EXHIBIT 2.7
PURCHASE AND SALE AGREEMENT
THIS AGREEMENT (this "Agreement"), made as of September 19, 2002, by
and between Plum Creek Timberlands, L.P., a Delaware limited partnership ("PC
Timberlands"); Plum Creek Marketing, Inc., a Delaware corporation ("Marketing");
and Plum Creek Land Company, a Delaware corporation ("Land Company," and
collectively with PC Timberlands and Marketing, "Purchaser"), and STORA ENSO
NORTH AMERICA CORP., a Wisconsin corporation (hereinafter referred to as
"Seller");
W I T N E S S E T H:
WHEREAS, Seller is the owner of the Assets (as hereinafter defined);
and
WHEREAS, Purchaser desires to purchase the Assets from Seller;
NOW, THEREFORE, the parties have agreed and as follows:
1. Agreement of Purchase and Sale. Subject to the provisions of
this Agreement, and for consideration herein stated, Seller agrees to sell to
Purchaser and Purchaser agrees to buy from Seller all of the following described
property (collectively, the "Assets"):
(a) Timberlands. All of Seller's right, title and
interest in and to certain real property owned by Seller in the States of
Wisconsin and Michigan, as further described on Exhibit "A" attached hereto and
incorporated herein by this reference as though fully set forth (hereinafter the
"Timberlands"), and other rights related or appurtenant thereto, including but
not limited to all of Seller's right, title, and interest (i) in and to the
merchantable and unmerchantable timber, growing, lying, standing or felled,
timber interests and timber rights located on or appurtenant to the Timberlands;
(ii) in and to any mineral, sand, oil, gas, hydrocarbon substances and gravel
and other hard rock rights on and under the Timberlands which have not
previously been reserved or severed by Seller's predecessors in interest; and
(iii) all rights of Seller in and to any development rights, air rights, water,
water rights, ditch and ditch rights appurtenant to the Timberlands.;
(b) Leases and Contracts. All of Seller's right, title
and interest in and to the leases, described on Exhibit B-1 attached hereto
(collectively, the "Gravel Leases"), pursuant to which third parties have the
right to use portions of the Timberlands for gravel and sand production and
other incidental purposes, and all of Seller's right, title and interest in and
to the contracts and other agreements identified on Exhibit B-2 attached hereto
(collectively, the "Contracts").
-1-
(c) Offices. All of Seller's right, title and interest in
and to certain real property described on Exhibit "C" attached hereto and
incorporated herein by this reference as though fully set forth (hereinafter the
"Offices," and together with the Timberlands, the "Real Property"), together
with all buildings, structures and other improvements located thereon and all
rights and appurtenances associated therewith.
(d) Access Rights and Easements. All rights of Seller in
and to any access rights, rights-of-way and easements appurtenant to the Real
Property, to the extent assignable ("Access Rights and Easements").
(e) Personal Property. Any and all personal property,
tangible and intangible, including without limitation all furniture, fixtures,
equipment, vehicles and tools, used primarily in connection with the operation
of the Timberlands or located within the Offices; any and all of Seller's maps,
seeds, property books, aerial photos, plans, drawings, specifications,
renderings, engineering studies, biological studies, grading or drainage
studies, environmental and hazardous waste studies and reports and related data
and materials in Seller's possession relating to the Timberlands or the Offices,
and all administrative software solely concerning the Timberlands, including the
timber inventory and computerized forest inventory software program, data base
software program and mapping software program ("GIS"), that can operate
independent of Seller's mainframe and that Seller is permitted to license to
Purchaser but excluding proprietary software of a type used by or which may be
used by Seller in its mill operations ("Personal Property"). In the event that
programs such as the timber inventory and GIS programs cannot operate
independent of Seller's mainframe or Seller cannot license such software, Seller
shall provide the electronic data contained in such programs to Purchaser. The
Personal Property is described on Exhibit "D-1" attached hereto and incorporated
herein by this reference as though fully set forth. Certain items of personal
property associated with Seller's forestry resources operations which are not
being sold to Purchaser are listed on Exhibit D-2 (the "Excluded Personal
Property").
(f) Assets. The Timberlands, Offices, Access Rights and
Easements and Personal Property are collectively referred to as the "Assets."
The parties agree that if any portion of the Real Property is deleted or taken
pursuant to either of paragraphs 6 or 7(c) below, then the term "Real Property"
shall no longer include such deleted portion.
2. Purchase Price, Allocations and Purchase Price Adjustment.
(a) Purchase Price. The purchase price (the "Purchase
Price") for the Assets will be One Hundred Forty-Two Million United States
Dollars ($142,000,000.00), subject to adjustment to the extent, if any, provided
in paragraphs 6 and 7(b) hereof. The Purchase Price will be paid at the Closing
(as hereinafter defined) by wire transfer of the full amount thereof in
immediately available funds to an account designated by Seller.
(b) Purchase Price Allocation. The parties shall allocate
the Purchase
-2-
Price among the Assets and Purchasers PC Timberlands, Marketing and Land Company
in accordance with Section 1060 of the Internal Revenue Code and shall cooperate
with each other and provide such information as may be requested in connection
with the preparation of the allocation. The parties shall report the federal,
state and local tax consequences of the purchase and sale contemplated hereby
(including the filing of IRS Form 8594) in a manner consistent with such
allocation.
(c) Purchase Price Adjustment.The amount of timber by
species and product mix contemplated to be harvested from the Timberlands by
Seller from April 1, 2002 to the Closing is set forth on the Harvest Schedule
attached hereto as Exhibit "E" (the "Harvest Schedule"). Immediately following
the Closing, Purchaser and its accountants shall be provided with reasonable
access to all of Seller's books, records, accounting and other documents
reasonably necessary to confirm the actual amount of timber harvested by species
and product mix from the period commencing April 1, 2002 through the Closing. In
the event that, based upon Purchaser's review of such books, records and
documents, Purchaser determines that the actual amount of timber harvested by
species and product mix exceeded the amounts contemplated to be harvested for
each species and product mix pursuant to the Harvest Schedule on a pro-rated
basis, Purchaser shall submit a harvesting report (the "Harvesting Report") to
Seller setting forth the basis for this determination. Seller shall have 10 days
to review the Harvesting Report and to deliver a notice of any dispute regarding
the determination made by Purchaser ("Harvesting Dispute Notice"). In the event
that Seller does not deliver a Harvesting Dispute Notice within such period, the
Harvesting Report shall be deemed accepted by Seller, and Seller shall pay to
Purchaser, within two (2) business days of the expiration of such review period,
an amount equal to the fair market value of such excess harvested timber as of
the Closing (based on volume and product mix). Such payment shall be made by
wire transfer of immediately available funds in U.S. dollars. In the event
Seller and Purchaser are unable to agree upon the fair market value for such
timber, the provisions of Paragraph 25 shall apply.
3. Closing.
(a) The execution and delivery of the documents and
instruments for the consummation of the purchase and sale pursuant hereto (the
"Closing") will take place at 10:00 a.m., local time, on the date mutually
selected by the parties which shall be as soon as practicable after (i) all
regulatory approvals have been obtained and (ii) Purchaser has completed the tax
planning it deems to be necessary or advisable as set forth in Section 28(d)
hereof; provided, however, that the Closing will occur in any event on or before
December 3, 2002 at the offices of Seller's counsel, Michael, Best & Friedrich,
at 401 N. Michigan Ave., Chicago, Illinois, subject to any extension expressly
provided for in this Agreement, or such earlier date and time, and/or such other
location, as may be mutually agreeable to Seller and Purchaser.
(b) At the Closing, Seller will execute and/or deliver to
Purchaser (i) special or limited warranty deeds (warranting only against claims
arising by, through or under Seller) conveying the Real Property to Purchaser
subject only to the Permitted Encumbrances (as hereinafter defined) (the
"Deeds"), (ii) assignment and assumption agreements, in form and
-3-
substance reasonably satisfactory to Purchaser and Seller, pursuant to which
Seller will assign to Purchaser all of Seller's right, title and interest under
the Gravel Leases, and Purchaser will assume and agree to perform all of
Seller's obligations and duties under the Gravel Leases and the Contracts (the
"Assignments"), (iii) a Bill of Sale, in form and substance reasonably
satisfactory to Purchaser and Seller, pursuant to which Seller will convey all
of Sellers right, title and interest in and to the Personal Property, free and
clear of all encumbrances and (iv) evidence, reasonably satisfactory to
Purchaser and its title insurer, with respect to the power and authority of
Seller to enter into and consummate this Agreement and the transactions
contemplated hereby and of the persons executing documentation on behalf of
Seller.
(c) At the Closing, Purchaser will execute and/or deliver
to Seller (i) the Assignments, and (ii) evidence, satisfactory to Seller, with
respect to the power and authority of Purchaser to enter into and consummate
this Agreement and the transactions contemplated hereby and of the persons
executing documentation on behalf of Purchaser.
(d) The parties agree to do such other acts and execute
and deliver such other documents and instruments as are reasonably necessary for
the consummation of the transactions contemplated hereby.
(e) Prior to the date of Closing, Seller shall have the
right to continue harvesting timber in accordance with its normal operations
pursuant to the Harvest Schedule. . Any timber severed and removed from the
Timberlands in accordance with the Harvest Schedule prior to the Closing shall
be the property of Seller.
4. Title.
(a) Seller agrees to convey to Purchaser fee simple title
to the Real Property, free and clear of all liens, claims and encumbrances
created by Seller, except for the matters set forth on Exhibit F attached
hereto.
(b) Seller shall provide to Purchaser preliminary
commitments for title insurance for the Real Property as soon as practical after
execution hereof, including copies of all exception documents referred to in
such title commitments (the "Title Commitments"). Purchaser shall have until
close of business on the 30th day after receipt of such title commitments (the
"Title Review Period") to notify Seller of any objections Purchaser has to any
matters shown or referred to in the title commitments. Any title encumbrances or
exceptions that are set forth in the title commitment to which Purchaser does
not object during the period specified and the encumbrances described on Exhibit
"F" shall be deemed to be permitted exceptions to the status of Seller's title
(the "Permitted Encumbrances"). With regard to items to which Purchaser does
object within the period specified, Seller shall attempt to cure and remove such
items prior to Closing. If Seller is unable or fails to cure or remove such
items by October 15, 2002, Purchaser may either waive its objection and proceed
with closing, or terminate this Agreement with respect to the specific
parcel(s)of Real Property subject to the objection(s) by written notice to
Seller no later than October 18, 2002. In the event Purchaser terminates this
Agreement with respect to specific parcel(s) of Real Property
-4-
pursuant to the provisions of this Paragraph, Purchaser shall receive a credit
against the Purchase Price at Closing in the amount of the number of acres of
Real Property so removed from Closing times the average price per acre paid for
all acres that are the subject of this Agreement. The foregoing notwithstanding,
in the event Purchaser objects to title matters within the Title Review Period
and Seller is unable or unwilling to cure such title objections by October 15,
2002, and the value of the Real Property which is the subject of such title
objections exceeds fifteen percent (15%) of the Purchase Price, then Purchaser
may terminate this Agreement by giving written notice of such termination by
October 18, 2002 to Seller, whereupon no party hereto will have any further
rights or obligations hereunder, except as may otherwise be expressly provided
herein. Any determinations of such values will be mutually agreed upon by
Purchaser and Seller, or if Purchaser and Seller are unable to agree, then such
values will be determined pursuant to paragraph 25 below. If Purchaser fails to
give such notice of termination to Seller within the times specified, the
objection(s) shall be deemed waived by the Purchaser.
(c) At or prior to the Closing, Seller will cause any
monetary liens, mortgages, deeds to secure debt and deeds of trust encumbering
the Real Property to be satisfied or otherwise removed.
(d) Except for the Permitted Encumbrances and the matters
shown in Exhibit F, so long as this Agreement remains in force, Seller will not
lease, encumber or convey all or part of the Assets or any interest therein,
without the prior written consent of Purchaser.
5. Inspection; Sale "AS IS".
(a) Purchaser and its agents and representatives will
have the right prior to the Closing to enter upon and to inspect the Real
Property, including the right to examine, survey and perform timber cruises,
environmental assessments and other tests or surveys which it may deem necessary
or advisable. Purchaser shall give reasonable advance notice to Seller prior to
any such entry on the Real Property, and Seller shall have the right to have a
representative of Seller accompany Purchaser or its agents or representatives
during any such entry on the Real Property. Notwithstanding the foregoing, (i)
unless legally compelled to do so, Purchaser will not discuss with or disclose
to any governmental authority any matter relating to the Assets unless and until
the written consent of Seller to such discussion or disclosure and contacting
such governmental authority has been received by Purchaser, and (ii) Purchaser
shall not conduct or cause to be conducted any physical testing of the Assets
for hazardous substances (as defined in paragraph 6 below) unless and until
Purchaser has executed an access agreement, which shall include a detailed
description of the scope of the testing and the work to be performed and shall
otherwise be in form and substance reasonably satisfactory to Seller.
(b) Seller agrees to make available to Purchaser, at
Seller's offices in Rhinelander, Wisconsin, for reviewing and copying by
Purchaser at Purchaser's expense, copies of various materials relating to the
Assets, including maps, aerial photographs, surveys, timber inventory data,
harvest schedules, environmental reports and studies, and any other materials
reasonably requested by Purchaser.
-5-
(c) Except for the special or limited warranty to be
included in the Deeds and except for the warranties and representations
expressly made by Seller in this Agreement, Purchaser acknowledges and agrees as
follows: (i) Purchaser is purchasing and Seller is selling the Assets "AS IS",
"WHERE IS" and "WITH ALL FAULTS"; (ii) Seller has not made, does not make and
specifically disclaims any representations, warranties, guaranties, commitments,
promises or agreements of any kind, express or implied, with respect to the
Assets, including, without limitation, governmental regulations, requirements or
constraints, site or physical conditions, condition of the Assets, access to and
from the Assets, matters affecting use or occupancy, profitability, volumes, age
classes, species, merchantability, yields, acreage, access, availability,
quantity or quality of water, environmental compliance, prospects for future
improvements or future development, economic feasibility, marketability or any
other matter relating to the Assets; (iii) Purchaser is relying on Purchaser's
independent investigations and examinations relating to the Assets; and (iv)
Purchaser waives, and releases Seller from, any and all claims, liabilities,
losses, damages, costs and expenses, whether known or unknown, or foreseen or
unforeseen, with respect to the condition of the Assets. The provisions of this
paragraph 5(c) will survive the Closing and will survive any termination of this
Agreement.
(d) Purchaser agrees to accept the transfer of the
Managed Forest Law/Forest Crop Law designation(s) and contract(s) for the Real
Property. Purchaser agrees that Purchaser is responsible for all costs and fees
related to withdrawal subsequent to Closing of all or any portion of the Real
Property from Managed Forest Law status or Forest Crop Law status for any
reason.
(e) Purchaser acknowledges that dimensions, total square
footage, total acreage and allocation of acreage information regarding the Real
Property provided to Purchaser by Seller are approximate. The dimensions of the
Real Property have not been verified by survey and Seller has no obligation to
provide a survey or to locate corners on specific parcels of the Real Property.
6. Environmental Assessment. In the event that Purchaser obtains
an environmental assessment of the Assets and such assessment reveals the
existence of any material amount of a hazardous substance (as defined below) on
or under a portion of the Real Property, Purchaser will have the right,
exercisable at Purchaser's election by written notice to Seller received by
Seller not later than the thirtieth (30th) day after the date of full execution
hereof, to delete such portion from the Real Property. If Purchaser makes a
timely election under the preceding sentence, then the Purchase Price will be
reduced by an amount equal to the value of such deleted portion of Real
Property, as mutually agreed upon by Purchaser and Seller, or if Purchaser and
Seller are unable to agree within fifteen (15) days after Seller's receipt of
Purchaser's election notice, then such value and the amount of such reduction
will be determined pursuant to paragraph 25 below; provided, however, if the sum
of the values of all such deletions under this paragraph 6, plus the values of
all portions of the timber which are damaged or destroyed by fire, insect
infestation or other casualty (paragraph 7(b) below) and the values of all
portions of the Real Property which are taken or to be taken by condemnation or
eminent domain
-6-
(paragraph 7(c) below), exceeds fifteen percent (15%) of the Purchase Price,
then Purchaser may terminate this Agreement by promptly giving written notice of
such termination to Seller, whereupon no party hereto will have any further
rights or obligations hereunder, except as may otherwise be expressly provided
herein. Any determinations of such values will be mutually agreed upon by
Purchaser and Seller, or if Purchaser and Seller are unable to agree, then such
values will be determined pursuant to paragraph 25 below. The date of Closing
will be extended to the extent necessary to permit any determination(s) of value
pursuant to this paragraph. For purposes of this Agreement, the term "hazardous
substance" means any chemical, compound, constituent, material, waste,
contaminant or other substance as defined in and regulated by any of the
following sources as amended from time to time: (i) the Resource Conservation
and Recovery Act of 1976, 42 USC Section 6901 et seq. (RCRA); (ii) the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42
USC Section 9601 et seq. (CERCLA); (iii) the Hazardous Materials Transportation
Act, 49 USC Section 1801, et seq.; (iv) the Toxic Substances Control Act, 15 USC
Section 2601 et seq.; (v) the Clean Water Act, 33 USC Section 1251 et seq.; (vi)
the Clean Air Act, 42 USC Section 1857 et seq.; (vii) applicable environmental
laws of the States of Wisconsin and Michigan; and (viii) any federal, state or
local regulation, rule or order issued or promulgated under or pursuant to any
of the foregoing by any governmental department, agency or other administrative,
regulatory or judicial body having jurisdiction over the Assets.
7. Condition of Assets; Damage; Condemnation.
(a) Seller agrees that at the Closing the Assets will be
in the same condition as exists on the date hereof, subject to natural wear and
tear, to condemnation, casualties and other circumstances beyond Seller's
control, to Seller's use, operation and management of the Assets in the ordinary
course of business, and to harvesting, cutting and removal of timber pursuant to
paragraph 3(e) of this Agreement; provided, however, Seller covenants and agrees
that it shall complete its planned operating and capital budgets for road
construction and maintenance and planting and other silvicultural activities as
disclosed in Seller's budgets attached hereto as Exhibit "G" (the "Operating
and Capital Budgets").
(b) If at any time prior to the Closing, any material
portion of the timber which is included as part of the Timberlands is destroyed
or damaged by fire, insect infestation or other casualty, or if any of the
Offices suffer material loss or damage, then the Purchase Price will be reduced
by an amount equal to the value of the portions of such timber so damaged or
destroyed or the value of the Offices so damaged as mutually agreed by Seller
and Purchaser, or if Seller and Purchaser are unable to agree within fifteen
(15) days after Purchaser's receipt of notice of the occurrence of such damage
or destruction, such value and the amount of such reduction will be determined
pursuant to paragraph 25 hereof; provided, however, if the sum of the values of
all portions of such timber so damaged or destroyed, plus the values of all
deletions pursuant to paragraph 6 above and the values of all portions of the
Real Property which are taken or to be taken by condemnation or eminent domain
(paragraph 7(c) below), exceeds fifteen percent (15%) of the Purchase Price,
then Purchaser may terminate this Agreement by promptly giving written notice of
such termination to Seller, whereupon no party hereto will have any further
rights or obligations hereunder, except as may otherwise be expressly provided
-7-
herein. Any determinations of such values will be mutually agreed upon by
Purchaser and Seller, or if Purchaser and Seller are unable to agree, then such
values will be determined pursuant to paragraph 25 below. The date of Closing
will be extended to the extent necessary to permit any determination(s) of value
pursuant to the preceding sentence.
(c) If at any time prior to the Closing, any action or
proceeding is filed or threatened under which any material portion of the Real
Property is or may be taken pursuant to any law, ordinance or regulation by
condemnation or the right of eminent domain, then Purchaser and Seller will
proceed with the purchase and sale of the Assets (excluding any portion thereof
so taken prior to Closing) pursuant to this Agreement, notwithstanding such
action or proceeding, and the Purchase Price will not be reduced, but Purchaser
will be entitled to receive all proceeds of any awards paid or payable to Seller
with respect to such taking; provided, however, if the sum of the values of all
portions of the Real Property so taken or to be taken, plus the values of all
deletions pursuant to paragraph 6 above and the values of all portions of the
timber or the Offices which are damaged or destroyed by fire, insect infestation
or other casualty (paragraph 7(b) above), exceeds fifteen percent (15%) of the
Purchase Price, then Purchaser may terminate this Agreement by promptly giving
written notice of such termination to Seller, whereupon no party hereto will
have any further rights or obligations hereunder, except as may otherwise be
expressly provided herein. Any determinations of such values will be mutually
agreed upon by Purchaser and Seller, or if Purchaser and Seller are unable to
agree, then such values will be determined pursuant to paragraph 25 below. The
date of Closing will be extended to the extent necessary to permit any
determination(s) of value pursuant to the preceding sentence.
8. Warranties and Representations.
(a) Seller hereby warrants and represents to Purchaser as
follows:
(i) Seller is a corporation duly formed and
validly existing under the laws of the State of Wisconsin and is duly
qualified to do business in the State of Michigan, and is in good standing
in the States of Wisconsin and Michigan, and Seller has the full capacity,
power and authority to enter into this Agreement and fully perform its
obligations hereunder.
(ii) This Agreement and the performance hereof by
Seller will not contravene any law or contractual restriction binding on
Seller.
(iii) No consent, approval, order or authorization
of any court or other governmental entity is required to be obtained by
Seller in connection with the execution and delivery of this Agreement or
the performance hereof by Seller, except for any filing required under the
HSR Act (as hereinafter defined).
(iv) This Agreement has been duly executed and
delivered by Seller and constitutes the valid and binding obligation of
Seller, enforceable against
-8-
Seller in accordance with its terms, subject to applicable bankruptcy,
insolvency and other similar laws affecting the enforceability of creditors'
rights generally and the discretion of the courts with respect to equitable
remedies.
(v) Except for the matters set forth on the
Disclosure Schedule attached hereto as Exhibit H, Seller warrants and
represents, in each case to Seller's knowledge, as follows:
(A) Seller owns fee simple title to the
Real Property, subject to the Permitted Encumbrances.
(B) Seller has made available for
Purchaser's review at Seller's offices correct and complete copies of
the Gravel Leases; other than the Gravel Leases and the Permitted
Encumbrances, there are no leases, subleases, contracts, licenses or
permits pursuant to which any person other than Seller has the right to
use or occupy any of the Real Property; and there are no existing
defaults by Seller under any of the Gravel Leases.
(C) Seller has provided to Purchaser
complete copies of the Contracts, and there are no existing defaults by
Seller under any of the Contracts.
(D) There is no pending or threatened
action, suit or proceeding (including any condemnation or eminent
domain proceeding) before any court, governmental agency or arbitrator
which could materially and adversely affect the Assets.
(E) Seller has not received any notice
from any Federal, State or local governmental authority having
jurisdiction over the Real Property or the timberland business of
Seller of any material violation of any such statute, ordinance, rule,
regulation or order relating to the Real Property, nor does Seller have
knowledge of any situation that could reasonably be expected to give
rise to any such notice.
(F) No person other than Seller has any
right to conduct timbering operations on the Real Property or any
right, title or interest in or to any standing timber located on the
Real Property.
(G) Except as set forth on EXHIBIT H
and in the environmental reports identified on SCHEDULE 4.8:
(a) The Real Property has not at any time been used for
the generation, transportation, management, handling, treatment, storage,
manufacture, emission disposal, release or deposit of any hazardous substances
or fill or other material containing hazardous
-9-
substances in material violation of levels permitted under applicable laws.
(b) There are no underground storage tanks on the Real
Property.
(c) Seller has not received notification from any
third party, including but not limited to any governmental agency, alleging that
the Real Property is not materially in compliance with applicable environmental
laws, and to Seller's knowledge, there is no pending notification.
(vi) Since the date of Seller's timber inventory, April 1, 2002,
Seller has conducted its harvesting operations on the Timberlands and managed
the Timberlands consistent with past practices and in compliance with the
Harvest Schedule, and the Operating and Capital Budgets.
(vii) Except as set forth on EXHIBIT J attached hereto and made a
part hereof, since the date of Seller's timber inventory, April 1, 2002, Seller
has not sold, conveyed or transferred, or entered into any contracts for the
sale, conveyance or transfer of any of Seller's right, title or interest in and
to the Assets or any portion thereof.
As used in this paragraph 8(a)(v), the term "Seller's knowledge" means only the
present, actual knowledge of Frederic J. Souba, Jr., Seller's Vice
President-Forest Resources; John Anderson; Dan Bobbe; Mark Fries; Dick Kayser;
Al Samz; Joe Schroeder; Dan Peterson; and Tim Tollefson.
(b) Purchaser hereby warrants and represents to Seller as
follows:
(i) Purchaser Plum Creek Timberlands, L.P. is a
limited partnership; Plum Creek Marketing, Inc. is a corporation; and Plum
Creek Land Company is a corporation, each of which is duly formed and
validly existing under the laws of the State of Delaware and has the full
capacity, power and authority to enter into this Agreement and fully perform
its obligations hereunder.
(ii) This Agreement and the performance hereof by
Purchaser will not contravene any law or contractual restriction binding on
Purchaser.
(iii) No consent, approval, order or authorization
of any court or other governmental entity is required to be obtained by
Purchaser in connection with execution and delivery of this Agreement or the
performance hereof by Purchaser, except for any filing required under the
HSR Act (as hereinafter defined).
(iv) This Agreement has been duly executed and
delivered by Purchaser and constitutes the valid and binding obligation of
Purchaser, enforceable against Purchaser in accordance with its terms,
subject to applicable bankruptcy,
-10-
insolvency and other similar laws affecting the enforceability of creditors'
rights generally and the discretion of the courts with respect to equitable
remedies.
(c) Subject to the limitations set forth in
paragraph 8(d) below, Seller and Purchaser each agrees to indemnify and hold
harmless the other from any damage, loss, liability, expense, cost and claim
(including, without limitation, attorneys' fees and court costs) incurred by or
asserted against the indemnified party as a result of the breach by the
indemnifying party of any warranty or representation set forth in this paragraph
8.
(d) The indemnification obligations set forth in
paragraph 8(c) above shall be subject to the following limitations: (i) such
indemnification obligations will survive the Closing, but will expire and be of
no further force or effect whatsoever on the first (1st) anniversary of the date
of the Closing, except to the extent, if any, that Seller or Purchaser, as the
case may be, has given to the other party, prior to expiration of such one-year
period, written notice of a specific claim of a breach by such other party of a
warranty or representation set forth in this paragraph 8; (ii) neither Seller
nor Purchaser will have any liability for indemnification under paragraph 8(c)
until the aggregate amount of all losses by the indemnified party for all
breaches by the indemnifying party of warranties and representations set forth
in paragraph 8(c) exceeds the sum $1,000,000 and then only for the amount by
which such losses exceeds such sum; and (iii) in no event will Seller or
Purchaser have any liability for indemnification under paragraph 8(c) in excess
of an aggregate amount of $10,000,000. The foregoing notwithstanding, in the
event of a breach of Seller's representation and warranty under Paragraph
8(a)(vi), the provisions of Paragraph 2(c) shall apply.
9. Operation of Assets Prior to Closing. Until the date of the
Closing, Seller will continue to use, operate and manage the Assets in the
ordinary course of business and consistent with past practice. This activity
will include harvesting operations and site preparation, release and planting
activities on the Real Property pursuant to the Harvest Schedule and the
Operating and Capital Budgets.
10. Brokerage. At the Closing, Seller will pay to UBS Warburg LLC
certain commissions, fees and/or expenses pursuant to the terms of a separate
agreement between Seller and UBS Warburg LLC.(the "UBS Fee"). Seller and
Purchaser each warrant and represent to the other that, except for the UBS Fee,
which remains the sole responsibility of the Seller, neither has incurred any
liability for any brokerage or finder's commission, fee or expense in connection
with the execution and delivery of this Agreement or the consummation of the
transactions contemplated hereby. Seller and Purchaser each agree to indemnify
and hold harmless the other from any and all damage, loss, liability, expense,
cost and claim (including but not limited to attorneys' fees and court costs)
arising with respect to any such other commission, fee or expense which may be
suffered by the indemnified party by reason of any action or agreement of the
indemnifying party. The foregoing indemnification provision will survive the
Closing and will survive any termination of this Agreement.
-11-
11. Prorations; Taxes; Expenses.
(a) Managed Forest Law, Forest Crop Law and ad valorem
real property taxes on the Real Property for any applicable period in which the
Closing occurs will be prorated between Seller and Purchaser as of the date of
Closing. If actual tax bills for the calendar year of Closing are not available,
said taxes will be prorated based on tax bills for the previous calendar year
and such proration will be final. If any portion of the Real Property is not
designated as a separate tax parcel, said taxes will be adjusted to an amount
bearing the same relationship to the total tax bill which the acreage contained
within such portion of the Real Property bears to the acreage contained within
the property included within said tax bill.
(b) Purchaser will pay (i) all costs and expenses for any
title examinations and all title insurance premiums and other charges in
connection with any title insurance policy or policies obtained by Purchaser,
and (ii) all costs and expenses in connection with any inspections,
examinations, tests, surveys, cruises or assessments performed by or for
Purchaser.
(c) Seller will pay all transfer taxes and any other
taxes in connection with this transaction. Purchaser will pay all recording fees
in connection with the recordation of the Deeds.
(d) Each party will pay its respective costs and expenses
of legal representation.
(e) Purchaser shall be solely responsible and liable
for any and all taxes, assessments and similar charges (including any and all
fines, penalties and interest charges in connection therewith) that may be
levied, assessed, recaptured or otherwise imposed with respect to the Assets or
any part thereof which result from or arise out of any change in the use of, or
other change in circumstances relating to, the Assets or any part thereof from
and after the date of Closing. Seller shall be solely responsible and liable for
any and all taxes, assessments and similar charges (including any and all fines,
penalties and interest charges in connection therewith) that may be levied,
assessed, recaptured or otherwise imposed with respect to the Assets or any part
thereof which result from or arise out of any change in the use of, or other
change in circumstances relating to, the Assets or any part thereof prior to
Closing.
(f) The provisions of this paragraph 11 will survive the
Closing.
12. Hart-Scott-Rodino. Seller and Purchaser acknowledge that the
transaction contemplated by this Agreement may be subject to the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), and it will be a condition to the Closing hereunder that the parties
obtain such approvals as may be required under the HSR Act. The parties agree to
cooperate in good faith in exchanging relevant information and filing any
documents required under the HSR Act, and each party will bear its own costs,
fees and expenses in making such filing, provided that any filing fees payable
in connection with such filings shall
-12-
be shared equally by Purchaser and Seller. If any approval required under the
HSR Act has not been received on or before six months from the date hereof, then
this Agreement shall automatically terminate, whereupon no party hereto will
have any further rights or obligations hereunder, except as may otherwise be
expressly provided herein.
13. Default; Remedies. If the purchase and sale of the Assets
contemplated hereby is not consummated because of a default under this Agreement
by Purchaser or Seller, then the other party shall have the right, at its
option, (a) to terminate this Agreement, whereupon neither party will have any
further rights or obligations hereunder, except as may otherwise be expressly
provided herein, or (b) to exercise any and all rights and remedies available at
law or in equity, including, without limitation, an action or suit for monetary
damages and/or specific performance; provided, however, that neither party shall
be entitled to punitive or consequential damages.
14. Assignment; Direct Deeding Capability. Neither party hereto
will have the right to assign its rights or obligations under this Agreement, in
whole or in part, without the prior written consent of the other party, which
consent shall not be unreasonably withheld; provided, however, Purchaser may, at
its sole option:
(a) assign all or any portion of this Agreement to a designated
qualified intermediary, exchange accommodation titleholder, or other special
purpose entity pursuant to Paragraph 27(d) hereof;
(b) assign all or any portion of this Agreement to an affiliate of
Purchaser; or
(c) require Seller to direct deed any or all of the Timberlands or
Offices to any designee of Purchaser.
In the event of any such assignment or direct deeding, Purchaser shall
remain liable for the complete performance of the terms and conditions
hereunder. Any attempted assignment in violation of this paragraph will be
deemed null and void.
15. No Waiver. No action or failure to act by any party hereto
will constitute a waiver of any right or duty afforded to such party under this
Agreement, nor will any such action or failure to act constitute an approval of
or acquiescence in any breach of this Agreement except as may be specifically
agreed in writing.
16. Governing Law. This Agreement will be governed by the laws of
the State of Wisconsin.
17. Notice. Any and all notices, elections and communications
required or permitted by this Agreement will be made or given in writing and
will be delivered in person, sent by reputable overnight courier or facsimile,
or sent by postage prepaid United States mail, certified or registered, return
receipt requested, to the other parties at the addresses set forth
-13-
below, or such other address as may be furnished by notice in accordance with
this paragraph. The date of notice given by personal delivery will be the date
of such delivery. The effective date of notice by overnight courier or facsimile
or by mail will be the date such notice is received by the addressee.
Seller: STORA ENSO NORTH AMERICA CORP.
510 High Street
Wisconsin Rapids, WI 54495
Attention: Carl H. Wartman
Facsimile: 715-422-3203
with a copy to: MICHAEL BEST & FRIEDRICH LLP
100 E. Wisconsin Ave.
Milwaukee, WI 53202-4108
Attention: Nancy Leary Haggerty
Facsimile: 414-277-0656
Purchaser: Plum Creek Timberlands, L.P.
999 Third Avenue, Suite 2300
Seattle, WA 98104
Attn: James A. Kraft, Sr. Vice President,
General Counsel and Secretary
Facsimile: 206-467-3799
Plum Creek Marketing, Inc.
999 Third Avenue, Suite 2300
Seattle, WA 98104
Attn: James A. Kraft, Sr. Vice President,
General Counsel and Secretary
Facsimile: 206-467-3799
Plum Creek Land Company
999 Third Avenue, Suite 2300
Seattle, WA 98104
Attn: James A. Kraft, Sr. Vice President,
General Counsel and Secretary
Facsimile: 206-467-3799
18. Entire Agreement. This Agreement and the documents delivered
pursuant hereto contain the entire agreement among the parties with respect to
the subject matter hereof and supersede all prior negotiations. None of the
parties shall be bound by nor shall be deemed to have made any representations,
warranties or commitments except those required to be made by the terms of this
Agreement, or those which are contained herein or in the documents
-14-
delivered pursuant hereto. This Agreement may only be amended by a written
instrument executed by both parties.
19. Captions. The captions of paragraphs in this Agreement are for
convenience and reference only and are not part of the substance hereof.
20. Severability. In the event that any one or more of the
provisions, paragraphs, words, clauses, phrases or sentences contained in this
Agreement, or the application thereof in any circumstance is held invalid,
illegal or unenforceable in any respect for any reason, the validity, legality
and enforceability of any such provision, paragraph, word, clause, phrase or
sentence in every other respect and of the remaining provisions, paragraphs,
words, clauses, phrases or sentences of this Agreement, will not be in any way
impaired, it being the intention of the parties that this Agreement will be
enforceable to the fullest extent permitted by law.
21. Counterparts; Facsimile Delivery. This Agreement may be
executed in counterparts either by original delivery or by facsimile
transmission, each of which shall be deemed to be an original instrument. All
such counterparts together shall constitute a fully executed Agreement.
22. No Third Party Beneficiaries; Binding Effect. This Agreement
is for the sole benefit of the parties hereto and their permitted assigns and
nothing contained herein will give or be construed to give to any party, other
than the parties hereto and such permitted assigns, any legal or equitable
rights hereunder. Subject to the foregoing and the provisions of paragraph 14
above, this Agreement will be binding upon and will inure to the benefit of the
parties hereto and their respective heirs, legal representatives, successors and
assigns.
23. Time of Essence. Time is of the essence of this Agreement.
24. No Survival. Except to the extent otherwise expressly provided
in this Agreement, the provisions of this Agreement will not survive any
termination of this Agreement and will not survive the Closing and will be
merged into the documents executed and delivered and the payment of all amounts
made at the Closing.
25. Determination of Value.
(a) In the event that any provision of this Agreement
refers to this paragraph 25 for a determination of the value of any portion(s)
of the Real Property, any leasehold interest(s) under the Gravel Leases and/or
any timber or improvements on the Real Property, Seller and Purchaser will
promptly agree upon and jointly appoint an independent forestry consultant or
appraiser, who will determine the fair market value thereof. The consultant will
reach a decision within thirty (30) days after such appointment, and the
decision of the consultant as to such value will be final and binding on Seller
and Purchaser.
-15-
(b) In the event Seller and Purchaser are unable to agree
on the appointment of a consultant under subparagraph (a) above, Seller and
Purchaser will each promptly appoint an independent forestry consultant, each of
which may be a consultant previously engaged by the appointing party with
respect to the Assets, and such two consultants will in turn promptly select a
third independent forestry consultant or appraiser to act with them in a panel
to determine the fair market value of such portion(s), interest(s) and/or
timber. The panel of consultants will reach a decision within thirty (30) days
after the selection of the third consultant, and the decision of the panel of
consultants as to such value will be final and binding on Seller and Purchaser.
(c) Seller and Purchaser will each bear one-half (1/2) of
the cost of each consultant appointed hereunder. The date of Closing will be
extended to the extent necessary to permit the final decision of the consultant
or panel of consultants, as the case may be.
26. Incorporation of Exhibits. All exhibits referred to herein are
hereby incorporated in this Agreement by this reference.
27. No Publicity; Confidentiality; Public Announcements; Return of
Information. Subject to the provisions of Paragraph 27(c)below:
(a) Neither Seller nor Purchaser shall disclose the
content or substance of this Agreement to any individual, firm, partnership,
corporation, entity, governmental authority, or other party except advisors,
agents, lenders and representatives assisting each respective party in
connection with this transaction, until such disclosure is agreed upon in
writing and then only to accomplish the consents and approvals required
hereunder.
(b) No press releases or other public statements
concerning this Agreement or the transactions contemplated hereby shall be made
by either party without the prior written approval of the other, except as
required by law.
(c) Each party hereto, its representatives, agents and
employees shall hold in strict confidence and shall not use or disclose to any
person or organization any information or data concerning this Agreement or the
transaction contemplated hereby except to the extent that (i) said information
has been published or constitutes a matter of public knowledge or record; (ii)
such disclosure is reasonably necessary for communications with and reporting to
the Board of Directors or other governing body of either party or reasonably
appears to be required by a governmental agency having jurisdiction over the
parties; (iii) such information is necessary in connection with any suit brought
to enforce the obligations of any party hereunder; or (iv) if based upon the
legal opinion of counsel for the disclosing party, that such counsel reasonably
believes that disclosure is necessary or desirable to avoid conflict with or
violation of any applicable law, rule, or regulation.
(d) In the event of termination of this Agreement for
whatever reason, Purchaser will return all originals and copies of documents,
work papers and other material
-16-
obtained hereunder, whether obtained before or after the execution hereof
(subject to retention of true copies for litigation purposes as applicable), and
Purchaser agrees that it will not disclose or divulge any such information to
any other person without Seller's written consent, and will use its best efforts
to keep any information so obtained confidential; provided, however, that (i)
Purchaser may disclose this information to its employees, attorneys, accountants
and prospective lenders who need to know such information in connection with
this transaction and who have been informed of Purchaser's obligation to
maintain the information as confidential; and (ii) Purchaser shall not be
obligated to treat as confidential any information which was known to it at the
time of disclosure or which becomes publicly known or available thereafter or is
rightfully received by Purchaser from a third party.
28. Miscellaneous.
(a) Further Assurances. If, at any time after the Closing
Date, either party shall consider or be advised that any further instruments or
assurance or any other things are necessary or desirable to carry out the terms
of this Agreement, the other party shall execute and deliver all such
instruments and assurances and do all things reasonably necessary and proper to
carry out the terms of this Agreement.
(b) Costs and Expenses. Each party to this Agreement
shall pay its own costs and expenses (including, without limitation, the fees
and expenses of its agents, representatives, counsel and accountants) incurred
in connection with the closing of the transactions contemplated under this
Agreement.
(c) Attorneys Fees and Other Costs. If either party
initiates any proceeding in law, equity or arbitration concerning this Agreement
or any of its provisions, the party that substantially prevails in such
proceeding shall be paid by the party not so prevailing therein all costs and
expenses incurred in such proceeding, including reasonable attorneys' fees at
the pretrial, trial and appellate levels as determined by the court or courts
considering the matter.
(d) Tax Cooperation. Purchaser may desire to complete
this transaction as part of a Section 1031 tax-deferred exchange. Seller agrees
to cooperate with Purchaser in documenting and completing such exchange.
Purchaser may assign some or all of Purchaser's rights and obligations under
this Agreement to a designated qualified intermediary, exchange accommodation
titleholder, or other special purpose entity. Seller agrees to accept such
designated qualified intermediary, exchange accommodation titleholder, or other
special purpose entity as the assigned Purchaser of the Timberlands to be
purchased by PC Timberlands under this Agreement. In addition, Seller shall
cooperate with Purchaser with respect to Purchaser's efforts to structure the
purchase and ownership of the Assets in a manner consistent with Purchaser's
status as a Real Estate Investment Trust. Seller shall not incur additional
expense or liability by such cooperation.
(e) Liabilities Not Assumed. Except for the obligations
assumed pursuant to the Gravel Leases, and as otherwise set forth in this
Agreement, Purchaser shall not
-17-
assume or be responsible for any liabilities of Seller.
(f) "Materiality" Defined. "Material" or "materiality" or
"materially" or "materially and adversely affect" as used in this Agreement
shall mean a claim, encumbrance or occurrence (including without limitation a
breach of warranty or violation by Seller) that could lessen the value of the
Assets by, or cause damages of, at least $500,000 or encumber or adversely
affect more than 1,000 acres of Timberlands in the aggregate.
IN WITNESS WHEREOF, this Agreement has been duly executed, sealed and
delivered by the parties hereto as of the date first set forth above.
PLUM CREEK TIMBERLANDS, L.P.
By Plum Creek Timber I, L.L.C.
Its General Partner
_____________________________________
By: ________________________________
Title: ______________________________
PLUM CREEK MARKETING, INC.
_____________________________________
By: ______________________________
Title: ______________________________
PLUM CREEK LAND COMPANY
_____________________________________
By: ________________________________
Title: ______________________________
SELLER:
STORA ENSO NORTH AMERICA CORP.
_____________________________________
By: _________________________________
Title: ______________________________
-18-
INDEX OF EXHIBITS
Note: Plum Creek agrees that it will furnish to the Commission a copy of any of
the following omitted schedules upon request.
A. Description of Timberlands
B-1. Gravel Leases
B-2. Assumed Contracts
C. Description of Offices
D-1. Personal Property
D-2. Excluded Personal Property
E. Harvest Schedule
F. Permitted Encumbrances
G. Operating and Capital Budgets
H. Disclosure Schedule - Encumbrances
I. Disclosure Schedule - Environmental Matters
J. Real Estate Transactions
Schedule 4.8 - Environmental Reports
-19-