Exhibit 2.6
TIMBERLANDS PURCHASE AND SALE AGREEMENT
by and among
NORTH AMERICAN TIMBER CORP.
GEORGIA PACIFIC CORPORATION
and
HAWTHORNE TIMBER COMPANY, LLC
dated
October 29, 1999
TIMBERLANDS PURCHASE AND SALE AGREEMENT
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THIS TIMBERLANDS PURCHASE AND SALE AGREEMENT ("Agreement") dated as of
the 29/th/ day of October, 1999, is made and entered into by and among NORTH
AMERICAN TIMBER CORP., a Delaware corporation and GEORGIA PACIFIC CORPORATION, a
Georgia corporation (hereinafter collectively "Sellers", and individually
"Seller"), and HAWTHORNE TIMBER COMPANY, LLC, a Delaware limited liability
company ("Buyer").
W I T N E S S E T H:
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WHEREAS, Sellers own and operate approximately 194,000 acres of
timberlands in Mendocino and Humboldt Counties, California as hereinafter
defined (the "Timberlands"); and
WHEREAS, Buyer wishes to purchase from Sellers and Sellers wish to sell
to Buyer, the Timberlands and related assets in accordance with the terms and
conditions of this Agreement;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE I
PURCHASE AND SALE
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Section 1.1 Purchase and Sale. On the basis of the representations,
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warranties, covenants and agreements, and subject to the satisfaction or waiver
of the conditions set forth herein, at the "Closing" (as defined in Section
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1.10) Sellers will sell and convey to Buyer, and Buyer will purchase and acquire
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from Sellers all of their respective right, title and interest, as of the
"Closing Date" (as defined in Section 1.10), in the following assets
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(collectively, the "Purchased Assets"), but specifically excluding the "Excluded
Assets" (as defined in Section 1.2):
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(a) the Timberlands, a legal description of which is attached as Schedule
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1.1(a), together with all buildings, roads, bridges and other improvements
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located thereon, all timber growing or lying thereon, all timber rights, mineral
rights and water rights pertaining thereto, and any other privileges, easements
and other access rights appertaining thereto;
(b) all of the machinery, equipment, vehicles, including trailers and
other transportation equipment, and supplies identified on Schedule 1.1(b), with
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such additions and deletions as may occur only in the ordinary course of
business after the date hereof (the "Equipment");
(c) all of the other tangible assets located at and used exclusively in
connection with the Timberlands, (excluding the Integrated Forest Management
System (IFIVIS), source code, executables, data base design, data base tables,
or any subsystems thereof);
(d) all computer hardware and software, except as provided in Section
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1.1(c), relating to the Timberlands, including systems, supporting documentation
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and program code for the Sellers' modified version of CRYPWHR, the Timber
Settlement System, CRIZM, and CRYPTOS 4.0 and as listed on Schedule 1.1 (d);
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(e) all of the books, maps, aerial photographs, surveys, GIS data,
wildlife records, other records, manuals, documents, and similar information
relating primarily or exclusively to the Timberlands;
(f) subject to any required consents of third parties, all operating
contracts, agreements, service agreements, purchase orders and leases listed on
Schedule 1.1 (f) (the "Operating Contracts"); and
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(g) to the extent transferable, all franchises, licenses, permits, water
rights, consents and certificates of all regulatory, administrative, and other
governmental agencies and bodies issued to or held by Sellers and which are
related exclusively to the operation of the Timberlands.
Section 1.2 Excluded Assets. All assets of Sellers on the Closing Date not
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referred to in Section 1.1 (the "Excluded Assets") shall be retained by Sellers,
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and shall not be transferred to or purchased by Buyer. Without limiting the
generality of the foregoing, Buyer shall not purchase from Sellers:
(a) any asset of whatsoever nature relating to Sellers' Atlanta
headquarters or Fort Xxxxx offices, including the office buildings, furniture,
and any information systems used in connection with transmitting information
from the Timberlands to (or from) the Atlanta or Fort Xxxxx facilities;
(b) any of the cash, cash equivalents, bank accounts, deposits, lock boxes
and other similar accounts (whether maintained at a bank, savings and loan or
other financial institution), marketable securities, including xxxxx cash and
cash deposits, and investments of Sellers as of the Closing Date;
(c) any of the accounts receivable generated by or in connection with the
Timberlands on or prior to the Closing Date;
(d) all prepaid items by or on behalf of Sellers or credits and deposits,
rights of offset and credits and claims for refund generated or incurred by or
in connection with the Timberlands prior to the Closing Date;
(e) any claims, choses in action and rights of or actions by Sellers
against third parties arising out of or related to the Timberlands prior to the
Closing;
(f) permits not related to the Timberlands, and permits related to the
Timberlands to the extent not lawfully transferable;
(g) any assets of any pension plan, including, but not limited to, the
right to receive any assets of any such plan upon termination thereof if the
plan's assets exceed its liabilities;
(h) personnel files, employee medical records, and affirmative action plans
and related documents, together with any other books and records the provision
of which to Buyer would violate any applicable law;
(i) any rights to any patents, copyrights, trade secrets, trademarks,
service marks or trade names (including use of the names "Georgia-Pacific", "The
Timber Company", and "G-P" or any derivations thereof and associated logos), any
applications therefor, or any other intellectual property of any Seller or its
affiliates or suppliers (except for intellectual property specifically included
in the Purchased Assets under Section 1.1);
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(j) any claims for refunds of taxes and other governmental charges or
assessments arising from or pertaining to periods, activities, operations or
events occurring on or prior to the Closing Date;
(k) the Integrated Forest Management System (IFMS), including any equipment
dedicated exclusively to the IFMS system; and
(l) any rights or liabilities related to any employee benefit plans
sponsored, or maintained, at any time by a Seller, or to which a Seller has
contributed.
Section 1.3 Assumed Liabilities. As partial consideration for consummation
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of the transactions contemplated hereby, at the Closing, Buyer shall assume and
agree to thereafter perform when due and discharge, and indemnify and hold
Sellers harmless with respect to, the following liabilities and obligations of
Sellers with respect to the Timberlands (the "Assumed Liabilities"):
(a) all obligations and liabilities for personal property taxes, ad valorem
property taxes pertaining to the Timberlands or other Purchased Assets relating
to any period after the Closing Date;
(b) those liabilities, obligations, costs and expenses arising out of or
relating to the Operating Contracts, after the Closing Date;
(c) all obligations undertaken by Buyer pursuant to the other provisions of
this Agreement; and
(d) immediately following the execution of this Agreement, Buyer shall
provide Georgia Pacific Corporation's Fort Xxxxx sawmill (the "Sawmill") a good
faith estimate of Buyer's planned harvest of timber from the Timberlands in the
year 2000 along with a
price at which Buyer would be willing to sell that volume of timber to the
Sawmill on a delivered basis. Within 30 days of receipt of the harvest estimate
from Buyer, Sawmill shall have the right to elect to purchase up to 80% of
Buyer's annual harvest of timber from the Timberlands in the year 2000, if the
parties can mutually agree on price. If the parties are unable to reach
agreement on price within the 30-day period, Buyer shall have no obligation to
sell any volume of timber to the Sawmill and the Sawmill shall have no
obligation to purchase any volume of timber from Buyer. Except as provided in
this Section 1.3(d), Buyer shall have no obligation to offer or sell timber to
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Sellers or their affiliates.
Section 1.4 Purchase Price. Subject to adjustment in accordance with
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Section 1.5, the purchase price (the "Purchase Price") payable in consideration
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for the Purchased Assets (in addition to assumption of the Assumed Liabilities)
shall be the sum of Three Hundred Ninety-Seven Million, Five Hundred Thousand
Dollars ($397,500,000). The Purchase Price shall be allocated among the
Purchased Assets as follows:
Purchased Asset Allocation
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Timberlands $397,000,000.00
Buildings & Equipment $ 500,000.00
The foregoing amounts are sometimes hereinafter referred to as the "Timberlands
Purchase Price" and the "Buildings and Equipment Purchase Price," respectively.
Section 1.5 Adjustment of the Purchase Price. The Purchase Price shall be
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adjusted for the matters set forth in Section 1.6(c) (Letter of Credit); Section
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2.5(b) (Title); Section 4.11(b) (Environmental Audit); and Section 4.17
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(Casualty Loss); provided, however, that if such reductions of the Purchase
Price shall exceed, in the aggregate, ten percent of the Purchase Price, either
Sellers or Buyer in their sole discretion shall have the right to terminate this
Agreement without liability for breach. All adjustments to the Purchase Price
shall result in a corresponding adjustment to the Timberlands Purchase Price.
Section 1.6 Payment of Adiusted Purchase Price.
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(a) Simultaneously with the execution of this Agreement, Buyer shall
deposit with Fidelity National Title Insurance Company (the "Title Company"),
pursuant to an Escrow Agreement in the form of Exhibit 1.6(a), a sum of money
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equal to two percent (2%) of the Purchase Price as xxxxxxx money with respect to
this transaction (the "Xxxxxxx Money"). The Xxxxxxx Money shall be held by the
Title Company in an interest bearing escrow account of the Title Company. The
Eamest Money shall be returned to Buyer at Closing or upon termination of the
Agreement under Section 8.1, but only if the reason for termination was not for
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Buyer's to complete the purchase in accordance with this Agreement. If Buyer
defaults in its obligation to complete the purchase in accordance with this
Agreement, the Xxxxxxx Money shall be paid to Sellers as liquidated damages
which shall be Sellers' sole and exclusive remedy for such default.
(b) At the Closing, Buyer shall deliver tio Sellers the Buildings and
Equipment Purchase Price by wire transfer of immediately available funds to one
or more accounts designated by Sellers. With respect to the Timberlands Purchase
Price, Buyer shall deliver to Sellers a single installment promissory note,
issued by Buyer in substantially the same form as Exhibit 1.6(b) hereto (the
"Promissory Note") in an amount equal to the Timberlands Purchase Price.
(c) Buyer shall deliver to Sellers irrevocable standby letters of credit
from financial institutions categorized under the regulations applicable to the
Federal Deposit insurance Corporation as "well capitalized", and approved by
Sellers (the "LC Bank"), in form and substance approved by Sellers, securing the
Promissory Note (the "Letter of Credit"). The Letter of Credit and related
documents shall be in substantially the form of Exhibit 1.6(c) hereto (the
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"Security Documents"). The Timberlands Purchase Price shall be reduced by the
fees charged by the LC Bank for the initial issuance of the Letter of Credit and
an amount of up to $75,000 to cover the Buyer's administrative costs associated
with the Letter of Credit.
(d) All amounts specified in this Agreement are in lawful money of the
United States.
Section 1.7 Allocation of Purchase Price. Within thirty (30) days prior to
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the Closing Date, Buyer shall provide Sellers with a proposed allocation of the
Purchase Price among the Purchased Assets which shall conform to the allocation
set forth in Section 1.4 and be determined in accordance with Treas. Reg.
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Section 1.1060-1T and which, absent manifest error, shall apply for purposes of
completing IRS Form 8594 (as provided for below). Subject to the foregoing,
Sellers shall have the right to object to such allocation. If Sellers so object
in writing to Buyer's allocation within ten (10) days of Sellers' receipt
thereof, the parties shall attempt to resolve among themselves Sellers'
objection in good faith and if such resolution is unsuccessful, shall resolve
their dispute by jointly designating a mutually agreeable appraisal or valuation
firm, which shall make such determination. Except in the event of a subsequent
adjustment to the Purchase Price which adjustment shall be reflected in the
allocation hereunder in a manner consistent with the "Treasury Regulations"(as
defined below), neither Sellers nor Buyer shall file any return or take a
position with any taxing authority that is inconsistent with any allocation
pursuant to this Section 1.7. "Treasury Regulations" means the Treasury
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Regulations (including Temporary Regulations) promulgated by the United States
Department of Treasury with respect to the Internal Revenue Code of 1986, as
amended to the date hereof (the "Code"), or other federal tax statutes.
Section 1.8 Prorations. On the Closing Date, or as promptly as practicable
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following the Closing Date, but in no event later than sixty (60) days
thereafter, the real and personal property taxes, water, gas, electricity and
other utilities, local business or other license fees or taxes, and other
similar periodic charges arising in connection with the Purchased Assets shall
be prorated between Buyer and Sellers retroactively effective as of the Closing
Date. Sellers shall pay to Buyer all deposits held under the Operating Contracts
and all other contracts and leases assigned to Buyer at Closing. To the extent
practicable, utility meter readings shall be determined as of the Closing Date.
If the real property tax rate for the current tax year is not established by the
Closing Date, the prorations shall be made on the basis of the rate in effect
for the preceding tax year and shall be adjusted when the exact amounts are
determined. All such tax prorations shall be based upon the most recent
available assessed value of the Timberlands prior to the Closing Date.
Section 1.9 Closing Costs; Transfer Taxes. Sellers shall pay all real
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estate transfer or conveyance taxes imposed by reason of the transfer of the
Purchased Assets. Buyer shall pay all recording and filing fees imposed by
reason of the transfers of the Purchased Assets, and any sales, use or other
taxes imposed by reason of the transfers of the Equipment provided hereunder.
Sellers shall provide title insurance commitments on the Timberlands in
accordance with Section 2.5(b). Sellers and Buyer shall each pay 1/2 of the
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premium costs of A.L.T.A. form 1970 B owner's policy of title insurance issued
by the Title Company in the amount of the Purchase Price. Buyer shall pay all
other premiums, costs, fees and expenses of any title insurance, surveys or
further evidence of title which it desires to obtain, including updates, special
endorsements or extended coverages.
Section 1.10 Time and Place of Closing. The closing ("Closing") of the
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transactions contemplated by this Agreement will be held at 10:00 a.m. on the
15th day of December, 1999 ("Closing Date") or on the fifth business day after
the fulfillment or waiver of the conditions set forth in Articles V and VI
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hereof, at the offices of the Title Company in San Francisco, California, or
such other time and place as the parties may agree. It is understood that the
Closing shall be deemed to take place effective as of the close of business on
the Closing Date, regardless of the time at which the Closing actually occurs on
the Closing Date.
Section 1.11 Deliveries at Closing. At the Closing, the following
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deliveries shall be made:
(a) Deliveries by Sellers. Sellers shall deliver or cause to be delivered
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to Buyer:
(i) True and correct copies of the Articles of Incorporation of each
Seller, certified by the Secretary of State of the States of Delaware and
Georgia, respectively, as of a date within thirty (30) business days preceding
the Closing Date, and true and correct copies of the bylaws of each Seller,
certified as of the Closing Date by their respective Secretaries or Assistant
Secretaries;
(ii) Good standing certificates relating to Sellers from the States
of Delaware, Georgia and California;
(iii) A resolution of the Board of Directors of each Seller
authorizing the execution and delivery of this Agreement and the performance of
the transactions contemplated hereby, certified by their respective Secretaries
or Assistant Secretaries;
(iv) Assistant Secretary's Certificates attesting to the incumbency
of each Seller's officers executing this Agreement and the other certificates
and agreements delivered by Sellers at the Closing;
(v) Officer's Certificates attesting to the matters set forth in
Section 5.1;
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(vi) Grant Deeds in the form of Exhibit 1.11(a)(vi) transferring
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and conveying the Timberlands and the buildings included in the Purchased Assets
to Buyer, subject to the Permitted Encumbrances (as defined in Section 2.5(a));
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(vii) Such assignments, bills of sale, certificates of title and
other instruments of transfer, all in form reasonably satisfactory to Buyer, as
are necessary to convey fully and effectively to Buyer the Purchased Assets in
accordance with the terms hereof; and
(viii) Such other and further certificates, assurances and
documents as may reasonably be required by Buyer in connection with the
consummation of the transactions contemplated hereby.
(b) Deliveries by Buyer. Buyer shall deliver or cause to be delivered to
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Sellers:
(i) True and correct copies of the Certificate of Formation of
Buyer, certified by the Secretary of State of Delaware as of a date within ten
(10) business days preceding the Closing Date, and true and correct copies of
the bylaws of Buyer, certified as of the Closing Date by the Secretary or an
Assistant Secretary of Buyer;
(ii) Good standing certificates relating to Buyer from the States of
Delaware and California;
(iii) A resolution of the Manager of Buyer authorizing the execution
and delivery of this Agreement and the performance of the transactions
contemplated hereby, certified by the Secretary or an Assistant Secretary of
Buyer;
(iv) The Buildings and Equipment Purchase Price by wire transfer of
immediately available funds to an account or accounts to be designated by
Sellers;
(v) The Promissory Note representing the Timberlands Purchase Price,
subject to adjustment pursuant to Section 1.5;
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(vi) The Letter of Credit;
(vii) A Secretary's Certificate attesting to the incumbency of the
officers executing this Agreement and the other certificates and agreements
delivered by Buyer at the Closing;
(viii) An Officer's Certificate attesting to the matters set forth
in Section 6.1;
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(ix) Opinion of Buyer's counsel dated the Closing Date, in the form
and substance satisfactory to Sellers and their counsel, affirming the matters
set forth in Section 6.1 and affirming that (a) Buyer is duly organized, validly
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existing and in good standing under the laws of the jurisdiction of its
incorporation or organization with the power and authority to own and operate
the Timberlands, and (b) the execution, delivery and performance of this
Agreement and the Promissory Note have been duly authorized by all necessary
action on the part of Buyer and this Agreement constitutes a valid and binding
obligation of Buyer, subject to the effects of bankruptcy, insolvency,
fraudulent conveyance, moratorium or similar laws affecting creditors' rights
and to equitable principles;
(x) Instruments executed by Buyer, in form and substance reasonably
satisfactory to Sellers, pursuant to which Buyer assumes the Assumed
Liabilities; and
(xi) Such other and further certificates, assurances and documents as
may reasonably be required by Sellers in connection with the consummation of the
transactions contemplated hereby.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SELLERS
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Sellers represent and warrant to Buyer as follows:
Section 2.1 Corporate Organization and Authority.
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(a) Incorporation; Authority. North American Timber Corp. and
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Georgia-Pacific Corporation are corporations duly organized, validly existing
and in good standing under the laws of the States of Delaware and Georgia,
respectively, with full corporate power and authority to own and operate the
Purchased Assets as now operated. Sellers have the power to enter into and
perform their respective obligations pursuant to this Agreement. Sellers'
execution, delivery and performance of this Agreement and the transfer to Buyer
of the Purchased Assets hereunder have been duly authorized by all requisite
corporate action on the part of Sellers. This Agreement constitutes Sellers'
legal, valid and binding obligation, enforceable against Sellers in accordance
with its terms, subject to the effects of bankruptcy, insolvency, fraudulent
conveyance, moratorium, reorganization or similar laws affecting creditors'
rights and to equitable principles.
(b) Foreign Qualification. Sellers are duly qualified and authorized to
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transact business and are in good standing in the State of California.
Section 2.2 Absence of Conflicts and Consent Requirements. Except in
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Insignificant respects (as defined at Section 9.9), Sellers' execution and
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delivery of this Agreement and performance of their respective obligations
hereunder do not: (a) conflict with or violate either Sellers' Articles of
Incorporation or bylaws; (b) violate or, alone or with notice or the passage of
time, result in the breach or the termination of, or otherwise give any
contracting party the right to terminate or declare a default under, the terms
of any written agreement relating to the Timberlands to which Sellers are
party or by which any of the Purchased Assets may be bound, or (c) violate any
judgment, order, decree, or to the Knowledge of Sellers, any law, statute,
regulation or other judicial or governmental restriction to which Sellers are
subject. Except for any filing required under the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvement Act of 1976, as amended, and the rules and regulations promulgated
thereunder ("Xxxx-Xxxxx-Xxxxxx"), there is no requirement applicable to Sellers
to make any filing with, or to obtain any permit, authorization, consent or
approval of, any governmental or regulatory authority as a condition to the
lawful performance by Sellers of their respective obligations hereunder.
Section 2.3 Taxes. Sellers shall pay all taxes which could result in a lien
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or other encumbrance on the Timberlands on account of Sellers' ownership of the
Timberlands, other than ad valorem property taxes for the current tax year (to
be prorated at Closing under Section 5.2). There are no encumbrances, other than
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the Permitted Encumbrances, as defined in Section 2.5, below, on any of the
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Timberlands that arose in connection with any failure or alleged failure to pay
any tax, and there are no material claims for taxes which might result in any
such encumbrances. To the extent such taxes relate to the period prior to the
Closing, no taxes relating to the Timberlands will be borne by Buyer other than
ad valorem property taxes for the current tax year. If the Timberlands is
specially assessed for ad valorem property taxes (e.g. farm, forest, or other),
Sellers shall be responsible for and shall pay all deferred and/or additional
taxes, interest, and penalties that apply to or arise from Sellers' use or
activities on the Timberlands prior to the Closing Date (but not if the
disqualification results from Buyers actions), regardless of whether the
Timberlands is disqualified for such special assessment at or after the Closing
Date. For purposes of the foregoing, taxes shall include all amounts owed to the
federal, or any state, or local government.
Section 2.4 Absence of Certain Changes. Since June 30, 1999, except as set
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forth in Schedule 2.4, there has not been:
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(a) any damage, destruction, loss or other change in the condition of the
Purchased Assets, except normal wear and tear of the elements, which would have
a Material Adverse Effect;
(b) any sale or transfer of any of the Purchased Assets other than in the
ordinary course of business;
(c) any material liability incurred by Sellers with regard to the Purchased
Assets, contingent or otherwise, other than trade accounts, operating expenses,
obligations under executory contracts incurred for fair consideration, or taxes
accrued with respect to operations during such period, all incurred in the
ordinary course of business; or
(d) any harvesting of the Timberlands in excess of the timber harvest
levels set forth on Schedule 4.16.
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Section 2.5 Ownership of Assets.
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(a) Timberlands - Permitted Encumbrances. The Timberlands consist of all
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the timberlands owned by Seller in Mendocino County and Humboldt County,
California except for the properties specifically excluded in Schedule 1.1(a).
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Sellers have good and marketable title to the Timberlands, free and clear of any
liens, claims, charges, options, rights of tenants or other encumbrances of any
nature whatsoever, except for "Permifted Encumbrances". For purposes of this
Agreement, "Permitted Encumbrances" with respect to any Timberlands shall mean:
(i) liens and assessments, both general and special, and other
governmental charges which are not yet due and payable as of the Closing;
(ii) all land use restrictions (including environmental, endangered
species and wetlands), building and zoning codes and ordinances, and other laws,
ordinances, regulations, rules, orders, licenses or determinations of any
federal, state, county, municipal or other governmental authority heretofore,
now or hereafter enacted, made or issued by any such authority;
(iii) any rights of the United States of America, the State of
California or others in the use and continuous flow of any xxxxxx, streams or
other natural water courses or water bodies within, crossing or abutting the
Timberlands, including, without limitation, riparian rights and navigational
servitudes;
(iv) all covenants, conditions, restrictions, reservations,
licenses, agreements, lack of access, and other matters of record that in
Buyer's judgment do not adversely affect the Timberlands or Buyers planned uses
and operation thereon;
(v) 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 Timberlands, and all licenses, easements,
rights-of-way, and other agreements relating thereto;
(vi) all recreational leases, licenses or permits that (a) expire
within 12 months of the Closing Date; or (b) may be terminated by Buyer without
cost with 180 days notice or less; or in Buyer's judgment do not adversely
affect the Timberlands or Buyer's planned uses and operation thereon;
(vii) all existing public and private roads and streets (whether
dedicated or undedicated), and all railroad lines and rights-of-way;
(viii) prior reservations or conveyances of mineral rights or mineral
leases of every kind and character;
(ix) the matters set forth in Schedule 2.5(a);
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(x) other imperfections of title, easements and encumbrances, if
any, which are Insignificant; and
(xi) the standard pre-printed exceptions (items (1-9) listed in
Schedule B of the Title Commitments to be provided by Sellers hereunder).
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(b) Timberlands - Title Commitments. Sellers shall provide, at their sole
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cost and expense, commitments for ALTA (form) owner's policies of title
insurance with respect to the Timberlands (the "Title Commitments") from the
Title Company; including, without limitation, legible copies of all encumbrances
and exceptions. Within
five (5) days following Sellers' receipt of such Title Commitments, Sellers
shall deliver copies of the Title Commitments to Buyer, together with true and
complete copies of all instruments giving rise to any defects or exceptions to
title to the Timberlands. Within fifteen (15) days following signing this
Agreement or, with respect to those encumbrances and exceptions for which
legible copies have not been provided to Buyer before signing this Agreement,
within fifteen (15) days following Buyer's receipt of legible copies of such
encumbrances and exceptions, Buyer shall advise Sellers in writing of any liens,
encumbrances or other defects or exceptions in or to title to the Timberlands,
other than Permitted Encumbrances (collectively, the "Unacceptable
Encumbrances"), subject to which Buyer is unwilling to accept title. Failure of
Buyer to provide such written notice within such fifteen (15) day period shall
be deemed an election by Buyer to waive any Unacceptable Encumbrances and to
accept such title as Sellers are able to convey without any reduction in the
Purchase Price. Within five (5) days following Sellers' receipt of Buyer's
notice of Unacceptable Encumbrances, if any, Sellers shall advise Buyer in
writing whether they intend to correct such Unacceptable Encumbrances. In the
event Sellers elect to correct all or some of the Unacceptable Encumbrances,
Sellers, in their sole discretion, may extend the Closing Date one or more times
for up to ninety (90) days in the aggregate in order to eliminate such
Unacceptable Encumbrances. If Sellers are not reasonably able to eliminate such
Unacceptable Encumbrances and to convey title to the subject portion of the
Timberlands in accordance with the terms of this Agreement on or before the
Closing Date (as such date may be extended), Buyer shall elect on the Closing
Date, as its sole remedy for such failure of Sellers to eliminate any
Unacceptable Encumbrances, either: (i) to accept title to the Timberlands
subject to such Unacceptable Encumbrances and receive no credit against, or
reduction of, the Purchase Price; (ii) require that Sellers delete that portion
of the Timberlands affected by said material title defects and purchase the
remainder of the Timberlands, deducting from the Timberlands Purchase Price an
amount equal to the Timberlands Purchase Price divided by total number of acres
prior to the deletion, and then multiplied by the number of acres deleted; or
(iii) if the adjustment to the Purchase Price set forth in subsection (ii) above
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would exceed five percent (5%) of the Purchase Price, then Buyer in its sole
discretion shall have the
right to terminate this Agreement without liability for breach. Notwithstanding
anything to the contrary contained in this Section 2.5 or elsewhere in this
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Agreement, Sellers shall not be obligated to bring any action or proceeding, to
make any payments or otherwise to incur any expense in order to eliminate any of
the Unacceptable Encumbrances raised by Buyer.
(c) Personal Property. Sellers have good and marketable title to all of
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the material items of Equipment owned by Sellers and included in the Purchased
Assets, free and clear of any liens, claims, charges, options, rights of tenants
or other encumbrances of any nature whatsoever, except for minor encumbrances
that in the aggregate are not substantial in amount, do not materially detract
from the value of the assets subject thereto, or materially interfere with the
present use thereof.
Section 2.6 Litigation. Except as set forth on Schedule 2.6, there are no
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material actions, suits or proceedings filed or commenced, or to the Knowledge
of Sellers threatened, by or before any court or any governmental or
administrative agency, and there are no orders, injunctions, awards, judgments
or decrees outstanding against, affecting or relating to the Timberlands or any
of the Purchased Assets which, in either case, would reasonably be anticipated
individually or in the aggregate to have a Material Adverse Effect.
Section 2.7 Disclaimer of Warranties. Any and all documents, cruises,
------------------------
compilations, timber inventories, surveys, plans, specifications, reports and
studies made available to Buyer by Sellers (the "Offering Documents") are
provided as information only. To the Knowledge of Sellers, the Offering
Documents are not incorrect, inaccurate or misleading in any material respect.
Except as expressly set forth in this Agreement, Sellers have not made, do not
make, and have not authorized anyone else to make any representation as to: (i)
the existence or non-existence of access to or from the Timberlands or any
portion thereof; (ii) the number of acres in the Timberlands; (iii) the volume,
condition or quality of timber on the Timberlands; (iv) timber harvest plans,
logging conditions or feasibility; (v) the volume, condition or quality of
minerals on the Timberlands; (vi) the availability of railroad, water, sewer,
electrical,
gas or other utility services; (vii) the environmental conditions or
requirements of the Timberlands; (viii) the quality or suitability of the
Timberlands for any purpose; (ix) the current or projected income or expenses of
the Timberlands; (x) any other matters related to the subject transaction, or
(xi) any representation or warranty with regard to the computer hardware and
software sold, conveyed or transferred hereunder, including without limitation
the warranties of merchantability, fitness for a particular purpose,
compatibility with other equipment or software, Year 2000 readiness or
compliance, that the software will be error or virus free, or that any software
to which a license applies will be transferable or free of transfer or
additional or new license fees. Buyer agrees to determine the transferability
and be responsible for any transfer or other additional fees for the software
including the possibility that a new software license must be purchased for any
or all of the software.
EXCEPT AS OTHERWISE SET FORTH IN THIS AGREEMENT, SELLERS HEREBY EXPRESSLY
DISCLAIM AND NEGATE ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND, WHETHER
EXPRESS OR IMPLIED, RELATING TO THE CONDITION, MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE OF THE TIMBERLANDS AND PURCHASED ASSETS, INCLUDING WITHOUT
LIMITATION ANY WARRANTY RELATING TO THE CONDITION OF THE TIMBERLANDS AND
PURCHASED ASSETS, THEIR SUITABILITY FOR BUYER'S PURPOSES OR THE STATUS OF THEIR
MAINTENANCE OR OPERATION. SELLERS DO NOT MAKE ANY REPRESENTATIONS OR WARRANTIES
THAT THE TIMBERLANDS OR PURCHASED ASSETS MAY BE USED FOR ANY PURPOSE WHATSOEVER.
Section 2.8 Licenses, Permits and Compliance With Law. Except as provided
-----------------------------------------
in Section 2.9 with respect to environmental matters and Section 2.12 with
----------- ------------
respect to labor and employment matters and except with respect to Insignificant
matters.
(a) Sellers hold all governmental licenses, certificates, permits,
franchises, approvals, exemptions, registrations and rights which are necessary
to operate the Timberlands as presently operated; and
(b) To the Knowledge of Sellers, Sellers are presently operating the
Timberlands so as to comply with all applicable statutes, ordinances, rules,
regulations and orders of any governmental authority.
Section 2.9 Environmental Matters.
---------------------
(a) Except as set forth on Schedule 2.9, to the Knowledge of Sellers:
------------
(i) No "Claim of Environmental Liability" (as defined below)
relating to the conditions at or on the Timberlands is pending or threatened by
any governmental agency or other third-party;
(ii) Sellers currently hold all permits, licenses, and approvals of
governmental authorities and agencies required under applicable environmental
laws for the current use, occupancy or operation of the Timberlands and the
Purchased Assets and Sellers and the Purchased Assets are in compliance with
such permits, licenses, and approvals in all material respects;
(iii) Sellers and the Purchased Assets are in compliance with all
applicable environmental laws, in all material respects;
(iv) Sellers have not received any written notice which remains
pending under any applicable environmental law concerning the Timberlands and
which notice relates to any substance that, as of the date hereof, is a
Hazardous Material (as defined below); and
(v) There is no proceeding against Sellers, or any pending
investigation or inquiry with respect to Sellers, by any federal, state or local
court, tribunal, administrative agency, department, commission, board or other
authority or instrumentality with respect to the presence on the Timberlands of
any material which is a Hazardous Material, or the migration thereof from or to
other property.
(b) As used in this Section 2.9, the following terms shall have the
-----------
following meanings:
(i) "Claim of Environmental Liability" shall mean any and all
claims, liabilities, obligations, losses or damages suffered or incurred as a
result of (a) any suit,
action, legal or administrative proceeding, or demand asserted or threatened by
any third-party, including any governmental agency or authority, arising under
any federal, state or local environmental law or regulation, (b) requirements
imposed by any federal, state or local environmental laws and regulations,
including all costs of remediation or costs otherwise incurred in complying with
applicable laws and regulations, and (c) any and all judgments, courts costs,
legal fees, and other costs of discovery and defense associated with (a) or (b)
above.
(ii) "Hazardous Material" shall mean any hazardous material,
hazardous wastes, or hazardous or toxic substances as defined in the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended (42 U.S.C.(S)(S) 9601 et seq.), the Resource Conservation and Recovery
-- ---
Act, as amended, (42 U.S.C.(S)(S) 6901 et seq.), the Toxic Substances Control
-- ---
Act, as amended (15 U.S.C.(S)(S) 2601 et seq.), and all applicable state and
-- ---
local laws, regulations and ordinances relating to the release of hazardous
materials, hazardous wastes or hazardous or toxic substances including petroleum
and fractions thereof.
Section 2.10 Operating Contracts. Complete and correct copies of all of the
-------------------
Operating Contracts have been delivered to or have been made available for
inspection by Buyer. To the Knowledge of Sellers: (a) each Operating Contract is
valid, binding and enforceable in accordance with its terms; (b) except with
respect to Insignificant matters, no other party to any Operating Contract is in
breach or default of the express written terms of such contract; and (c) except
with respect to Insignificant matters, there does not exist under any provision
of any Operating Contract any event that, with the giving of notice or the
passage of time or both, would constitute such a breach or default.
Section 2.11 Brokers, Finders, Etc. Except for the services of Warburg
---------------------
Xxxxxx Read LLC, Sellers have not employed any broker, finder, consultant or
other intermediary in connection with the transactions contemplated by this
Agreement who might be entitled to a fee or commission in connection with such
transactions. Sellers are solely responsible for any payment, fee or commission
that may be due to Warburg Dillon Read LLC, in connection with the transactions
contemplated hereby.
Section 2.12 Labor and Employment Matters.
----------------------------
(a) Buyer shall have no liability, obligation or expense with respect to
any of Sellers' bonus, pension, profit sharing, 401(k), stock option, deferred
compensation, hospitalization, medical, vision or dental, postretirement
medical, sickness, accident, severance pay, vacation pay, disability, death
benefits, insurance and other similar plans, programs, funds, contracts or
arrangements providing benefits to the employees, former employees or their
dependents which are "employee benefit plans" within the meaning of Section 3(3)
of the Employee Retirement Income Security Act of 1974, as amended ("ERISA")
(collectively the "Benefit Plans") currently sponsored or maintained by Sellers,
or to which Sellers currently contribute or are obligated to make contributions,
which are applicable to any "Timberlands Employees" (as that term is defined in
Section 4.10).
------------
(b) Sellers are not a party to any collective bargaining agreements with
respect to the Timberlands Employees.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF BUYER
---------------------------------------
Buyer hereby represents and warrants to Sellers as follows:
Section 3.1 Organization and Authority. Buyer is a limited liability
--------------------------
company duly organized, validly existing and in good standing under the laws of
the State of Delaware, with full power and authority to conduct its business as
now conducted and to own its assets. Buyer has the power to enter into and
perform its obligations pursuant to this Agreement. Buyer's execution, delivery
and performance of this Agreement, and its acquisition of and payment for the
Purchased Assets hereunder have been duly authorized by all requisite corporate
action on the part of Buyer. This Agreement constitutes Buyer's legal, valid and
binding obligations, enforceable against Buyer in accordance with its terms,
subject to the effects of bankruptcy, insolvency, fraudulent conveyance,
moratorium, reorganization or similar laws affecting creditors' rights and to
equitable principles.
Section 3.2 Absence of Conflicts and Consent Requirements. Buyer's
---------------------------------------------
execution and delivery of this Agreement, and the performance of its obligations
hereunder, do not: (a) conflict with or violate Buyer's Certificate of Formation
or operating agreement; (b) violate or, alone or with notice or passage of time,
result in the material breach or termination of, or otherwise give any
contracting party the right to terminate or declare a default under, the terms
of any material written agreement to which Buyer is a party or by which Buyer or
its assets are bound; or (c) violate any judgment, order, decree, or to the best
knowledge of Buyer, any material law, statute, regulation or other judicial or
governmental restriction to which Buyer is subject. Except as may be required
under Xxxx-Xxxxx-Xxxxxx, there is no requirement applicable to Buyer to make any
filing with, or to obtain any permit, authorization, consent or approval of, any
governmental or regulatory authority as a condition to the lawful performance by
Buyer of its obligations hereunder.
Section 3.3 Litigation Affecting Buyer. There is no claim, action,
--------------------------
proceeding or investigation pending or, to the best knowledge of Buyer,
threatened in writing, nor is there outstanding any writ, order, decree or
injunction that (a) calls into question Buyer's authority or right to enter into
this Agreement and consummate the transactions contemplated hereby, or (b) would
otherwise prevent or delay the transactions contemplated by this Agreement.
Section 3.4 Finders' Fees. Neither Buyer nor any of its affiliates, nor
-------------
any of their respective officers, directors or employees has employed any broker
or finder or incurred any liability for any brokerage fees, commissions, or
finder's fees in connection with the transactions contemplated herein.
ARTICLE IV
COVENANTS OF SELLERS AND BUYER
------------------------------
Section 4.1 Investigation of Business; Access to Properties and Records.
-----------------------------------------------------------
(a) Subject to restrictions contained in confidentiality agreements to
which Sellers are subject with respect to any information relating to any third
party, prior to the Closing, Sellers shall give to Buyer and its legal counsel,
accountants and other representatives reasonable access during normal business
hours to all of the subject assets for inspection (including environmental
inspection), and to the books, contracts, commitments and records of the
Timberlands (excluding personnel files and employee medical records), and shall
permit them to consult with management employees of the Timberlands to allow
Buyer full opportunity to make such investigations as are necessary to analyze
the affairs of the Timberlands.
(b) Any information provided to or obtained by Buyer or its
representatives pursuant to this Agreement shall be held by Buyer and its
representatives in accordance with, and shall be subject to the terms of, the
Confidentiality Agreement dated June 24, 1999 by and between Seller and Buyer,
which is attached as Exhibit 4.1(b).
--------------
Section 4.2 All Reasonable Efforts. Subject to the terms and conditions
----------------------
herein provided, including, but not limited to those contained in Section 4.15,
------------
Sellers and Buyer agree to use all reasonable efforts to take, or cause to be
taken, all actions and to do, or cause to be done, all things necessary, proper
or advisable to consummate and make effective as promptly as practicable the
transactions contemplated by this Agreement and to cooperate with the other in
connection with the foregoing, including using all reasonable efforts:
(a) to obtain all necessary waivers, consents, releases and approvals from
other parties to loan agreements, leases, guarantees and other contracts;
(b) to obtain all consents, approvals and authorizations that are required
to be obtained under any federal, state, local or foreign law or regulation,
including approvals under Xxxx-Xxxxx-Xxxxxx;
(c) to lift or rescind any injunction or restraining order or other order
adversely affecting the ability of the parties hereto to consummate the
transactions contemplated hereby;
(d) to effect all necessary registrations and filings and submissions of
information requested by governmental authorities; and
(e) to fulfill all conditions to this Agreement.
Section 4.3 Further Assurances. Sellers and Buyer agree that, from time to
------------------
time, at or after the Closing Date, each of them will execute and deliver such
further instruments of conveyance and transfer and take such other action as may
be reasonably necessary to carry out the purpose and intent of this Agreement.
Section 4.4 Preservation of Business.
------------------------
(a) Subject to the terms and conditions of this Agreement and except as
otherwise contemplated hereby, Sellers, from the date hereof through the Closing
Date, shall use all reasonable efforts to preserve the Purchased Assets.
(b) Subject to the terms and conditions of this Agreement and except as
otherwise expressly permitted by Sellers, Buyer shall not interfere with
Sellers' conduct of the Timberlands pending the Closing and Buyer shall not take
any action which might impair Sellers' relationships with customers, suppliers
and employees of the Timberlands.
Section 4.5 Public Announcements. Neither Sellers nor Buyer shall make,
--------------------
nor permit any agent or affiliate to make, any public statements, including,
without limitation, any press releases, with respect to this Agreement and the
transactions contemplated hereby without the prior consultation (but not
consent) of the other parties hereto except as may be required by law.
Section 4.6 No Implied Representation. It is the explicit intent of each
-------------------------
party hereto that neither Buyer nor Sellers are making any representation or
warranty whatsoever, express or implied, beyond those expressly given in this
Agreement. Without limiting the generality of the foregoing, it is understood
that any cost estimates, projections or other predictions contained or referred
to in any of the offering materials that have been provided to Buyer are not and
shall not be deemed to be representations or warranties of Sellers. Buyer
acknowledges that there are uncertainties inherent in attempting to make any
such estimates, projections and predictions, that Buyer is familiar with such
uncertainties, and takes full responsibility for making its own evaluation of
the adequacy and accuracy of any and all such estimates, projections and
predictions.
Section 4.7 Bulk Transfer Compliance. Buyer hereby waives compliance with
------------------------
the provisions of any applicable Bulk Sales Act under the Uniform Commercial
Code in effect in any jurisdiction (the "Bulk Sales Laws"), to the extent
applicable to the transactions contemplated hereby.
Section 4.8 Assignment of Contracts. To the extent the assignment of any
-----------------------
contract, lease, commitment, or other asset to be assigned to Buyer pursuant to
the provisions hereof shall require the consent of any other person, this
Agreement shall not constitute a contract to assign the same if an attempted
assignment would constitute a breach thereof or give rise to any right of
acceleration or termination. Required consents are set forth in Schedule 4.8. To
------------
the Knowledge of Sellers, no other consents to assignment are required. Sellers
shall use all reasonable efforts to procure consents to any such assignment
prior to Closing. If any such consent is not obtained, Sellers shall cooperate
with Buyer in any reasonable arrangement designed to provide Buyer the benefit
of any such contract, agreement, commitment, or other asset, including
enforcement of any and all rights of Sellers against the other party thereto
arising out of breach or cancellation thereof by such party or otherwise.
Section 4.9 Access to Books and Records after Closing. The parties agree
-----------------------------------------
that, for the purpose of this Section 4.9, the "Access Period" is defined as the
-----------
longer of (a) a period of three (3) years following the Closing Date; or (b) the
period of time beginning on the Closing Date and ending on the date on which
taxes may no longer be assessed against Sellers with respect to the ownership or
operation of the Timberlands under the applicable statutes of limitation,
including the period covered by any waivers or extensions thereof. During the
Access Period, Buyer shall maintain in a reasonably accessible location all
books and records of the Purchased Assets and the Timberlands relating to
operations prior to the Closing Date, and shall provide to Sellers any
information reasonably necessary for the filing of tax returns or the response
to tax audits or other inquiries of any taxing authority. Buyer shall notify
Sellers prior to disposing of any such books and records after the Access Period
has expired and, upon request made by Sellers within sixty (60) days after
receipt of such notice, Buyer shall deliver such books and records to Sellers at
Sellers' expense.
Section 4.10 Employees. Schedule 4.10 (a sets forth a true and correct
--------- -------------
list, as of the Closing Date, of all Timberlands Employees (as defined herein),
together with their respective job titles, and continuous service dates. Prior
to the Closing Date, Buyer shall offer to interview all of Sellers' personnel
currently employed in connection with the Timberlands (the "Timberlands
Employees"). Buyer or its designee will offer to hire 80% of all Timberlands
Employees who pass a drug test, at initial compensation and benefit levels
consistent with other similarly situated employees of Buyer or its designee.
Buyer shall not assume any of Sellers' employment related obligations with
respect to any such employee.
Section 4.11 Environmental Audit.
-------------------
(a) Within sixty (60) days of the date of this Agreement, Buyer shall
conduct, or cause to be conducted, at its sole cost and expense, such
environmental audits/surveys of the Timberlands, if any, as it may deem
reasonably necessary. To the extent any drillings, boring or other excavation
work is to be conducted, the scope, methodology, timing and conduct of such
activities shall be subject to the prior written
approval of Sellers, which approval shall not be unreasonably withheld and will
either be given or refused within five (5) days of receipt by Sellers of a
request from Buyer. All such work and studies shall be nondestructive. Buyer
shall leave the Timberlands in good condition and repair upon completion of any
tests, studies and entry pursuant to this paragraph and upon any request by
Sellers, Buyer shall restore the Timberlands to their condition immediately
preceding any such tests, studies or entry. Buyer shall keep the Timberlands
free from liens relating to or arising out of any tests, studies or entry by
Buyer pursuant to this paragraph. Buyer covenants and agrees to indemnify and
hold Sellers harmless from any loss, liability, costs, claims, damages, demands,
actions, causes of action and suits caused by the exercise of the rights and
privileges granted to Buyer or the breach of Buyer's covenants to restore the
Timberlands contained in this paragraph. The indemnity contained in this
paragraph shall expressly survive the termination for any reason of this
Agreement.
(b) In the event the Buyer's Environmental Audit reveals an adverse
environmental condition (other than promiscuous dumps containing household
refuse and white goods of 1 acre or less) existing upon the Timberlands, either
Buyer or Sellers shall have the right to delete the affected acreage from
Timberlands prior to Closing and Sellers shall retain title to the deleted
acreage. The Timberlands Purchase Price will be reduced by an amount mutually
agreed to by the parties.
(c) Buyer and Sellers agree to keep all environmental audit/survey reports
and other environmental information generated by or exchanged among the parties
pursuant to this Agreement confidential and not to disclose or use for any
purpose not expressly contemplated by this Agreement, or permit any other party
to use for any purpose, any such reports or information concerning the
Timberlands. Buyer shall deliver to Sellers copies of all environmental reports,
surveys or audits (both drafts and final versions) which Buyer obtains with
respect to the Timberlands pursuant to this Section 4.11.
------------
Section 4.12 Intermediary. The parties agree that Sellers may, in their
------------
discretion, substitute an intermediary (an "Intermediary") to act in place of
Sellers, in whole or in part, as the seller of the Timberlands, and thereby
elect to consummate the
transaction as a like kind exchange pursuant to Section 1031 of the Code. Buyer
agrees to accept the Timberlands, any escrow instructions and any other required
performance of the Sellers hereunder from an Intermediary and to render
performance of Buyer's obligations hereunder to an Intermediary. Sellers agree
to pay any and all additional costs incurred as a result of substituting an
Intermediary.
Section 4.13 Right to Update. To the Knowledge of Sellers, all matters set
---------------
forth in the Exhibits or Schedules hereto are complete and accurate. From time
to time prior to the Closing, Sellers shall have the right (but not any
obligation) to update or amend in any respect its disclosure of any matter set
forth or permitted to be set forth in an Exhibit or Schedule hereto. If Buyer at
its discretion, objects to any prepared update or amendment, Buyer may notify
Sellers in writing within ten (10) business days after the date on which Sellers
notify Buyer of the proposed update or amendment that is objectionable. If Buyer
fails to so notify Sellers within such ten (10) business day period, the update
or amendment shall be deemed to have been accepted by Buyer. If Buyer does so
notify Sellers, within ten (10) business days of Sellers' receipt of such
notice, the parties shall meet to 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 (10) business days of
such meeting, Buyer may terminate this Agreement by written notice to Sellers.
Section 4.14 Removal of Trademarks, Etc. As promptly as practical after
--------------------------
the Closing, and in no event later than forty-five (45) days after the Closing
Date, Buyer shall delete, remove or otherwise obliterate from the Purchased
Assets, all trade names, trademarks and service marks of the Sellers, including,
without limitation, references to "Georgia-Pacific", "The Timber Company" and
"G-P" and derivatives thereof and related logos, and shall notify Sellers that
it has done so.
Section 4.15 Antitrust Regulatory Approvals. The Buyer and the Sellers
------------------------------
shall prepare and file promptly, with all reasonable diligence, all
notifications, forms, reports and other documents, and shall take and complete
promptly, with all reasonable
diligence, all steps, measures and procedures, as may be required by any
federal, state or local governmental authority, as the case may be (the
"Antitrust Authority"), for the purpose of obtaining all permits, consents,
order or approvals required under the applicable federal, state, or local
antitrust and competition laws (the "Antitrust Laws") including, without
limitation, the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act, for the purpose of
the consummation of the transaction contemplated hereby.
Section 4.16 Pre-Closing Operation of the Assets. Between the date
-----------------------------------
of this Agreement and the Closing Sellers shall continue to conduct their
businesses in connection with the Timberlands and Purchased Assets in the
ordinary and usual course as heretofore conducted, subject to the provisions of
this Agreement. Without limiting the generality of the foregoing, the Sellers
shall, during such period (i) take all reasonable steps to enforce their rights
under all contracts affecting the Purchased Assets, (ii) not exceed the
currently permitted and planned harvest levels on the Timberlands as set forth
on Schedule 4.16, (iii) not enter into any new timber cutting or timber sale
-------------
contracts affecting the Timberlands without Buyer's prior written consent, which
shall not be unreasonably withheld, (iv) not sell, transfer, or encumber or
otherwise dispose of any of the Purchased Assets except in the ordinary course
of business, and (v) operate in accordance with the budget disclosed to Buyer in
the Offering Documents including road, bridge and other maintenance and capital
expenditures.
Section 4.17 Casualty Loss. If, prior to the Closing, the value of
------------ -------------
the Purchased Assets are materially impaired ($25,000,000.00 or greater) by
fire, casualty, act of God or exercise of eminent domain powers, Buyer or
Sellers may terminate this Agreement by giving written notice to other, in which
case the Xxxxxxx Money shall be refunded to Buyer and, except as expressly
provided to the contrary in this Contract, Sellers and Buyer shall have no
further rights, duties, obligations or liabilities under this Agreement. In the
event that a casualty loss of less than $25,000,000.00, or as to a casualty loss
of over $25,000,000.00 without termination of this Agreement, Buyer and Sellers
shall adjust the Purchase Price by a mutually agreed price representing the
value of the casualty loss. If the parties are unable to agree on the amount of
the adjustment, the adjustment shall be submitted to binding arbitration.
Section 4.18 Seeds and Seedlings. Effective as of the Closing Date,
-------------------
Sellers and Buyer shall enter into a written agreement under which Sellers shall
provide Buyer with seeds and seedlings sufficient to allow Buyer to operate the
Timberlands for four years. In the first year after Closing, the seeds and
seedlings shall be provided at no cost to Buyer. For the next three years, the
seeds and seedlings will be sold to Buyer at market prices.
Section 4.19 Buyer's Financing. By 6:00 PM EST on Wednesday,
-----------------
November 3, 1999, Buyer shall have paid a commitment fee and obtained a firm
commitment for loan in an amount which coupled with Buyer's equity would be
sufficient to fund the Purchase Price, from a financial institution reasonably
acceptable to Sellers. If Buyer fails to satisfy this covenant and to provide
Sellers with reasonable evidence of the commitment letter from the financing
institution by the time specified herein, Sellers shall have the right to
terminate this Agreement without liability for breach. If Sellers terminate this
Agreement pursuant to this Section 4.19 the Xxxxxxx Money shall be returned to
Buyer.
ARTICLE V
CONDITIONS TO BUYER'S OBLIGATION TO CLOSE
-----------------------------------------
Buyer's obligation to consummate the transactions contemplated hereunder
is contingent upon the satisfaction on or prior to the Closing Date of each of
the following conditions, except to the extent Buyer may, in its absolute
discretion, waive any one or more thereof in whole or in part:
Section 5.1 Representations, Warranties and Covenants of Sellers.
----------------------------------------------------
The representations and warranties of Sellers in this Agreement shall be true
and correct in all material respects on and as of the Closing Date with the same
effect as though such representations and warranties had been made on and as of
such date except for
representations and warranties that speak as of a specific date or time other
than the Closing Date (which need only be true and correct in all material
respects as of such date or time), and the covenants and agreements of Sellers
to be performed on or before the Closing Date in accordance with this Agreement
shall have been duly performed in all material respects.
Section 5.2 Filings; Consents; Waiting Periods. All registrations,
----------------------------------
filings, applications, notices, covenants, approvals, waivers, authorizations,
qualifications and orders required by this Agreement to be filed, made or
obtained by Sellers shall have been filed, made or obtained and copies thereof
shall have been delivered to Buyer. The applicable waiting period, including any
extensions thereof, under the Xxxx-Xxxxx- Xxxxxx Act, shall have expired or been
terminated and neither the Department of Justice nor the Federal Trade
Commission shall have taken any action to enjoin or delay (for a period of
longer than 120 days) the consummation of the transactions contemplated under
this Agreement.
Section 5.3 No Injunction. At the Closing Date, there shall be no
-------------
injunction, restraining order or decree of any nature of any court or
governmental agency or body of competent jurisdiction that is in effect that
restrains or prohibits the consummation of the transactions contemplated
hereunder or imposes conditions on such consummation not otherwise provided for
herein.
Section 5.4 Environmental Matters. Buyer shall not have identified
---------------------
any matter or matters relating to the handling, storage, transportation,
treatment, disposal, release or potential release into the soil or groundwater
on the Timberlands of any Hazardous Material which, in the aggregate is
unacceptable to Buyer, and would have a Material Adverse Effect.
Section 5.5 Closing Documents. Sellers shall have delivered the
-----------------
items set forth in Section 1.11 (a).
----------------
Section 5.6 Absence of Litigation. With the exception of any
---------------------
continuing inquiry or investigation into compliance with Xxxx-Xxxxx-Xxxxxx: (a)
no claim, action, suit, arbitration, investigation, inquiry or other proceeding
by any United States federal or state governmental, regulatory or administrative
agency or authority or any other person shall be pending on the Closing Date; or
(b) prior to the Closing Date, no party to this Agreement shall have been
advised by any United States federal or state governmental, regulatory or
administrative agency or authority (which advisory has not been officially
withdrawn by such agency or authority on or prior to the Closing Date) that such
agency or authority is investigating the transactions contemplated by this
Agreement to determine whether to file or commence any litigation, which, in the
case of either (a) or (b) above, seeks or would seek to enjoin, restrain or
prohibit the consummation of the transactions contemplated by this Agreement or
to impose limitations on the ability of Buyer to continue operation of the
Timbedands as presently conducted with the Purchased Assets or to require the
divestiture by Buyer of the Purchased Assets.
Section 5.7 Title Insurance. The Title Company shall be prepared to
---------------
issue Buyer its 1970 B form ALTA owner's policy of title insurance in the amount
of the Purchase Price insuring title to the Timberlands in Buyer subject only to
the Permitted Encumbrances.
Section 5.8 Buyer's Financing. On the Closing Date, the lender
-----------------
shall have funded the Financing Loans described in Section 4.19.
------------
Section 5.9 Letter of Credit. On or before the Closing Date, the LC
----------------
Bank shall have approved and the final terms and conditions of the Security
Documents.
ARTICLE VI
CONDITIONS TO SELLERS' OBLIGATIONS TO CLOSE
-------------------------------------------
Sellers' obligations to consummate the transactions contemplated
hereunder are contingent upon the satisfaction on or prior to the Closing Date
of each of the following
conditions, except to the extent Sellers may, in their absolute discretion,
waive any one or more thereof in whole or in part:
Section 6.1 Representations, Warranties and Covenants of Buyer. The
--------------------------------------------------
representations and warranties of Buyer in this Agreement shall be true and
correct in all material respects on and as of the Closing Date with the same
effect as though such representations and warranties had been made on and as of
such date except for representations and warranties that speak as of a specific
date or time other than the Closing Date (which need only be true and correct in
all material respects as of such date or time), and the covenants and agreements
of Buyer to be performed on or before the Closing Date in accordance with this
Agreement shall have been duly performed in all material respects.
Section 6.2 Filings; Consents; Waiting Periods. All registrations,
----------------------------------
filings, applications, notices, covenants, approvals, waivers, authorizations,
qualifications and orders required by this Agreement to be filed, made or
obtained by Buyer shall have been filed, made or obtained, and copies thereof
shall have been delivered to Sellers. The applicable waiting period, including
any extensions thereof, under the Xxxx-Xxxxx-Xxxxxx Act, shall have expired or
been terminated and neither the Department of Justice nor the Federal Trade
Commission shall have taken any action to enjoin or delay (for a period of
longer than 120 days) the consummation of the transactions contemplated under
this Agreement.
Section 6.3 No Injunction. At the Closing Date, there shall be no
-------------
injunction, restraining order or decree of any nature of any court or
governmental agency or body of competent jurisdiction that is in effect that
restrains or prohibits the consummation of the transactions contemplated
hereunder or imposes conditions on such consummation not otherwise provided for
herein.
Section 6.4 Closing Items. Buyer shall have delivered the items
-------------
listed in Section 1.11(b), including, without limitation, instruments executed
--------------
by Buyer, in form and substance reasonably satisfactory to Sellers, pursuant to
which Buyer assumes the Assumed Liabilities.
Section 6.5 Board Approval. The approval of the execution and
--------------
delivery of this Agreement and authorization of Sellers' performance of their
obligations hereunder by each of Sellers' respective boards of directors.
Section 6.6 Letter of Credit. On or before the Closing Date, the LC
----------------
Bank shall have approved the final terms and conditions of the Security
Documents.
ARTICLE VII
SURVIVAL; INDEMNIFICATION
-------------------------
Section 7.1 Survival. Subject to the specific limitations and other
--------
express provisions of this Agreement, the representations, warranties, covenants
and agreements of the parties contained herein shall survive the Closing and
shall remain in full force and effect for a period of two (2) years after the
Closing Date except for those representations and warranties related to taxes
which shall survive until expiration of applicable statutes of limitations;
provided, however, that the representations and warranties in Section 3.5 shall
-----------
not survive the Closing; and provided, further, that if a party shall have made
a claim for indemnification pursuant to Section 7.2 within the aforesaid
-----------
survival period, the representations, warranties, covenants and agreements to
which such claim relates shall survive only for purposes of that claim and no
others until such claim is disposed of as provided in this Article VII.
------------
Section 7.2 Indemnification.
---------------
(a) Indemnification by Sellers. Sellers hereby agree to indemnify,
--------------------------
defend and hold harmless Buyer, its parents, subsidiaries, affiliates,
predecessors, successors, and assigns (and their respective officers, directors,
employees and agents) from any and all liabilities, losses, claims, judgments,
damages, expenses and costs (including, without limitation, reasonable counsel
fees and costs and expenses incurred in connection therewith) (collectively, the
"Indemnifiable Damages") which it may suffer or
incur by reason of: (i) the breach or inaccuracy of any of the representations
and warranties of Sellers contained in this Agreement; (ii) the breach by
Sellers of any of the covenants or agreements made by either of them in this
Agreement; (iii) any misrepresentation contained in any certificate furnished by
Sellers pursuant to this Agreement; (iv) any loss arising or resulting from the
Excluded Assets; (v) any liabilities of Sellers not expressly assumed by Buyer
hereunder; (vi) failure to comply with the Bulk Sales laws; (vii) failure by
Sellers to pay Warburg Dillon Read LLC, Sellers' employees, Sellers' trade
payables, or taxes Sellers are required to pay pursuant to this Agreement; or
(viii) the litigation disclosed on Schedule 2.6.
-------------
(b) Indemnification by Buyer. Buyer hereby agrees to indemnify,
------------------------
defend and hold harmless Sellers, their parents, subsidiaries, affiliates,
predecessors, successors, and assigns (and their respective officers, directors,
employees and agents) from any and all Indemnifiable Damages which either of
them may suffer or incur by reason of: (i) the breach or inaccuracy of any of
the representations or warranties of Buyer contained in this Agreement; (ii) the
breach by Buyer of any of the covenants or agreements made by it in this
Agreement; (iii) any misrepresentation contained in any certificate furnished by
Buyer pursuant to this Agreement; (iv) any Assumed Liabilities; (v) Buyer's
operation of the Timberlands after the Closing Date; or (vi) suits or claims
asserted by Timberlands Employees (as that term is defined in Section 4.10)
------------
arising out of Buyer's hiring decisions in violation of applicable law.
(c) Third-Party Claims. If any claim or demand is asserted against
------------------
the indemnified party by a third party with respect to any matter under the
indemnities set forth in Sections 7.2(a) or (b) (a "Third Party Claim"), the
------------
indemnified party shall promptly give written notice and details thereof,
including copies of all pleadings and the pertinent documents, to the
indemnifying party. Within twenty (20) days of receipt of such notice, the
indemnifying party shall (i) pay the Third Party Claim either in full or upon
compromise agreed to by the indemnifying party, or (ii) notify the indemnified
party that the indemnifying party disputes the Third Party Claim and intends to
defend against it, and thereafter so defend and pay any adverse final judgment
or award or settlement amount in regard thereto. Such defense shall be
controlled by the
indemnifying party, and the cost of such defense shall be borne by it, except
that the indemnified party shall have the right to participate in such defense
at its own expense. The indemnified party agrees that it will cooperate in all
reasonable respects in the defense of any such claim or demand, including making
personnel, books, and records relevant to the claim available to the
indemnifying party, without charge, except for reimbursement of reasonable
out-of-pocket expenses.
If the indemnifying party fails to take action within twenty (20) days
as set forth above, then the indemnified party shall have the right to pay,
compromise or defend any Third Party Claim and to assert the amount of any
payment on the Third Party Claim plus the expense of defense or settlement as an
indemnity claim. The indemnified party shall also have the right, exercisable in
good faith, to take such action as may be necessary to avoid a default prior to
the assumption of the defense of the Third Party Claim by the indemnifying party
and any expenses incurred by so acting shall be paid by the indemnifying party.
(d) Payment. With respect to all claims other than Third Party
-------
Claims, the indemnifying party shall promptly pay or reimburse the indemnified
party in respect of any claim or liability for Indemnifiable Damages to which
the foregoing indemnities relate after receipt of written notice from the
indemnified party outlining with reasonable particularity the nature and amount
of the claim(s). All claims for indemnity hereunder must be submitted by the
indemnified party to the indemnifying party within the applicable time periods
set forth above. In the event the indemnifying party fails or refuses to make
payment for such claims within a period of twenty (20) days from the date of
notice to the indemnifying party, the indemnified party shall be entitled to
exercise all legal means of relief available.
(e) Access and Information. With respect to any claim for
----------------------
indemnification hereunder, the indemnified party will give to the indemnifying
party and its counsel, accountants and other representatives full and free
access, during normal business hours and upon the giving of reasonable prior
notice, to their books and records relating to such claims, and to their
employees, accountants, counsel and other representatives, all without charge to
the indemnifying party, except for reimbursement
of reasonable out-of-pocket expenses. In this regard, the indemnified party
agrees to maintain any of its books and records which may relate to a claim for
indemnification hereunder for such period of time as may be necessary to enable
the indemnifying party to resolve such claim.
(f) Monetary Limitations on Indemnification.
---------------------------------------
(i) With respect to Indemnifiable Damages specified in subsections
7.2(a)(iv), (vii) and (viii), there shall be no monetary limitation on Sellers'
---------- ----- ------
obligation to indemnify Buyer hereunder.
(ii) For all other Indemnifiable Damages, Sellers shall not be
obligated hereunder to indemnify Buyer with respect to any liabilities, losses,
claims, judgments, damages, expenses and costs as to which Buyer is otherwise
entitled to indemnification under this Agreement unless and until the aggregate
amount of indemnification so asserted exceeds Two Hundred Fifty Thousand Dollars
($250,000), and thereafter Buyer shall be entitled to indemnity from Sellers
herdunder only with respect to any amounts in excess of Two Hundred Fifty
Thousand Dollars ($250,000). Notwithstanding anything in this Agreement to the
contrary, Sellers' maximum aggregate obligation to Buyer pursuant to this
Section 7.2 shall not exceed Seventy-Five Million Dollars ($75,000,000).
-----------
(iii) Buyer shall not be obligated hereunder to indemnify Sellers
with respect to any liabilities, losses, claims, judgments, damages, expenses
and costs as to which Sellers is otherwise entitled to indemnification under
this Agreement unless and until the aggregate amount of indemnification so
asserted exceeds Two Hundred Fifty Thousand Dollars ($250,000), and thereafter
Sellers shall be entitled to indemnity from Buyer hereunder only with respect to
any amounts in excess of Two Hundred Fifty Thousand Dollars ($250,000).
Notwithstanding anything in this Agreement to the contrary, Buyer's maximum
aggregate obligation to Sellers pursuant to this Section 7.2 shall not exceed
-----------
Seventy-Five Million Dollars ($75,000,000).
(iv) The liability of any indemnifying party under this Section 7.2
-----------
shall be offset dollar for dollar by: (a) any insurance proceeds received or
recoverable by the indemnified party after the Closing in respect of the item of
Indemnifiable Damages
involved, (b) any other recovery made or recoverable by the indemnified
party from any third party on account of the item of Indemnifiable Damages
involved; (c) any actual tax benefit realizable by the indemnified party or any
affiliate thereof on account of the item of Indemnifiable Damages involved;
and (d) any adjustment to the Purchase Price on account of the item of
Indemnifiable Damages involved.
(g) Other Limitations on Indemnification.
------------------------------------
(i) No indemnifying party under this Section 7.2 shall have any
-----------
obligation to an indemnified party with respect to any matter unless the
indemnified party shall have taken all reasonable steps to mitigate the
liabilities, losses, claims, judgments, damages, expenses and costs involved
upon and after becoming aware of such matter. In no event shall an indemnifying
party be liable for consequential or punitive damages.
(ii) Anything in this Agreement to the contrary notwithstanding, no
claim may be asserted nor any action commenced against any party for breach of
any representation, warranty, covenant or agreement contained herein, unless
written notice of such claim or action is received by such party describing in
reasonable detail the facts and circumstances with respect to the subject matter
of such claim or action within thirty (30) days after the date on which the
representation, warranty, covenant or agreement on which such claim or action is
based ceases to survive as set forth in this Agreement irrespective of whether
the subject matter of such claim or action shall have occurred before or after
such date.
Section 7.3 Exclusive Remedy.
----------------
(a) Each of Buyer and Sellers hereby acknowledges and agrees that its
sole and exclusive remedy with respect to Indemnifiable Damages identified in
subsections 7.2(a) and (b) shall be pursuant to the indemnification provisions
------------------ ---
set forth in this Article VII. In furtherance of the foregoing, each of the
-----------
parties hereto hereby waives, to the fullest extent permitted under applicable
law, any and all rights, claims and causes of action it may have against any
other party hereto arising under or based upon any federal, state or local
statute, law, ordinance, rule or regulation (including, without
limitation, any such rights, claims or causes of action arising under or based
upon common law or otherwise) with respect to Indemnifiable Damages identified
in subsections 7.2(a) and (b).
------------------ ---
(b) Notwithstanding the foregoing subsection (a), nothing contained in
--------------
this Section 7.3 shall prevent any party hereto (i) from seeking and obtaining
-----------
specific performance by the other party hereto of any of its obligations under
this Agreement as provided in Section 9.12; (ii) from seeking and obtaining
------------
injunctive relief against the other party's activities in breach of this
Agreement; or (iii) from enforcing any warranties of title contained in the
Grant Deeds, described in Section 1.11(a)(vi).
-------------------
(c) Anything in this Agreement to the contrary notwithstanding, no breach
of any representation, warranty, covenant or agreement contained herein shall
give rise to any right on the part of Buyer after the Closing to rescind this
Agreement or any of the transactions contemplated hereby.
ARTICLE VIII
TERMINATION
-----------
Section 8.1 Termination. This Agreement may be terminated prior to
-----------
Closing by:
(a) the mutual consent of Sellers and Buyer;
(b) Sellers if the Closing has not occurred by the close of business on
December 31, 1999, so long as the failure to consummate the transaction on or
before such date did not result solely from the failure by Sellers or its
affiliates seeking termination of this Agreement to fulfill any undertaking or
commitment on their part provided for herein prior to Closing;
(c) Buyers if the Closing has not occurred by the close of business on
December 31, 1999, so long as the failure to consummate the transaction on or
before such date did not result solely from the failure by Buyer or its
affiliates seeking termination of this Agreement to fulfill any undertaking or
commitment on its part provided for herein prior to Closing;
(d) Sellers pursuant to Section 4.17:
------------
(e) Buyer pursuant to Section 2.5(b)(iii), Section 4.13, and Section
------------------- ------------ -------
4.17;
----
(f) By Sellers or Buyer pursuant to Section 1.5; or
-----------
Section 8.2 Procedure and Effect of Termination. In the event of
-----------------------------------
termination of this Agreement pursuant to Section 8.1, written notice thereof
-----------
shall forthwith be given by the terminating party to the other parties hereto,
and this Agreement shall thereupon terminate and become void and have no effect,
and the transactions contemplated hereby shall be abandoned without further
action by the party hereto, except that the provisions of Sections 1.6(a), 4.5,
--------------- ---
4.11(a) and (c), 8.2, 9.3 and 9.5 and the Confidentiality Agreement referred to
------- --- --- --- ---
in Section 4.1(b) shall survive the termination of this Agreement; provided,
-------------
however, that such termination shall not relieve any party hereto of any
liability for any prior breach of this Agreement.
ARTICLE IX
MISCELLANEOUS
-------------
Section 9.1 Counterparts. This Agreement may be executed in two or more
------------
counterparts, all of which shall be considered one and the same agreement, and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other parties.
Section 9.2 Governing Law/Dispute Resolution.
--------------------------------
(a) This Agreement shall be governed by and construed in accordance with
the laws of the State of Oregon without reference to the choice of law
principles thereof. Deeds for the Timberlands will be issued in accordance with
and governed by the laws of the State of California.
(b) The parties will attempt in good faith to resolve any controversy or
claim arising out of or relating to this Agreement promptly by negotiations
between representatives and senior executives of the parties who have authority
to settle the controversy. If a controversy or claim should arise, Xxxx X. Xxxxx
of Sellers and Xxxxx
Xxxxxx of Buyer, or their respective successors in the positions they now hold
(the "Managers"), will meet at least once and will attempt to resolve the
matter. Either Manager may request the other to meet within fourteen (14) days,
at a mutually agreed time and place. If the matter has not been resolved within
twenty (20) days of their first meeting, the Managers shall refer the matter to
senior executives, who do not have direct responsibility for administration of
this Agreement (the "Senior Executives"). Thereupon, the Managers shall promptly
prepare and exchange memoranda stating: (i) the issues in dispute and their
respective positions, summarizing the evidence and arguments supporting their
positions, and the negotiations which have taken place, and attaching relevant
documents; and (ii) the name and title of the Senior Executive who will
represent that party. The Senior Executives shall meet for negotiations at a
mutually agreed time and place within fourteen (14) days of the end of the
twenty-day (20) period referred to above, and thereafter as often as they
reasonably deem necessary to exchange relevant information and to attempt to
resolve the dispute. If the matter has not been resolved within thirty (30) days
of the meeting of the Senior Executives, or if either party will not meet within
thirty (30) days of the end of the twentyday (20) period referred to above, the
parties will attempt in good faith to resolve the controversy or claim by
mediation in accordance with the American Arbitration Association model
procedures for mediation of business/commercial disputes. If the matter has not
been resolved pursuant to the aforesaid mediation procedure within thirty (30)
days of the commencement of such procedure, or if either party will not
participate in a mediation, the controversy shall be settled by arbitration in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association. The arbitration shall be governed by the United States Arbitration
Act, 9 U.S.C. ss. 1016, and judgment upon the award rendered by the
arbitrator(s) may be entered by any court having jurisdiction thereof. The place
of arbitration shall be Atlanta, Georgia. The arbitrator(s) are not empowered to
award damages in excess of actual damages, including punitive damages. All
deadlines specified in this Section 9.2(b) may be extended by mutual agreement.
--------------
Except as specifically provided to the contrary herein, the procedures specified
in this Section 9.2(b) shall be the sole and exclusive procedures for the
--------------
resolution of disputes between the parties arising out of or relating to
this Agreement; provided, however, that a party may seek a preliminary
injunction or other preliminary judicial relief if in its judgment such action
is necessary to avoid irreparable damage. Despite such action the parties will
continue to participate in good faith in the procedures specified in this
Section 9.2(b). All applicable statutes of limitation shall be tolled while the
--------------
procedures specified in this Section 9.2(b) are pending, and the parties will
--------------
take such action, if any, required to effectuate such tolling.
Section 9.3 No Third Party Beneficiaries. Nothing in this Agreement or any
----------------------------
ancillary documents, whether expressed or implied, is intended or shall be
construed to confer upon or give to any person, firm, corporation or legal
entity, other than the parties hereto, any rights, remedies or other benefits
under or by reason of this Agreement.
Section 9.4 Entire Agreement. Except for the Confidentiality Agreement
----------------
referred to in Section 4.1(b), this Agreement (including any agreements
--------------
incorporated herein) and the Schedules and Exhibits hereto contain the entire
agreement between the parties with respect to the subject matter hereof, and
there are no agreements, understandings, representations and warranties
regarding the subject matter hereof between the parties other than those set
forth or referred to herein.
Section 9.5 Expenses. The filing fees connected with filing the
--------
notification required under the Xxxx-Xxxxx-Xxxxxx Act will be shared equally by
Buyer and Sellers. Except as expressly provided herein to the contrary, whether
or not the transactions contemplated by this Agreement are consummated, all
legal and other costs and expenses incurred in connection with this Agreement
and the transactions contemplated hereby shall be paid by the party incurring
such costs and expenses.
Section 9.6 Notices. All notices hereunder shall be sufficiently given
-------
for all purposes hereunder if in writing and delivered personally, sent by
documented overnight delivery service, or to the extent receipt is confirmed,
telecopy, telefax or other electronic transmission service to the appropriate
address or number as set forth below. Notices to Sellers shall be addressed to:
Georgia-Pacific Corporation
000 Xxxxxxxxx Xxxxxx, XX
Xxxxxxx, Xxxxxxx 00000
Attention: General Counsel
Telecopier: (000) 000-0000
or at such other address and to the attention of such other person as Sellers
may designate by notice to Buyer in accordance with this Section 9.6. Notices to
-----------
Buyer shall be addressed to:
The Xxxxxxxx Group, Inc.
Xxxxx 0000
Xxx XX Xxxxxxxx
Xxxxxxxx, Xxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxxx
Fax: (000) 000-0000
With a copy to: Xxxxxx Xxxx, ILLP
000 XX Xxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxx, Xxxxxx 00000
Attn: Xxx X. Xxxxxx, Xx.
Fax: (000) 000-0000
or to such other address and to the attention of such other person as Buyer may
designate by written notice to Sellers in accordance with this Section 9.6.
-----------
Section 9.7 Successors and Assigns. This Agreement shall be binding upon
----------------------
and inure to the benefit of the parties hereto and their respective successors
and permitted assigns; provided, however, that Buyer will not assign its rights
or delegate its obligations under this Agreement without the express prior
written consent of Sellers. Buyer shall, however, have the right to assign all
of its rights and obligations under this (but not less than not less than all of
it rights and obligations) Agreement, to an entity which is wholly owned by
Buyer and in such event Buyer shall have no obligations whatsoever arising under
the Promissory Note and the Security Documents executed by the assignee at
Closing.
Section 9.8 Headings; Definitions. The section and article headings
---------------------
contained in this Agreement are inserted for convenience and reference only and
will not affect the meaning or interpretation of this Agreement. All references
to "Sections", "Articles", "Schedules" or "Exhibits" contained herein mean
Sections or Articles of this Agreement and Schedules or Exhibits attached to
this Agreement, which are hereby incorporated by reference, unless otherwise
stated. All capitalized terms defined herein are equally applicable to both the
singular and plural forms of such terms.
Section 9.9 Knowledge; Material Adverse Effect; Insignificant. For the
-------------------------------------------------
purpose of this Agreement, the term "to the Knowledge of Sellers" shall be
defined as the actual knowledge of the current officers and managerial employees
of Sellers including without limitation Xxxxxx X. Xxx, Xxxxxx X. Xxxx, Xxxxxxx
X. Xxxxxxx and Xxxxxxxx X. Xxxxxxx without inquiry or investigation of any
available sources of information. For the purpose of this Agreement, the term
"Material Adverse Effect" shall be defined as 1% of the Purchase Price in the
aggregate. For the purpose of this Agreement, the term "Insignificant" shall be
defined as having an economic consequence of less than $20,000.
Section 9.10 Schedules and Exhibits. The inclusion of any matter in a
----------------------
Schedule or Exhibit hereto shall be deemed to relate to all parts of this
Agreement, despite any references therein to particular sections of this
Agreement.
Section 9.11 Amendments and Waivers. This Agreement may not be modified or
----------------------
amended except by an instrument or instruments in writing signed by the party
against whom enforcement of any such modification or amendment is sought. Any
party hereto may, only by an instrument in waiting, waive compliance by the
other parties hereto with any term or provision of this Agreement. The waiver by
any party hereto of a breach of any term or provision of this Agreement shall
not be construed as a waiver of any subsequent breach.
Section 9.12 Specific Performance. The parties acknowledge that money
--------------------
damages would not be a sufficient remedy for any breach of this Agreement and
that irreparable harm would result if this Agreement were not specifically
enforced.
Therefore, the rights and obligations of the parties under this Agreement shall
be enforceable by a decree of specific performance issued by any court of
competent jurisdiction, and appropriate injunctive relief may be applied for and
granted in connection therewith. A party's right to specific performance shall
be in addition to all other legal or equitable remedies available to such party.
Section 9.13 Severability of Provisions. If any 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 any such determination, 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 extent possible.
IN WITNESS WHEREOF, this Agreement has been executed and delivered by or
on behalf of the parties as of the date first above written.
"Sellers" "Buyer"
------- -----
NORTH AMERICAN TIMBER CORP. HAWTHORNE TIMBER COMPANY, LLC
By: /s/ Xxxxxx X. Xxxxx By: The Xxxxxxxx Group, Inc., its Manager
-------------------------
Xxxxxx X. Xxxxx
Title: President
-------------------------
By: /s/ Xxxxxxx X. Xxxxxxxx
-----------------------------------
GEORGIA-PACIFIC CORPORATION Xxxxxxx X. Xxxxxxxx
Title: Managing Director - Acquisitions
By: /s/ Xxxxxx X. Xxxxx
------------------------------------
Xxxxxx X. Xxxxx
Title: Executive Vice President - Timber
------------------------------------
