39
12.3 Effect of Termination.................................................................39
12.4 Cure Right............................................................................40
Article XIII GENERAL PROVISIONS................................................................40
13.1 Expenses, Taxes, Etc..................................................................40
13.2 Notices...............................................................................40
13.3 Disclosure Schedule...................................................................41
13.4 Interpretation........................................................................42
13.5 Severability..........................................................................42
13.6 Assignment............................................................................42
13.7 No Third-Party Beneficiaries..........................................................43
13.8 Amendment.............................................................................43
13.9 No Other Remedies.....................................................................43
13.10 Further Assurances....................................................................44
13.11 Mutual Drafting.......................................................................44
13.12 Governing Law.........................................................................44
13.13 Jurisdiction; Waiver of Jury Trial....................................................44
13.14 Interest..............................................................................44
13.15 Counterparts..........................................................................44
13.16 Entire Agreement......................................................................44
PURCHASE AGREEMENT
INDEX TO EXHIBITS, SCHEDULES AND
DISCLOSURE SCHEDULE*
EXHIBITS: DESCRIPTION:
EXHIBIT 1.1-1..............................................Data Processing Transfer and Services Agreement
EXHIBIT 1.1-2..............................................................Form of Environmental Agreement
EXHIBIT 1.1-3....................................................................Form of Supply Agreements
EXHIBIT 2.7...................................................................................Form of Note
EXHIBIT 3.3(c).................................................Form of Assignment and Assumption Agreement
EXHIBIT 3.3(d)..................................................Form of Assignment and Assumption of Lease
EXHIBIT 3.3(g)....................................................Form of Designated Employee Offer Letter
EXHIBIT 6.1(b)....................................................................Form of Access Agreement
EXHIBIT 7.6........................................................Form of Louisiana-Pacific Legal Opinion
EXHIBIT 8.5....................................................................Form of Buyer Legal Opinion
SCHEDULES:
1.1..............................................................................................Contracts
2.4.........................................................................Additional Assumed Liabilities
2.5........................................................................Additional Retained Liabilities
2.6(d)........................................................................Adjustment to Purchase Price
10.1..........................................................................Allocation of Purchase Price
13.4(b)-1....................................................................Louisiana-Pacific's Knowledge
13.4(b)-2................................................................................Buyer's Knowledge
DISCLOSURE SCHEDULE:
SECTION 4.3.........................................................................Consents and Approvals
SECTION 4.5...........................................................................Financial Statements
SECTION 4.6.....................................................................Absence of Certain Changes
SECTION 4.7(a)(i).............................................................Non-Timber Personal Property
SECTION 4.7(a)(ii)................................................................Timber Personal Property
SECTION 4.8(a)....................................................................Non-Timber Real Property
SECTION 4.8(b)........................................................................Timber Real Property
SECTION 4.8(f)...............................................................Leases of Owned Real Property
SECTION 4.8(g)..........................................................................Map of Timberlands
SECTION 4.10....................................................................................Litigation
SECTION 4.11........................................................................Employee Benefit Plans
SECTION 4.12.........................................................................................Taxes
SECTION 4.13.....................................................................Contracts and Commitments
SECTION 4.14..........................................Non-Environmental Permits and Other Operating Rights
SECTION 4.15.................................................................................Labor Matters
SECTION 4.18...............................................................................Excluded Assets
* The Exhibits and Schedules to the Purchase Agreement have been omitted pursuant to Item 601(2) of
Regulations S-K. The registrant will furnish supplementally a copy of any omitted exhibit or schedule to
the Commission upon request.
PURCHASE AGREEMENT
TERMS NOT DEFINED IN SECTION 0
DEFINED TERM: SECTION:
"Adjusted Working Capital".................................................Section (i)1 of Schedule 2.6(d)
"Adjustment Schedule"......................................................Section (ii) of Schedule 2.6(d)
"Antitrust Authorities" ............................................................................6.3(d)
"Assumed Liabilities"..................................................................................2.4
"Assignment and Assumption Agreement"...............................................................3.2(d)
"Assignment and Assumption of Lease"................................................................3.2(c)
"Apportioned Obligations"..........................................................................10.2(a)
"Approval".............................................................................................2.3
"Balance Sheet Assets".................................................................................2.2
"Business Employee"................................................................................4.11(a)
"Buyer"...........................................................................................Recitals
"Buyer Indemnified Parties"............................................................................9.2
"Buyer Loss"...........................................................................................9.2
"Cash Amount".......................................................................................2.6(b)
"Closing Cash Payment"..............................................................................2.6(b)
"Closing"..............................................................................................3.1
"Closing Date".........................................................................................3.1
"Commitments".........................................................................................4.13
"Credit Enhancement Arrangement"....................................................................2.7(a)
"Deadline Date"....................................................................................12.1(b)
"Deductible"........................................................................................9.5(a)
"Deposit"...........................................................................................2.6(a)
"Distribution Business LLC"...........................................................................13.6
"Employee Benefit Plan"............................................................................4.11(a)
"Financial Statements".................................................................................4.5
"Formula Percentage"..................................................................................11.5
"Hired Employees".....................................................................................11.5
"Indemnitee"........................................................................................9.4(a)
"Indemnitor"........................................................................................9.4(a)
"Leased Real Property"..............................................................................4.8(e)
"Legal Division".......................................................................................6.7
"Losses"............................................................................................9.4(a)
"Louisiana-Pacific"...............................................................................Recitals
"Louisiana-Pacific Indemnified Parties"................................................................9.3
"Louisiana-Pacific Loss"...............................................................................9.3
"Louisiana-Pacific Marks"..............................................................................6.5
"LPS Corporation".................................................................................Recitals
"Non-Timber Leased Real Property"...................................................................4.8(a)
"Non-Timber Owned Real Property"....................................................................4.8(a)
"Non-Timber Personal Property"...................................................................4.7(a)(i)
"Non-Timber Real Property"..........................................................................4.8(a)
PURCHASE AGREEMENT
OTHER DEFINED TERMS
(CONTINUED)
DEFINED TERM: SECTION:
"Note Arrangement".....................................................................................2.7
"Note Assets".......................................................................................2.6(c)
"Owned Real Property"...............................................................................4.8(d)
"Permits".............................................................................................4.14
"Purchase Price"....................................................................................2.6(c)
"Purchased Assets......................................................................................2.1
"Leased Real Property"..............................................................................4.8(c)
"Owned Real Property"...............................................................................4.8(c)
"Personal Property".............................................................................4.7(a)(ii)
"Redwood, LLC"....................................................................................Recitals
"Retained Liabilities".................................................................................2.5
"Samoa, Inc.".....................................................................................Recitals
"Settlement Date".........................................................Section (iii) of Schedule 2.6(d)
"Xxxxxxx".........................................................................................Recitals
"Xxxxxxx Purchase Agreement"......................................................................Recitals
"Third Party Claims"................................................................................9.4(b)
"Timber Business LLC".................................................................................13.6
"Timber Leased Real Property".......................................................................4.8(b)
"Timber Owned Real Property"........................................................................4.8(b)
"Timber Personal Property"......................................................................4.7(a)(ii)
"Timber Real Property"..............................................................................4.8(b)
"Title Commitments"....................................................................................6.6
"Title Company"........................................................................................6.6
"Vehicles".........................................................................................6.14(c)
"Wood Treatment Business LLC".........................................................................13.6
"Wood Treatment Facility"..............................................................................6.7
"Wood Treatment Facility Property".....................................................................6.7
"Workers' Compensation Claims"........................................................................11.5
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PURCHASE AGREEMENT
PURCHASE AGREEMENT, dated as of May 1, 1998, by and among
Louisiana-Pacific Corporation, a Delaware corporation ("Louisiana-Pacific"), LPS
Corporation, an Oregon corporation and wholly-owned subsidiary of
Louisiana-Pacific ("LPS Corporation"), L-P Redwood, LLC, a Delaware limited
liability company and wholly-owned subsidiary of LPS Corporation ("Redwood,
LLC"), and Sansome Forest Partners, L.P., a Delaware limited partnership
("Buyer").
RECITALS
A. Louisiana-Pacific owns and operates a timber harvesting,
milling, wood treatment and distribution business located in Mendocino and
Sonoma counties and in Riverside, California, in part through Redwood, LLC.
B. Louisiana-Pacific and LPS Corporation desire to cause
Redwood, LLC to sell and assign to Buyer, and Buyer desires to purchase and
assume from Redwood, LLC, certain of the assets and liabilities of Redwood, LLC,
as provided in this Agreement.
C. Louisiana-Pacific desires to sell to Buyer, and Buyer
desires to purchase from Louisiana-Pacific certain assets from
Louisiana-Pacific, as provided in this Agreement.
D. Louisiana-Pacific and LPS Corporation desire to assign to
Buyer, and Buyer desires to assume from Louisiana-Pacific and LPS Corporation
certain liabilities of Louisiana-Pacific and LPS Corporation, as provided in
this Agreement.
E. Concurrently with the Closing hereunder, Louisiana-Pacific,
LPS Corporation, Redwood, LLC and Louisiana-Pacific Samoa, Inc., an Oregon
corporation ("Samoa, Inc."), desire to sell and assign certain assets and
liabilities to Xxxxxxx Timber Company, a Washington corporation ("Xxxxxxx"),
pursuant to a Purchase Agreement, dated the date hereof, among
Louisiana-Pacific, LPS Corporation, Redwood, LLC, Samoa, Inc., Xxxxxxx and
Xxxxxxx'x parent, Xxxxxxx Investment Company, a Washington corporation (the
"Xxxxxxx Purchase Agreement").
In consideration of the premises and the respective
representations, warranties and agreements herein contained, the parties hereto
hereby agree as follows:
ARTICLE I
DEFINITIONS
1.1 Certain Defined Terms. As used in this Agreement, the
following terms shall have the following meanings (such definitions to be
equally applicable to both the singular and plural forms of the terms defined):
"Action" means any claim, action, suit, audit, assessment or
arbitration, or any proceeding, in each case by or before any Governmental
Authority.
"Affiliate" has the meaning set forth in Rule 12b-2 of the
regulations under the Securities Exchange Act of 1934, as amended.
"Affiliated Group" means any affiliated group within the
meaning of Code ss.1504(a) or any similar group defined under a similar
provision of state, local or foreign law.
"Agreement" means this PURCHASE AGREEMENT, including all
schedules and exhibits hereto and the Disclosure Schedule, as such agreement may
be further amended from time to time as herein provided.
"Agreement Date" means the date hereof.
"Allowed Pre-Signing Changes" means changes relating to the
Business or to the Mendocino-Sonoma-Riverside Assets individually or
collectively that occur between the date of the Balance Sheet and the Agreement
Date and which do not result in the inaccuracy in any material respect of the
representations and warranties in Section 4.6.
"Allowed Pre-Closing Changes" means any changes relating to the
Business or to the Mendocino-Sonoma-Riverside Assets individually or
collectively that occur between the Agreement Date and the Closing Date that do
not result in a breach or violation in any material respect of Section 0.
"Ancillary Agreements" means the Environmental Agreement, the
Note and the Supply Agreements.
"Balance Sheet" means the unaudited balance sheet for the
Business as at March 7, 1998 set forth in Disclosure Schedule Section 4.5.
"Books and Records" means all of the following to the extent
pertaining to the conduct of the Business: books, records, manuals and other
materials, accounting books and records, general ledger, files, computer tapes,
advertising matter, catalogues, price lists, correspondence, mailing lists,
lists of customers and suppliers, distribution lists, photographs, production
data, sales and promotional materials and records, purchasing materials and
records, personnel records, credit records, manufacturing and quality control
records and procedures, blueprints, research and development files, data and
laboratory books, patent disclosures, media materials and plates, sales order
files, litigation files related to litigation that Buyer is assuming hereunder
and other documentation concerning the Real Property, the Personal Property, the
Contracts and the Permits, including, to the extent available, originals of
timber harvest plans, vehicle titles and licenses; provided however, that any of
the foregoing that relate to other businesses of Louisiana-Pacific or its
Affiliates shall not be deemed to be covered by the definition of "Books and
Records" but copies of the portions thereof that relate to the Business shall be
made available to Buyer.
"Business" means, collectively, the businesses conducted by
Louisiana-Pacific through Redwood, LLC prior to the Closing Date to the extent
related to the Mendocino-Sonoma-Riverside Assets subject to Allowed Pre-Closing
Changes.
"Bylaws" means a company's bylaws, code of regulations or
equivalent document.
"Charter" means a company's articles of association, articles
of incorporation, certificate of incorporation or equivalent organizational
documents.
2
"Code" means the Internal Revenue Code of 1986 and any
successor statute thereto, as amended.
"Confidentiality Agreement" means the letter agreement, dated
November 19, 1997, between Louisiana-Pacific and Buyer.
"Contracts" means all contracts, agreements and commitments
described on Schedule 1.1.
"Data Processing Transfer and Services Agreement" means the
Data Processing Transfer and Services Agreement, in the form attached as Exhibit
1.1-1.
"Disclosure Schedule" means the Disclosure Schedule with
respect to this Agreement and the Environmental Agreement, dated as of the date
hereof, delivered to Buyer by Louisiana-Pacific and forming a part of this
Agreement and the Environmental Agreement.
"Encumbrance" means any interest (including any security
interest), pledge, mortgage, lien, charge, adverse claim or other right of third
Persons.
"Environmental Agreement" means the Environmental Agreement, in
the form attached as Exhibit 1.1-2.
"Environmental Laws" means all federal, state and local laws,
regulations, ordinances, codes, policies, Governmental Orders and consent
decrees, and any judicial interpretations thereof, relating to pollution or
protection of the environment and natural resources, including the Endangered
Species Act (as defined in the Environmental Agreement) and those relating to
emissions, discharges, Releases or threatened Releases of Hazardous Material
into the environment (including ambient air, surface water, groundwater or
land), or otherwise relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transportation or handling of Hazardous Material.
As used herein, Environmental Laws means only those Environmental Laws as
amended and in effect on the Agreement Date.
"Environmental Permits" means all permits, approvals,
agreements with Governmental Authorities, identification numbers, licenses and
other authorizations required under or issued pursuant to any applicable
Environmental Law.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
"Governmental Authority" means any federal, state, municipal or
local government, governmental authority, regulatory or administrative agency,
governmental commission, department, board, bureau, agency or instrumentality,
court, tribunal, arbitrator or arbitral body.
"Governmental Order" means any order, writ, rule, judgment,
injunction, decree, stipulation, determination or award entered by or with any
Governmental Authority.
"Hazardous Material" means any substance, pollutant, material
or waste which is regulated under any Environmental Law, including any such
materials regulated as hazardous or
3
toxic substances or material, and asbestos, petroleum and any fraction or
product of crude oil or petroleum.
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements
Act of 1976, as amended, Section 7A of the Xxxxxxx Act, 15 U.S.C. ss. 18A, and
the regulations promulgated thereunder.
"IRS" means the U.S. Internal Revenue Service.
"Liabilities" means any and all debts, liabilities and
obligations of any nature whatsoever, whether accrued or fixed, absolute or
contingent, mature or unmatured or determined or indeterminable.
"Material Adverse Effect" means any event(s) with respect to,
change(s) in, effect(s) on, or state of facts affecting, the Purchased Assets
arising or existing on or prior to the Closing Date that, individually or in the
aggregate, would have an adverse effect (based on the Business as it was
conducted by Louisiana-Pacific and its Affiliates prior to the Closing Date) (i)
on the net income of the Business equal to $500,000 per year, which effect is
reasonably likely to continue on an annual basis for at least five years after
the Closing Date, or (ii) on the net assets of the Business equal to $10,000,000
or more. For purposes of the conditions to Closing set forth in Sections 7.1,
7.2, 8.1 and 8.2, and the Officer's Certificates delivered pursuant to
subsections 3.2(f) and 3.3(f), the determination of whether a breach of a
representation and warranty or covenant of this Agreement shall be deemed to
give rise to a Material Adverse Effect, shall be determined on a cumulative
basis by adding the effect of the breach of any such representation and warranty
or covenant to the effect of all other breaches of representations and
warranties and covenants of this Agreement for each of the applicable period or
periods to which each of such representations, warranties or covenants relate,
in all cases before applying the limitations set forth in the preceding
sentence, and then determining whether, for any of the applicable periods, such
aggregate sum exceeds the threshold set forth in the preceding sentence. For
purposes of this definition of Material Adverse Effect, the effect of any matter
as to any past period shall be determined based on its actual effect, and its
effect as to any future period shall be determined based on the effect that such
matter is reasonably likely to have.
"Mendocino-Sonoma-Riverside Assets" means the Real Property,
the Personal Property, the Contracts and the Permits, but excluding the assets
and properties designated as "excluded" on Disclosure Schedule Sections 4.8(g)
and 4.18.
"Note" means the promissory note to be delivered, at
Louisiana-Pacific's election, pursuant to Section 2.6(c).
"Permitted Liens" means any (a) mechanics', carriers', workers'
and other similar liens arising in the ordinary course of business and which in
the aggregate are not substantial in amount, and do not interfere with the
present use of the assets of the Business; (b) liens for current Taxes and
assessments, both general and special, and other governmental charges not yet
due and payable as of the Closing; (c) usual and customary non-monetary real
property Encumbrances; (d) liens securing those Liabilities relating to the
Business that are to become the responsibility of Buyer or any subsidiary or
Affiliate thereof as of the Closing in accordance with the terms of this
Agreement; (e) all land use restrictions (including
4
environmental, endangered species and wetlands), building and zoning codes and
ordinances, and other laws, ordinances, regulations, rules, orders, licenses or
determinations of any Governmental Authority, now or hereafter enacted, made or
issued by any such Governmental Authority affecting the Real Property; (f) all
easements (including conservation easements and public trust easements),
rights-of-way, road use agreements, covenants, conditions, restrictions,
reservations, licenses, agreements and other matters of record; (g) all
encroachments, overlaps, overhangs, unrecorded easements, variations in area or
measurement, rights of parties in possession, lack of access or any other
matters not of record which would be disclosed by an accurate survey or physical
inspection of the Real Property; (h) all electric power, telephone, gas,
sanitary sewer, storm sewer, water and other utility lines, pipelines, service
lines and facilities of any nature on, over or under the Real Property, and all
licenses, easements, rights-of-way and other agreements relating thereto; (i)
all existing public and private roads and streets (whether dedicated or
undedicated) including all rights of the public to use such roads and streets,
and all railroad lines and rights-of-way affecting the Real Property; (j) prior
reservations or conveyances of mineral rights or mineral leases of every kind
and character; (k) water rights (whether asserted by any Governmental Authority
or private party); (l) other imperfections of title, easements and encumbrances,
if any; and (m) with respect to any asset of the Business that consists of a
leasehold or other possessory interest in real property, all Encumbrances,
covenants, imperfections in title, easements, restrictions and other title
matters (whether or not the same are recorded) to which the underlying fee
estate in such real property is subject which were not created or incurred by
Louisiana-Pacific, LPS Corporation or Redwood, LLC; all of which clauses (a)
through (m) do not interfere materially with the operation of that portion of
the Business of the type currently conducted by Louisiana-Pacific or its
Affiliates on such property.
"Person" shall include any individual, trustee, firm,
corporation, partnership, limited liability company, Governmental Authority or
other entity, whether acting in an individual, fiduciary or any other capacity.
"Privileged Documents" means all documents (and compilations of
documents completed by, for or on behalf of counsel) that are subject to any
legal privilege, including the attorney-client privilege or the attorney work
product protection, which relate to any Action involving Louisiana-Pacific or
its Affiliates or other Liability for which Louisiana-Pacific or its Affiliates
may be responsible.
"Real Property" means collectively, the real property, fee or
leasehold, together with all improvements, fixtures and easements appurtenant
thereto, set forth on Disclosure Schedule Sections 4.8(a)-1, 4.8(a)-2, 4.8(b)-1
and 4.8(b)-2.
"Release" means any spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching, dumping or
disposing into the environment (including the abandonment or discarding of
barrels, containers and other closed receptacles containing any Hazardous
Material).
"Riverside Lease" means that certain Lease; dated March 1,
1997, by and between Louisiana-Pacific and Xxxx Xxxxxxx Mutual Life Insurance
Company with respect to the distribution center located in Riverside,
California.
5
"Supply Agreements" means the Supply Agreements, in the form
attached hereto as Exhibit 1.1-3.
"Tax" means any federal, state, local, or foreign income, gross
receipts, license, payroll, parking, employment, excise, severance, stamp,
occupation, premium, windfall profits, environmental (including taxes under Code
Sec. 59A), customs duties, capital stock, franchise, profits, withholding,
social security (or similar), unemployment, disability, real property, personal
property, sales, use, transfer, registration, value added, alternative or add-on
minimum, estimated tax, or other tax of any kind whatsoever, including any
interest, penalty, or addition thereto, whether disputed or not, including such
item for which Liability arises as a transferee or successor-in-interest,
including Liability therefor as a transferee or successor-in-interest.
"Tax Return" means any return, declaration, report, claim for
refund, information return or statement relating to Taxes, including any
schedules or attachments thereto, and including any amendment thereof.
1.2 OTHER DEFINED TERMS. In addition to the terms defined in
Section 1.1, certain other terms are defined elsewhere in this Agreement and,
whenever such terms are used in this Agreement, they shall have their respective
defined meanings. A table of such terms appears after the table of contents.
ARTICLE II
PURCHASE AND SALE OF ASSETS
2.1 SALE OF CERTAIN ASSETS BY REDWOOD, LLC. Subject to the
terms and conditions herein set forth and in consideration of the payment of the
Purchase Price, at the Closing Louisiana-Pacific and LPS Corporation shall cause
Redwood, LLC to sell, assign, transfer and deliver to Buyer (or its permitted
assigns pursuant to Section 13.6), and Buyer (or its permitted assigns pursuant
to Section 13.6) shall purchase from Redwood, LLC, all of Redwood, LLC's right,
title and interest, existing as of the Closing, in and to the
Mendocino-Sonoma-Riverside Assets subject only to Allowed Pre-Signing Changes
and Allowed Pre-Closing Changes, but excluding the Humboldt-Trinity-Samoa Assets
(as defined in the Xxxxxxx Purchase Agreement) (together with the Balance Sheet
Assets defined below, the "Purchased Assets").
2.2 SALE OF CERTAIN OTHER ASSETS. Subject to the terms and
conditions herein set forth and in consideration of the payment of the Purchase
Price, at the Closing, Louisiana-Pacific and Redwood, LLC shall sell, assign,
transfer and deliver to Buyer (or its permitted assigns pursuant to Section
13.6) and Buyer (or its permitted assigns pursuant to Section 13.6) shall accept
and acquire from Louisiana-Pacific and Redwood, LLC, all of the current assets
of the Business as reflected on the Balance Sheet (other than cash or cash
equivalents), subject only to Allowed Pre-Signing Changes and Allowed
Pre-Closing Changes (the "Balance Sheet Assets").
2.3 NO ASSIGNMENT IN CERTAIN CIRCUMSTANCES. Notwithstanding any
provision (other than Section 7.8) in this Agreement to the contrary, this
Agreement shall not constitute an agreement to sell, convey, assign, transfer or
deliver any interest in any instrument, commitment, contract, lease, license,
permit or other agreement or arrangement or any claim, right or benefit arising
thereunder or resulting therefrom to the extent that such a transfer or an
6
attempt to make such a transfer without the authorization, approval, consent or
waiver (collectively, "Approval") of a third Person would constitute a breach or
violation thereof, or affect adversely the rights of Buyer, Louisiana-Pacific or
Redwood, LLC thereunder, or constitute a Material Adverse Effect; and any such
transfer to Buyer that requires the Approval of a third Person shall be made
subject to such Approval being obtained. Louisiana-Pacific shall, unless Buyer
otherwise directs Louisiana-Pacific in writing with respect to certain
Approvals, use its commercially reasonable efforts to obtain any such Approval
prior to the Closing Date, and Buyer shall cooperate therewith. In the event
that any such Approval is not obtained on or prior to the Closing Date,
Louisiana-Pacific shall, for a period of six months thereafter, continue to use
its commercially reasonable efforts to obtain any such Approval and cooperate
with Buyer in any reasonable and lawful arrangement to provide that Buyer or
Buyer's designee shall receive all of Louisiana-Pacific's right, title and
interest in any Contract with respect to which such Approval is required,
including performance by Louisiana-Pacific, as agent; provided, however, that
Louisiana-Pacific shall not be obligated to commence or prosecute any Action or
pay any amount to any third Person other than any consent or assignment fees
expressly set forth in the Contracts, which shall be paid by Louisiana-Pacific.
2.4 ASSUMED LIABILITIES. Except as provided in Section 2.5, at
the Closing, Buyer shall assume and agree to thereafter perform when due and
discharge, without any recourse to Louisiana-Pacific, LPS Corporation, Redwood,
LLC or any of their Affiliates, the following liabilities and obligations of
Louisiana-Pacific, LPS Corporation and Redwood, LLC, as applicable (the "Assumed
Liabilities"):
(a) Accounts Payable. Any Liability for those accounts payable
of Louisiana-Pacific or Redwood, LLC arising out of the operation of the
Business to the extent (i) reflected on the Balance Sheet or (ii) arising from
Allowed Pre-Signing Changes or Allowed Pre-Closing Changes, all of which
Liabilities will be reflected in the adjustment to the Purchase Price as set
forth in subsection 2.6(d).
(b) Contract Advances. Any Liability or credit owing from
Louisiana-Pacific or Redwood, LLC for deposits, prepayments or advances paid to
Louisiana-Pacific or Redwood, LLC with respect to the Contracts to the extent
(i) reflected on the Balance Sheet or (ii) arising from Allowed Pre-Signing
Changes or Allowed Pre-Closing Changes, all of which Liabilities will be
reflected in the adjustment to the Purchase Price as set forth in subsection
2.6(d).
(c) Other Balance Sheet Liabilities. In addition to the
foregoing, any other Liabilities of Louisiana-Pacific or Redwood, LLC arising
out of the operation of the Business to the extent (i) reflected on the Balance
Sheet or (ii) arising from Allowed Pre-Signing Changes or Allowed Pre-Closing
Changes, all of which Liabilities will be reflected in the adjustment to the
Purchase Price as set forth in subsection 2.6(d); provided, however, that (other
than the capital lease liabilities set forth thereon) Buyer shall not assume any
long-term liabilities set forth on the Balance Sheet or other long-term
liabilities that would otherwise be included in a balance sheet for matters
occurring after the date of the Balance Sheet and before the Closing Date.
(d) Contract Obligations. Any Liability for obligations that
first become due to be performed on or after the Closing Date under the
Contracts, and any additional contracts, agreements or commitments entered into
by Louisiana-Pacific or Redwood, LLC to the extent entry into such additional
contracts, agreements or commitments is permitted as an Allowed Pre-
7
Closing Change but only to the extent that any required Approval for assignment
and assumption of such Contracts or additional contracts has been obtained, or
to the extent Buyer is otherwise receiving the economic benefits under such
Contracts or additional contracts.
(e) Product Liability. Any Liability for bodily injury or
property damage arising from occurrences on or after the Closing as a result of
any alleged or actual defects in products of the Business designed, manufactured
or assembled by or on behalf of Louisiana-Pacific or Redwood, LLC, other than
such Liability relating to a product shipped or sold or service rendered by
Louisiana-Pacific or Redwood, LLC or their Affiliates prior to the Closing.
(f) Litigation Matters. Any Liability arising with respect to
matters disclosed to Buyer in Disclosure Schedule Section 4.10 for the Purchase
Agreement delivered to Buyer on the Agreement Date, as well as those Liabilities
arising with respect to matters arising after the Agreement Date and disclosed
to Buyer on a supplement to Disclosure Schedule Section 4.10 delivered to Buyer
on or prior to the Closing Date pursuant to Section 6.11, to the extent the
amount or value in controversy with respect to such new matters shall not be
reasonably likely to exceed $75,000 individually or $500,000 in the aggregate.
(g) Schedule of Additional Assumed Liabilities. Any additional
Liabilities of Louisiana-Pacific or Redwood, LLC to the extent set forth on
Schedule 2.4, including the reforestation and other obligations described
therein.
2.5 RETAINED LIABILITIES. All liabilities and obligations of
Louisiana-Pacific, LPS Corporation and Redwood, LLC other than those
specifically set forth in Section 2.4 (the "Retained Liabilities") shall remain
the responsibility of Louisiana-Pacific, except as provided in the Environmental
Agreement, and shall not be assumed by Buyer pursuant to this Agreement. The
Retained Liabilities shall not include the specific liabilities set forth in
Section 2.4 but shall otherwise include the following liabilities:
(a) Benefit Plans. Any Liability (including liabilities for
taxes, penalties, excise taxes, claims incurred and benefits accrued, to any
Person, including the IRS, the Department of Labor, the Pension Benefit Guaranty
Corporation, any employee, plan participant or beneficiary) with respect to any
"employee benefit plan" maintained, administered or contributed to by
Louisiana-Pacific or any trade or business (whether or not incorporated) that is
a member of a "controlled group" of which Louisiana-Pacific is a member or under
"common control" with Louisiana-Pacific (within the meaning of Section 414(b)
and (c) of the Code), but excluding (i) any Liability for which Buyer is, or
would become, liable in the absence of the transaction contemplated hereby and
(ii) any Liabilities expressly assumed by Buyer in Section 2.4. As used in this
subsection, the term "employee benefit plan" means "employee benefit plan" as
defined in Section 3(3) of ERISA, including any multiemployer plan as defined in
Section 3(37) of ERISA, and any bonus, deferred compensation, performance
compensation, stock purchase, stock option, stock appreciation, salary
continuation, sick leave, holiday pay, fringe benefit, personnel policy,
reimbursement program, incentive, insurance, welfare or similar plan, program,
policy or arrangement, whether or not disclosed under Disclosure Schedule
Section 4.11.
(b) Schedule of Additional Retained Liabilities. Any additional
Liabilities of Louisiana-Pacific or Redwood, LLC to the extent set forth on
Schedule 2.5(b).
8
2.6 Purchase Price and Payment; Deposit.
(a) On or before the Agreement Date, Buyer shall have paid to
Redwood, LLC in cash, 3% of the Purchase Price ($7,200,000) (the "Deposit"). If
Buyer terminates this Agreement pursuant to subsections 12.1(a), 12.1(b) or
12.1(c), or if Louisiana-Pacific terminates this Agreement pursuant to
subsection 12.1(a) or 12.1(b), Louisiana-Pacific shall cause Redwood, LLC to,
and Redwood, LLC shall, promptly return the Deposit to Buyer. At Closing, the
Deposit shall be applied as a credit against the Purchase Price as set forth in
subsection 2.6(b).
(b) Subject to the terms and conditions herein set forth, and
in consideration of the sale, assignment, transfer and delivery to Buyer (or its
permitted assigns pursuant to Section 13.6) of the Purchased Assets not
otherwise referred to in subsection 2.6(c), Buyer shall, or shall cause its
permitted assigns pursuant to Section 13.6 to, pay to Redwood, LLC in cash, at
the Closing, TWO HUNDRED FORTY MILLION DOLLARS ($240,000,000) (the "Cash
Amount"), less the amount of the Deposit, for a total cash payment at Closing of
TWO HUNDRED THIRTY TWO MILLION EIGHT HUNDRED THOUSAND DOLLARS AND NO CENTS
($232,800,000) (the "Closing Cash Payment").
(c) Subject to the terms and conditions herein set forth, and
in consideration of the sale, assignment, transfer and delivery to Buyer (or its
permitted assigns pursuant to Section 13.6) of the Timber Personal Property and
the Timber Real Property, plus any similar assets acquired by Redwood, LLC after
the Agreement Date, less any similar assets disposed of by Redwood, LLC after
such date, in each case to the extent such subsequent acquisition or disposition
is permitted as an Allowed Pre-Closing Change (collectively, the "Note Assets"),
Redwood, LLC may elect, not later than 30 days prior to the Closing Date, to
require Buyer to, and in such event, Buyer shall, or shall cause Timber Business
LLC to, deliver to Redwood, LLC at Closing, the Note, substantially in the form
attached hereto as Exhibit 2.6(c), with a maturity date of 15 years and a
principal amount of ONE HUNDRED FORTY EIGHT MILLION ONE HUNDRED SIXTY TWO
THOUSAND DOLLARS AND NO CENTS ($148,162,000) in lieu of receiving such amount in
cash at the Closing. The Cash Amount, without offset for the principal amount of
the Note, if any (as such aggregate amount may be adjusted in accordance with
subsection 2.6(d)), are referred to herein as the "Purchase Price."
(d) To take into account various changes in working capital
from the Agreement Date to the Closing Date, the Purchase Price shall be subject
to adjustment after the Closing as set forth in Schedule 2.6(d).
(e) In the event the Note is required to be delivered
hereunder, under no circumstances shall Buyer (or its permitted assigns pursuant
to Section 13.6) withhold payment under the Note or offset or adjust the
principal, premium, if any, or interest payments under the Note whether by
reason of Buyer's assertion of claims for amounts owing to Buyer (or its
permitted assigns pursuant to Section 13.6) from Louisiana-Pacific, LPS
Corporation or Redwood LLC as a result of Louisiana-Pacific's, LPS Corporation's
or Redwood LLC's breach of representations and warranties or covenants hereunder
or their indemnification obligations hereunder, or otherwise.
9
2.7 NOTE ARRANGEMENT. In the event that Redwood, LLC requires
delivery of the Note pursuant to subsection 2.6(c) (the "Note Arrangement"):
(a) Buyer shall, or if Timber Business LLC executes the Note,
shall cause Timber Business LLC to, pledge cash collateral at the Closing equal
to the full amount of the principal of the Note for the entire term of the Note,
in exchange for a stand-by letter of credit, or other arrangement that is
obtainable and acceptable to Louisiana-Pacific under which the obligations of
Buyer are guaranteed (the "Credit Enhancement Arrangement"). Redwood, LLC shall
be the sole beneficiary of the Credit Enhancement Arrangement, but shall not
have a lien upon or other security interest in such cash collateral.
(b) Buyer or Timber Business LLC, as applicable, shall be
responsible for its own fees and costs for providing the cash to be deposited as
collateral, and Louisiana-Pacific or Redwood, LLC shall be responsible for any
other costs or expenses associated with the Credit Enhancement Arrangement.
(c) The interest rate on the Note shall be equal to the
interest received by Buyer on the cash collateral for the Credit Enhancement
Arrangement.
2.8 LIQUIDATED DAMAGES. IN THE EVENT THE CLOSING AND THE
CONSUMMATION OF EITHER THE TRANSACTION CONTEMPLATED HEREBY OR THE TRANSACTION
CONTEMPLATED BY THE XXXXXXX PURCHASE AGREEMENT SHALL NOT OCCUR FOR ANY REASON
OTHER THAN DUE TO A TERMINATION OF THIS AGREEMENT BY BUYER OR BY XXXXXXX
PURSUANT TO SUBSECTIONS 12.1(a), 12.1(b) OR 12.1(c), OR BY LOUISIANA-PACIFIC
PURSUANT TO SUBSECTION 12.1(a) OR 12.1(b), REDWOOD, LLC SHALL HAVE THE RIGHT TO
(i) RETAIN THE DEPOSIT (TOGETHER WITH ATTORNEYS' FEES AND EXPENSES AS SPECIFIED
BELOW) AS LIQUIDATED DAMAGES AND NOT AS A PENALTY (THE PARTIES HERETO
ACKNOWLEDGE THAT LOUISIANA-PACIFIC'S AND REDWOOD, LLC's DAMAGES AS A RESULT OF
SUCH FAILURE TO CLOSE ARE NOT CAPABLE OF EXACT ASCERTAINMENT AND THAT SAID
LIQUIDATED DAMAGES, TOGETHER WITH ANY ATTORNEYS' FEES AND EXPENSES INCURRED BY
LOUISIANA-PACIFIC OR REDWOOD, LLC IN CONNECTION WITH THIS AGREEMENT, ARE A FAIR
AND REASONABLE ESTIMATE OF THE NET DETRIMENT THAT LOUISIANA-PACIFIC AND REDWOOD,
LLC WOULD SUFFER IN THE EVENT OF SUCH FAILURE TO CLOSE) OR (ii) EXERCISE ITS
RIGHTS UNDER SECTION 13.9. THE PAYMENT OF SUCH AMOUNT AS LIQUIDATED DAMAGES IS
NOT INTENDED AS A FORFEITURE OR PENALTY WITHIN THE MEANING OF CALIFORNIA CIVIL
CODE SECTIONS 3275 OR 3369, BUT IS INTENDED TO CONSTITUTE LIQUIDATED DAMAGES TO
REDWOOD, LLC PURSUANT TO CALIFORNIA CIVIL CODE SECTION 1671. REDWOOD, LLC AND
BUYER HEREBY WAIVE THE PROVISIONS OF CALIFORNIA CIVIL CODE SECTION 3389.
------------------------ -------------------------
Buyer's Initials Redwood, LLC's Initials
2.9 CASH. Notwithstanding any provision in this Agreement to
the contrary, nothing herein shall constitute an agreement to sell cash, bank
accounts or cash equivalents (the
10
exclusion of which will be reflected in the adjustment to Purchase Price as
provided in subsection 2.6(d)).
2.10 DISCLAIMER. Except as otherwise expressly set forth in
Article IV of this Agreement or in Article II of the Environmental Agreement,
Louisiana-Pacific, LPS Corporation, and Redwood, LLC expressly disclaim any
representations or warranties of any kind or nature, express or implied, as to
the condition, title, value or quality of the assets (including the Real
Property the Personal Property and the Balance Sheet Assets) or properties
currently or formerly used, operated, owned, leased, controlled, possessed,
occupied or maintained by Louisiana-Pacific or its Affiliates (including
Redwood, LLC) and Louisiana-Pacific, LPS Corporation, and Redwood, LLC
SPECIFICALLY DISCLAIM ANY REPRESENTATION OR WARRANTY OF MERCHANTABILITY, USAGE,
SUITABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE WITH RESPECT TO SUCH ASSETS OR
PROPERTIES, OR ANY PART THEREOF, OR AS TO THE WORKMANSHIP THEREOF, OR THE
ABSENCE OF ANY DEFECTS THEREIN, WHETHER LATENT OR PATENT, IT BEING UNDERSTOOD
THAT SUCH ASSETS AND PROPERTIES ARE BEING ACQUIRED "AS IS, WHERE IS" ON THE
CLOSING DATE, AND IN THEIR PRESENT CONDITION, WITH ALL FAULTS, AND (WITHOUT
LIMITING THE GENERALITY OF THE FOREGOING) WITHOUT ANY EXPRESS OR IMPLIED
WARRANTY OR REPRESENTATION AS TO THE VOLUME, AGE CLASS, SPECIES OR
MERCHANTABILITY OF ANY OF THE TIMBERLANDS SOLD TO BUYER HEREUNDER, OR AS TO THE
ACREAGE, TAX STATUS, LEGAL ACCESS, OPERATIONS, ENCROACHMENTS, PHYSICAL
CONDITION, ZONING OR ANY OTHER ASPECT OF SUCH TIMBERLANDS, AND THAT BUYER SHALL
RELY ON ITS OWN EXAMINATION AND INVESTIGATION THEREOF.
ARTICLE III
CLOSING
3.1 CLOSING. Subject to the fulfillment or waiver of the
conditions precedent set forth in Articles VII and VIII, the consummation of the
purchase and sale of the Purchased Assets and assumption of the Assumed
Liabilities (the "Closing") shall take place at the offices of Xxxxxx,
Xxxxxxxxxx & Xxxxxxxxx LLP, Old Federal Reserve Bank Building, 000 Xxxxxxx
Xxxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx, effective as of 12:01 a.m., local time, (a)
on June 22, 1998 (provided, that, in the event the HSR Act condition in Section
7.3 shall have been met, Louisiana-Pacific may elect to close early upon 21 days
written notice to Buyer, subject to other extension options set forth herein),
or (b) at such other date, time or place as the parties hereto may agree upon in
writing. The date and effective time of the Closing are referred to herein as
the "Closing Date."
3.2 LOUISIANA-PACIFIC OBLIGATIONS AT CLOSING. At the Closing,
Louisiana-Pacific, LPS Corporation and Redwood, LLC, as appropriate, shall
deliver or cause to be delivered to Buyer or its permitted assigns designated by
Buyer pursuant to Section 13.6:
(a) one or more duly executed grant deeds from Redwood, LLC,
subject to Permitted Liens, in form and content reasonably satisfactory to
Buyer, conveying (i) to the Timber Business LLC fee title to the real property
owned by Redwood, LLC among the Purchased Assets and designated by
Louisiana-Pacific as timber business real property pursuant to Section 6.13,
(ii) to the Distribution Business LLC fee title to the real property owned by
11
Redwood, LLC among the Purchased Assets and designated by Louisiana-Pacific as
distribution business real property pursuant to Section 6.13, and (iii) to the
Wood Treatment Business LLC fee title to the real property owned by Redwood, LLC
among the Purchased Assets and designated by Louisiana-Pacific as wood treatment
business real property pursuant to Section 6.13, together with any real property
transfer tax declarations for each grant deed as may be required by the
applicable county recorder's office;
(b) duly executed Xxxx of Sale from Redwood, LLC transferring
and conveying to the Timber Business LLC, the Distribution Business LLC, and the
Wood Treatment Business LLC (using the same allocation method as set forth in
subsection 3.2(a)), all of the personal property owned by Redwood, LLC or
Louisiana-Pacific, as applicable, among the Purchased Assets and the Books and
Records existing on the Closing Date;
(c) in the event that any necessary third Person consents or
Approvals are actually obtained therefor (it being understood that, except as
expressly provided in Section 7.8 such consent or Approval shall not be a
condition to Closing), a duly executed counterpart to an Assignment and
Assumption of Lease for each of the leases of real property or personal property
to Redwood, LLC among the Purchased Assets, substantially in the form attached
as Exhibit 3.2(c) (the "Assignment and Assumption of Lease");
(d) duly executed counterpart to Assignment and Assumption
Agreements, in the forms of Exhibit 3.2(d)-1 or 3.2(d)-2, as applicable or
providing for the assignment to the Timber Business LLC, the Distribution
Business LLC, and the Wood Treatment Business LLC (using the same allocation
method as set forth in subsection 3.2(a)) of the Contracts, as well as the
intangible property to be assigned to Buyer under Section 2.2, and providing for
the assumption by Buyer (or its permitted assigns pursuant to Section 13.6) of
the Assumed Liabilities (the "Assignment and Assumption Agreement");
(e) certificates of the Secretaries of Louisiana-Pacific, LPS
Corporation and Redwood, LLC (i) certifying to the attached Charter, Bylaws and
board resolutions authorizing the execution, delivery and performance of this
Agreement and the Ancillary Agreements, and (ii) attesting to the incumbency of
officers executing this Agreement, the Ancillary Agreements and the
certificates, agreements and transfer documents delivered by Louisiana-Pacific,
LPS Corporation or Redwood, LLC at the Closing;
(f) certificate of duly authorized officer on behalf of each of
Louisiana-Pacific, LPS Corporation and Redwood, LLC, dated the Closing Date,
pursuant to which the applicable entity (i) certifies as to compliance with the
conditions set forth in Article VII, and (ii) represents and warrants that all
of the representations and warranties of the applicable entity are true and
correct as of the Closing Date, except, in each case, (x) that representations
or warranties made as of, or in respect of, only a specified date or period are
true and correct in respect of or as of, such date or period, and (y) to the
extent that any failure of such representations and warranties to be true and
correct as aforesaid when taken in the aggregate would not have a Material
Adverse Effect or (z) to the extent there has been an Allowed Pre-Signing Change
or an Allowed Pre-Closing Change;
(g) copies of any third Person Approvals or consents to
assignment of Contracts that may have actually been obtained by
Louisiana-Pacific through the Closing Date (it
12
being understood that, except as expressly provided in Section 7.8 such consent
or Approval shall not be a condition to Closing);
(h) the Ancillary Agreements, duly executed by
Louisiana-Pacific, LPS Corporation and Redwood, LLC, as applicable; and
(i) releases or the equivalent for all existing monetary Real
Property Encumbrances which are not Permitted Liens affecting the Owned Real
Property.
3.3 BUYER OBLIGATIONS AT CLOSING. At the Closing, Buyer shall
deliver or cause to be delivered to Louisiana-Pacific:
(a) the Closing Cash Payment (net of the principal amount of
the Note, if any), by wire transfer of immediately available funds to Redwood,
LLC's account, as specified by Redwood, LLC in writing not less than five
business days prior to the Closing Date;
(b) if applicable, a duly executed Note and related
documentation;
(c) duly executed counterpart to the Assignment and Assumption
Agreement;
(d) in the event that any necessary third Person consents are
actually obtained therefor (it being understood that, except as expressly
provided in Section 7.8 such consent shall not be a condition to Closing), a
duly executed counterpart to each Assignment and Assumption of Lease;
(e) certificate of the Secretary of Buyer's general partner (i)
certifying to the attached Charter, Bylaws and board resolutions authorizing the
execution, delivery and performance of this Agreement and the Ancillary
Agreements, and (ii) attesting to the incumbency of Buyer's and its general
partner's officers executing this Agreement, the Ancillary Agreements and the
certificates, agreements and transfer documents delivered by Buyer at the
Closing;
(f) certificate of duly authorized officer on behalf of Buyer,
dated the Closing Date, pursuant to which Buyer (i) certifies as to compliance
with the conditions set forth in Article VIII and (ii) represents and warrants
that all of the representations and warranties of Buyer are true and correct in
all material respects as of the Closing Date;
(g) copies of letters formally offering employment to all of
the Business Employees pursuant to Section 11.1, in the form of Exhibit 3.3(g);
(h) the Ancillary Agreements, duly executed by Buyer; and
(i) the documents contemplated by Section 13.6.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF LOUISIANA-PACIFIC
Except as may be set forth in the Disclosure Schedule, except
for any Allowed Pre-Signing Changes or Allowed Pre-Closing Changes, and except
with respect to Environmental Laws and Environmental Permits and all Liabilities
thereunder (which representations and warranties and Liabilities related thereto
are set forth exclusively in the Environmental Agreement), Louisiana-Pacific,
LPS Corporation and Redwood, LLC, as relevant to each entity, each represent and
warrant to Buyer as follows:
4.1 ORGANIZATION. Louisiana-Pacific and LPS Corporation are
corporations duly organized, validly existing and in good standing under the
laws of the state of their incorporation and have full corporate power and
corporate authority to own their respective assets and properties and to conduct
their respective businesses as and where they are now being conducted.
Louisiana-Pacific and LPS Corporation are qualified to transact business as
foreign corporations in the State of California. Redwood, LLC is a limited
liability company duly organized, validly existing and in good standing under
the laws of the State of Delaware and has full limited liability company power
and limited liability company authority to own its assets and properties and to
conduct its business as and where it is now being conducted. Redwood, LLC is
qualified to transact business as a foreign limited liability company in the
State of California. By virtue of the nature of the properties owned or leased
by Louisiana-Pacific, LPS Corporation and Redwood, LLC and the Business
conducted by them, neither Louisiana-Pacific, LPS Corporation nor Redwood, LLC
are required to qualify to transact business as a foreign corporation in any
jurisdiction (other than California), except where the failure to be so
qualified is not reasonably likely to result in a Material Adverse Effect.
4.2 AUTHORIZATION AND ENFORCEABILITY. Louisiana-Pacific, LPS
Corporation and Redwood, LLC each has full corporate (or limited liability
company, as applicable) power and corporate (or limited liability company, as
applicable) authority to enter into this Agreement and the Ancillary Agreements
to which it is a party and to consummate the transactions contemplated hereby
and thereby. The execution and delivery of this Agreement and the Ancillary
Agreements and the consummation of the transactions contemplated hereby and
thereby by Louisiana-Pacific, LPS Corporation and Redwood, LLC (i) have been
duly authorized by all necessary corporate (or limited liability company, as
applicable) action on the part of Louisiana-Pacific, LPS Corporation and
Redwood, LLC and (ii) do not require approval of Louisiana-Pacific's
stockholders. This Agreement and the Ancillary Agreements have been duly
executed and delivered by Louisiana-Pacific, LPS Corporation and Redwood, LLC.
This Agreement and the Ancillary Agreements each constitutes a legal, valid and
binding obligation of Louisiana-Pacific, LPS Corporation and Redwood, LLC,
enforceable against each such entity (to the extent they are parties to such
agreements), respectively, in accordance with its terms, except as the
enforceability thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the enforcement of creditors' rights
generally and general principles of equity (regardless of whether enforceability
is considered in a proceeding at law or in equity).
4.3 CONSENTS AND APPROVALS. Except for compliance with the
notification filing and waiting period requirements of the HSR Act, no consent,
waiver, approval, order or
14
authorization of, notice to, or registration, declaration, designation,
qualification or filing with, any Governmental Authority or third Person,
domestic or foreign, is or has been required on the part of Louisiana-Pacific,
LPS Corporation or Redwood, LLC in connection with the execution and delivery of
this Agreement or the Ancillary Agreements or the consummation by them of the
transactions contemplated hereby or thereby, other than where the failure to
obtain such consents, waivers, approvals, orders or authorizations or to make or
effect such registrations, declarations, designations, qualifications or filings
is not reasonably likely to (x) prevent or materially delay consummation of the
transactions contemplated by this Agreement and the Ancillary Agreements, (y)
prevent Louisiana-Pacific, LPS Corporation or Redwood, LLC from performing their
obligations under this Agreement and the Ancillary Agreements or (z) result in a
Material Adverse Effect; provided, however, that no representation or warranty
is made herein as to whether such consents would be needed with respect to any
contract, agreement, arrangement, purchase order, commitment, permit, license,
order, approval or authorization other than those listed in Disclosure Schedule
Sections 4.13 or 4.14 (it being understood that obtaining consents for the
transfer of the items set forth on Disclosure Schedule Section 4.3 is not a
condition to Closing).
4.4 NON-CONTRAVENTION. Neither the execution and delivery of
this Agreement or the Ancillary Agreements by Louisiana-Pacific, LPS Corporation
or Redwood, LLC nor the consummation by them of the transactions contemplated
hereby or thereby, will violate or conflict with (a) any provision of
Louisiana-Pacific's, LPS Corporation's or Redwood LLC's Charter or Bylaws or (b)
to Louisiana-Pacific's knowledge, any statute, law, regulation or Governmental
Order to which Louisiana-Pacific, LPS Corporation or Redwood, LLC or the assets
and properties of Louisiana-Pacific, LPS Corporation or Redwood, LLC are bound
or subject, except, with respect to clause (b), for such violations and
conflicts which are not reasonably likely to (i) prevent or materially delay
consummation of the transactions contemplated by this Agreement and the
Ancillary Agreements, (ii) prevent Louisiana-Pacific from performing its
obligations under this Agreement and the Ancillary Agreements, or (iii) result
in a Material Adverse Effect.
4.5 FINANCIAL STATEMENTS. Disclosure Schedule Section 0 sets
forth (a) the Balance Sheet and (b) certain financial information for the
Business (together with the Balance Sheet, the "Financial Statements"). The
Financial Statements have been prepared based on the applicable entries from
Louisiana-Pacific's general ledger (but have not been prepared on the basis of
generally accepted accounting principles), and were prepared based on the
assumptions and caveats stated in Disclosure Schedule Section 4.5. The Books and
Records of Louisiana-Pacific and its Affiliates from which the Financial
Statements were prepared were complete and accurate in all material respects at
the time of such preparation. The recognition of revenues and expenses in such
Financial Statements is consistent in all material respects with the recognition
policies followed by Louisiana-Pacific for its other internal unaudited
financial statements. Disclosure Schedule Section 4.5(a) sets forth certain
information concerning past timberland capitalized expenditures and cut rate,
which is true and correct in all material respects.
4.6 ABSENCE OF CERTAIN CHANGES. During the period between the
date of the Balance Sheet and the Agreement Date, (i) as otherwise contemplated
by this Agreement or the Xxxxxxx Agreement, and (ii) specifically subject to the
assumptions and caveats relating to the Financial Statements set forth in
Disclosure Schedule Section 4.5, neither Louisiana-Pacific, LPS Corporation nor
Redwood, LLC has:
15
(a) suffered any damage or destruction adversely affecting the
Business or the tangible assets among the Real Property, and the Personal
Property that has had or is reasonably likely to result in a Material Adverse
Effect;
(b) made any change in the compensation levels of the senior
executives of the Business, any changes in the manner in which other employees
of the Business generally are compensated, or any provision of additional or
supplemental benefits for employees of the Business generally, except normal
periodic increases or promotions effected in the ordinary course of business;
(c) engaged in any transaction with Louisiana-Pacific or any of
its Affiliates other than in the ordinary course of business consistent with
past practice;
(d) engaged in any sale or purchase of real estate with
Louisiana-Pacific or any other real estate related transaction that would
continue after the Closing Date;
(e) entered into any contract with Louisiana-Pacific or its
Affiliates that would last after the Closing Date;
(f) borrowed any money or issued any bonds, debentures, notes
or other corporate securities evidencing money borrowed, in each case, that will
be an Assumed Liability;
(g) engaged in any transaction outside of the ordinary course
of business other than as contemplated in this Agreement or the Xxxxxxx Purchase
Agreement; or
(h) agreed, whether in writing or otherwise, to take any action
described in this Section 4.6.
4.7 TITLE TO THE PERSONAL PROPERTY.
(a) Except for Encumbrances which individually or in the
aggregate are not reasonably likely to result in a Material Adverse Effect:
(i) Redwood, LLC has good title to all of the personal property
set forth on Disclosure Schedule Section 4.7(a)(i)-1 and has a valid leasehold
interest in all of the personal property set forth on Disclosure Schedule
Section 4.7(a)(i)-2, in each case, subject to Allowed Pre-Closing Changes
(collectively, the "Non-Timber Personal Property");
(ii) Redwood, LLC has good title to all of the personal
property set forth on Disclosure Schedule Section 4.7(a)(ii)-1 and has a valid
leasehold interest in all of the personal property set forth on Disclosure
Schedule Section 4.7(a)(ii)-2, in each case, subject to Allowed Pre-Closing
Changes (collectively, the "Timber Personal Property" and, together with the
Non-Timber Personal Property, the "Redwood Personal Property"); and
(iii) Louisiana-Pacific has good title to the Balance Sheet
Assets, subject to Allowed Pre-Closing Changes.
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4.8 REAL PROPERTY.
(a) Disclosure Schedule Section 4.8(a)-1 lists certain
non-timber real property owned by Redwood, LLC, subject to Allowed Pre-Closing
Changes (the "Non-Timber Owned Real Property") and Disclosure Schedule Section
4.8(a)-2 lists certain non-timber leases of real property leased or subleased to
Redwood, LLC, subject to Allowed Pre-Closing Changes (the "Non-Timber Leased
Real Property" and together with the Non-Timber Owned Real Property, the
"Non-Timber Real Property").
(b) Disclosure Schedule Section 4.8(b)-1 lists certain timber
real property owned by Redwood, LLC, subject to Allowed Pre-Closing Changes (the
"Timber Owned Real Property") and Disclosure Schedule Section 4.8(b)-2 lists
certain leases of timber real property leased or subleased to Redwood, LLC,
subject to Allowed Pre-Closing Changes (the "Timber Leased Real Property" and
together with the Timber Owned Real Property, the "Timber Real Property").
(c) The Non-Timber Owned Real Property and the Timber Owned
Real Property constitute all of the real property owned by Redwood, LLC other
than the Owned Real Property as defined in the Xxxxxxx Purchase Agreement
(collectively, after giving effect, in each case, to Allowed Pre-Closing
Changes, the "Owned Real Property"). The Non-Timber Leased Real Property and the
Timber Leased Real Property constitute all of the real property leased or
subleased to Redwood, LLC other than the Leased Real Property as defined in the
Xxxxxxx Purchase Agreement (collectively, after giving effect, in each case, to
Allowed Pre-Closing Changes, the "Leased Real Property").
(d) Redwood, LLC has good title to the Owned Real Property it
purports to own, and at Closing, such Owned Real Property will be free and clear
of any Encumbrance, other than Permitted Liens and Encumbrances which
individually or in the aggregate are not reasonably likely to result in a
Material Adverse Effect.
(e) Originals or copies of all of the leases and subleases
among the Leased Real Property, which are accurate and complete, have been
provided to Buyer (in accordance with the terms of the Confidentiality
Agreement) for review.
(f) Disclosure Schedule Section 4.8(f) contains an accurate and
complete list of all leases of Owned Real Property and subleases of Leased Real
Property by Louisiana-Pacific or Redwood, LLC to third Persons, subject, in each
case, to Allowed Pre-Closing Changes. Originals or copies of such leases and
subleases, which are accurate and complete, have been provided to Buyer (in
accordance with the terms of the Confidentiality Agreement) for review.
(g) Disclosure Schedule Section 4.8(g) sets forth a map that
sets forth the location of all the timberlands owned by Redwood, LLC that will
be conveyed to Buyer hereunder, except for the Real Property to be conveyed
under the Xxxxxxx Agreement. Based solely on information obtained from the real
property tax bills received by Louisiana-Pacific and prepared by the respective
county assessor's office, the acreage comprising the Timber Real Property is
approximately 235,000 acres.
(h) To Louisiana-Pacific's knowledge, with respect to the
Non-Timber Owned Real Property, there are no encroachments, overlaps, overhangs,
unrecorded easements,
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boundary line disputes, rights of parties in possession, or lack of access which
would otherwise be disclosed by an accurate "as-built" survey of the Non-Timber
Owned Real Property, which individually, or in the aggregate, interfere
materially with the operation of that portion of the Business currently
conducted on any such Non-Timber Owned Real Property.
4.9 INTELLECTUAL PROPERTY. There are no (a) patents anywhere in
the world, (b) registered or unregistered trademarks, trade names or service
marks or applications therefor anywhere in the world, (c) copyrights or
applications therefor anywhere in the world, or (d) licenses relating to any of
the foregoing, in each case used or held for use by Louisiana-Pacific, LPS
Corporation or Redwood, LLC, that, in each case, are exclusively related to the
Business.
4.10 LITIGATION. There is no Action pending or, to the
knowledge of Louisiana-Pacific, threatened against Louisiana-Pacific affecting
the Business or against LPS Corporation or Redwood, LLC, where the amount or
value in controversy is reasonably likely to exceed $75,000, whether at law or
in equity, or before or by any Governmental Authority (other than matters set
forth on Schedule 2.5(b)), nor is there any material Governmental Order to which
Louisiana-Pacific, LPS Corporation or Redwood, LLC or any of their properties or
assets are subject or bound which affect the Business (other than any
Governmental Order that may be applicable generally to the industry in which the
Business operates).
4.11 EMPLOYEE BENEFIT MATTERS.
(a) Disclosure Schedule Section 4.11 sets forth a complete and
accurate listing of the following: (i) the name, title, recognized hire date,
current annual base salary rate (if salaried) or current hourly compensation
rate (if hourly), accrued and unused vacation days (if salaried) or hours (if
hourly) of each employee of Louisiana-Pacific whose employment is exclusively
dedicated to the Business (the "Business Employees"); (ii) each "Employee
Benefit Plan," as such term is defined in Section 3(3) of ERISA, which is
covered by any provision of ERISA and which is maintained by Louisiana-Pacific
or any of its Affiliates for the benefit of the Business Employees; (iii) each
other material fringe benefit plan, policy or arrangement currently maintained
by Louisiana-Pacific or any of its Affiliates for the benefit of Business
Employees, including those that provide for pension, deferred compensation,
bonuses, severance, employee insurance coverage or similar employee benefits;
and (iv) an accurate and complete list of all employment, managerial, advisory,
and consulting agreements, employee confidentiality agreements, and all other
material agreements, policies, or arrangements maintained by Louisiana-Pacific
for Business Employees. Louisiana-Pacific has delivered to Buyer copies (in
accordance with the terms of the Confidentiality Agreement), which were accurate
and complete as of the date so delivered, of all such documents and (if
applicable) summary plan descriptions with respect to such plans, agreements and
arrangements, or summary description(s) of any such plans, agreements or
arrangements not otherwise in writing.
(b) To the knowledge of Louisiana-Pacific, each Employee
Benefit Plan has been established and administered in all material respects in
accordance with the material terms of ERISA and the applicable provisions of the
Code.
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4.12 TAXES.
(a) All material Tax Returns relating to any Taxes, which are
required to be filed by Redwood, LLC, LPS Corporation and Louisiana-Pacific,
with respect to the Business or the Purchased Assets, prior to the Closing Date,
are correct and have been duly and timely filed, and all material Taxes that
have become due pursuant to such Tax Returns have been fully paid prior to the
Closing.
(b) There are (i) no actions or proceedings currently pending
or, to Louisiana-Pacific's knowledge, threatened against Redwood, LLC or LPS
Corporation, the Business, the Purchased Assets, or, with respect to the
Purchased Assets or the Business, Louisiana-Pacific, by any Governmental
Authority for the assessment or collection of Taxes; (ii) no audits or other
examinations of any return is in progress nor has Redwood, LLC been notified of
any request for examination; (iii) no claims for assessment or collection of
taxes has been asserted against LPS Corporation, Redwood, LLC, the Business, the
Purchased Assets, or, with respect to the Purchased Assets or the Business,
Louisiana-Pacific; and (iv) no matters under discussion with any Governmental
Authority regarding claims for assessment or collection of Taxes against LPS
Corporation, Redwood, LLC, the Business, the Purchased Assets, or, with respect
to the Purchased Assets or the Business, Louisiana-Pacific, and neither Redwood,
LLC nor Louisiana-Pacific has any reason to believe that any such claims for
Taxes described in Section 4.12(a) will be asserted. There are no liens on any
of the Purchased Assets that arose in connection with the failure (or alleged
failure) to pay any Taxes. Neither LPS Corporation nor, with respect to the
Business or the Purchased Assets, Louisiana-Pacific, has made any tax elections
regarding the Business outside of the ordinary course of the Business.
(c) None of Louisiana-Pacific, LPS Corporation or Redwood, LLC
is a "foreign person" within the meaning of ss.1445(b)(2) of the Code.
4.13 CONTRACTS AND COMMITMENTS. Disclosure Schedule Section
4.13 contains an accurate and complete list (except as modified by Allowed
Pre-Closing Changes), of those Contracts which individually require total
payments to or by Louisiana-Pacific or Redwood, LLC of at least $100,000
annually or in any single payment of $100,000 or more (collectively, the
"Commitments"). To Louisiana-Pacific's knowledge, none of Louisiana-Pacific,
Redwood, LLC or the other parties thereto is in default under any of the
Commitments, which default is reasonably likely to result in a Material Adverse
Effect.
4.14 NON-ENVIRONMENTAL PERMITS AND OTHER OPERATING RIGHTS.
Disclosure Schedule Section 4.14 contains an accurate and complete list (except
as modified by Allowed Pre-Closing Changes), of each permit, license, order,
approval or authorization (i) required by any applicable law, statute,
regulation or Governmental Order, or, to Louisiana-Pacific's knowledge, (ii)
required by the property or contract rights of third Persons, in each case, that
are necessary to permit the operation of the Business in the manner in which it
is currently being conducted by Louisiana-Pacific or Redwood, LLC, as
applicable, and to permit the current occupancy of the Real Property, except
where the failure to possess any such permit, license, order, approval or
authorization is not reasonably likely to result in a Material Adverse Effect
(collectively, the "Permits").
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4.15 LABOR MATTERS. No Business Employee is covered under any
collective bargaining agreement. As it relates to the Business: (a) there is no
unfair labor practice complaint against Louisiana-Pacific pending or, to the
knowledge of Louisiana-Pacific, threatened before the National Labor Relations
Board or any comparable state or local Governmental Authority, (b) there is no
labor strike, slowdown or stoppage actually pending or, to the knowledge of
Louisiana-Pacific, threatened against or directly affecting Louisiana-Pacific,
(c) no grievance or any Action arising out of or under collective bargaining
agreements is pending or, to the knowledge of Louisiana-Pacific, threatened
against Louisiana-Pacific and (d) to the knowledge of Louisiana-Pacific, there
are no representation petitions pending before the National Labor Relations
Board or demands for representation recognition pending for any group of
non-union employees from any labor organization, which, in the case of any of
clauses (a), (b), (c) or (d), is reasonably likely to result in a Material
Adverse Effect.
4.16 NO BROKERS. Except with respect to Louisiana-Pacific's
engagement of SBC Warburg Dillon Read Inc., the fees and expenses of which will
be paid by Louisiana-Pacific, none of Louisiana-Pacific, LPS Corporation,
Redwood, LLC or their directors, officers or employees has employed any broker,
finder or investment banker or incurred any Liability for any brokerage fees,
commissions, finders' fees or similar fees in connection with the transactions
contemplated by this Agreement.
4.17 ACQUISITION FOR INVESTMENT. Louisiana-Pacific, LPS
Corporation and Redwood, LLC acknowledge that the Note will not be registered
under the Securities Act of 1933, as amended, or qualified or registered under
any state securities laws on the ground that no distribution or public offering
of the Note is to be effected and that no public market now exists for the Note
and that a public market may never exist therefor. Louisiana-Pacific, LPS
Corporation and Redwood, LLC will not take any action or permit any action to be
taken which would require Buyer to file, register or otherwise take steps to
comply with the registration requirements of any federal or state securities
laws.
4.18 USE OF THE ASSETS. The Mendocino-Sonoma-Riverside Assets,
together with assets under the Xxxxxxx Purchase Agreement that may have been
used by Louisiana-Pacific, constitute substantially all of the assets used by
Louisiana-Pacific in the conduct of the Business, excluding assets or services
described in the assumptions and caveats with respect to the Financial
Statements set forth in Disclosure Schedule Section 4.5; and excluding assets
that may have been obtained or disposed of in the ordinary course of business.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Louisiana-Pacific as follows:
5.1 ORGANIZATION. Buyer is a limited partnership duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has full partnership power and partnership authority to own its
assets and properties and to conduct its business as and where it is now being
conducted. Buyer's general partner is a corporation duly organized, validly
existing and in good standing under the laws of the State of California and has
full corporate power and corporate authority to own it assets and properties and
to conduct its business as and where it is now being conducted.
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5.2 AUTHORIZATION AND ENFORCEABILITY. Buyer has full
partnership power and partnership authority to enter into this Agreement and the
Ancillary Agreements and to consummate the transactions contemplated hereby and
thereby. Buyer's general partner has full corporate power and corporate
authority to enter into this Agreement and the Ancillary Agreements and to
consummate the transactions contemplated hereby and thereby on behalf of Buyer.
The execution and delivery of this Agreement and the Ancillary Agreements and
the consummation of the transactions contemplated hereby and thereby by Buyer
and by Buyer's general partner have been duly authorized by all necessary
partnership action on the part of Buyer and all necessary corporate action on
the part of Buyer's general partner. This Agreement has been duly executed and
delivered by Buyer. This Agreement constitutes, and upon the execution and
delivery thereof by Buyer, the Ancillary Agreements will constitute, a legal,
valid and binding obligation of Buyer, enforceable against Buyer in accordance
with its terms, except as the enforceability thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors' rights generally and general principles
of equity (regardless of whether enforceability is considered in a proceeding at
law or in equity).
5.3 CONSENTS AND APPROVALS. Except for compliance with the
notification filing and waiting period requirements of the HSR Act, no consent,
waiver, approval, order or authorization of, notice to, or registration,
declaration, designation, qualification or filing with, any Governmental
Authority or third Person, domestic or foreign, is or has been or will be
required on the part of Buyer in connection with the execution and delivery of
this Agreement or the Ancillary Agreements or the consummation by Buyer of the
transactions contemplated hereby or thereby, other than where the failure to
obtain such consents, waivers, approvals, orders or authorizations or to make or
effect such registrations, declarations, designations, qualifications or filings
is not reasonably likely to (x) prevent or materially delay consummation of the
transactions contemplated by this Agreement and the Ancillary Agreements or (y)
prevent Buyer from performing its obligations under this Agreement and the
Ancillary Agreements.
5.4 NON-CONTRAVENTION. Neither the execution and delivery of
this Agreement or the Ancillary Agreements, nor the consummation of the
transactions contemplated hereby or thereby, will violate or conflict with (a)
any provision of Buyer's Charter or partnership agreement or (b) to Buyer's
knowledge, any statute, law, regulation or Governmental Order to which Buyer or
the assets or properties of Buyer are bound or subject, except for such
violations and conflicts which are not reasonably likely to (i) prevent or
materially delay consummation of the transactions contemplated by this Agreement
and the Ancillary Agreements or (ii) prevent Buyer from performing its
obligations under this Agreement and the Ancillary Agreements.
5.5 ABILITY. Buyer knows of no fact or circumstance that would
impair its ability, or the ability of its assignees pursuant to Section 13.6, to
consummate the transaction contemplated hereby.
5.6 NO BROKERS. Neither Buyer nor any of its directors,
officers or employees has employed any broker, finder or investment banker or
incurred any Liability for any brokerage fees, commissions, finders' fees or
similar fees in connection with the transactions contemplated by this Agreement.
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5.7 NET WORTH. Buyer's net worth, based on generally accepted
U.S. accounting principles, will be at least $60,000,000 immediately prior to
the Closing.
5.8 ACQUISITION FOR OWN ACCOUNT. The entity that executes the
Note will be purchasing the Note Assets for its own account.
ARTICLE VI
CERTAIN COVENANTS
6.1 ACCESS TO INFORMATION.
(a) From the Agreement Date through the Closing Date, but
subject to any rights of third Persons, upon reasonable notice,
Louisiana-Pacific, LPS Corporation and Redwood, LLC shall (i) afford the
officers, employees and authorized agents and representatives of Buyer
reasonable access during normal business hours to the offices, properties and
Books and Records of the Business and (ii) furnish to the officers, employees
and authorized agents and representatives of Buyer such additional financial and
operating data and other information regarding the assets and properties of the
Business (or legible copies thereof) as Buyer may from time to time reasonably
request; provided, however, that such investigation shall not unreasonably
interfere with any of the businesses or operations of the Business or
Louisiana-Pacific. Without limiting the generality of the foregoing,
Louisiana-Pacific, LPS Corporation and Redwood, LLC shall cooperate fully with
Buyer's investigation of such assets and properties and provide copies of such
documents in its possession as Buyer may reasonably request to confirm the title
to any and all properties or assets owned or leased by Louisiana-Pacific, LPS
Corporation or Redwood, LLC and exclusively related to the Business.
(b) Notwithstanding subsection 6.1(a), and except for
background environmental records reviews of any Governmental Authority, (i)
Buyer shall not investigate any matter with any Governmental Authority having
jurisdiction over any aspect of the Business or Louisiana-Pacific's assets or
properties, unless and until the written consent of Louisiana-Pacific to the
making of such investigation and contacting of any Governmental Authority has
been received by Buyer, which consent shall not be unreasonably withheld or
delayed, and (ii) Buyer's right of examination and access pending the Closing
with respect to environmental matters relating to the Real Property shall be
limited to an examination of existing records and interviews with
Louisiana-Pacific's personnel as authorized in writing by Louisiana-Pacific. In
no event shall any physical testing of the Real Property for the presence of
Hazardous Material take place unless and until Buyer has executed an access
agreement, in the form of Exhibit 6.1(b), including a detailed description of
the scope of the investigation and the work to be performed which is reasonably
satisfactory to Louisiana-Pacific (whose permission shall not be unreasonably
withheld or delayed), together with an appropriate agreement indemnifying
Louisiana-Pacific for any Losses caused by Buyer resulting from such physical
testing. Copies of all test results, reports and other information obtained by
Buyer from its investigation (including all draft reports) shall be delivered to
Louisiana-Pacific promptly after receipt by Buyer. At Buyer's request,
Louisiana-Pacific shall enter into a joint defense agreement in reasonable form
in order to maintain any privileges that may apply to such results, reports or
information.
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6.2 CONDUCT OF BUSINESS PENDING CLOSING. From the Agreement
Date through the Closing Date, except as required or permitted by this Agreement
or otherwise specifically consented to by Buyer in writing, after specific
notice from Louisiana-Pacific, which consent shall not be unreasonably withheld
or delayed:
(a) Redwood, LLC shall operate the Business only in its usual,
regular and ordinary manner and substantially in the same manner as heretofore
conducted. Louisiana-Pacific, LPS Corporation and Redwood, LLC shall use
commercially reasonable efforts to (i) preserve the Business and (ii) keep
available to Buyer the services of the Business Employees; and
(b) Louisiana-Pacific, LPS Corporation and Redwood, LLC shall
not, with respect to the Business (except as otherwise provided by this
Agreement or the Xxxxxxx Agreement), without the written consent of Buyer, which
consent shall not be unreasonably withheld or delayed:
(i) incur, or assume or become subject to any additional
material indebtedness for money borrowed or purchase money indebtedness, that
will be an Assumed Liability, except in the ordinary course of business;
(ii) permit or allow any of the material assets or properties
of the Business to be subject to any additional Encumbrance (other than
Permitted Liens and, with respect to personal property, Encumbrances which
individually or in the aggregate do not interfere materially with the operation
of the Business) or sell, transfer, lease or otherwise dispose of any such
assets or properties, except in the ordinary course of business;
(iii) grant any increase in salaries or commissions payable or
to become payable to any Business Employee, except normal periodic increases in
salaries and commissions reflected on Disclosure Schedule Section 4.11 and made
in accordance with Louisiana-Pacific's existing compensation practices;
(iv) make any capital expenditure or commitment therefor for
additions to property, equipment or facilities (other than road maintenance and
reforestation expenditures and commitments) in excess of $100,000 individually
or in the aggregate;
(v) engage in any transaction with Louisiana-Pacific or any of
its Affiliates other than in the ordinary course of business consistent with
past practices;
(vi) engage in any sale or purchase of real estate with
Louisiana-Pacific or any of its Affiliates or any other real estate related
transaction that would continue after the Closing Date;
(vii) enter into any contract with Louisiana-Pacific or its
Affiliates that would last after the Closing Date; or
(viii) agree, whether in writing or otherwise, to do any of the
foregoing.
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6.3 AUTHORIZATIONS.
(a) Each party promptly as practicable after the Agreement
Date, shall (i) deliver, or cause to be delivered, all notices and make, or
cause to be made, all such declarations, designations, registrations, filings
and submissions under all statutes, laws, regulations and Governmental Orders
applicable to it as may be required for it to consummate the sale of the
Purchased Assets and the assumption of the Assumed Liabilities and the other
transactions contemplated hereby and by the Ancillary Agreements in accordance
with the terms of this Agreement and the Ancillary Agreements; (ii) use
commercially reasonable efforts to obtain, or cause to be obtained, all
authorizations, approvals, orders, consents and waivers from all Persons
necessary to consummate the foregoing; and (iii) use commercially reasonable
efforts to take, or cause to be taken, all other actions necessary, proper or
advisable in order for it to fulfill its respective obligations hereunder and to
carry out the intentions of the parties expressed herein. The preceding sentence
notwithstanding, (x) Louisiana-Pacific, Redwood, LLC and LPS Corporation shall
have no obligation to take any action with respect to any contract, agreement,
arrangement, purchase order, commitment, permit, license, order, approval or
authorization other than those listed in Disclosure Schedule Sections 4.13 and
4.14 (it being understood that the obtaining of any consents necessary to
transfer the Contracts and permits set forth on such Disclosure Schedule
Sections is not a condition to Closing) and (y) neither party shall have any
obligation to waive any condition herein for its benefit or any performance
hereunder by the other party.
(b) Each party shall use its commercially reasonable efforts to
satisfy the conditions to Closing applicable to it in Article VII and Article
VIII as soon as commercially practicable.
(c) Each party shall comply promptly with the notice and
reporting requirements of the HSR Act.
(d) Each party shall comply substantially with any additional
requests for information, including requests for production of documents and
production of witnesses for interviews or depositions, by the Antitrust Division
of the United States Department of Justice, the United States Federal Trade
Commission or the antitrust or competition law authorities of any other
jurisdiction (whether U.S., foreign or multi-national) (the "Antitrust
Authorities").
(e) Each party shall take all steps necessary other than
divestiture of assets or payment of money to prevent the entry in any Action
brought by an Antitrust Authority or any other Person of any Governmental Order
which would prohibit, make unlawful or delay the consummation of the
transactions contemplated by this Agreement and the Ancillary Agreements.
(f) Each party shall cooperate in good faith with the Antitrust
Authorities and undertake promptly any and all action required to complete
lawfully the transactions contemplated by this Agreement and the Ancillary
Agreements; provided, no party shall be required to comply with an Antitrust
Authority's request to divest assets or pay money.
(g) Each party shall have prepared the appropriate
documentation for filing under the HSR Act within five business days of the date
hereof.
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6.4 BOOKS AND RECORDS.
(a) Buyer and Louisiana-Pacific shall, at the request of the
other party, make available to such other party from time to time on a
reasonable basis the Books and Records in their or Redwood, LLC's possession.
Such Books and Records shall be held by the party in possession thereof for
seven years after the Closing Date, and the other party shall have the right, at
its expense, to inspect and make copies of such Books and Records upon such
party's request; provided, however, that (i) all such access and copying shall
be done in such a manner so as not to unreasonably interfere with the normal
conduct of the operations of the party requested to provide access to such Books
and Records and (ii) the party requesting access to such Books and Records shall
treat the same and the contents thereof as confidential and not disclose such
Books and Records or the contents thereof to any Person except as required by
applicable statute, law, regulation or Governmental Order. Without limiting the
generality of the foregoing, the party in possession of Books and Records
responsive to information or document requests from a Tax Authority shall
provide such information and copies of all documents responsive to such requests
to the other party within the deadline set forth in such information or document
requests, but in no event later than two weeks from the date the party in
possession of such Books and Records shall receive such information or document
requests from the other party. In addition, after the Closing Date, at
Louisiana-Pacific's request, Buyer shall make available to Louisiana-Pacific and
its Affiliates, employees, representatives and agents those employees of Buyer,
as may be reasonably requested by Louisiana-Pacific in connection with any
Action, including to provide testimony, to be deposed, to act as witnesses and
to assist counsel; provided, however, that (x) such access to such employees
shall not unreasonably interfere with the normal conduct of the operations of
Buyer, and (y) Louisiana-Pacific shall reimburse Buyer for the out-of-pocket
costs reasonably incurred by Buyer in making such employees available to
Louisiana-Pacific. Buyer and Louisiana-Pacific shall not dispose of, and Buyer
shall cause Redwood, LLC not to dispose of, any Books and Records without first
offering to surrender such Books and Records to the other party.
(b) Except as otherwise agreed between Buyer and
Louisiana-Pacific: All Privileged Documents shall be deemed to remain in the
sole custody and control of Louisiana-Pacific regardless of the location in
which they may be found. Louisiana-Pacific, LPS Corporation and Redwood, LLC
have made a diligent attempt to remove all such Privileged Documents from the
premises of the Business. In the event, after the Closing, Buyer discovers any
such Privileged Documents in its possession, except as otherwise provided by
applicable statute, law, regulation or Governmental Order, Buyer (i) shall hold
them in strict confidence; (ii) shall not make any copies of them; (iii) shall
not provide such Privileged Documents or copies thereof, or reveal the contents
thereof, to any of their employees or agents, or to any other Person, including
any Governmental Authority; and (iv) shall promptly return the same, and all
copies thereof, to Louisiana-Pacific, except as otherwise provided by applicable
statute, law, regulation or Governmental Order. In the event any request, demand
or process is received by Buyer seeking any Privileged Documents, Buyer shall
provide prompt notice thereof to Louisiana-Pacific, including therewith a copy
of such request, demand or process, to enable Louisiana-Pacific or its
Affiliates to timely assert any and all privileges against disclosure it may
have with respect thereto or to seek an appropriate protective order. Receipt of
any such request, demand or process shall not alter Buyer's obligations under
this Agreement, including the obligation to promptly provide Louisiana-Pacific
with Privileged Documents and all copies thereof. In no event shall Buyer take
any action which might have the effect of waiving any
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claim of legal privilege with respect to any Privileged Document which
Louisiana-Pacific or its Affiliates may have.
6.5 LOUISIANA-PACIFIC MARKS. Buyer acknowledges and agrees with
Louisiana-Pacific that Louisiana-Pacific has the absolute and exclusive
proprietary right to all names, marks, trade names, trademarks and corporate
symbols and logos used by Louisiana-Pacific or its Affiliates (including
Redwood, LLC), including those names, marks, trade names, trademarks and
corporate symbols and logos incorporating "L-P," "Louisiana-Pacific" and "Yes We
Can" (collectively, the "Louisiana-Pacific Marks"), all rights to which and the
goodwill represented thereby and pertaining thereto are being retained by
Louisiana-Pacific. Within 30 days after the Closing Date, Buyer shall and shall
cause Buyer's Affiliates to cease using any Louisiana-Pacific Xxxx and remove
from the assets, properties, stationary and literature of Buyer and Buyer's
Affiliates any and all Louisiana-Pacific Marks; provided, however, that Buyer or
its Affiliates shall be entitled to exhaust existing stocks of any office
supplies located on the Real Property at Closing and any inventories among the
Purchased Assets existing at Closing, so long as such inventories shall be sold
within six months after the Closing Date. Thereafter, Buyer shall not, and shall
cause Buyer's Affiliates not to, use any Louisiana-Pacific Xxxx in connection
with the sale of any products or services or otherwise in the conduct of their
business. In the event that Buyer breaches this Section 6.5, Louisiana-Pacific
shall be entitled to specific performance of this Section 6.5 and to injunctive
relief against further violations, as well as any other remedies at law or in
equity available to Louisiana-Pacific.
6.6 TITLE INSURANCE. Prior to the Closing Date,
Louisiana-Pacific shall reasonably cooperate with Buyer's efforts to obtain
commitments and final policies for standard CLTA owner's fee title insurance
policies, with respect to the Owned Real Property (the "Title Commitments"),
from First American Title Insurance Company (the "Title Company").
6.7 SEPARATION OF WOOD TREATMENT FACILITY. To
Louisiana-Pacific's knowledge, which knowledge for purposes of this Section 6.7
only is based solely on a review by Xxxxx Xxxxxxx, Forester of
Louisiana-Pacific, of the legal description and informal site inspection of the
portion of the Non-Timber Owned Real Property comprised of the wood treating
plant located in Ukiah, California (the "Wood Treatment Facility") on
approximately 8.88 acres of real property more fully described on Disclosure
Schedule 6.7 (the "Wood Treatment Facility Property"), the primary wood treating
operations and facilities of the Wood Treatment Facility are situated within the
Wood Treatment Facility Property. Louisiana-Pacific agrees that it shall
reasonably cooperate with Buyer's efforts to verify that the Wood Treatment
Facility Property is a valid and lawfully created parcel and that the primary
wood treating operations and facilities of the Wood Treatment Facility are
situated within the Wood Treatment Facility Property. Louisiana-Pacific agrees
that it shall also reasonably cooperate with Buyer's efforts to obtain a 116.7
endorsement from the Title Company insuring Buyer that the Wood Treatment
Facility Property constitutes a separate legal parcel in compliance with the
California Subdivision Map Act. In the event Buyer reasonably determines that
the Wood Treatment Facility Property is not a valid and lawfully created parcel
or that the primary wood treating operations and facilities of the Wood
Treatment Facility are not situated within the Wood Treatment Facility Property
and, therefore, a boundary line adjustment or other legal subdivision (a "Legal
Division") of the Non-Timber Owned Real Property used in connection with the
primary wood treating operations of the Wood Treatment Facility would be
necessary, Louisiana-Pacific agrees to reasonably cooperate with Buyer's efforts
to obtain the requisite
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Legal Division whether such Legal Division is obtained prior to or following the
Closing. The parties acknowledge and agree, however, that the separate
conveyance of the Wood Treatment Facility Property or the issuance of a 116.7
endorsement are not a condition to Closing.
6.8 ACKNOWLEDGEMENTS BY BUYER. In order to induce
Louisiana-Pacific to enter into and perform this Agreement and the Ancillary
Agreements, Buyer acknowledges and agrees with Louisiana-Pacific as follows:
(a) To the knowledge of Buyer, Louisiana-Pacific's
representations and warranties made in Article IV are true and correct. To the
extent any representation or warranty of Louisiana-Pacific made herein is, to
the knowledge of Buyer acquired prior to the Closing, untrue or incorrect with
respect to a particular matter (other than if such knowledge is obtained by an
update to the Disclosure Schedule pursuant to Section 6.11), and Buyer closes
under this Agreement without promptly disclosing to Louisiana-Pacific in writing
such knowledge prior to the Closing Date, Buyer shall have no rights under this
Agreement or the Ancillary Agreements (unless the parties mutually agree upon an
amendment thereto) by reason of such untruth or inaccuracy with respect to such
matter; provided, that Louisiana-Pacific shall have the burden of proving such
knowledge of Buyer.
(b) Buyer will be relying solely on its own investigation as to
the Business and Louisiana-Pacific's representations and warranties set forth in
Article IV, and except as otherwise expressly agreed in the Environmental
Agreement, is assuming the risk that adverse physical, economic or other
conditions or circumstances (including soils and groundwater conditions) may not
have been revealed by such investigation.
(c) EXCEPT AS SET FORTH IN ARTICLE IV OF THIS AGREEMENT AND IN
ARTICLE II OF THE ENVIRONMENTAL AGREEMENT, NONE OF LOUISIANA-PACIFIC OR ANY OF
ITS AFFILIATES, EMPLOYEES, REPRESENTATIVES OR AGENTS MAKES OR HAS MADE ANY
REPRESENTATION OR WARRANTY AS TO THE ACCURACY OR COMPLETENESS OF ANY
INFORMATION, WRITTEN OR ORAL, FURNISHED TO OR PREPARED AT THE REQUEST OF BUYER
OR ANY OF ITS AFFILIATES, EMPLOYEES, REPRESENTATIVES OR AGENTS WITH RESPECT TO
LOUISIANA-PACIFIC, LPS CORPORATION, REDWOOD, LLC OR ANY OF THEIR BUSINESSES,
ASSETS OR PROPERTIES.
(d) THE REPRESENTATIONS AND WARRANTIES SET FORTH IN ARTICLE IV
OF THIS AGREEMENT AND IN ARTICLE II OF THE ENVIRONMENTAL AGREEMENT CONSTITUTE
THE SOLE AND EXCLUSIVE REPRESENTATIONS AND WARRANTIES OF LOUISIANA-PACIFIC, LPS
CORPORATION AND REDWOOD, LLC TO BUYER IN CONNECTION WITH THE TRANSACTIONS
CONTEMPLATED HEREBY. THERE ARE NO REPRESENTATIONS, WARRANTIES, COVENANTS,
UNDERSTANDINGS OR AGREEMENTS, ORAL OR WRITTEN, IN RELATION THERETO BETWEEN THE
PARTIES OTHER THAN THOSE INCORPORATED HEREIN AND THEREIN. EXCEPT FOR THE
REPRESENTATIONS AND WARRANTIES EXPRESSLY SET FORTH IN ARTICLE IV OF THIS
AGREEMENT AND IN ARTICLE II OF THE ENVIRONMENTAL AGREEMENT, BUYER DISCLAIMS
RELIANCE ON ANY REPRESENTATIONS OR WARRANTIES, EITHER EXPRESS OR IMPLIED, BY OR
ON BEHALF OF LOUISIANA-PACIFIC, LPS CORPORATION, REDWOOD, LLC OR THEIR
27
AFFILIATES, EMPLOYEES, REPRESENTATIVES OR AGENTS. BUYER ACKNOWLEDGES AND AGREES
THAT, EXCEPT AS PROVIDED IN ARTICLE II OF THE ENVIRONMENTAL AGREEMENT, THERE ARE
NO REPRESENTATIONS OR WARRANTIES OF LOUISIANA-PACIFIC, LPS CORPORATION OR
REDWOOD, LLC WITH RESPECT TO THE CONDITION OF THE PROPERTIES OR ASSETS OF
LOUISIANA-PACIFIC, LPS CORPORATION OR REDWOOD, LLC (INCLUDING THE REAL
PROPERTY), COMPLIANCE BY LOUISIANA-PACIFIC, LPS CORPORATION OR REDWOOD, LLC WITH
ENVIRONMENTAL LAWS AND ENVIRONMENTAL PERMITS OR THE PRESENCE OR RELEASES OF
HAZARDOUS MATERIAL IN THE FIXTURES, SOILS, GROUNDWATER, SURFACE WATER OR AIR ON,
UNDER OR ABOUT OR EMANATING FROM ANY OF THE PROPERTIES OR ASSETS OF
LOUISIANA-PACIFIC, LPS CORPORATION OR REDWOOD, LLC (INCLUDING THE REAL
PROPERTY).
6.9 PUBLIC ANNOUNCEMENTS. Neither Buyer, Louisiana-Pacific nor
the representatives of either of them shall make any public announcement with
respect to this Agreement, the Ancillary Agreements or the transactions
contemplated hereby or thereby without the prior written consent of the other
party hereto. The foregoing notwithstanding, any such public announcement may be
made if required by applicable statute, law, regulation, Governmental Order or
securities exchange rule, provided that the party required to make such public
announcement shall confer with the other party concerning the timing and content
of such public announcement before the same is made and any description of Buyer
or its Affiliates shall be subject to prior notice to and consultation with
Buyer, and shall, without the consent of Buyer, only be made to the extent that
Louisiana-Pacific reasonably believes required by law.
6.10 DISCLOSURE OF CONFIDENTIAL INFORMATION. Until the third
anniversary of the Closing Date, Louisiana-Pacific shall, and shall cause its
Affiliates to, hold in confidence, and not, without the prior written approval
of Buyer, use for their own benefit or the benefit of any party other than Buyer
or disclose to any Person other than Buyer (other than as required by applicable
statute, law, regulation or Governmental Order) any confidential information
relating to the Business, except such information as was publicly available
prior to the Closing Date, and except for information necessary for
Louisiana-Pacific to conduct its business and/or exercise its rights under this
Agreement.
6.11 RIGHT TO UPDATE DISCLOSURE SCHEDULE. From time to time
prior to the Closing, on its own initiative or after receipt of a written notice
from Buyer pursuant to Section 0, Louisiana-Pacific shall update or amend its
disclosure of any matter of which it has knowledge that is required to be set
forth in any Exhibit, Schedule or the Disclosure Schedule (other than an update
or amendment that involves the deletion of any matter or description set forth
in Schedule 0 as delivered at the Agreement Date). If Louisiana-Pacific believes
in good faith that the information in any such update or amendment discloses any
fact or circumstance that would have a Material Adverse Effect, then
Louisiana-Pacific shall so notify Buyer in writing within five business days
after the date on which Louisiana-Pacific notifies Buyer of the proposed update
or amendment. If Louisiana-Pacific does so notify Buyer, within such five
business day period, the parties shall attempt in good faith to negotiate an
equitable resolution, by adjustment of the Purchase Price or otherwise. If the
parties are unable to reach such a resolution within ten business days of
Buyer's receipt of such notice, Buyer may terminate this Agreement by written
notice to Louisiana-Pacific within five business days thereafter subject to
Section 0. Except as the parties may otherwise expressly agree in
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writing, effective as of the Closing, Buyer shall be deemed to have waived its
right to make any claim for indemnification under this Agreement on the basis of
any matter or matters that Louisiana-Pacific asserts to constitute a Material
Adverse Effect pursuant to the second sentence of this Section 6.11.
6.12 ASSIGNMENT OF INSURANCE PROCEEDS. The
Mendocino-Sonoma-Riverside Assets shall include the right to receive any
casualty insurance proceeds related thereto and Louisiana-Pacific shall assign
to Buyer the proceeds, if any, of all casualty insurance, including any business
interruption insurance, payable by reason of fire, flood, riot, theft, Act of
God or other casualty, with respect to the period beginning on the Agreement
Date and ending on the Closing Date. Such right to receive casualty insurance
proceeds shall be Buyer's sole right with respect to any damaged assets, other
than pursuant to Section 7.5.
6.13 REVISION TO DISCLOSURE SCHEDULE. Louisiana-Pacific, at
least 15 days prior to the Closing Date shall provide to Buyer, based on Buyer's
reasonable specifications, revised Schedules and Disclosure Schedule Sections of
the Mendocino-Sonoma-Riverside Assets describing which such assets relate
primarily to (a) the timber business, (b) the wood treatment business or (c) the
distribution business; provided that such revision shall not be deemed to modify
or affect any representations or warranties contained herein.
6.14 CERTAIN ADJUSTMENTS.
(a) On or prior to the Closing Date, Louisiana-Pacific shall
obtain equipment being used under the contracts by and between Louisiana-Pacific
and Xxxxx Enterprises or its Affiliates, with a value or an agreement to buy
equipment for use in the Ukiah sawmill yard at a discount to fair market value,
of at least $1,000,000 for conveyance to Buyer at the Closing, as is with all
faults. In lieu of transferring such equipment to Buyer, Louisiana-Pacific shall
have the option of deducting $1,000,000 from the Purchase Price, which deduction
shall be allocated among the Purchased Assets as reasonably determined by
Louisiana-Pacific.
(b) On or prior to the Closing Date, Louisiana-Pacific shall
either (1) expend at least $1,000,000 for capital related matters connected with
roads associated with the Purchased Assets, or (2) reduce the Purchase Price by
an amount equal to the difference between $1,000,000 and the amount
Louisiana-Pacific shall have actually spent for such capital related matters
during such period. Any such reduction of the Purchase Price shall be allocated
among the Purchased Assets as reasonably determined by Louisiana-Pacific.
(c) On or prior to the Closing Date, Louisiana-Pacific shall
either (1) obtain the Approval of the lessor for the assignment of
Louisiana-Pacific's rights and obligations for the leased vehicles set forth on
Disclosure Schedule Section 4.7(a)(i)-2 (the "Vehicles") pursuant to the lease
agreement with PACCAR Leasing Corporation provided that the outstanding
principal amount due for such Vehicles under such lease shall be added to the
Adjusted Working Capital baseline amount set forth in paragraph (iv) of Schedule
2.6(d), or (2) if Louisiana-Pacific is unable to obtain such Approval, it shall
purchase such Vehicles and thereby discharge all obligations under such lease
and convey the Vehicles to Buyer or its permitted assigns free and clear of all
liens, claims and encumberances pursuant to Section 2.2.
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6.15 NO SHOP. Louisiana-Pacific shall not (and shall not cause
or permit any of Louisiana-Pacific's Affiliates to) (1) solicit, initiate, or
encourage the submission of any proposal or offer from any Person to acquire the
Business, or any portion of the Purchased Assets (other than in the ordinary
course of business or as otherwise allowed by this Agreement), or (2)
participate in any discussions or negotiations regarding, furnish any
information with respect to, assist or participate in, or facilitate in any
other manner, any effort or attempt by any Person to acquire or seek to acquire
the Business or any portion of the Purchased Assets (other than in the ordinary
course of business or as otherwise allowed by this Agreement). Louisiana-Pacific
will notify Buyer promptly if any Person makes any proposal or offer with
respect to any of the foregoing. Notwithstanding any of the foregoing, this
Section 6.15 shall not be deemed to cover any inquiries, proposals, offers,
contacts, discussions or matters with respect to Louisiana-Pacific as a whole
(relating to mergers, acquisitions, or similar matters).
6.16 CERTAIN UPDATE. Louisiana-Pacific shall use its good faith
commercially reasonable efforts to advise Buyer in writing on the Closing Date
of the following information: (1) the then current employees of the Business and
other matters set forth on Disclosure Schedule Section 4.11 and (2) the sale or
other disposal since the Agreement Date of any Non-Timber Personal Property
whose value is in excess of $25,000 where there has not been a replacement of at
least comparable value.
ARTICLE VII
CONDITIONS TO THE OBLIGATIONS OF BUYER
The obligations of the Buyer to effect the transactions
contemplated hereby shall be subject to the fulfillment or satisfaction, on or
before the Closing Date, of each of the following conditions:
7.1 ACCURACY OF REPRESENTATIONS AND WARRANTIES. Subject to
Section 12.4, all of the representations and warranties of Louisiana-Pacific,
LPS Corporation and Redwood, LLC contained herein shall be true and correct as
of the Agreement Date and as of the Closing with the same effect as though made
at and as of the Closing Date, except, in either case, (a) that representations
and warranties made as of, or in respect of, only a specified date or period
shall be true and correct in respect of, or as of, such date or period, and (b)
to the extent that any failure of such representations and warranties to be true
and correct as aforesaid when taken in the aggregate would not have a Material
Adverse Effect, or (c) to the extent there has been an Allowed Pre-Signing
Change or an Allowed Pre-Closing Change.
7.2 PERFORMANCE. Louisiana-Pacific, LPS Corporation and
Redwood, LLC shall have performed and complied in all material respects with all
agreements and obligations required by this Agreement to be performed or
complied with by it on or prior to the Closing Date, except where the failure to
so perform or comply when taken in the aggregate would not have a Material
Adverse Effect. Without limiting the generality of the foregoing,
Louisiana-Pacific shall have tendered to Buyer at the Closing each of the
deliverables specified in Section 3.2.
7.3 TERMINATION OF HSR ACT WAITING PERIOD. Any waiting period
(and any extension thereof) under the HSR Act applicable to the transactions
contemplated hereby shall have expired or shall have been terminated.
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7.4 ABSENCE OF GOVERNMENTAL ORDERS. No temporary or permanent
Governmental Order shall be in effect that prohibits or makes unlawful
consummation of the transactions contemplated hereby.
7.5 TIMBER CASUALTY. If, prior to Closing, any loss or damage
resulting in substantial harm to the timber on 25% or more of the acreage
comprising the Timber Real Property occurs due to fire, flood, riot, theft, act
of God or other casualty, Buyer may elect to terminate this Agreement within 5
business days after Buyer learns of the occurrence of such casualty loss. If,
prior to Closing, any loss or damage resulting in substantial harm to the timber
on less than 25% of the acreage comprising the Timber Real Property occurs due
to fire, flood, riot, theft, act of God or other casualty, Buyer may elect not
to purchase, and shall not have any obligation to pay for, such damaged timber
and the Purchase Price shall be reduced by an amount equal to the fair market
value of such damaged timber immediately prior to such casualty loss.
7.6 LEGAL OPINION. Louisiana-Pacific shall have delivered the
written legal opinion of Xxxxxx, Xxxxxxxxxx & Xxxxxxxxx LLP or of the in-house
legal counsel of Louisiana-Pacific, dated as of the Closing Date, in the form of
Exhibit 7.6.
7.7 JOINT CONDITIONS. Each condition specified in Article VII
of the Xxxxxxx Purchase Agreement, all of which are incorporated herein by this
reference, shall have been satisfied or waived by Xxxxxxx.
7.8 CONSENT TO ASSIGNMENT. The landlord under the Riverside
Lease shall have consented in writing to the assignment of the Riverside Lease
to Buyer, or if such consent has not been obtained, Louisiana-Pacific shall have
agreed to indemnify Buyer for the actual reasonable out-of-pocket costs incurred
as a result of the failure to have obtained such consent.
7.9 NOTE. In the event Redwood, LLC elects to require delivery
of the Note, the Note Arrangement shall be reasonably satisfactory to Buyer.
7.10 TITLE. Buyer shall have received from the Title Company a
standard owner's title policy in favor of Buyer with respect to the Owned Real
Property subject to Permitted Liens and subject to Encumbrances which
individually or in the aggregate are not reasonably likely to result in Material
Adverse Effect; provided that any requirements of Buyer with respect to extended
coverages, title endorsements, surveys, or similar matters are not required as a
condition of the Closing.
ARTICLE VIII
CONDITIONS TO THE OBLIGATIONS OF LOUISIANA-PACIFIC
The obligations of Louisiana-Pacific, LPS Corporation and
Redwood, LLC to effect the transactions contemplated hereby shall be subject to
the fulfillment or satisfaction, on or before the Closing Date, of each of the
following conditions:
8.1 ACCURACY OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties of Buyer contained herein shall be true and
correct in all material respects at and as of the Closing Date with the same
effect as though made at and as of the Closing Date.
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8.2 PERFORMANCE. Buyer shall have performed and complied in all
material respects with all agreements and obligations required by this Agreement
to be performed or complied with by it on or prior to the Closing Date. Without
limiting the generality of the foregoing, Buyer shall have tendered to
Louisiana-Pacific at the Closing each of the deliverables specified in Section
3.3.
8.3 TERMINATION OF HSR ACT WAITING PERIOD. Any waiting period
(and any extension thereof) under the HSR Act applicable to the transactions
contemplated hereby shall have expired or shall have been terminated.
8.4 ABSENCE OF GOVERNMENTAL ORDERS. No temporary or permanent
Governmental Order shall be in effect that prohibits or makes unlawful
consummation of the transactions contemplated hereby.
8.5 LEGAL OPINION. Buyer shall have delivered the written legal
opinion of Altheimer & Xxxx, counsel for Buyer, dated as of the Closing Date, in
the form of Exhibit 8.5.
8.6 JOINT CONDITIONS. Each condition specified in Article VIII
of the Xxxxxxx Purchase Agreement, all of which are incorporated herein by this
reference, shall have been satisfied or waived by Louisiana-Pacific.
8.7 INDEMNITY OBLIGATION. Louisiana-Pacific, LPS Corporation
and Redwood, LLC shall have reasonably determined that they do not have an
aggregate indemnity obligation under this Agreement in excess of $10,000,000.
8.8 INSTALLMENT SALE TREATMENT. If Louisiana-Pacific makes the
election pursuant to Section 2.7, Louisiana-Pacific shall have determined in the
exercise of its reasonable judgment that the sale of the Note Assets will
qualify for tax deferred installment treatment as provided by Section 453 of the
Code and would not be subject to the provisions of Section 453A of the Code.
ARTICLE IX
INDEMNIFICATION
9.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties of Louisiana-Pacific, LPS Corporation and
Redwood, LLC in Article IV and of Buyer in Article V (and as restated in the
Officer's Certificates delivered pursuant to subsections 3.2(f) or 3.3(f)) shall
survive for a period of two years from the Closing. If written notice of a claim
has been given prior to the expiration of the applicable representations and
warranties by a party in whose favor such representations and warranties have
been made to the party that made such representations and warranties, then the
relevant representations and warranties shall survive as to such claim, until
the claim has been finally resolved.
9.2 INDEMNIFICATION BY LOUISIANA-PACIFIC. Except as otherwise
limited by this Agreement, so long as Buyer shall have validly tendered to
Louisiana-Pacific at the Closing each of the deliverables specified in Section
3.3 and the Closing has occurred, Louisiana-Pacific, LPS Corporation and
Redwood, LLC shall indemnify, defend and hold harmless Buyer and its Affiliates,
shareholders, officers, directors, employees, subsidiaries, successors and
assigns (collectively, the "Buyer Indemnified Parties") from and against, and
pay or reimburse the Buyer
32
Indemnified Parties for, any and all losses, damages, claims, costs and
expenses, interest, awards, judgments and penalties (including reasonable legal
costs and expenses) actually suffered or incurred by them (hereinafter a "Buyer
Loss") arising out of or resulting from:
(a) the inaccuracy of any representation or warranty of
Louisiana-Pacific, LPS Corporation or Redwood, LLC set forth in Article IV or as
restated in the Officer's Certificate delivered pursuant to subsection 3.2(f);
provided that solely for purposes of this subsection 9.2(a), the accuracy of
such representations and warranties shall be determined (i) without giving
effect to any limitations that are based on a Material Adverse Effect or (ii)
without regard to any disclosures by Buyer to Louisiana-Pacific pursuant to
subsection 6.8(a) of this Agreement or to any disclosures by Louisiana-Pacific
to Buyer pursuant to Section 6.11 of this Agreement (other than as to matters
for which Buyer shall have been deemed to have waived its right to
indemnification pursuant to the last sentence of Section 6.11 and other than
matters that constitute Assumed Liabilities pursuant to subsection 2.4(f) of
this Agreement);
(b) any other breach or violation of this Agreement by
Louisiana-Pacific; and
(c) any Retained Liability; provided, however, that for
purposes of this subsection 9.2(c), Retained Liabilities shall not include any
liabilities or obligations of Louisiana-Pacific, LPS Corporation or Redwood, LLC
arising under or pursuant to Environmental Laws or Environmental Permits.
Any such payment shall be made in cash and treated by the parties hereto as an
adjustment of the Purchase Price.
9.3 INDEMNIFICATION BY BUYER. Except as otherwise limited by
this Agreement, Buyer shall, and shall cause Buyer's Affiliates to which it
assigns its rights or delegates its duties pursuant to Section 13.6 to,
indemnify, defend and hold harmless Louisiana-Pacific and its Affiliates,
shareholders, officers, directors, employees, subsidiaries, successors and
assigns (collectively, the "Louisiana-Pacific Indemnified Parties") from and
against, and pay or reimburse the Louisiana-Pacific Indemnified Parties for, any
and all losses, damages, claims, costs and expenses, interest, awards, judgments
and penalties (including reasonable legal costs and expenses) actually suffered
or incurred by them (hereinafter a "Louisiana-Pacific Loss") arising out of or
resulting from:
(a) the inaccuracy of any representation or warranty of Buyer
set forth in Article V; provided that solely for purposes of this subsection
9.3(a), the accuracy of such representations and warranties shall be determined
without giving effect to any limitations that are based on a Material Adverse
Effect;
(b) any other breach or violation of this Agreement by Buyer;
(c) any Assumed Liability; and
(d) Buyer's or Buyer's Affiliates' hiring practices and
decisions followed or effected before, on or after the Closing Date, including
its drug testing program, all only to the extent such hiring practices are in
violation of applicable laws or the terms of this Agreement.
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Any such payment shall be made in cash and treated by the parties hereto as an
adjustment of the Purchase Price.
9.4 GENERAL INDEMNIFICATION PROVISIONS.
(a) For the purposes of this Section 9.4 and Section 9.5: the
term "Indemnitee" shall refer to the Person or Persons indemnified, or entitled,
or claiming to be entitled, to be indemnified, pursuant to the provisions of
Section 9.2 or 9.3, as the case may be; the term "Indemnitor" shall refer to the
Person having the obligation to indemnify pursuant to such provisions; and
"Losses" shall refer to Louisiana-Pacific Losses or Buyer Losses, as the case
may be.
(b) Within a reasonable time following the determination
thereof, an Indemnitee shall give the Indemnitor notice of any matter which an
Indemnitee has determined has given or could give rise to a right of
indemnification under this Agreement (regardless of whether a claim for
indemnification otherwise would be prohibited by subsection 9.5(a)), stating the
amount of the Loss, if known, and method of computation thereof, all with
reasonable particularity and containing a reference to the provisions of this
Agreement in respect of which such right of indemnification is claimed or
arises. The obligations and Liabilities of an Indemnitor under this Article IX
with respect to Losses arising from claims of any third Person that are subject
to the indemnification provided for in this Article IX ("Third Party Claims")
shall be governed by and contingent upon the following additional terms and
conditions: If an Indemnitee shall receive notice of any Third Party Claim, the
Indemnitee shall promptly give the Indemnitor notice of such Third Party Claim.
Such notice shall be given and the Indemnitor shall have the right to defend
such Third Party Claim (as set forth below) even if indemnification of the
Indemnitee with respect thereto otherwise would be prohibited by subsection
9.5(a). If the Indemnitor acknowledges in writing its obligation to indemnify
the Indemnitee hereunder against any Losses that may result from such Third
Party Claims (subject to the limitations set forth herein), then the Indemnitor
shall be entitled, at its option, to assume and control the defense of such
Third Party Claim at its expense and through counsel of its reasonable choice if
it gives notice to the Indemnitee within 60 calendar days of the receipt of
notice of such Third Party Claim from the Indemnitee of its intention to do so.
In the event the Indemnitor exercises its right to undertake the defense against
any such Third Party Claim as provided above, the Indemnitee shall cooperate
with the Indemnitor in such defense and make available to the Indemnitor, at the
Indemnitor's expense, all witnesses, pertinent records, materials and
information in its possession or under its control relating thereto as is
reasonably required by the Indemnitor. Similarly, in the event the Indemnitee
is, directly or indirectly, conducting the defense against any such Third Party
Claim, the Indemnitor shall cooperate with the Indemnitee in such defense and
make available to it all such witnesses, records, materials and information in
its possession or under its control relating thereto as is reasonably required
by the Indemnitee. No such Third Party Claim, except the settlement thereof
which involves the payment of money only (by a party or parties other than the
Indemnitee) and for which the Indemnitee is released by the third party claimant
and is totally indemnified by the Indemnitor, may be settled by the Indemnitor
without the written consent of the Indemnitee. No Third Party Claim that is
being defended in good faith by the Indemnitor shall be settled by the
Indemnitee without the written consent of the Indemnitor.
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9.5 LIMITATIONS ON INDEMNIFICATION.
(a) No claim or claims may be made against an Indemnitor for
indemnification pursuant to either subsection 9.2(a) or subsection 9.3(a), as
the case may be, unless the Losses of the Indemnitees with respect to such
clauses shall exceed $1,000,000 in the aggregate (the "Deductible"), in which
case the Indemnitor shall be obligated to the Indemnitee only for the amount of
the Loss in excess of the Deductible.
(b) In addition to the provisions and limitations as provided
in (i) Section 9.1 with respect to the period of survival of representations and
warranties and (ii) subsection 9.5(a) with respect to dollar amounts of Losses
for which indemnification for breaches of representations and warranties is not
available, no Indemnitor shall be liable for any Louisiana-Pacific Loss or Buyer
Loss, as the case may be, to the extent such Louisiana-Pacific Losses (in the
aggregate) or Buyer Losses (in the aggregate) relate to breaches of
representations and warranties contained in Article IV or Article V, as the case
may be, and exceed an amount equal to $25,000,000 in excess of the Deductible
(in addition to amounts available separately for environmental indemnification
under the Environmental Agreement).
(c) In addition, the Liability of any Indemnitor with respect
to any Losses shall be determined on a basis that is net of the amount of any
such Losses covered by insurance. Without limiting the generality of the
foregoing, any claim made by Buyer arising out of or resulting from an alleged
breach of any representation or warranty of Louisiana-Pacific, LPS Corporation
or Redwood, LLC set forth in Section 4.8 shall be tendered first to the Title
Company for recovery of any Buyer Losses.
(d) Notwithstanding any provision of this Agreement to the
contrary, all claims for indemnification hereunder or otherwise by Buyer with
respect to Buyer Losses arising out of or resulting from (i) the application of,
or compliance with, any Environmental Law or Environmental Permit or (ii) the
presence or Releases of any Hazardous Material in the fixtures, soils,
groundwater, surface water or air, or on under or about, or emanating from, any
of the properties or assets of Louisiana-Pacific, LPS Corporation or Redwood,
LLC, shall be exclusively governed by the terms of the Environmental Agreement.
9.6 WAIVER AND RELEASE. Except as provided in this Agreement or
in the Environmental Agreement, Buyer, on behalf of itself and any Buyer
Indemnified Party, hereby forever waives, relieves, releases and discharges the
Louisiana-Pacific Indemnified Parties and their successors and assigns from any
and all rights, Liabilities, Actions (including future Actions) and Buyer
Losses, whether known or unknown at the Closing Date, which any Buyer
Indemnified Party has or incurs, or may in the future have or incur, arising out
of or related to (a) the physical, environmental, economic or legal condition of
the properties and assets currently or formerly used in the Business or
operated, owned, leased, controlled, possessed, occupied or maintained by LPS
Corporation, Redwood, LLC or Louisiana-Pacific and related to the Business or
(b) any Assumed Liability; provided, that such waiver and release shall not
apply with respect to acts or omissions of the Louisiana-Pacific Indemnified
Parties after the Closing Date.
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ARTICLE X
TAX MATTERS
10.1 ALLOCATION OF PURCHASE PRICE. For income tax purposes, the
parties shall allocate the Purchase Price among the Mendocino-Sonoma-Riverside
Assets in accordance with Schedule 10.1. For income tax purposes, the parties
shall treat the Note as the consideration for the Note Assets. The parties shall
complete IRS Form 8594 consistent with the foregoing allocations and shall
furnish each other with a copy of such form prepared in draft form within 60
days prior to the filing due date for such form. Within 60 days after the
Closing Date, Redwood, LLC shall submit to Buyer detailed allocation schedules
that are in all respects consistent with Schedule 10.1. No party shall file any
Tax Return or take a position with any Governmental Body that is inconsistent
with the foregoing allocations, unless Buyer has received an opinion of counsel
(copy to Louisiana-Pacific) concluding that there is no reasonable basis for
such position.
10.2 CERTAIN TAXES.
(a) Except to the extent reflected in the adjustment to the
Purchase Price pursuant to subsection 2.6(d), all real property Taxes, personal
property Taxes and similar ad valorem obligations that are due or become due
without acceleration with respect to the Purchased Assets or the Business for
tax periods within which the Closing Date occurs (collectively, the "Apportioned
Obligations") shall be apportioned between Redwood, LLC and Buyer as of the
Closing Date based on the number of days in any such period falling on or before
the Closing Date, on the one hand, and after the Closing Date, on the other hand
(it being understood that Buyer is responsible for the portion of each such
Apportioned Obligation attributable to the number of days after the Closing Date
in the relevant tax period, which is July 1 through June 30). Each party shall
cooperate in assuring that Apportioned Obligations that are due and payable on
or prior to the Closing Date are billed directly to and paid by Redwood, LLC,
and that Apportioned Obligations that are due and payable after the Closing Date
shall be billed directly to and paid by Buyer. In the event that any refund,
rebate or similar payment is received by Buyer or Redwood, LLC for any real
property Taxes, personal property Taxes or similar ad valorem obligations that
are Apportioned Obligations and which payment pertains to the tax period in
which the Closing Date falls, such payment shall be apportioned between Redwood,
LLC and Buyer on the basis of each party's respective ownership of the taxed
asset during the applicable tax period. In the event that it is determined
subsequent to the Closing Date that additional real property Taxes, personal
property Taxes or similar ad valorem obligations that are Apportioned
Obligations are required to be paid for the applicable tax period in which the
Closing Date falls, such additional taxes will be apportioned between Redwood,
LLC and Buyer on the basis of each party's respective ownership of the taxed
asset during the applicable tax period.
(b) Louisiana-Pacific shall indemnify and hold harmless Buyer
from and against any Taxes imposed upon Buyer solely as a result of its being a
transferee of the Business or the Purchased Assets and only to the extent that
such Taxes are attributable to a period before the Closing Date.
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(c) Notwithstanding any other provision contained in this
Agreement (including Section 9.5), any obligation arising out of this Section
10.2 shall survive until expiration of the applicable statute of limitations for
any such Tax obligations.
10.3 BUYER'S COOPERATION IN A SECTION 1031 EXCHANGE. If so
requested by Louisiana-Pacific or Redwood, LLC, Buyer agrees to cooperate with
Louisiana-Pacific and Redwood, LLC in any manner reasonably necessary to
complete an exchange under Section 1031 of the Code and any state and local
counterpart provision with respect to the Purchased Assets at no additional cost
or liability to Buyer.
ARTICLE XI
EMPLOYEES AND EMPLOYEE BENEFIT PLANS
11.1 EMPLOYMENT. Within 10 days prior to the Closing Date, to
be effective as of the Closing Date, Buyer shall offer to employ, or to cause
Buyer's Affiliates to offer to employ, all of the Business Employees, each at a
rate of compensation not less than the annual base salary rate (if salaried) or
current hourly compensation rate (if hourly) set forth on Disclosure Schedule
Section 4.11, within 50 miles of such Business Employee's principal place of
employment with Louisiana-Pacific immediately prior to the Closing Date, and
with no substantial reduction in the responsibilities or duties that applied to
such Business Employee in his or her position at Louisiana-Pacific immediately
prior to the Closing Date. The Buyer's offer of employment to each Business
Employee in accordance with this Section 11.1 may be conditioned upon such
Business Employee's passing a drug test administered in compliance with
applicable law and upon such Business Employee being actively employed by
Louisiana-Pacific or its Affiliates on the Closing Date (i.e., being actively at
work or on vacation or excused absence for a period not expected by
Louisiana-Pacific to be of long duration; provided that such leave does not
expire later than 30 days after the Closing Date or such longer period required
by law). Buyer shall, and shall cause Buyer's Affiliates to, count the service
recognized by Louisiana-Pacific of each Business Employee as reflected on
Disclosure Schedule Section 4.11, under Buyer's and Buyer's Affiliates' vacation
policies and welfare benefit plans applicable to such Business Employee. In
addition, Buyer shall, and shall cause Buyer's Affiliates to, count such service
in determining each Business Employee's eligibility to participate in, each
Business Employee's vested percentage in, and each Business Employee's
eligibility for retirement subsidies under, each of Buyer's and Buyer's
Affiliates' employee benefit plans (as defined in Section 3(3) of ERISA)
applicable to such Business Employee.
11.2 EMPLOYEE TRANSITION ADMINISTRATION. Within 21 days
following the date of this Agreement, Louisiana-Pacific shall provide to Buyer
all employee data reasonably necessary to allow Buyer to establish payroll and
other employee benefit systems in advance of its hiring of any Business
Employees pursuant to this Agreement. In addition, Louisiana-Pacific and Buyer
shall each make its appropriate employees and reasonable information available
to the other at such reasonable times prior to and after the Closing Date as may
be necessary for the proper administration by the other of any and all matters
relating to employee benefits and worker's compensation claims affecting their
employees. After the Agreement Date and before the Closing Date,
Louisiana-Pacific shall provide Buyer with reasonable access to the Business
Employees; provided that (i) such access shall not interfere with
Louisiana-Pacific's business operations, (ii) all communications to Business
Employees by Buyer shall be subject to Louisiana-Pacific's advance approval,
(iii) Louisiana-Pacific shall have the right to designate a
37
representative(s) to be present at any meeting between Buyer and any Business
Employee, and (iv) Buyer shall comply with all applicable employment and other
laws in connection with interviews, discussions and hiring practices.
11.3 VACATION. Buyer shall grant to each of the Business
Employees hired by Buyer pursuant to this Agreement vacation days or hours
determined under the Louisiana-Pacific vacation program applicable to each such
employee as of the Closing Date and reflected on Disclosure Schedule Section
4.11. The vacation days or hours granted by Buyer hereunder shall be provided
under a program no more restrictive than the vacation policy of
Louisiana-Pacific in effect on the Agreement Date.
11.4 VESTING. Louisiana-Pacific shall cause its Employee Stock
Ownership Trusts to recognize each Business Employee to be fully vested in his
or her account balance in such Plan as of Closing.
11.5 CROSS-INDEMNITY FOR CERTAIN WORKERS COMPENSATION CLAIMS.
Notwithstanding anything to the contrary in this Agreement, except for breaches
of representations and warranties under Article IV, the rights and obligations
of Louisiana-Pacific and Buyer, as between each other, with respect to claims by
Business Employees who accept Buyer's offer of employment ("Hired Employees")
based on occupational injury, illness or death, before and/or after the Closing
Date ("Workers' Compensation Claims") shall be governed by this Section 11.5 and
not the general indemnification provisions of Article IX. As between themselves,
without conferring any benefit on third Persons: (i) Louisiana-Pacific shall
indemnify, defend, and hold Buyer harmless against any Workers' Compensation
Claims that are incurred by Hired Employees prior to the Closing Date or that
relate to injuries incurred by Hired Employees prior to the Closing Date; (ii)
Buyer shall indemnify defend, and hold Louisiana-Pacific harmless against any
Workers' Compensation Claims that are incurred by Hired Employees on or after
the Closing Date or that relate to injuries incurred by Hired Employees on or
after the Closing Date; and (iii) notwithstanding clauses (i) and (ii): with
respect to any Workers' Compensation Claims that arise out of continuing work
place exposures both before and after the Closing Date (a) the respective
liabilities of Louisiana-Pacific and Buyer shall be apportioned in accordance
with the clear and convincing evidence that such Workers' Compensation Claim was
caused before and after Closing Date, respectively, and (b) to the extent that
there is not clear and convincing evidence to apportion the respective
liabilities of Louisiana-Pacific and Buyer to periods before and after the
Closing Date in accordance with clause (a): (I) Louisiana-Pacific shall
indemnify, defend and hold Buyer harmless against Louisiana-Pacific's Formula
Percentage (as defined below) of such Workers' Compensation Claims and (II)
Buyer shall indemnify, defend and hold Louisiana-Pacific harmless against
Buyer's Formula Percentage of such Workers' Compensation Claims. As used in this
Section 11.5, "Formula Percentage" means a percentage calculated for any
Workers' Compensation Claim by dividing the number of years (rounded to the
nearest whole year) of employment in the "relevant activity" (as hereinafter
defined) by the claimant with the indemnitor under this Section 11.5 by the
total number of years (rounded to the nearest whole year) of employment in the
"relevant activity" by the claimant with both Buyer and Louisiana-Pacific. As
used in this Section 11.5, the term "relevant activity" means the activity that
caused the occupational injury, illness or death upon which the Workers'
Compensation Claim is based. Louisiana-Pacific and Buyer hereby mutually waive
as to each other all rights of subrogation based on payments to
38
workers hereunder and all rights of employer immunity or limitation of liability
based on federal, state or local laws.
ARTICLE XII
TERMINATION
12.1 TERMINATION. This Agreement may be terminated at any time
prior to the Closing:
(a) by the mutual written consent of Buyer and
Louisiana-Pacific; or
(b) by either Buyer or Louisiana-Pacific, if the Closing shall
not have occurred by July 15, 1998 (the "Deadline Date") (provided that the
Deadline Date shall be extended to August 15, 1998 if either of the conditions
set forth in Sections 7.3 or 7.4 shall not have been satisfied by July 15,
1998); provided, however, that the right to terminate this Agreement pursuant to
this subsection shall not be available to any party or parties whose failure to
fulfill any obligation under this Agreement shall have been the cause of, or
shall have resulted in, the failure of the Closing to occur prior to such date;
or
(c) by Buyer, pursuant to Sections 7.5 or 6.11, or upon the
breach of any of the representations and warranties of Louisiana-Pacific
contained herein or in the Environmental Agreement or the failure by
Louisiana-Pacific to perform and comply with any of the agreements and
obligations required by this Agreement or the Environmental Agreement to be
performed or complied with by Louisiana-Pacific, provided that such breach or
failure is reasonably likely to result in a Material Adverse Effect and is not
cured within 20 days of Louisiana-Pacific's receipt of a written notice from
Buyer that such a breach or failure has occurred; or
(d) by Louisiana-Pacific, upon the breach in any material
respect of any of the representations and warranties of Buyer contained herein
or upon the breach in any material respect of any of the representations of
Xxxxxxx contained in the Xxxxxxx Purchase Agreement, or the failure by Buyer to
perform and comply in any material respect with any of the agreements and
obligations required by this Agreement or the Environmental Agreement to be
performed or complied with by Buyer, or the failure of Xxxxxxx to perform and
comply in any material respect with any of the agreements and obligations
required by the Xxxxxxx Purchase Agreement to be performed or complied with by
Xxxxxxx, provided that any such breach or failure is not cured within 20 days of
Buyer's or Xxxxxxx'x, as the case may be, receipt of a written notice from
Louisiana-Pacific that such a breach or failure has occurred.
12.2 WRITTEN NOTICE. In order to terminate this Agreement
pursuant to Section 12.1, the party so acting shall give written notice of such
termination to the other party, specifying the grounds thereof.
12.3 EFFECT OF TERMINATION. In the event of the termination of
this Agreement in accordance with Section 12.1, this Agreement (other than
Sections 2.8, 6.9 and 13.1, which shall survive the termination hereof) shall
become void and have no effect, with no liability on the part of any party or
its Affiliates, directors, officers, employees, shareholders or agents in
respect thereof. The Confidentiality Agreement shall continue in full force and
effect notwithstanding the termination of this Agreement for any reason.
39
12.4 CURE RIGHT. Notwithstanding anything to the contrary
contained in this Agreement, in the event of any breach of Louisiana-Pacific's,
LPS Corporation's or Redwood, LLC's representations, warranties or covenants
(set forth herein or in any Ancillary Agreement) or in the event of any notice
of termination given pursuant to Sections 7.5 or 6.11 prior to the Closing,
Louisiana-Pacific, at its sole discretion, shall have 20 days to cure such
breach or agree in writing to reimburse Buyer for any actual and reasonable
costs associated with such breach or matters resulting in such termination
notice; promptly payable at the time such costs are incurred; if
Louisiana-Pacific does so cure or offer to reimburse Buyer, Buyer shall have no
rights to terminate this Agreement or have any further claims against
Louisiana-Pacific or its Affiliates with respect to such breach or matters
resulting in such termination notice. In such events, Buyer shall have the right
to delay the Closing up to 30 days from the date of such cure or agreement to
reimburse.
ARTICLE XIII
GENERAL PROVISIONS
13.1 EXPENSES, TAXES, ETC. Except as otherwise provided herein,
each party will pay all fees and expenses incurred by it in connection with this
Agreement and the transactions contemplated hereby; provided, however, that all
sales, use, documentary, stamp and excise Taxes and all transfer, filing,
escrow, notary, title insurance premiums and endorsements, recordation and
similar Taxes and fees (including all real estate transfer Taxes and conveyance
and recording fees, if any) incurred in connection with this Agreement and the
transactions contemplated hereby will be borne 50% by Buyer and 50% by Redwood,
LLC; provided further that all such fees and expenses incurred by
Louisiana-Pacific or LPS Corporation in connection with the transfer of assets
to Redwood, LLC prior to the Agreement Date shall be borne solely by
Louisiana-Pacific or LPS Corporation, and any Tax refunds in respect of such
transfers shall inure solely to the benefit of Louisiana-Pacific or LPS
Corporation.
13.2 NOTICES. All notices and other communications given or
made pursuant hereto shall be in writing and shall be deemed to have been duly
given or made as of the date delivered or mailed if delivered personally or
mailed by registered or certified mail (postage prepaid, return receipt
requested), or sent by facsimile transmission, (confirmation received) to the
parties at the following addresses and facsimile transmission numbers (or at
such other address or number for a party as shall be specified by like notice),
except that notices after the giving of which there is a designated period
within which to perform an act and notices of changes of address or number shall
be effective only upon receipt:
(a) if to Louisiana-Pacific, Redwood, LLC or LPS
Corporation:
000 X.X. Xxxxx Xxxxxx
X.X. Xxxxxxx Xxxxx
Xxxxxxxx, Xxxxxx 00000
Attention: Xxxx X. Xxxxx
Facsimile No.: (000) 000-0000
Telephone No.: (000) 000-0000
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with a copy to:
Louisiana-Pacific Corporation
000 X.X. Xxxxx Xxxxxx
X.X. Bancorp Tower
Portland, Oregon 97204
Attention: Office of General Counsel
Facsimile No.: (000) 000-0000
Telephone No.: (000) 000-0000
and an additional copy to:
Xxxxxx, Xxxxxxxxxx & Xxxxxxxxx LLP
Old Federal Reserve Bank Building
000 Xxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
Xxxxxx X. Xxxx, Esq.
Facsimile No.: (000) 000-0000
Telephone No.: (000) 000-0000
(b) if to Buyer:
Sansome Forest Partners, L.P.
Xxx Xxxxxxxx Xxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxxxxxxx Xxxx
Facsimile No.: (000) 000-0000
Telephone No.: (000) 000-0000
with a copy to:
Altheimer & Xxxx
00 Xxxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx Xxxxxx
Facsimile No.: (000) 000-0000
Telephone No.: (000) 000-0000
13.3 DISCLOSURE SCHEDULE. The Disclosure Schedule shall be
divided into sections corresponding to the sections and subsections of this
Agreement. Disclosure of any fact or item in any section of the Disclosure
Schedule shall, should the existence of the fact or item or its contents be
relevant to any other section of the Disclosure Schedule, be deemed to be
disclosed with respect to that other section or subsection of the Disclosure
Schedule whether or not any explicit cross-reference appears therein. Disclosure
of any matter in the Disclosure Schedule shall not be deemed to imply that such
matter is or is not material. Disclosure of any matter in the Disclosure
Schedule shall not constitute an admission or raise any inference that such
matter constitutes a violation of law or an admission of Liability or facts
supporting Liability.
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13.4 INTERPRETATION.
(a) When a reference is made in this Agreement to Sections,
subsections, Schedules or Exhibits, such reference shall be to a Section,
subsection, Schedule or Exhibit to this Agreement unless otherwise indicated.
The words "include," "includes" and "including" when used herein shall be deemed
in each case to be followed by the words "without limitation." The table of
contents and the headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement. The words "herein" and "hereby" and similar references mean, except
where a specific Section or Article reference is expressly indicated, the entire
Agreement rather than any specific Section or Article. Except as otherwise
expressly provided herein, all monetary amounts referenced in this Agreement
shall mean U.S. dollars.
(b) Any references in this Agreement to the "best knowledge" or
"knowledge" of Louisiana-Pacific or to matters "known" to Louisiana-Pacific,
shall mean the actual knowledge without inquiry or investigation (other than
reviewing this Agreement) of only the Persons listed on Schedule 13.4(b)-1. Any
references in this Agreement to the "best knowledge" or "knowledge" of Buyer
shall mean the actual knowledge without inquiry or investigation (other than
reviewing this Agreement) of only the Persons listed on Schedule 13.4(b)-2.
Anything herein to the contrary notwithstanding, no Person listed on any of such
schedules shall have any personal Liability with respect to any of the matters
set forth in this Agreement or any representation or warranty herein being or
becoming untrue, inaccurate or incomplete.
13.5 SEVERABILITY. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
adverse to any party. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in an acceptable manner to the end
that transactions contemplated hereby are fulfilled to the greatest extent
possible.
13.6 ASSIGNMENT. Between the Agreement Date and the Closing
Date, no party hereto shall assign this Agreement by operation of law or
otherwise without the prior written consent of the other parties hereto unless
the assignor, together with the assignee (subject to the last proviso that
starts "provided, however," in the following sentence), remains liable
hereunder. The sale of more than 50% of the stock or ownership interest in Buyer
shall constitute an assignment of this Agreement for purposes of this Section;
provided, that Buyer may assign any or all of its rights and obligations, before
or immediately, prior to the Closing to three newly formed limited liability
companies that are wholly owned by Buyer, so long as the three new entities
formed to hold the assets, liabilities and contracts designated by
Louisiana-Pacific as the distribution business assets, liabilities and contracts
(the "Distribution Business LLC"), the timber business assets, liabilities and
contracts (the "Timber Business LLC") and the wood treatment business assets,
liabilities and contracts (the "Wood Treatment Assets") (the "Wood Treatment
Business LLC") on the list delivered pursuant to Section 6.13 shall agree to be
jointly and severally liable in a manner reasonably satisfactory to
Louisiana-Pacific for the obligations of Buyer hereunder; provided, however,
that the total aggregate combined liability of
42
Buyer, the Distribution Business LLC and the Timber Business LLC arising from or
relating to the Wood Treatment Assets or the Wood Treatment Business LLC and any
liabilities, obligations and costs related thereto shall not exceed $10,000,000.
Any attempted assignment in violation of this Section shall be deemed null and
void.
13.7 NO THIRD-PARTY BENEFICIARIES. This Agreement is for the
sole benefit of the parties hereto and their permitted assigns and nothing
herein expressed or implied shall give or be construed to give to any Person,
other than the parties hereto and such assigns, any legal or equitable rights
hereunder.
13.8 AMENDMENT. This Agreement may not be amended or modified
except by an instrument in writing signed by all of the parties hereto.
13.9 NO OTHER REMEDIES.
(a) Any and all remedies herein expressly conferred upon a
party hereby are deemed exclusive of any other remedy conferred hereby or by law
or equity on such party; provided, however, that any party hereto shall have the
right to seek specific performance of the obligations of another party hereto
under this Agreement if all of the conditions to the obligations of such party
seeking specific performance set forth in Article VII or Article VIII, as the
case may be, have been satisfied. In particular, except as provided in Sections
2.8, 6.5 and 11.5, the remedies provided by Article IX for Losses shall be
exclusive of any other rights or remedies available to a party against the other
party, either at law or in equity, in relation to any breach, default or
nonperformance of any representation, warranty, covenant, agreement or
undertaking made or entered into by such other party pursuant to this Agreement,
any agreement executed pursuant to this Agreement or the transactions
contemplated hereby. Notwithstanding any provision hereof or of the Ancillary
Agreements, no party hereto shall be liable hereunder or under the Ancillary
Agreements to any Buyer Indemnified Party or Louisiana-Pacific Indemnified Party
for any incidental or consequential damages, or loss of profits, or
opportunities, or any exemplary or punitive damages, regardless of the
circumstances from which such damages arose.
(b) No Action for termination or rescission, or claiming
repudiation, of this Agreement or any agreement executed pursuant to this
Agreement may be brought or maintained by any party against another party
following the Closing Date no matter how severe, grave or fundamental any such
breach, default or nonperformance may be by one party, except in the event of
actual fraud in a material respect. Accordingly, the parties hereby expressly
waive and forego any and all rights they may possess to bring any such Action.
(c) With regard to Section 2.8, Section 9.6, this Section 13.9
and Section 13.13, each party hereto acknowledges that it has read and is
familiar with, and hereby waives the benefit of, the provisions of California
Civil Code Section 1542, which is set forth below:
"A general release does not extend to claims which the creditor
does not know or suspect to exist in his favor at the time of
executing the release, which if known by him must have
materially affected his settlement with the debtor."
43
13.10 FURTHER ASSURANCES. Each party agrees to cooperate fully
with the other parties and to execute such further instruments, documents and
agreements and to give such further written assurances as may be reasonably
requested by any other party to evidence and reflect the transactions described
herein and contemplated hereby and to carry into effect the intents and purposes
of this Agreement.
13.11 MUTUAL DRAFTING. This Agreement is the product of the
parties hereto and each provision hereof has been subject to the mutual
consultation, negotiation and agreement of the parties hereto and shall not be
construed for or against any party hereto.
13.12 GOVERNING LAW. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of California (without
giving effect to its choice of law principles).
13.13 JURISDICTION; WAIVER OF JURY TRIAL. Subject to the
arbitration provisions set forth in Schedule 2.6(d), the parties hereby
irrevocably and unconditionally consent to submit to the exclusive jurisdiction
of the courts of the State of California and of the United States of America
located in San Francisco, California for any action, suit or proceeding arising
out of or relating to this Agreement and the transactions contemplated hereby
(and the parties shall not commence any action, suit or proceeding relating
thereto except in such courts), and further agree that service of any process,
summons, notice or document by registered mail shall be effective service of
process for any action, suit or proceeding in any such court. The parties hereby
irrevocably and unconditionally waive any objection to the laying of venue of
any action, suit or proceeding arising out of this Agreement or the transactions
contemplated hereby, in the courts of the State of California or the United
States of America located in San Francisco, California, and hereby further
irrevocably and unconditionally waive and agree not to plead or to claim in any
such court that any such action, suit or proceeding brought in any such court
has been brought in an inconvenient forum. The parties hereby further
irrevocably and unconditionally waive any right to a jury trial in any such
court.
13.14 INTEREST. At such time as it shall have been conclusively
determined that one party owes a sum certain of money to another party hereunder
(other than pursuant to Sections 9.2 or 9.3), the obligated party shall pay
interest on the amount due from the date determined due until the date paid, at
a floating rate equal to the prime rate of Bank of America, NT & SA, as publicly
announced and in force from time to time.
13.15 COUNTERPARTS. This Agreement may be executed in one or
more counterparts, and by the different parties hereto in separate counterparts,
each of which when executed shall be deemed to be an original but all of which
taken together shall constitute one and the same instrument.
13.16 ENTIRE AGREEMENT. This Agreement, together with all
schedules and exhibits hereto and the Disclosure Schedule, the documents and
instruments and other agreements among the parties delivered at the Closing
pursuant to Article III, including the Ancillary Agreements, and the Data
Processing Transfer and Services Agreement, constitute the entire agreement and
supersede all prior agreements and undertakings, both written and oral
(including, in particular, the Confidential Information Memorandum prepared by
SBC Warburg Dillon Read Inc. which has been superseded by Buyer's subsequent due
diligence), other than
44
the Confidentiality Agreement, with respect to the subject matter hereof and are
not intended to confer upon any other Person any rights or remedies hereunder,
except as otherwise expressly provided herein.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as of the date first written above by their respective
officers thereunto duly authorized.
LOUISIANA-PACIFIC CORPORATION,
a Delaware corporation
By: /s/ Xxxxxx X. Xxxxxxx
Name: Xxxxxx X. Xxxxxxx
Title: Vice President, Treasurer
and Chief Financial Officer
LPS CORPORATION,
a Delaware corporation
By: /s/ Xxxxxx X. Xxxxxxx
Name: Xxxxxx X. Xxxxxxx
Title: Treasurer
L-P REDWOOD, LLC,
a Delaware limited liability company
By: /s/ Xxxxxx X. Xxxxxxx
Name: Xxxxxx X. Xxxxxxx
Title: Treasurer
SANSOME FOREST PARTNERS, L.P.,
a Delaware limited partnership
By: SD GENPAR, INC.,
a California corporation, its
general partner
By: /s/ Xxxxxxxxx X. Xxxx, Xx.
Name: Xxxxxxxxx X. Xxxx, Xx.
Title: President
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